vonnie: from bloomberg world headquarters, good morning the afternoon. -- monday afternoon. what we ares watching. u.s. stocks approaching records, and the dollar falling today as traders put back bets on higher interest rates. alix: a stagnant economy. ken corona replace that economy -- governor kuroda replace that? matt: we sit down with larry grassed i ubs and ask why global growth can be competitive for more m&a. scarlet: we are halfway through the u.s. trading day. moves to another record high, even volumes closing quite a bit. we are in august. 26%, but we are at new

records for all three major averages. there is another milestone we reached today. thes 26 straight sessions s&p has moved at least 1%. this goes all the way back to july 8. we have seen the s&p up 8% in that timeline, and hitting records on multiple occasions as progress has continued to be slow progress upward. let's look at the major averages. they are holding relatively steady with gains of 4% for the s&p and the dow and's euro .6% for the nasdaq. a lot of the gains have to do with oil prices. we have seen the correlation of oil and stocks come back. it was broken for a little bit. crude oil recently entered a bear market, dropping 20%. but we have seen something up

over the past five sessions. and once again today on this talk out of saudi arabia and russia about pipe stabilization at the opec meeting in algiers next month. this is having an effect on oil stocks. chevron, conoco phillips, and others are some of the larger ones on the rise. we are looking at the latest association of homebuilders, this index came out. you can see it is remaining relatively high at 68. and we have seen a range that has been in this year among sentiment of homebuilders. it has been high, but has not gained much momentum. if you look at how they are behaving in reaction, there were gains. toll brothers, kb home's, and other stocks reporting well. and part of the housing market

has been the mortgage rates. here is the 30 year mortgage rate. in july, it was a three year low. it bounced a little bit, but still very low. that is one of the things underpinning the market. it is cheap to borrow money. matt: thanks very much. scarlet: time to refinance your mortgage? matt: maybe i should. rates keep coming down. [speaking simultaneously] not time for me yet, because i don't want to do all that paperwork. but let's check in on his word news with mark crumpton. isk: president obama interrupting his vacation to raise money for hillary clinton. athas a fund-raising thing martha's vineyard. this will benefit the victory fund, the democratic national thingsee and state across the country.

donald trump is in ohio. he willsay if elected, give up nationbuilding in favor of a foreign policy that focuses on destroying islamic state and other terrorist organizations. he will propose a new ideological task for the new united states. much of louisiana is underwater. tens of thousands have fled their homes, including the governor and his family. at least six people have died. more aresses and without power. president obama has declared a state of emergency. a new poll finds most americans favor limited u.s. military action in syria. approved ofcans airstrikes against terrorists. 67% approved of spending special operations forces into syria.

only 42% favor sending ground troops into the region. day,l news 24 hours a powered by more than 2600 journalists and analysts in more than 120 countries. scarlet: it remains to be seen if u.s. market records will have any bearing on the federal reserve regarding rate increases. how thend go explained uncertainty around the brexit became a catalyst for monetary policy. news is good news. it might have turned out when all was said and done, the most bullish thing that happened was greg at. -- was brexit. the bank of england did more bond buying, japan, pushed up a rate hike for at least a year. markets celebrated by launching themselves and to new highs.

it was the academy of bad news is good news that wall street loves -- epitome of bad news is good news. >> payrolls was good. the market reaction was strong. retail sales were good. good news andbeen bad news has been bad news if you look at domestic u.s. data. how do you reconcile that? jim: with data that you have to look at since we are here at bloomberg, w pri go. december.in that did not move that probability. the market rolled right through and said we would not raise rates. the fed will not raise rates, that is good. that was the consistent theme that got the market higher. david: talk to us about inflation a little bit, which must be one of the things janet yellen and other people a tight about -- king talking about.

a good storyg had about models and how the models are not working. they are centered around inflation expectations. it is hard for the fed to measure that, anybody to measure that. the fed wants higher inflation. they want to get closer to their 2% goal. it is not happening. if they are getting any inflation, it is in asset prices, not the real world or api. the -- cpi. the fed will continue to be cautious. go back to want to the data points. it talks to what you just talked about. why do you think there is this asymmetric reaction to the fed on data points? is it is negative, they react more than the overwhelmingly positive report jim:. i think it started last august when the markets were all

separate. september, we had the downgraded in china. at all came in a way. and then in january when the markets sold off hard, the fed said we will push off the rate hike. and then brexit, don't forget may and june when they had orchestrated to try to raise rates in june, the markets did not buy into it. the momentum has shifted, the markets have decided or the inmates have decided they are running the asylum. they don't want the fed to raise rates. the fed is too afraid to raise rates and risk this toxic reaction. so if the market does not price it in, it does not happen. it has been so sanguine, ignoring the talks we have had. nobody seems in the marketplace to be listening. they decided they are not going to do it. gorlet: that was jim beyond speaking. bianco.

matt: we have larry graff stein on the global m&a laughs day. ♪

♪ matt: you are watching bloomberg markets. scarlet: it is time where we look at the m&a landscaping in the u.s. and around the world. a scooter the ubs investment bank.

