On china stabilizing the yuan. We are being influenced by europe and germany headlines. The s p 500 right now 2915. The nasdaq is up 1. 5 . The 10 year yield is well higher than it was yesterday. A little bit of selling in the treasury market today. A couple of individual stories to look at, kraft heinz a sadly said, we need a plan. The street said yes, you do, and in the meantime we are going to sell your stock. Down 40 . Symantec up on a proposed deal with broadcom. Guy lets talk about what is happening with that german story. The German Finance Ministry says there is no decision to balance its budget for recovery. We will come to that story in a moment with more detail. Look, weve seen a massive gyration in the market over the last few days. How have you dealt with that . What is your view on that . Twodi e have taken a rightwosided approach now. We dont think there is going to be a recession. We are in a manufacturing recession, but services and consumption are relatively strong, so we think a model two is likely. We think the fed is dovish. If you get into a recession, you see a sharp decline. If we get a rebound in growth and a bit of a secondhalf recovery, i think the fed remains anchored, and that is also bullish for growth. They will run hot and you might have some inflationary pressures eventually building. Guy the bond market is basically daring governments to spend money. Theres no other way of putting it. We are going to take yields lower and lower. At some point, fiscal policy is going to happen. We are not there yet, but there was a produce report earlier that saying maybe they will move into green spending more projects. Denied that they have made a decision. Patrick increasing your debt, you actually increase your surplus because of negative Interest Rates right as well. The euro zone needs the german consumer to consume a little bit to offset. The fiscal thrust from germany is much needed. It is the ideal situation for a comedy to have for an economy to have right now. I dont know if the people in germany who are underemployed right now would even welcome a fiscal deficit, even it might help them get jobs, because that culture is so strong in avoiding deficits. Vonnie it sounds like you dont see opportunities there, although the picture you painted, were germany to get some fiscal aid, looks very attractive, now . Attractive, no . Patrick youve got low growth in the euro zone and germany, but we looked at a significant number of plays still based around the european economy. We own airbus, snyder electric, a Swiss Company driven by german renovations and household demand. We think they are cheap in pricing in a recession that wont happen, but i am hopeful for fiscal thrust from germany rather than expecting it. Vonnie what if there were to be some type of tariff war with europe along what we are seeing with china . Patrick that would be terrible news for the economy. If you are going to have a trade war between the two biggest economies, thats one thing. That is a bilateral trade war is stagflationary effects around the world. I dont know if the u. S. Economy going into an Election Year can be fighting with everyone. You get a strong response from the base when trump talks about tariffs, but a very weak response from the stock market. I think those of the two measures he looks at to see how hes doing. When the market hits an alltime high, trump gets very hawkish on trade. When the market selloff, he sort of softense sort his stance. As we get closer to that, you that. To see the market reacts to short little tweets. Thats what we saw monday with the tweet about new tariffs. The market gets some support. It is a funny market to be in. Youve got guy germany 60. Hsbc thinks they can go 80. What does it take for that next move to get it down to that levels . Is the ecb going to come out with a big bazooka . What good is it going to do . Want theyou dont front end of the yield curve to discourage investment and force people towards cash, where you use less than even on a longterm investment. Negative Interest Rates, i dont know if that is the right answer. Not an ecb answer to europe. It is german fiscal spending that is going to a lot that is going to unlock a lot more of the growth potential. Think draghi is a genius on monetary policy. Ab lagarde will unlock it with a more maybe lagarde will unlock it with a more political sway. Guy lets get back to the industrials. Airbus is up circa 50 this year. Some other industrials are having a really horrendous time. Phillips is up about 15 . Guy what about Car Companies . Lets dig into the details. They are having a horrendous time. Banks and autos. Patrick banks are something we have gravitated more to whoops more towards. If we have an economic slowdown, ink contention bonds think to mention a bonds are very wellcapitalized. Europe is probably up about 12 year to date with a dividend, which is not a terrible year to date performance. Terms,put it in dollar it is a little more maybe. Dont think itwe is doing much, but it is not falling us into a recession it is not falling into a recession either. Vonnie lets get a check on markets now. We have indices higher. The s p 500 up 1 . The nasdaq is up 1. 4 . Symantec driving that higher. The dow, just a handful of stocks higher. It is just trimming some gains. Amd the best performer in the s p 500. