Transcripts For BLOOMBERG Bloomberg Markets Balance Of Power

Numbers. Consumers are showing up and helping. The markets are counting on the fed cutting. Yelena the fed told us they want to see the whites of the eyes and chair powell said it is too premature. I think of the economy will hold up just fine, that is what we see in the data you just mentioned. Consumer spending is showing us it is ok. Then we are seeing the fed will remain on hold. Having said that, i think it will be markets that will determine what happens next. We do expect a couple of cuts at the december meeting. We will have to wait to see that. Marketsket david are waiting with bated breath. Lets go down to miami with tyler. We have had round two of the first debate. What is the update on what happened last night and wednesday as well . That the takeaway is Kamala Harris had a breakout moment, finding her voice in her criticism of former Vice President joe biden, attacking him for his record on race in segregation in personal terms. She had a breakout in miami. The night before was the undercard debate, where we had one polling leader in senator Elizabeth Warren, but some of the lower tier candidates around her. They did not attack her or trump. Lower polling candidates attacking each other. The big takeaway in miami over the past two days is Kamala Harris having that breakout moment in the back and forth with biden. David if there is a breakout moment for Kamala Harris or biden or anybody, how will we know . Will it be in the money or the polling . Tom it is both tyler it is both. The end of q2 fund raising is coming up. We will see the numbers about whether this debate performance gave Kamala Harris a big push. Whether it hurt biden. Both will be looking at all numbers to see if the debate had a big impact. , thank you soager much from miami. At the Supreme Court we find greg stohr. You could argue the most farreaching decision came last. Greg they did. We had two major decisions yesterday, it seems like last week, the courts said federal judges have no role when it comes to partisan gerrymandering and saying in saying it does go too far. That will give state legislatures a free hand to use Party Considerations in drawing their districts. And Donald Trumps big setback in his efforts to add a question about citizenship to the next census. The court said the reasons the Commerce Department gain for adding that question do not stand up and it send it back there to come up with a different explanation. It is not clear there will be enough time. David potentially is their decision to review obamacare. They already had that case before. What do they have left to decide . Greg this is a case that has to do with payments to Insurance Companies that they did not receive. A very complicated law. These are some of the payments that insurers were supposed to get from the federal government to cover the rest of putting policies on the exchanges. They say they were entitled to these payments and congress did not appropriate the money the way it was supposed to. It does not affect the Ongoing Operations of obamacare. It could be a check to mostly nonprofit Insurance Companies. David we have that to look forward to next term. Thank you so much for your reporting from the Supreme Court. Now lets find out what is going on the markets with abigail doolittle. Abigial the last trading day of the month end of the quarter, we do have gains for the major averages. The s p 500, the dow, nasdaq. The dow up for the first day in three. The s p 500 up for the second day in the nasdaq up for the third day. On the week, small losses. Today we see outperformance for the bank index, up 1. 8 . That is not being helped out by falling yields but the fact that banks did these pass the second round of stress tests. If we look at what is happening globally for stocks, these are the Global Indexes over last couple of years. In yellow we have the shanghai composite, in white we have the s p 500. In 2018 we are starting to see bigger moves to the upside. The volatility in the Fourth Quarter of last year. This year we have lots of big gains. Take a look at china in february. Its best month since 2018. We did have the weakness in may. This junes we have gains being led by the u. S. , beating the german dax and the shanghai composite. A risk on tone from a stock perspective. What is moving in the u. S. Beyond the big banks that are higher on this Federal Reserve stress test, take a look at Western Digital up 5 . This is as they had a power outages, one of their plants in japan, that will weigh on revenues but it will also help pricing and inventory. Constellation brands up 4 . Investors are cheering that. That stock up more than 20 on the year. Foot locker up 2. 7 in sympathy with nike results. I mentioned a risk on month for stocks. Gowe dont cross at if we across asset stats, that is the measure percent from bank action. The 10 year yield is down 30 basis points. That is pretty extraordinary as investors are going into those haven bonds on the prospect of the Federal Reserve cutting once or twice this year. You have the dollar index down 1. 