>> thank you. good to have you. let's start with kind of a look at 2016. we have some sense of how this year is going. we have pulled back, we are 20% behind where we were last year. what is your deal this year? larry: we are coming off of fairly robust highs. last year was hard, and it satisfied some of the top demand . things were on hold for a couple of years during the crisis. you can make too much of the fact it is down. there are a lot of large deals last year. looking at dollar volumes, it is natural there is more caution especially since the number of big deals have not closed. jeffrey: those take time to do digest if you acquire a $10 million or more deal.

you have got to synthesize if you will. larry: people have to adjust and perhaps consider other alternative targets when one target goes off the table. by and large, you are right. there is a. riod of digestion. this m&a is unusual that it comes after many years of low interest rates, and that fundamentally has not changed. it is more of a normalization of activity. conditions have led to a fairly strong market. any of this slowdown tied to the u.s. economy, which seems like sluggish is not the right word, but it has not been a strong as people would have hoped after seven or eight years of incredibly stimulative prodding by the fed. r ceos concerned? larry: absolutely. growth oris not 1%

low capital investment, it is 1.2% growth and investment after years and years of monetary conditions. that said, what is. doxsee goal about the m&a cycle paradoxical about the m&a cycle is if you don't have the tailwind of growth, and you have a relatively strong stock wonder how you grow into valuation and also the persistence of cheap money conditions. that is one way you can generate growth and support a stock market valuation through everyday. growth: so despite 1.2% which seems sluggish, does that mean ceos are willing to be more aggressive to go after a target

than you would expect in a slow growth environment? larry: it looks like the low interest rate environment is going to sort of drag on longer than people expected. maybe no one really knows when that will change. as a result of that, there is more pressure to say, where my going to get my growth from? so that has led people to consider things. i also think you have this bifurcation in the market companies who stocks have been doing well, you feel confidence in taking a risk or two. but the companies that are lagging real even more pressure, because you have to ask yourself as a board or management team, if we are not performing well after all of these years, what comes next? , afrey: if you are lagging sector like fig or dmt, and you are behind your peers, is this

the right time to sell, because your performance is not living up to your others, or do you hold off because you need more time to get to where you think you can get to? what is the viewpoint if you are lagging? larry: they have the toughest question. on one's hand you say, are we going to get bailed out by general market conditions? probably not. no one ever likes to sell when they are at a valuation loss. at the same time, there are pressures from shareholders that we have not seen from activists that are omnipresent in the market. so as an underperforming stock, the boards are almost proactively pushing management to say, what are we going to do about this? jeffrey: it used to be that activists came in and checked the seat-of-the-pants of people that were laggards, trying to

break them up or sell them. we are seeing them get on boards. is their strategy change? ed? what kind of influence are they having on institutional investors? i think first definitely activists are now a part of the landscape. that is just part of being a public company. they are showing up in places big and small. jeffrey: kind of permanent. little bitthere is a of recommendations that they bring something to the table, no one has an ounce of wisdom. you should engaged with them and take them very seriously. , it is veryd point tough to beat an active money manager. we have seen the analytics about passive funds versus others.

there is pressure on small variety institutions to take a more assertive role in making sure that management teams are listening to their concerns as shareholders. these two things that converge, where you have credible activists, sort of campaigns that are not fairly unwelcome, it is a very major company, coupled with the types of funds that would not normally take the lead the way activists do, but putting pressure on -- jeffrey: i do wonder how many times activists will launch a campaign, or if it is an idea they worked out. beestors say we will try to quiet, but you have our support. larry: they have to be careful about acting jointly in concert. ofre is a lot of transfer intellectual debate that goes on , and some of the conferences with hedge funds people invest

their best ideas. there is again and yank -- a yi n and yang. jeffrey: we talked about the u.s. deal market. chinese companies or japanese companies do really big deals into europe or the united states. chemchina, so gentle, softbank with a rm. why is that going on? are they concerned about their companies? , what taking about this will it look like in retrospect, the dominant features are ironically tied to places where shock.as been market we started the year in a difficult market condition in china. but china outbound an end day has been dramatic.

it may have already passed of the volume for all of last year this year. we are not just talking about china into the u.s. switzerland.a into you suck so gentle and china to sogenta, andu saw china to germany and china to france. wasyou look at brexit, that a surprise to the market. and that was june 23. here we are less than two months deals.we see many large we have seen many other in the wake of brexit including some that may not have crystallized. jeffrey: with brexit, we'll thought the world was falling apart. how has it been. ,t has been roughly two months

we had to deals may be because of brexit or despite brexit. larry: that is a little bit of the paradox of this m&a market. currency is weaker. that has led people inside and outside the u.k. to sort of re-think, do these deals make sense? jeffrey: thank you. we i appreciate your time. back to you. scarlet: thank you so much. ahead, home depot with earnings. 21st quarter of growth. ♪

♪ scarlet: this is bloomberg markets, i am scarlet fu. home depot stands out among retailers of americans choosing

to prioritize their homes rather than cars and clothing. let's look at numbers don't lie. home depot has posted 20 straight quarters of growth. it has vacillated a bit, but it is consistently above 2%, and it has not been negative since early 2012. this correlates with the remodeling market index, the white line here. it shows remodelers on a current basis, how much worth they are getting. any value above 50 will increase. run in same-store sales has shown growth. revenue has climbed it 20%, and they reached $121 billion by 2018. more of that is coming from online. according to bloomberg intelligence, e-commerce is 6% of home depot sales. that is up from 2% in 2011.

home depot is growing that i effectively merging its physical and its internet businesses. pickedonline orders are up in home depot stores. while a lot of analysts point stored america is over , it does not matter. have seen and lowe's their tight gain. favorors and customers online over traditional department stores. we are watching all of these numbers before the u.s. opening bell on tuesday. matt. matt: here it is time for the been berg is this flash -- bloomberg business flash. private equity firm tpg is buying broadband servicers rcm and another.

grande are opened by avery partners. it is internet service on the east coast. grande is in texas. that is your business flash update. up next, the bank of japan controversial march to the top of shareholder rankings is picking up pace ♪ . we will discuss.

matt: live from bloomberg world headquarters in new york, i am matt miller. scarlet: i am alix steel. -- scarlet fu. this is the markets.