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is the european close on bloomberg markets. Lets check in on the first word news. Heres Courtney Donohoe. Courtney President Trump said he is not thrilled by the strong dollar and wants the fed to make substantial Interest Rate cuts to lower the value of the currency. The president said the Dollar Strength is making it more difficult for American Companies to compete. Saudi arabia looking at ways to halt the seven month long slide in oil prices. Officials said the kingdom has spoken to other Oil Producers to discuss options. The saudis have already cut production more than required in the deal between opec and its allies. In italy, deputy Prime MinisterMatteo Salvini is ratcheting up pressure on the Coalition Government to yield to his policy demands. If not, he could decide to solve the policy sharing decide the powersharing agreement between the parties. Les wexner accused every epstein of appropriate invest amount of money from his family. Wexner said he was in the dark about epsteins abridged long about epsteins alleged wrongdoing. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. On Courtney Donohoe im Courtney Donohoe. This is bloomberg. Abigail we are having a risk off tone on this thursday in contrast to volatility we saw yesterday. Today is similar to tuesday. Up,s p and the nasdaq both still down a bit from major averages. The shanghai composite in the Asian Session up 9 10 of 1 . A little bit of relief today on the part of Global Investors around the trade war tensions. Where that is really being demonstrated, the emerging markets. Lets take a look at the 11 day 12 day, actually, chart. Down 11 days in a row, the longest streak for emerging markets going back to 2015. Ver that time, down 6. 8 something to keep in mind, but we are seeing a little bit of relief there. We see in the u. S. Also lots of relief supporting that risk off tone. Sector composition very bullish. Earlier, a few sectors were lower, but right now all 11 higher. We also have utilities and consumer staples, defensive sectors. Up top we have tech, one of the growthiest sectors out there. The bulls are really buying the divot. Helping out the s p 500, lets take a look at a few of the individual movers. Soaring,ing to see amd up nearly 14 on a new chip. Close to with broadcom buying one of their units for about 10 billion. That stock is down about 40 from alltime highs. Trip advisor and booking holdings both higher. Trip advisor missed quarterly estimates, but there seems to be a sympathy tailwind to the upside. Guy absolutely. Abigail, thank you very much. Lets get back to patrick armstrong, Plurimi Wealth cio. Massive move at the back end of the curve this week. Weve been watching the 10s mov e, the same story here in germany. Then a big bid attached to the u. S. 30 year. Are you a buyer or seller of that move . Patrick we are not sure which direction the economy is going to go. We think we have to muddle through where growth slows, but doesnt move into recession. I think the fed has to cut more aggressively toward zero like the rest of the world. If you look at the last four recessions, you get a massive steepening of the curve with each. We think the fed doesnt have as much dry powder as it usually does. Guy but you are not sure that recession is coming. You talked earlier on about how the industrial sector is lacking, but the consumer is holding up, so that side of the economy still looks good. Can the u. S. Consumers shoulder the rest of the world in terms of growth . It makes the world so vulnerable. Any kind of a crack, and weve got a problem. Weve got an election coming. Theres all kinds of other factors. I am seeing a slowdown. Will i see a hiring slowdown . Patrick employment is full by any measure right now. You could have a bit of a slowdown in hiring, and that wouldnt be recessionary necessarily. But a big trade war is still the most likely catalyst. If trump continues to escalate trade, that pushes down consumption in the whole world and increases the cost to the u. S. Consumer. Thats the most likely trigger for an outright technical recession. I dont think it happens because blink,s most likely to especially with an election coming up. Theould miscalculate and market could overreact to tweets , like the boy who cries wolf too many times. Not respond the way it has historically. Vonnie how much do you keep for safety purposes, and where do you stash that money . Patrick for safety purposes, we call gold a hedge. We are long stuck volatility and short index volatility, which is a funny one. I wont get into the dynamics of that. We are in cheaper regions as well. So japan and europe are much more exposed to global trade, but we think the equities may hold up relatively well in the trade war versus the economy. Onan has never been cheaper earnings, never been cheaper on dividend yield, never been ebitda. On ebit on s, but wesome headwind think that is priced in. Its had a big downdraft in the last few days. Accurate, what do you make of all of this currency volatility patrick, what do you make of all of this currency volatility . Patrick we are not playing currency volatility right now. You see a lot of movements in the market, directional trades, but implied vol isnt incredibly high right now. It is something that would make sense to go long of. Thes hard to tell direction of currencies right now. The u. S. Has been benefiting because of Interest Rate differentials. Our may start to wane if base case plays out, based on fears of the u. S. And japanese recession that we dont know will come. Guy what have you got on brexit . Patrick i think the next four weeks are probably