In the s p 500, fundamentals deteriorating for the store maker. Guy lets get to our top story. U. S. Growth is slowing in the First Quarter but not as much as analysts anticipated. Consumer spending plus gdp growth to over 2 despite a drop in investments and exports which will probably worry the fed. Joining us now on set. Afternoon. Guy the dollar up six days in a row. It seems to be a tough trade right now. How will that change . As things stand, there is little to change it. When you think about this data that we saw this morning, it confirms the fact that the u. S. Economy is doing well. There are pockets of weakness, but for the most part, the u. S. Is doing far better than the rest of the world. As things stand, even if the fed cuts rates, the u. S. Dollar is still going to be the highest field. Few larry kudlow amount a minutes ago and said that u. S. Is not going to intervene in the Foreign Exchange markets. Was there serious thought that the white house was considering it . You know, it sounds crazy, but in the last month, they have seen research go from six pages on the subject to 76 pages. Clearly some people think it is a realistic possibility. With the current administration, you never know. Vonnie on that point, one person wrote that the simpler way for an investor to get a weaker currency would be to scrap the strong dollar policy. It seems like people are trying to figure out ways for this to happen without it being too crazy i move on the part of the administration. I saw another note saying the treasury only holds about 94 billion that could be used to influence the market and that is a drop in the ocean. Is the conversation getting diverse . Elsa it is difficult for treasury to do anything meaningful if it does not have the fed on board. As things stand, the fed is still an independent to central bank. They still have a mandate they need to follow. Ratesy are only cutting once or twice, it is difficult. If they were to go into a proper easing cycle and cut rates radically, it would be a different story. Vonnie is the dollar unhealthily strong . Elsa i dont think so. The first two quarters, it is basically a wash. We have done a lot of works looking at impact currencies and exports. A lot of the benefit comes through profit margins. Guy mario draghi does not want to see a stronger euro. That is clear. Lets talk about what happened yesterday. What went wrong for mario draghi yesterday . Elsa i think it was expectations building into the event. We had seen a lot of positioning, and it is very different difficult to deliver. Mario draghi has two more meetings after yesterday and there is still disagreement on the governing council as to what they should do and when. It is difficult for him to engineer a weaker euro and less he has the rest of the governing body on board. Guy there is a different narrative running in the states with regard to europe and is running over here. In the states, there is a narrative that Christina Dodd is going to persuade the germans to deliver fiscal policy. That does not seem to be the case over here. Pouredeague completely cold water on the idea. Is there a mismatch across the atlantic on perception, is there any chance that the germans will deliver fiscal policy, and if , can they get Monetary Policy done and europe . Elsa they do think that the germans at some point will ease fiscally. It is not going to be easy and they will not do it willingly, but mario draghi is right when he says that Monetary Policy is losing its bite. Fiscal policy is the only tool left. Rbc makehat do you at of the comments the other day . Elsa this is part and parcel of an attempt by the ecb to lessen the impact on the banking sector. We were actually thinking they may go down the route of buying bank bonds. Yesterday the story that appeared that definitively ruled that out, but clearly something needs to be done to diminish the impact that brexit has on the banking system. Vonnie a story on another today that europe incorporates are shortening debt. Europe corporates are shortening debt. How long can europe corporate sectors stay strong if they have to make all of these changes because of ecb policy . Elsa europes corporate sector has a number of issues. If you look at germany, the Manufacturing Sector has been under pressure. Ecb policy cannot necessarily change that. Long processo be a of structural adjustment to a new normal. Part of that is a cyclical problem. And part of that is structural problem where the german Auto Industry has to adjust to a new normal. Another narrative that is sticking around is that Boris Johnson is pushing a hard brexit, he knows the parliament will reject it, and he is therefore heading for a general election later this year. How much of that is priced . Elsa great question. When we saw the cabin announcement the other day, that was our first reaction. This is a cabinet that has been created to fight a general election. This is not a cabinet with the intent of governing. We track bookies markets as a good range. It is sitting at 40 to 50 for 2019. Still lower than i think make be. As things stand, it is hard to say how we would avoid a general election. Europe,a lignos, rbc going to be staying with us. Vonnie lets check markets because we are seeing a nice little balance in the s p 500 up. 5 . 