let's begin with first word news. mark c.: donald trump will layout a series of foreign-policy initiatives this monday. he is expected to call for destroying the islamic state and other terrorist groups. he will also oppose a new ideological test for admission into the united states. it would question stances on issues such as religious freedom and gay rights. hillary clinton is leading donald trump in the state that both candidates call home, new york. to 27%.nton is up 57% in a four-way race, mrs. clinton pay gary johnson has 9%. jill stein has 6%. carolina isn north forcing nearly 4000 people from

their homes. that fire is spreading rapidly, destroying more than 100 homes. it is one of the 11 wildfires burning in the state, fuel by harsh conditions brought on by a five-year drought. from the european union could be delayed until 2019. a new department set up for the up --tion may not the set for some time. that means they may not invoke article 50 until next year. this is bloomberg. back to you. scarlet: thank you so much. let's get a quick check of u.s. markets. we have u.s. equities, all three to a new high.

you have trading of the dell raising 5%. did you use the new sds function to find that out? scarlet: no. tell us about it. matt: we have this function we have been using for some time. we have a new version. scarlet: let show it on the bloomberg. any: you can use it for index. it shows not only average volume at any time but projection and is volume is growing on that projection, which it is. very cool. scarlet: let's go now to abigail too little who is live at the nasdaq. abigail: yes, we do have a lot of action here at the nasdaq. that sounds like a great function. i will have check it out.

broad-based, all the sectors are higher. , an analyst thinks that the major u.s. equity index could be due for some kind of minor pullback. if that happens she could see it as a buyback opportunity for this longer up trend of string strength. not will love this. we are looking at apple and asco trading higher as well cisco. also, activision blizzard, higher. as for what could be driving investors towards activision, a stock that is already up, a bloomberg analyst follows the fundamentals that says some good

stuff is happening there including stabilization in subscriber growth. plus, they have a new game out, overwatch, which is expected to be a big boost on average. will check out that new game. thank you. there is a lot of green obviously behind you on that wall. tell us about any other pockets of strength. abigail: one we have been watching, we are watching the chinese internet stock. we are looking at sea trick and j.d..com. some of these are the top performers. it seems that this is consistent with the chinese composite. it looks a chinese investors are very excited about the the proxyy of m&a in development space. plus it looks like the stock exchange could be

links to hong kong. scarlet: thank you so much. we will check in with you later on. matt: demographics are getting in the way of growth in japan. that is according to carl wiberg after the country's economy failed to grow in the second quarter. wiberg says the problems are hyper local. he made the case this morning with tony krzyzewski. >> if the population goes down, the economy will shrink rate since there is no sign of the population going down and we will not know the wall against mexico and we will not cut off immigration, we will continue to grow. maybe not as fast as before but we will continue to grow ph japan needs more people. i'm going to push back a little bit against what you said

previously. the blue line is unemployment. we are at 3.3%. other economies would love and kill for this thing. this is the battle she. -- battle sheet. how do you get out of this? they need to have immigration. they need more people. when you have a contracting economy, it is different. the unemployment rate is an irrelevant statistic in a contracting economy. in measures how growing labor force is pressured by growing employment. when unemployment is coming down it does not matter what it is anymore. you have more of anything. matt: with that said, we know

the bank of japan will grow anyway. it says it will provide a competence of assessment today to see if they have worked. it seems they're worried about the impact on financial institutions, pension funds, etc. what you expect of this confidence of assessment that will be done? what will they do? >> their idea of comprehensive and years in my idea of comprehensive are very different. their idea of competence it is stable published a document. it will not be an open discussion. they have no exit strategy to get out of it and no prospect of .uccess moving forward they are criticizing it. i do not think we will see anything in september. >> you need businesses and consumers to start spending. negative rates backfired, what will take for people to start

spending in japan? >> people have started spending in japan but they're not as many to spend as before. that is what everyone is missing about japan. .ndeed more productivity >> hold on. the suspending action declined. consumer spending increasing, 0.2%, barely spending. of 1%re are one quarter less people in japan this quarter than the quarter bu before. the fact that there is more spending, that is a success. the debt to population is rising. the debt burden is rising. inevitably the expenditures will have to fall. after they pay down the debt they will have less money to spend on blu-rays, dvds, sushi, and everything else they buy in

japan. ?> how will they get out there is an enormous amount of debt relative to gdp. >> there are problems and there are facts. if you look at a problem enough different ways, it is no longer a problem but it is a fact. they will fail. if you consider what they're doing now with negative interest rates, they have everything deployed to prevent it from happening, and they cannot. weinbergt was crowe speaking to bloomberg surveillance this morning. very interesting. as we are playing that, i'm getting messages from a number of economists saying that he is spot on. scarlet: and it is an for japan. problem bank of japan has become quite trader,e as a

putting the doj on -- boj on course to be the number one shareholder in the nikkei 25 by the end of next year. matt: hang on. it are already among the top five holders in more than 80 stocks. scarlet: 81 companies to be precise. matt: they are on track to become the number one shareholder in 55 companies. scarlet: by the end of 2017. this chart really illustrates it. you're looking at the white line markets the rest of the ownership in the yellow line, the breadline, is the bank of japan holdings. the white line includes the orange line, if that makes sense. fires bazooka in 2013. recently, they doubled the

dying. you can see the bank of japan ownership stake has only gotten bigger. the has boosted the rest of the market as well. matt: obviously they have to do something with all of this money. the idea is they are pushing further people at -- people further out. scarlet: encouraging risk-taking. matt: the thing that i wonder if the strength of the yen also makes it easier for them to buy things. if they are running the printing presses and no matter how much they print -- they could literally throw it out of helicopters with buckets -- the strength of the again continues. no one is losing strength in that currency. scarlet: softbank already did it, to buy armed holdings of the boj. you can buy companies with your strong currency especially if your target is in a currency that is weakening. matt: it will be interesting to

see because this is all through etf's. the bank of japan has no voting power. scarlet: no, but people wonder if it undercuts making companies more efficient and more accountable because they will be a big voice. they could play a role if they so chose in the functioning of the company. matt: considering how they have fared so far i'm not sure a company's board would want them voting. which of the cubbies are the ones most affected by the beauty ownership? here is an estimate. you can see the ownership is up to over 12%. this is of course the proxy ownership through etf holdings. retailing --, fast matt: some of those are very big names. scarlet: big, big stakes. japanesesort of the

whale, the boj as the whale. the most read story on the bloomberg terminal all day yesterday and a large part of this morning. of the 400,000 bloomberg clients, you you could argue the most educated in these markets, they are clicking on that story the most. matt: a lot of people are thinking what happened could be a precursor of what happened in the stock o market. volatility jumped to the largest level since 1999. trade volume has been slumping. that is creating this distorted effect. matt: sure. there is only a buyer. they own what, one third and they are not letting go of them. coming up, the hottest cars line up for auction in california's pebble beach.