going to be terrible for sterling because you need to talk a hard brexit to have any to go sheeting power with the eu. I dont think you have any negotiating power anyway, but the rhetoric is going to be very hard brexit, and a noconfidence vote likely coming in september, and you have a majority of one, so you only need one or two conservatives to vote noconfidence. I think something will get resolved and serling is higher, but over the next four weeks, i dont see anything moving at higher. Guy patrick armstrong, Plurimi Wealth cio. Vonnie dont forget the function gtv on the bloomberg allows you to browse all of the charts featured on bloomberg tv. Catch up on key analysis and save your favorites for future reference. Thats gtv. This is bloomberg. Guy from london, im guy johnson. Vonnie in new york, im vonnie quinn. This is the european close on bloomberg markets. Erik schatzker spoke with howard marks, the cofounder and chairman of Oaktree Capital, on the decision to cut rates. Howard it is unusual. Usually we stimulate the economy when it is doing poorly and want to wake it up from the doldrums. We generally dont stimulate the economy after 10 good years. We usually accept that there ebit flow to the cycle, and that there might be justified recession. We had the lowest unemployment rates in 50 years, and you usually dont stimulate in that time. So the point is that the fed can stimulate. Should it do so . Is it the feds job properly . Erik i get the feeling you dont think it should. Howard i dont think the feds job is to make sure theres never a recession. ,hat the fed chair tends to say jay powell said it last month, and i have a quote in their from september 2007, we will do whatever it takes to keep the expansion going. Is it the feds job to keep the expansion going forever . I dont think so. If i ran the fed, and im not applying for the job, but i would do when the economy is roaring, i would try to cool it off so theres not too much inflation. When it is really weak and not creating jobs, i bowed stimulate. But if i would stimulate. But if not, i would leave it alone. Erik what does it mean for investors . The 10 year is at 1. 75 . High yields are something in the order of 6 . Savers andmeans that lenders and people with money are going to have trouble getting good returns. All the returns emanate from the base rate, which is basically what the fed sets. The lower it is, the lower the perspective return on everything is. The process of lowering the rates causes assets to inflate. So there will be more wealth piled up by the people who have assets, and it will be harder for people who just have a little bit of savings to get a return. Vonnie Oaktree Capital cofounder and cochairman howard marks there in an exclusive interview. I would urge everyone to watch the entire interview. Checking u. S. Markets and where we stand right now, the dow is up 8 10 of 1 . Just five or six stocks lower in the dow. The s p 500 up 1. 25 . Something helping it today, a new amd chip is helping it today, making it best performer in the s p. The nasdaq is up 1. 6 . The vix is down from a little earlier in the week, still at 18 though. The u. S. 10 year yield just under 1. 75 right now. That is meeting that the 210 spread is wider today. That is maybe a bit of a relief. Gold futures now back up above 1500 an ounce, but down 7 10 of 1 today. Crude at about 53 a barrel. Guy lets take a look at where europe is heading into the close. European equities have been climbing throughout the day, now trading as we head towards the close at session highs. Ftse 100 trading up. It is the miners lifting the market today. Certainly a positive trend for the ftse 100 today. They are a real standup story for the dax, trading at session highs, as is the cac 40, up by 1. 9 . We are heading into the european close. A much more positive session for european equities today. We wore a new through the details in a minute. This is bloomberg. From the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Click, call or visit a store today. Of 30 seconds until the end regular trading in europe. A positive session, a bright spot in france. Only one stock in france is not trading in positive territory on the cac 40. We are seeing airbus have a solid day as well. Other european markets are trading as well. At session highs. Positive progression throughout the day. Lets show you the intraday chart. This is where we have been and where we are now. A positive start. Since then weve been grinding out throughout the rest of the day. A stable feel after the gyrations generated by the bond market. We are seeing selling in the bond market after buying, nine sessions, maybe 10 where we saw the buying coming through. Lets take a look at the bigname markets in europe to give you an idea of what has been going on at the sector story. Chemicals trading strongly. Basic resourcing is lifting london. Technology doing well. Health care trading strongly. The chemical sector up 2. 18 . Prettyend of the market, much every sector is in positive territory in europe. Telecom just managing to get into the green as we watch it come through the close. Utilities, real estate, travel and leisure, utilities are at the bottom of the market. Bond proxy stop looking so clever. The market rotating the money out of those names. Lets talk about the individual names. Ive mentioned a few. There is the ftse 100, there is the dax, theres the cac 40. , the dax up 1. 33. The cac 40 up 1. 