6 . The worst month for the dollar since january 2018, when President Trump was talking about wanting a weak dollar. Falling yields weighing on the dollar. The big winner is gold, up 10 . Many think of gold is the haven asset, but you have to think of it as the vehicle the central banks. With a dovish tone, gold doing well. David is all about the fed. Coming up, the first round is over for the Democratic Candidates, but did two nights in miami change the debate . That is coming up next. This is bloomberg. David this is balance of power on bloomberg television. We turn to Mark Crumpton for bloomberg first word news. Mark the World Meteorological Association Says an exceptional hit europe has broken day and nighttime temperature records. The unusually early heat wave with highs in france and spain excluding 44 degrees celsius or 104 fahrenheit is the latest in a series of extreme weather events. Spokesperson said she hopes the wmo spokesperson she said she hopes the heat wave will not lead to death tolls. Climate change, extreme weather, no no National Boundaries or regional boundaries. We are seeing unfold on a monthly basis. It is hitting the poorest and most vulnerable hardest. Mark in spain, firefighters and Aircraft Battle for the Third Straight day to contain a racing fire going across the hills of northeastern spain amid that he wave. In osaka, President Trump is said to meet with xi jinping on saturday at the g20 summit. The two are expected to discuss tariffs. Mr. Trump has said he has not promised to hold off on imposing new tariffs on china. Did you promise china you will not put any new tariffs on . No. Mark the president also says he thinks the meeting with his chinese counterpart will be productive at a minimum. The Supreme Court has agreed to take up a political explosive issue. Justices will hear President Trumps bid to end deportation restrictionsation from young undocumented immigrants. Daca was begun under president obama. Nancy pelosi blinked in her standoff with republicans over a bill that provides money for my grandchildren. She allow the house to vote on the Senate Version of a 4. 5 billion measure. That infuriated progressive democrats, who wanted their own bill. The house passed the legislation. Trump is expected to sign it. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. I am Mark Crumpton. This is bloomberg. David . Twod 20 candidates over nights. Has the first debate changed anything . Not according to our next guest, who wrote do not assume the race will reshape the democratic primary debate. Editor of crystal ball at the university of Virginia Center for politics and the author of the book the blue way. Kyle joins us from washington. Let me ask you as a professional, what should be the what should we be looking at who lost, who is up or down. Kyle i would not say there is no way the debate impacted things, but i would say be cautious to think about huge changes. We should look at the polls and see if there is any movement. Joes joe biden does joe biden drop a little bit . Does Kamala Harris get anything out of her exchange with joe biden last night . Are there canadas that we are not talking up are there candidates we are not talking about who we who made a positive impression . What is dangerous is watching the debates and assuming that because people are talking about it on twitter or people that one candidate was impressive or one candidate was not impressive that that will have some impact on the polls. It may not. The Analyst Community can be insular. Social media can be insular. We have to wait and see what the actual data says. David our donors watching the debate . What about the money . I assume the candidates will be dialing around for dollars. Kyle we are at the end of the Second Quarter reporting period and we will start to get fundraising totals for these candidates. There are basically too many candidates right now and not enough money to sustain the camera sees from now until the voting starts in iowa. There are some folks who needed to break through in this debate to get new funds in and to show strength. There are a lot of candidates who have not shown that much strength. I think they are in danger of being afterthoughts in this process. The selection criteria for the next debate remains the same. I think you will see at the end of july, this kind of two night system. Once we get to september and october it will be harder to get the debates and some of the candidates will fall by the wayside. David one of the subjects that came up was the economy. The economy is doing pretty well. Democrats think it is better off than it has been since 2001. Is there any way for the democrats to make a change a chink in the president s armor on the economy . Kyle the gains from Economic Growth are unevenly felt and have been since the recession in the late to thousands and arguably in many parts of the country that have been in a state of permanent recession for decades. A lot of those places, particularly white workingclass places swung heavily toward donald trump. The problem for democrats is that the economy remains good but Donald Trumps approval remains poor. There is an opening to be trump with a good economy. The democrats are calling for radical change as opposed to swapping out a president that a lot of people do not like, maybe that is a problem. Fundamentally, what the democrats want to do is try to make this election a referendum on donald trump. What trump wants to do is make a choice between the democratic candidate and his republican policies. The democrats are going to far left on policy, maybe it becomes more of a choice and that is to the president s advantage. David looking last night to figure out which of the Democratic Candidates will run against President Trump, it struck me that age was explicitly on the stage. Representatives wall well went