you know, i'm excited. we have a sneak review at some of the timeless classics an incredible investments as well. this is bloomberg. ♪

you are watching bloomberg. vonnie: this is your global business report. here is what we are watching. expandingonsidering the use of cell phones, but only one specific area. mark b.: the brexit folk, dragging down prices of homes in

the city. legacy,hugo chavez's starting to fade. in london are taking longer to sell than they did before the brexit vote. right move says that homes are staying on the market five more days than they were in may. they are trying to encourage buyers by lowering the asking price 5% to just about $1 million. hark b.: the bid from hh holdings is valued around $1 billion. the offer is said to continually undervalue the company. liftrities in china may cell phones on

airplanes. if it is approved, flyers will be able to shop online and chat. the world's biggest shipping company is warning against protectionism. ersk says trade value should you reduced as much as possible. donald trump and hillary clinton opposed the transpacific trade agreement. vonnie: time now for the bloomberg quick take where we vie context and background on issues of interest. subsidized oil and other benefits long road from this way less popular at home. but, widespread violent crime has put hugo chavez is legacy at risk. here's the situation. the supreme court has 32 whomces, more than half of

backed nicholas majuro when he took office. fact, a bill blocks majuro's aduro's broad actions. he has faced challenges from the national electoral council. size of hyperinflation are starting to appear with the imf indicating that prices will surge 500% this year. increasingly question whether venezuela will be able the $13 million due this year on their debt. here is the background. hugo chavez was elected president back in 1998 and revolutionized venezuelan politics with fiery anti-u.s. rhetoric. he nationalized thousands of companies.

he maintained a deep connection with supporters, frequently pulling above 50% and winning the elections three times. duro has struggled for popularity. it is time for him to leave office. those skeptical of the opposition say it ranges in parties and it has no single leader. you can read more about venezuela and all the quick takes on the bloomberg. that is the global business report. had to bloomberg.com for more stories.

matt: this is bloomberg markets. i matt miller. scarlet: i'm scarlet fu. matt: every august the most beautiful, rare, and expensive

cars converge in monterey, california. bloomberg's suits had a elliott 's hannah elliott joins us now. expect more we can than 370 million dollars worth of cars sold this weekend. millions and millions worth of cars. was sellingseinfeld a huge portion of pushers and telling my mom, who was watching with me, this is the second best concorde in the america. is pebble as important? >> definitely. it is all the blue chips, the racing ferraris, all sold here at double beach. scarlet: if that is the case,

want all the stuff happening in europe deflate the optimism this year? >> that is a great question. for people who are a little hesitant anyway, they will not buy the car. for solid buyers who can afford the thing, it probably will not affect the much at all. matt: kevin hagood he has also gone very involved in the car scene. they have a car index. scarlet: do we have on the bloomberg? matt: we have that on the bloomberg. they continue to rise and rise. what are the cars like in the index? >> right now, they are doing great. we saw some cars that were not doing very good. right now, the scene for cars has stable, strong. right now, so far, so good.

jerryt: matt mentioned seinfeld. he is known to be a car collector. he plans to attend the event doesn't he? >> absolutely. leno,seinfeld goes, jay caitlyn jenner. if you or anyone in the car will, you want to be here. matt: what are your favorites? type -- is a or d jaguar, d type. that is my favorite. it is such a gorgeous car. matt: it is on the cover of their catalog. you see modern classics -- scarlet: what are martin classics? -- modern classics? after 1980.built if youre the cars that

, you will havel that as a modern classic. these are the guys that are just now starting to collect. very cool. thank you very much. have fun in monterey. you can find the destination for cars. go to bloomberg go. scarlet: this is bloomberg. ♪

e scarlet: 1:00 p.m. in new york, 6:00 p.m. in london, 1:00 a.m. in hong kong. matt: welcome to "bloomberg markets."

from bloomberg world headquarters in new york, good afternoon. i am a matt miller. scarlet: i'm scarlet fu. here is what we're watching. all three u.s. equity benchmarks are suffering. gainsoil is extending with commodity producers. matt: big week for british economic data. reports on u.k. inflation, jobs, and retail that will give the clearest picture yet on the actual effect of b ritain's decision to leave the european union. scarlet: every sedan with billionaire real estate investor tom barrick. specific vision on the nominees vision for tax cuts and the protectionist trade agenda. matt: we are halfway through the training j.

julie hyman has the latest. julie: s&p, doubt, and the nasdaq, last friday they closed the records, the percent that happen simultaneously since 1999. here we have it in today's session as well. nasdaq leads the gains as we see the tech heavyweights perform well in today's session. back on february 11, as you recall, the steep drop in stocks experienced in january going into february. since and we have seen the s&p come back by nearly 20%. 1949%. -- 19.89%. we have apple, microsoft, intel as well. as you talked about earlier in the day, there was talking "the new york times" that twitter is

in talks with apple to add the nfl streaming app to apple tv. there are some momentum going on here. some of the best performers from last week, whether they were rising on earnings or other news , are continuing to rise the substantially in some cases. up 15% after the company reported earnings last week, nkc communications, nordstrom, part -- we're seeing that as part of the story today, it seems like the path of least resistance for the moment is upward. scarlet: it has been for a while now. what have we learned so far? over the weekend into today, and in some cases they are moving the stocks. reportion adding to this holdings but also an enterprise, invesco, some of the others adding to their holdings.