87 . Ftse by theyer, miners, cac 40 by just about every sector. Individual names, that is one area we are seeing weakness in the german market. It was down more earlier on. Throughproduct coming is costing them. Recently a company listed. We were seeing a private equity takeover on that listing, but allianz does not like that. Carlsberg trading strongly. Craft beers, demand for craft beers driving carlsberg. That is look at the european close. Vonnie here in the u. S. , we have had a markets getting lambasted the last couple of days. Today we are seeing stabilization. The u. S. Taking its cue from china, which is fixing a tiny bit above seven. The offshore yuan still trading weaker, but a little bit of stabilization is the mood of the day. You can see that in gold, trading around 1500. Definitely not going below 5,000. The s p up 1. 25 . The nasdaq up 1. 5 . A couple of chip stocks doing well, also amd and the symantec deal. Sox up one up 1. 75 . Amd up 14. 5 . The board is gone from perrigo, saying the job is done and they do not need to be there. That has a selling going on in that stock. Beverage down 5. 3 . A little bit of warning. Guy lets talk about the Asset Management industry facing in existential prices. For years, investors have been shifting their money into active funds away from passive. That has forced largescale consolidation. Now the industry is on the brink of a shakeout. Only the strongest will survive. One of the coauthors of this bloomberg story joins us. We have known the ship from active to passive has been gone on for some time. Are we reaching a Tipping Point . We put together this datadriven story on how much of a watershed moment youre looking at. Four years you have seen outflows from actively managed funds and inflows into passive indexed products. As we have seen, those pressures have escalated on active managers. Vonnie you point out in your story that to be a successful active fund manager you need help, but you also need something unique. What has that been and why isnt that working . Annie we laid out the various types of Asset Managers you might see on his trump. On on a spectrum. Blackrock, you have which has so many offerings for clients and the scale that goes along with that. On the other end of the spectrum you have small boutique Asset Managers that might have a special thing they do really well. What we are seeing in the marketplace is that if you fall somewhere in the middle of that spectrum, it is hard, and you have to figure out what you will. E to be able to prosper guy what role is regulation playing . Annie regulation and Technology Costs the cost of compliance and technology have been stepping up pressure on this industry. To cope with those costs, these Asset Managers have had to figure out where they are going to pick up some of the slack. You have seen layoffs and part of that is keeping up the cost of compliance. Vonnie what kind of Money Management firms are at the greatest risk . Annie the middleoftheroad type of asset manager. In thing you have seen response to these pressures is consolidation in the industry. We have seen a couple of big passive active and the oppenheimer merger, also a couple of cases like the changes henderson like the Janis Henderson where you have seen client out all client outflows as a result even though the firms are trying to consolidate to survive. Guy this move is largely being found in the equity space. Are we now seeing it move and other Asset Classes . The one that would stand out would be bond markets. Annie that is a good question. You have seen indexing coming for different markets. Equities were the first frontier but index products are eight next wave are eight next wave to watch out for. The trend will continue. This wasou pointed out pointed out decades ago. What it takes a long . Did people not believe . It was a big visionary in the terms that active managers are not worth the fees they charge. One inflection we noted in the article was the financial crisis in 2008, when you saw investors take a look at their portfolios and the fees they are being charged for underperformance. In many cases you have seen a recalibration and an interest in lower funds like you get from index products. Guy the bigger question in all of this, is this a permanent situation . Is there anything that can be done to change this . You talk about the barbell approach a lot of people are taking. At one end you have the niche players, at the other end you have the vanguards. Does the middle just die . Can i extrapolate that far . Annie one potential frontier is moving and other locations. You see a saturation in the u. S. An oversupply of Asset Managers. One other strategy that might look toward is what can they provide to other geographies and what other areas can they move into to offer their products and find sources of new flows . Vonnie it does also bring up the question, if we were to see a market that stalled out, with this trend reverse . It is only at times the s p is not performing well Asset Managers can be the s p. Annie it is good to keep in mind we had a 10 year running bull market during which index products have done very well. As it managers will tell you to wait for the market to turn. That is when you need the expertise of a stock picker for active manager. If we do see a downturn, it will be a moment for active managers to prove that point they have been making for many years. Annie, great story. Currently on your bloomberg story. I would encourage everybody to read it. That is annie massa joining us there. Guy we are through the auction process in london and europe. Lets take a quick look at where we settle. A big uplift during the auction process. Today you have a big jump coming through during the option. You can see on the chart if you go to your bloomberg. 