to joe biden and said it is time for you to get off the stage. Will this divide the Democratic Party . Up on some page perceptions amongst voters. Some of this is just anecdotal. Biden,el like when joe when those accusations came out about joe biden a couple months ago, about him being touchyfeely with women in certain circumstances. Younger people care about that more than older people within the Democratic Party. There may have been some of that onh Kamala Harriss attacks biden last night. I think she was smart to attack biden in that biden has a significant share of the africanamerican vote. Harris needs those voters. For her candidacy to take off she needs to buy and of all shend attacking biden needs biden to fall back and attacking biden is a good way david democratic primary voters want somebody who can be President Trump. On the index, to jo bonner the joe biden fall behind last night because he was not the president some people had expected . Kyle joe biden has been around for a long time and i think there were moments last night where he showed his age a little bit. I think he did in his back and forth with harris. Biden is only a few years older than President Trump, but the president does not show his age in his appearances. If there begins to be a perception that time has passed joe biden by, that is where you can see problems with his candidacy because the premise of joe bidens candidacy is that he is Strong Enough that he can challenge donald trump on the debate stage. If people do not come away feeling that way, maybe they will look for alternative. David thanks for being with us. Managing editor of crystal ball and coeditor of the blue way, the 2018 midterms and what they mean for the 2020 election. Still ahead, the banks have been in the crosshairs as the fed releases their stress test with surprising news about Deutsche Bank in particular. That is coming up and this is bloomberg. David you are watching ounce of the power. Im david westin. Were watching the banks. And withleared them 130 billion going back to shareholders. Im joined by abigail doolittle. Abigial we have a rally with these banks. The overall message of the stress test with the comprehensive analysis and review that the banks are extremely wellcapitalized. That means they can pass along capital to shareholders, more than 130 billion, far more than last year. Investors are lighting that a lot. All 18 banks passed and there were a number of surprises, including Goldman Sachs who raised their dividend. We saw jpmorgan returning 30 billion. That would is expected to come in closer to 20 billion. Lots of good stuff going on. Investors cheering the fact that these tests were passed so handily. David all of them past, including Deutsche Bank. Abigial a stamp of approval for Deutsche Bank despite the headlines. We have one of those again today. Passing the u. S. Stress test and capitalized well enough to pass along capital to shareholders. David thanks to abigail doolittle. Now lets focus in on Deutsche Bank. Not only did they pass the stress test. Lots of news out of Deutsche Bank. Sonail it is every day. Leastay be cutting at half of their Global Equity staff and cutting rates as well. People will start knowing about whether they will be there or not in the next couple of weeks. It is certainly news, youve been hearing about it for a while. It is more definitive now but what we are looking at is more of the structural plans closer to the end of the month. David their stock is up about 3. 3 at the moment. How much is because of the layoffs and how much is because of the stress test . Sonali probably a little of both. People want decisiveness as to what the bank will look like. The stress test helped. It was years of failing the stress test in the u. S. To have that as well as Decisive Action about what the footprint will be like is something investors will want to see. David you said it, the ceo has been saying we will fix it. Have we seen all of the plan or , morere more to come dramatically than what they announced today . Sonali theyve not announced anything yet. The story today was based on people familiar reporting to bloomberg. The ceo himself has not said what the Restructuring Plan is going to be. David why has it taken them this long . Sonali there was some push pull about whether to keep Investment Banking operations or to let them go. They had ambitions to be a global bank but vicious showing they may be a lot smaller but this is showing they may be a lot smaller in regions including the u. S. David to what extent are they subject to influence from the German Government . Union there are also representatives on the supervisory board. All the way from the top you have pressure. When you lose 750 million last year in and equities division, it is hard to justify that. David you make a powerful point. You have unions representative. When you have a merger with commerzbank, part of the concern was you have to lay off people. The government does not like laying off people. How do you cut costs without laying people off . Sonali what has gone on to stop mean everybody in the world is thrilled with the footprint in their own country. Everybody is making sure they are keeping jobs on the ground at home. David thank you so much for joining us. Up next, the g20 is meeting in osaka. We talk with the man who put the summit together. He will be joining us next. If you have a bloomberg. Nal, go to tv live from new york, this is bloomberg. Hey im bill slowsky jr