de shaun omega adding to holdings. called humor capital boosting its stake in a company to 12.64%. fairly substantial increased there. slovak, adding -- inflow block, adding to holdings of that company. we watch these filings come through by the end of the day today and it could be some other members. thanksll right, jules, very much. julie hyman with the latest on equities. scarlet: now let's check in on the "first world" news. mark compton has more from the newsroom. mark: milwaukee mayor tom barrett says he think outsiders are as possible for the uprisings that occurred following the saturday shooting death of a black man.

he says curfews will be more strictly aimed at teenagers. >> i lived in that neighborhood 11 years. i know many people who live in that neighborhood. they love their neighborhood. they are proud of their neighborhood. there are families who have been for 20, 30, 40 years. they want their neighborhood back. were injured in clashes with considers last night. mayor barrett said he saw a still photo of a video that shows a 23-year-old had a gun in his hand when he was shot by police. hillary clinton and vice president biden are hitting the campaign trail at this hour in scranton, pennsylvania, which is the vice president's hometown. you are looking at a live picture from scranton. the vice president's office says he will argue that donald trump is less prepared on a national security than any nominee in history and that trump's "erratic rhetoric and bluster"

will make americans less safe. in nepal, 83 people were killed when an overcrowded bus veered off a mountain highway. the bus was taking passengers to the c of kathmandu when it went off the road. a judge has settled a long-running dispute between the reverend martin luther king, over his bible and nobel peace prize. ing won the nobel prize 1964. the bible was used by president obama during his second 2013.ration in january the judge assigned in order today releasing the items to k ing's estate. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. matt: thanks very much. let's turn to a bloomberg scoop

on dropbox. the company has met with advisers to discuss the possibility of an ipo as soon as 2017, according to people familiar with the matter. ipo reporter alex barinka broke the story and is with us now. is this something they have been thinking about for a long time and he finally decided to go public? a lot of silicon valley companies like to hold off as long as they can. alex: this marks a shift in dropbox's thinking. they went outt and brought these folks in to see if this is feasible and to valuation discussion as to what public market investors might give them compared to what some would say is a lofty private violation. scarlet: do they need the cash or is this a way for investors to cash out? alex: it is probably going to be the latter.

these private companies need a liquidity event eventually give investors the actualized return. you have to have an existing whether it is an ipo or m&a exit. this isn't one of the earlier revision right now. we have reported on spotify considering next year. this user hasn't been a lot of big unicorn companies going public. that?what is is the hold up for it ? right now it seems like valuation is the hold up. in 2014 any private funding round the narrative to $10 billion. to $10 narrowed it billion. we have seen a lot of questions around whether or not dropbox is worth that. if you look at the most likely peer group, box is the number one company it is compared to they went out at a $1.7 billion valuation, 29% haircut the last

private round, which was only six months prior to them ipoing. when you look at what is happening here, it seems like valuation is going to be a big question, and whether or not it is worth it. when you look at competition for employees in silicon valley, for customers, this is a busy space with dropbox. microsoft is jumping in, to print any this -- jumping in, to. any of this negative aura, they want to avoid that. matt: it is a great function keys and i'm sure you can also result of all this data on the so many different tabs you can click on. ipo's have that tapered off in summer. that is normal, though. alex: it is normal, but it is the slowest year for public offerings in the u.s. since the recession. for tech companies there has only been a handful that

actually went out, and all these smaller deals. that is going to be something that any company will have to face because investors have what a lot of pressure on valuations because they don't want to pay up. it is one thing to keep in mind. scarlet: dropbox specifically, does this company make money at? tech the ceo said at a conference this summer that they are cash flow positive but not profitable. getting to profitability or showing a really clear plan is going to be one of the most important things they even think about. scarlet: they have to have a story to sell. matt: thanks very much, alex barinka. she broke the story. scarlet: copper among the worst performing base metals. why exactly? details in the metals bulletin. this is bloomberg. ♪

matt: you are watching "bloomberg markets." i am matt miller. scarlet: i am scarlet fu. and theas drifted lower price of copper is not broken the $5,000 levels april. pricing fundamentals remain bearish. how do you explain the resiliency of the action and what does the decline indicate about the second half weakness of copper? with us is barclays commodities research analyst james stevens. this is all about china when it comes down to us. indicates that prices

should come down the were but it hasn't. why not? >> china has actually beaten our expectations. clockwere to rewind the to this trimester everyone was bearish on china and the chinese older rabbit out of the hat. the implemented testing this land, loosen of credit, put forth infrastructure projects, and the first half of this year we saw base metals rallied. coverage under it to rally from every time it 55,000 barrier you just mentioned, it fell back down. fundamentals in copper remain uncertain, particularly on the supply side. the big story in covers this year and next year we see new copper mines come into production. the market is not yet clear whether these ambitious targets will come into reality. the problem is the supply-side problem, not a problem of too little demand. thinkme is the chinese aluminum, that, etc., record

aces, they must need cover that much as well. copperhey do on the demand is growing but there is also some doubt on the demand side. one of the questions we face into the second half of the year is is this mini stimulus in the first half of china going to continue? will momentum be maintained? the market isn't clear. china, can they beat expectations again, or will they fall back down to a slower growth rate? scarlet: my other question is you pointed out the cathode premium. what does it tell us? dane: this is a spot indicator of demand. if people are consuming copper, you are willing to pay a higher premium above the basic price to get the copper now. we see the premium strengthen it is a sign of good demand and when we see it weaken a sign of tepid demand. in the chart you saw on the