1. 2 , daxinishing up 2. 31 , and the cac 40 up. An amazing turnaround for european equities. The bond market shows signs of stabilization. Well carry on the conversation on bloomberg radio. The cable show. Jon ferro in new york, i will be joining him in london. Top of the hour on dab digital radio. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy and from london, im guy johnson. This is the european close on bloomberg markets. Lets get a news update with Courtney Donohoe. Courtney the Trump Administration is rushing to finalize a list of 300 billion dollars in chinese products that will face a new terror. American companies are making a lastditch appeal. They are looking to scrap the tariffs altogether or to drop items the import from the list. Holdstest jobless claims the u. S. Labor market is holding fast. Applications for Unemployment Benefits fell to 209,000. Claims are hovering just above a 49 year low. Cutting down trees is making the world hotter and hungrier according to a new u. N. Report on climate change. That raises the issue of food security. The report does not pinpoint any countrys, but scientists mentioned brazils stepped up deforestation of the amazon. Mortgage refinance fever sweeping across the u. S. Rates for 30 year mortgage at their lowest since late 2016. That has homeowners running to their brokers. Normally new home purchases make up 70 of the business at cornerstones First Financial in washington, d. C. These days, 70 are refinancing. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im Courtney Donohoe. This is bloomberg. Vonnie thank you. Our stock of the hour is plunging to a record low after its first cap earnings included another 1. 2 billion in impairment charges. Abigail doolittle is looking at all the numbers. Abigial it was an ugly situation and this is there first half report, because they delayed the first quarter. They are not reported until now. Behind the s p investigation, the 1. 2 billion charge you mentioned, earlier this year it they are not reported until now. Was 15 billion. This is relatively small, but the numbers themselves were dismal. Growth is moving in the wrong direction. Much worse than expected. Any number you look at, it is ugly. Why . This has to do with the past. In the past investors love this country for the bottom line growth love this company for the bottom line growth. They were not competitive innovating, there is a whole health trend toward nongml and organic and their behind the curve. They do not have the growth on the top line at all. Guy the new ceo what does he need to do . Abigial he is a big job ahead of him. There is a huge shift to turn around. He has two options. One would be divestitures. A lot of rumors a couple of the brands they would try to sell off, including Maxwell House coffee, the philadelphia cream cheese brand. The market is not very a lot in terms of other competitors trying to sell. That might not go so well. The other option would be to invest in the brand. You can cut pricing to make the products more competitive also. Another way would be to repackage the product. Not beingf the brands associated of the healthiest brands, trying to repackage those brands so there perceived areonsumer so they perceived by consumers and the markets. They did earlier cut the dividend by 36 . They may have to do that again. Vonnie he decided this is going to be the kitchen sink conference call. [laughter] he said we really need a plan. He is a 3g capital guy. Abigial they have to be pretty unhappy. Warren buffett owns about 22 . They were the masterminds behind what is now the mismatch. It is unclear what theyre going to do. They are unlikely to divest. They will be selling to themselves. Aybe recapitalize the stock is down more than 60 . Something is clearly needed. It will be interesting to see. You have to hope this was the kitchen sink first half and that things to improve. They do not offer guidance so nobody knows. Vonnie our thanks to you, abigail doolittle. The golfer is into his 19th year on the pga tour. Right now he is placed number three in the fedexcup rankings, neck in neck with rory and only slightly behind brooks. Witht up with max matt. Matt the quality of golf is so strong and so deep. We see these young kids, matthew wilson, guys just plain great golf straight out of college. It is awesome to see. It is also daunting knowing i have these young guys trying to take my job. It is inspiring and you have to keep working. If you try to stay still, you are not helping yourself. It always has to improve. That is the goal every year. Vonnie is it a case of prince and repeat of rinse and repeat . Has the game changed now . Is it much more datadriven . Matt theres definitely data involved. Everyone knows their skill set and what needs to improve. The beauty about golf is there are so many areas to improve upon. No matter how good of a driver you are, you can be better, no matter how good of a putter you are, you can be better. There are hundreds of ways to improve. It is easier to look back and figure out what areas should i focus more time on, what areas should i enjoyed spending time on and figure out how to get better. Vonnie talk about the field. Are you playing against rory and brooks, are you play against the entire field . Matt i feel like