9 10he nasdaq is up a full of 1 . Computersg led by index followed by the bank index. This is bloomberg. Live from new york, im vonnie quinn. Guy from london, i am guy johnson. This is the european close on bloomberg markets. Lets get a first word news update. The Trump Administration has unveiled a federal aid program for farmers. The administration is set to allocate an additional 16 billion in funds to help the agricultural industry. Payments are set to begin next month with a 500,000 per person limit. Agriculture has been depressed in the wake of chinese retaliatory tarifs. Tariffs. Turkey may reconsider an order of about 10 billion worth of airplanes. The nation is still buying boeings planes. Turkish airlines order to purchase about 100 boeing planes. The first streamliner jet arrived and eston bowl in june. In china, 24 people are dead and dozenre missing two are missing after a landslide this week. Extensive has caused flooding and landslides all across the region. Prosecutors it set to defendant bill cosbys Sexual Assault conviction in Appeals Court say the accusations from women are no coincidences but quote, a culmination of decades long pattern of behavior. The comedian is accused of drugging and assaulting women at his home. Global news, 24 hours a day on air and tiktoc on twitter powered by more than 2,700 journalists and analysts in over 120 countries. I am courtney donohoe. This is bloomberg. Vonnie Global Markets now, here is abigail doolittle. Overall, a risk on day, but look at the divergence we are seeing between the dow and the nasdaq. The dow is lower on the week and the nasdaq is clearly outperforming up 8 10 of 1 . That has everything to do with google and twitter doing nicely higher. About 1 10up of 1 . And reversing yesterdays loss of the german bund. 38 basis points. Investors are still paying the German Government to hold their money. Take ag of a decline, look at the euro over the last year. Down about 4. 5 . This year, about 3 . The downtrend, itll be interesting to see if these recent lows hold, but this of course is on the expected dovishness from the ecb even though i did not comment terms of actual details. The european economy weighing there a little bit. In thethe vix performers u. S. , universal Health Services up 9. 5 . The Hospital CompanyBeat Estimates of shares now up 30 of the year. Starbucks up 6. 9 . They beat both top and bottom line estimates. Very strong important since that had been week. Mohawk industries, down nearly 14 . The worst day of the year. The Third Quarter guidance was below, 13 below consensus. Cabin oil and growth, their shares plunging down 10. 9 . This after their thirdquarter production view missed estimates. We are looking at a risk on week from a very basic standpoint. This is a oneweek chart and in almost 2. 5 on the week for the best base of the week since early july. The 10 year treasury note futures are down on the week. This of course with the fed next week, it will be interesting to see whether this risk on tone can hold after the fed on wednesday. Guy big day and lots of great coverage. Abigail, thank you. Emerging markets stocks and currencies heading for a weekly decline. Mixed reports on u. S. Gdp growth with chances of a more aggressive said. Still with us, elsa lignos. Lets review the details of this week. The turkish lira. 425ally if you cut rates by basis points, you would not expect currency to go down. It did not. Walk us through your results. Elsa the market was not priced for that deep of a cut. There has been a lot of concern around the central bank and the lack of independence, but a lot of people have been putting out that this is a great market for turkish bonds. The central bank as cutting rates aggressively. It is not something you can hedge. They are unhedged. What do you trade the turkish lira against . It is hard to trade the turkish lira at the moment, but where do the risks lie around that . Elsa it is difficult at the moment because it is still the highest yield across the space. But that is not going to last forever. If the central bank was deliver as many cuts as priced and at the moment, we would get to the point where the real yields are no longer attractive. Even if we do not get that far, we estimate they probably have room of 200 to 300 basis points of further cuts before the really old drops away to further levels. Vonnie in terms of frontier markets, we are just getting a bbdline of south african plus rating to negative. South africa is another interesting currency the rand is weaker by 1. 5 percent versus the u. S. Dollar. Is there a trade here. Here . Ratings are ay, tricky trade. Countries lose Investment Grade status, a lot of the move happened ahead of the rating itself and by the time the cut comes, you should be looking to favored the move by the currency. It is a very attractive highyield and we are not that pessimistic about the rand, not looking to buy at the moment, but definitely keeping an eye on it. Vonnie the other question thrown around are the asian currencies. Going ontrade war between the United States and china, some other currencies are benefiting and it is up about 5 year to date versus the u. S. Dollar. The south korean won almost down 6 . What are you doing to try to take advantage of the trade woes the world are seeing right now . Elsa given the current context, low volatility, and a look out for carry, but not and discriminate carry but where you are being paid for volatility risk that you are taking on. You can find some of the asian highyield with some of the low yields, or you can do nonus dollar short taiwan. It is a heavily crowded trade to get to be careful with your entry levels. If you look at the risk reward in terms of volatility, it is a pretty good tradeoff. Guy it is all about the fed though. 25 basis points in the fed next week but pretty much baked in. How volatile are some of these currencies going to be depending on the language out of the fed . Elsa the language is very important because we will get the press conference. We are not going to get updated dots, so it will be all about how do they present this cut. We are really looking for whether they will present as tough, and if that is what they are going to do, we will still be in this environment where you are looking for carrie and not a regular easing cycle. If they do start cutting rates aggressively, you may get to a state that you wonder where the fed sees where you do not. Week, on the yuan . Elsa they will continue to manipulate it. It is not going to happen overnight but i think certainly the first couple of times to get one above seven will be flushed down. And elsa lignos, rbc europe global head of foreignexchange strategy. Vonnie remember the function on gtv on the bloomberg. Catch up on key analysis and even save your charts for future reference. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy and in london, im guy johnson. This is the european close on bloomberg markets. Lets get to the top of the tough week for the oil sector. Lowering its sales for the four year. Dismal results from his partner. Bloombergo exclusively. Operation, it is working very strongly. It is an investor project. All of the new cars that we are preparing, all of the new technologies that we are 2020, ad delivery 12 and it is dragging earnings down. We have been sharing entry tickets. We are sharing as well the cost of all of these elements. Otherwise, our results would not be the one that we are expecting for the future. We should never forget the termsce is a reality in of operation and in terms of industry, and that is why we are so strong and resistant. Is visibility of what happening and that is our experience. It is very positive. It is very important that for us, the concern because we are, we have all of the necessary conditions to make project progress. It is not yet the case for the reasons you say, so our top priority is to help nissan to get out of the situation thanks to the alliance as well. Does that mean perhaps , there is a lot of pressure at the moment after the plunge of 19 9 yesterday and they are planning thousands of job cuts globally. Thierry it is a matter of company to company, that is my goal. That is why i am getting back to life ofations and the the industry whatsoever, but at the end, what matters is to make sure that we are helping all of the company nissan to get out as quickly as possible. The difficult situation of nissan could actually help you revisit a possible merger with fiat . Thierry the key point is to make sure the alliance is on track. The story has shown that renault in the alliance is extremely attractive. And more attractive because we have the technology, we have the models, and we have the experience of corporation. Corporation is ups and downs. At the end of the day, it is not since eight months. We have been experimenting that and living with that, and is hiring that. That is desiring that. That is why we are attractive for opportunities beyond, but it is our response ability to make sure the alliance has a more better situation. Guy the ceo of are of renault. U. S. E chevron has won the extension to keep producing oil in venezuela. The waiver was set to expire on saturday. Chevron is climbing higher now having dropped this morning. It is a racing erasing declines. Chevron has an extension to the waiver and can keep producing oil now and venezuela. It has been a venezuela for 100 years. There was a decision by secretary of state mike pompeo that the president what announced it soon, and he has now. It allows chevron and several Oil Companies including halliburton to continue to operate in venezuela despite u. S. Sanctions. Hasourse, this also repercussions because if chevron has to pull out, then that would have handed more power to the likes of china which operates still in venezuela as well as in russia. Time now for your bloomberg fitness flash. Business flash. Besttrong quarter, sale since 2012. And it helps the worlds biggest restaurant chains bottom line. Risingds is facing labor costs. That is your latest. Guy a few minutes to go until the end of european trading. Higher, and there is not Much Movement on the dax individual. Carrying its suffering. The closes next and this is bloomberg. Were the slowskys. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. Guy 30 seconds until the end of regular training this friday in europe. Main markets are up, but look at spain. They are down because of the banks. Peripheral europe under pressure. Core europe having a better time of things. , and cac 40 all trading in positive territory. Miners are week. No action in the dax. We do have breaking news. Vonnie sprint and tmobile both higher. Tmobile has won the u. S. Dodd for the sprint deal the u. S. With thehe sprint deal dish assets included. The doj has given sprint and tmobile the goahead to go with the deal. That does not mean state will also do that, but it does take away one major barrier. Sprint is soaring on this news. It was up almost 5 , it was of even more. Tmobile is up 2. 5 . Dish also higher. Lets bring in Bloomberg News reporter ed hammond. We may have been anticipating this through the doj. Does it mean the companies can go ahead . Ed pretty much. That was the this was the final big hurdle. Based on space they need to be in front of, but this is the one people were looking for. This is what the risk odds were focused on. I think it is a big day. It is a momentous occasion for these companies and this has been five years. This was a deal that was blocked in his previous iteration. They brought it back. Both companies have done a lot of work in terms of being in front of the ftc or the sec and now in front of the doj to get this done. Guy they are doing this for competitive reasons, to consolidate. How does this change the Competitive Landscape in the United States . Ed they are doing it has much to consolidate as to survive. Their argument was that if they did not they would both become obsolete. They needed to merge. Just looking through what has just come out is this commitment to build out the five g network. They are also reported previously that they forced them to send a significantly number of assets to dish network and they said the dish would have access to tmobile and Sprints Network of stores. They will able they will be up to sell their products through the stores. I expect across the country in several hundred stores. In order tonnie keep another competitor they took assets from tmobile and sprint and gave them to dish, now they are telling dish you need to have a national presence. Can dish do that . Ed that will be a big challenge. There is a past master of building these kind of net wo