screen, it gave a very perplexing picture. it has been in the low 40's. scarlet: it stalled out. dane: it stalled. the chinese copper market is standing. scarlet: what is the takeaway for foreign investors? dane: the takeaway for foreign investors is china continues to be a black box, continues to surprise. as we go to the second half of the year, do not assume we have figured china out. don't assume the economy, the strong performance will be maintained in the future. there is room for further slowdown as we go ahead. matt: let's step back for a minute and talk to the layperson who isn't in the copper markets all the time. we talk about fixed asset investment, and i assume we are only talking about fixed asset investment in china. why is china the most important part of the copper story? surely other countries need cover as well. dane: other countries do, but to give you a sense of scale, china

consumes 10 million to 11 million tons. nearly half of global consumption is going to one single country. when china has done in a generation is to industrialize. when we see the fixed asset investment road, this is talking about the growth of the capital stock, whether it is factories or houses or commercial buildings with a light. scarlet: at the same time, as china began to slow down, people are looking at markets whether it is russia or brazil or india. what kind of the men are we seeing for those countries, or is it on the margins? dane: it does matter and it matters on the margins but what we have seen from these countries is they are quite poor. the political crises we have seen in russia and brazil, the key emerging markets, have seen and led to a collapse in copper consumption. india's little bit better. it is not meeting expectations.

as the emerging markets fail to perform china becomes that much more important. they really have to achieve if you win the game. matt: excellent. great stuff. dane davis, barclays metal analyst. flash, thee business biggest business stories in the news right now. confidence among u.s. homebuilders climbs in august, according to data from the association of homebuilders and wells fargo. the sentiment gauge rose to 60 from the revised 58. behind the improvement of a steady job growth and low interest rates, both of which are boosting prospects for the residential real estate market in the second half year. millenials areh suffering from economic mistakes of the past. they now have to pay for the country's future. liabilities hitting

a record $1.3 trillion of the bank of england cut interest rates this month. it could get worse because economists expected to be a week to cut rates again this year. matt: private equity firm tpg has agreed to buy rcn and rhonda communications. grande were owned by another private equity firm. rcn offers cable, phone, and internet services on the coast, and in chicago, and grande is in texas. that is the bloomberg business flash. scarlet: china emerging markets continue a great success and stocks climbed to the highest in more than year. this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. matt: i'm matt miller. scarlet: stocks are climbing to their highest level in more than

you could emerging markets index topping the fifth week of increases. so far this year it is up by better than 15%. emerging markets have more room to run. let's join carol massar and cory johnson for more on this topic. carol: scarlet, matt, thank you very much. this is "bloomberg advantage." the manager of this fund is beating most of his peers. what, $246 billion in assets under management. this market environment, do you feel it is logical at this point in terms of what we're seeing the fundamental backdrop earnings, revenue growth, and someone act -- and so on? >> if you look at emerging markets, up mid-teens this year. it is playing catch-up. part of it is there was a bit of and people are

despondent and fundamentally gotten cheap, but what most people are looking for is gdp growth better than developed markets come in a global environment that is pretty anemic for growth. second is money, important for us as bottom of investors. that seems to be bottoming out because you see a big cut in earnings especially across quantity stocks and sectors and currencies as well. that is abating, and upwards emerging markets on a better footing coming into this year and looking forward. cory: conrad, what is your number one best place to generate ideas for new investment? --rad: when we look at across sectors across countries, we are very bottom-of-oriented. valuetinue to find good in longer-term structural growth the domestic side of religion markets. -- emerging markets. that is much more predictable in

an environment where global growth is anemic and that is what we have been focusing on, and where we tend to find that has been in india. you do pay a higher price for it but those are high-return, high-quality businesses. more recently, china has been the big laggard across emerging markets. big rise in brazil and the stock market as well as in the brazilian. see. -- resign currency. you look at china come that is kind of flat. down becausewing we are finding good opportunity there resulted carol: what kind of opportunities in china specifically? conrad: right now in the financial system while people cannot believe the 19% return in equities, they are trading at significant discount to book value and the range of .6, when seven times book value. to us, the chinese financials are sticking to the highest in terms of quality offers interesting opportunities. we like the internet space in

china in which is growing rapidly. is combining at a healthy rate and is reasonably valued. cory: you describe the bottoms-up approach, or describe the top-down approach looking at geography. as you sort through the names and find the names, do you look at the macro first and then the things that public in the area? -- bubble up in the area? conrad: actually, just the opposite. the macro, i mentioned before, that is what is driving the market. from the risk standpoint and and my worried about the currency and regulatory risk, and macro risks? that will inhibit the growth in the stocks we are investing in. yeah other aspect that is important and will structurally drive emerging markets is going to be reform. are these economies performing because you take the

bottom-of view but you have a lot of the management on the macro level like to mismanage it? carol: where are we, though, in the cycle, because these are things we could talk about 10 years ago in terms of reform and domestic economies developing hit are we further along in that process with a lot of these markets? conrad: absolutely we are. there's a big distinction factor because we have had the commodity rise in global markets rising, especially china importing a lot of commodities in the 2000s that led to the em rising any need to distinction between them. all em is not homogenous. the middle class, as we mentioned, consumption is growing. less credit penetration as opposed to most developed markets. the consumer is pretty leveraged. you have the opportunities coming through. we are seeing interest rates cut in emerging markets, and with all the money that has been printed, especially in the west,

that led it a lot of inflationary concern with emerging markets tightening since 2011. that is turning right now with using broad-based across emerging markets. run.: we've got a thank you so much. let's toss it back to matt and scarlet in television. matt: thank you very much. bloomberg's carol massar with cory johnson. scarlet: coming up next, next was of interview with thomas barrick senior economic adviser to donald trump. what he has to say on the economic policies. this is bloomberg. ♪