i play at liberty national. I play the golf course. You play 72 holes worth of gold and you add up your strobes and you figure out how you your strokes and you finish you figure out how you finish. Like i can get caught up in worrying about what they do and not enough about what you do. You play a chess match against the golf course and try to see what you come to the course with. With your skill set, the lowest score you could possibly shoot. Some days that is 62, some days that is 74. Yup the balance to try not to let the 74 turn into a 76. You try to do the best you can against the golf course. And you just want to practice round with gary woodland. I wonder if these guys still come to you for advice. Are the tables turned . You ask them . Matt absolutely. Im always trying to learn and get better. I still go to some of these veteran golfers that maybe on the champions tour now but still a close relationship with it that i think are spectacular and a certain area of the game and still trying to learn from those guys. The young guys, if they do something impressive, i will take notes and see if i can learn. I still enjoy sharing, still enjoy when the guys asked me something. Most of what i do they can do but it is a consistency standpoint where i think i stand up. Some of the guys pick my brain about trying to play good golf week in and week out and i take a lot of pride in what i have been able to do the last few years. 1 under,tt kuchar, the leader nine under par right now. Guy time for the Bloomberg Business flash. Lets kick things off with uber, responding to a european crackdown on offshore tax statements with the ridehailing service has created a 6. 1 billion dutch tax reduction that will help the company reduce its global tax bill in the year to come. That will be a cushion should uber ever turn a profit. Is teaming up with asias richest man to form a joint venture to open stores in new delhi and mumbai by next year. Tiffany is targeting the world secondlargest gold market. And that is your Bloomberg Business flash. Vonnie coming up, our global battle of the charts. That is next. This is bloomberg. Im all about my bed. This mattress is dangerously comfortable. When i get in, i literally say ah. Experience deeper rest with the awardwinning leesa mattress. This bed hugs my body. Im now a morning person. The leesa mattress is designed for every body. Providing strong support, pressure relief and optimized airflow to keep you cool. Hello bed of my dreams. Order online, well build it, box it and ship it to your door so you can try the leesa mattress at home. Love it, or get a full refund. And rest assured, returns are free and easy. I love my leesa. Today is gonna be great. Find out why so many people love the leesa mattress, then try it in your own home. Order now to get big savings but only for a limited time. Just go to leesa. Com today. You need this bed. Vonnie time for our global battle of the charts. You can see these charts on the bloomberg by running gtv. Kicking things off his alix steel. Alix i will focus on oil. Two things happening. You have the white line, which is the brent spread. It is what prices are currently. The blue line is the difference between prices now and prices in 12 months. At the line goes down it means the front month prices are getting weaker. Were balancing today, but there is a discrepancy between the two. What gives . Does the spread have to come down . A lot of different views. The prevailing one is there is way too much has miss him in the white line. Way too much pessimism in the white line. Goldman sachs since the current depressed means half of gdp being saved all, and that means 400 barrels of oil being shaved up, which we have not seen since the european debt crisis in 2011. If we are not at that point, maybe with the stock price is too pessimistic. And the prices need to rally at some point. At some point. Vonnie how will you be that . Guy something is wrong with the relationship between bonds and equities. It does not normally work this way. We have a chart of the s p dividend yield and the u. S. 10 year. For most of the time we have tracked, and you can take the chart back further, you see the 10 year yield basically being higher than the dividend yield on the s p. That is not the case right now. We have broken into the green. 16, we have now popped higher. This is due to the fact weve seen this massive bid being attached to the u. S. Bond market across the curve. Talking about the 10 year, that is driving the yield lower. What is going to give . Do prices in the bond market come back down or prices in the equity market go higher from here as this bond equity relationship starts to normalize . We wait to see what happens, but at the moment you have an anomalous situation with the yield on the equity market higher than the bond market. Vonnie you guys make it difficult. You created a little anticipation. I am tempted to give it to alix but todays winner is guy johnson in london. Do join alix steel because she is coming up on commodities edge at 1 00 eastern, 6 00 in london. You can hear more about the oil markets there. Coming up now, balance of power with david westin. Cory bookers Campaign Spokesperson is on deck. Will protect it shows the actually grew on the first is an increase of three percent in imports and exports better than expected. The big signal is china is finding other markets. The flip side of that is the import picture, which is stronger than expected. We were expecting imports to fall close to