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you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. live from bloomberg world headquarters in new york, i am matt miller. scarlet: i am scarlet fu. this is "bloomberg markets." let's begin with the headlines

and "first word" news. mark crumpton has more from the newsroom. mark: ukrainian officials confirmed that donald trump's campaign chairman's name appears in a list of so-called black accounts come a list compiled by the country's ousted president. paul manafort has denied any of the off the books payments from the ukrainian government. "the new york times" reported that his name appeared on a list of payments amounting to $12.7 million from 2007 to 2012. apple ceo tim cook tells "the washington post" that he consulted with former president bill clinton before testifying on capitol hill for the first time. in 2013, he was called to testify about allegations that apple was avoiding taxes. cook told the newspaper he also consulted with goldman sachs ceo lloyd blankfein and steve jobs' much of louisiana is underwater after days of catastrophic flooding.

more than 20,000 people have been rescued. at least six people have died. 40,000 businesses and homes are without power. president obama has declared a state of emergency. is trying to curb the influx of people seeking to reach the european union through the baltics. border guards say more than 2000 migrants have been prevented from crossing bulgaria in less than a month. two dozen smugglers have been caught. most of the migrant want across further north to hungry before continuing to wealthier states. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet? scarlet: republican presidential candidate donald trump's senior economic adviser, tom barrack, i says trump is better than the negativity surrounding his campaign in recent weeks. tom barrack spoke exclusively to

erik schatzker earlier today. asset isld greatest that he is his own person and he creates his own agenda. i think all of us are trying to support him on the economic business site are saying terrific, we are where we are, let's move off of that. we are tired and exhausted from negativism on both sides. it is a choice just between status quo -- hillary is very qualified, competent, she has proven that in various venues. president obama has done a good -- as good a job as any individual can. there is no malice in his heart in trying to accomplish it. a difficult and impossible job. let's move on from the negativism and find the little degrees that we can move as a group. i think everybody is ready to do that.

including us. that is what we are advising donald to do, he will do it. he is better than all the negativism that is out there. that is the message we are trying to give to him. erik: tom, the very least you and i can move on for a moment and talk about the details of his economic plan. both candidates say they will reject the transpacific partnership and reworked trade deals that cost american jobs. both candidates say they are going to prioritize infrastructure spending. given that, what is special? what stands out about the trunk plan?-- trump plan? tom: well, look at all of these plans are really complicated. it wouldn't be complicated if we had a dictatorship it when individual would say i have a great idea and i thought through it and i will implement it. the problem is the president can only advise and consult, and the

process through these bureaucracies is massively massively complex. when we talk about trade, most people don't understand what is that. you have gigantic, multilateral institutions to whom we have allocated our trade responsibilities. things like that of the -- after world war ii, really, where trade was not for the purpose of creating jobs. trade was for the purpose of -- postageed stand stamp to stop the penetration of what was then the soviet union, to ensure the fact that you could recover -- we lost 30 million houses, 17 million people. europe was in disarray, asia was following. it was intimated from foreign policy -- implemented from foreign policy, not domestic. we were the strongest and best country in the world and we consumed more than we produce. how do we subsidize these other countries from the foreign

policy point of view? that is no longer the case. erik: ok, the reason i asked the question that way i did is i am trying to give people -- i'm trying to allow you to help others to understand what it is about the trunk economic -- trump economic plan they should be focusing on. what is it that is distinct and in your mind special an exemplary from the clinton economic plan, and if both of them are saying the same thing about trade, effectively the same thing as our minus in details, about infrastructure, what should we be focusing on? tom: let me give you a simple example of the difference. both of them are well-meaning. the clinton plan is saying tpp is no longer viable because it is a multilateral, very complicated, 5000-page agreement that only the bureaucracy that created it understands. the difference is in approach. what people criticize about trump is the abruptness and the lack of inside

bureaucratic process that he is using to come up with these ideas. in essence, that is the answer. the difference between them is you have thousands of people from hundreds of committees involved in the trade decision, and if the average person looked and saw how many congressional committees, how many agencies, how many independent , thatateral bureaucracies their life depends on the continuation of these multilateral agreements, it is mind-boggling. there is not one entity that has control. president obama did a good job and came up with a fast-track method. if i sat down with china and wanted to negotiate a deal with the chinese chairman, i'm sitting with him and he knows i have the authority to make a decision. chairman to chairman, we can do a deal. if i'm representing america, i'm a diplomat, it's a diplomatic process, and the person on the other side knows that i have 100

traps to go through before i have the authority to make the decision. erik: theerik: but those traps are the same -- excuse me for interrupting -- whether it is president trump for president clinton. tom: no, that's not correct. if it is president trump, those traps will be eliminated. erik: we will know longer have to negotiate with congress? tom: he will no longer have to negotiate through these multilateral tribunals that you are allocating response ability to print -- allocating responsibility two. what is nobody -- and we understands what the wto is there to do. if you talk about going through guest on what is already in place is the fast-track mechanism to give the u.s. trade representative the authority on behalf of congress and the executive branch, preapproved, so everybody comes to consensus, and what we are doing in consensus is we need more jobs, higher pay, and we have to go

back to a kind of protection is in -- protectionist environment. it is not smoot-hawley. scarlet: that was tom barrack, senior economic adviser to donald trump. matt: the dog days of summer are upon us and it is not just stocks seeing low volumes. one of this year's top commodities is taking a pause, as shown by this chart. this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. matt: i'm matt miller. julie hyman has more on today

's --i guess it was a mistry chart. julie: low volatility chart. it is shiny. scarlet: is it a precious metal? matt: i know the answer. it is right behind you. julie: yeah, it is gold. [laughter] julie: can't put one over on matt, can you? it has fallen below 12 as volatility has dried up. gold is one of the assets. 30-8 volatility, now and is lowest in about a year. we have seen the action in gold dry up. it is not just action overall. it is the bullishness we have seen a precious metals. 1185, open interest in gold as well. this is going all the way back to 2010. earlier in the year we saw a spike in the open interest rose to a record since then is down by about 13%. by that measure some of the

bullishness as well. it is up 27% and it had some brief, small pullback. nothing terribly significant. it is the underlying measures of gold prices that may be reason for caution. one of the reasons it is able to hold up so well is there is a perception that students would continue around the globe. futuresthe fed funds and the probability they are christ in the interest rate increase of the various meetings coming up. .e're still below 50% the onset of crap up to some degree. rept upodds have c

to some degree. with a friday jobs report, gold comes up a little bit. matt: i thought i would show a chart come i have going back to the 1990's, and you can see that the lowest level on the vix since 1993, we bounced that 95 and in 2006 and in 2014 but basically, it is cheapest, cheapest it has ever been for protection. buy protection against s&p declines. matt: we having another of this discussion? scarlet: i think we've had a few . matt: julie, thank you very much good we're going to go to canada -- well, not as literally. well, literally. she founded goldcorp in the 1990's and now runs his own room for an annual salary of one dollar, and he doesn't take a bonus. hamlet ritchie joins us with

more on the -- pamela ritchie joins us with more on the renegade gold investor's view to the market. what sort of outside does cc for gold now through the end of 2016? pamela: yes is starkly always been someone who has been bullish on gold. not surprising, the ceo of a gold company. still very bullish on gold. looking at the small-cap companies, market caps off $1 billion or less, and those listed on the toronto stock exchange. have seenr companies rises this year of two out of 47% -- 247%. ofyou look at the barracks the world, seen collectively 125% rises over the same sort of time period.

he sees that is really the large companies will rise with t ides, as the gold price moves along. that is what he wants to be. the larger ones in many cases are working off that, working to find out how they can be losing hedges and many of the cases. whatever gold investors think is the catalyst, many of them mentioned by julie, he thinks it is the small-cap area where he needs to be. scarlet: what sort of state busy holding his own company? matt: very important when he mentioned he doesn't take a salary. pamela: i know. matt: i hope he is able to eat. pamela: i think he is just fine. he calls himself the chief investor, but he's the ceo of the gold company of $1 billion at least you have the most skin in the game. he is the largest investor in the company. shares of the company, mcewen

mining, have seen rises of fourfold so far this year. and in a terminal store you can read today, he has had his one dollar salary reapproved. he claimed that goldcorp is the third-largest company, -- goldcorp is the third-largest company, according to market cap. he says it allows you to align better with other investors. when you go to mergers, it doesn't look like you are holding out for the big grab at the end of the merger acquisition. matt: you mentioned goldcorp and the move related to that company. remind us what happened. pamela: back in 2000, it is interesting, he came on board a few years before that but one of the things he did is he threw open proprietary knowledge about ininute in ontario -- mine

ontario and offered $600,000 in awards. the next 6 million ounces of gold in the piece of property. an underperforming mine has become one of the best-performing mines. he is a bold player in gold. in 2021.old at $5,000 matt: $5,000! 13,40 troy -- $13,40 four ounce right now. a gold investor bullish on gold is not terribly surprising but that is bold. scarlet: time for the biggest is the stories in the designer. chesapeake energy trying to secure a loan. proceeds will be used to refinance debt including backing

offers to back up to $500 million. matt: blackrock is reducing its exposure to the elongated u.s. treasury's. that is an increased hedging costs from japan to europe making the debt less alluring to foreign investors. benchmark u.s. 10-year notes are negative for japanese buyers. it is about 04 euro-based for euro-basedro investors. scarlet: dropbox has met with advisers to discuss the possibility of the ipo, according to people familiar with the matter. they said they wanted to discuss the feasibility of the listing. dropbox has faced questions over whether it is worth the $10 billion valuation it was awarded in 2014 funding round. that is the bloomberg business flash. matt: coming up, we are about to get the biggest picture yet of the post-brexit british economy

with the key economic report from actual numbers -- scarlet: our data. matt: not just forecast for sentiment. this is bloomberg. ♪

this is "bloomberg markets ." i am matt miller. scarlet: i'm scarlet fu. we are going to get hard economic data out of the u.k. of the country voted to leave the european union in june. surveys have shown a downturn, but they are all estimates. starting tomorrow we get data for inflation, retail sales, and jobs. joe weisenthal joins us now. before we get to you, here is the function matt and i were talking about.

you will see on the bloomberg that you have different choices. i will click on u.k. here. italy, japan, germany. under u.k., this is the data we will get in the next couple days. retail sales, claimant count rate, jobless claims, unemployment rate, retail sales. it goes on. matt: public finance. joe: this is going to be a fun week to this is why we are all here, right? scarlet: this is why we are here because until now it has an sentiment-based. joe: just surveys asking managers in construction and manufacturing companies how things are going. that is inherently subjective. scarlet: it is squishy. joe: it is squishy data. historically this lines up well with the hard data. there will be interesting since the markets have recovered so

much. scarlet: brexit, what brexit? matt: i'm excited for retail sales because i was there the week after brexit and one of the things i did after the 10% drop in the pound was by a whole bunch of times. tourists were excited to -- buy a whole bunch of ties. tourists were excited by the same thing. joe: the pound obviously has been one of the victims of the brexit folk, and it has not bounced back. friday was the worst performing currency of the expanded measures and people say it is good for you. reallyt does the u.k. export again? if it leads to increasing purchases, that could be a reason or case where the weakened pound does cushion the fall. softbankought a tie,

bought holdings. scarlet: different price point. matt: that could potentially result in job losses. there are things that will result in job losses because of brexit. i wonder what we will see when we get employment data. right now it is at 4.9% in new will probably stay there for the month of july. looking for the jobless rate, the unemployment right, to climb to 5.5% by the end of next year. it is because of this that it is moving ahead with the stimulus. it is interesting -- you mention 4.9%. that is where u.s. unemployment is, too. it will be interesting to see if there is an emergent. if there is, how much of that can be quantified by the brexit vote? if we see arise after brexit, --t will be definitely scarle :

scarlet: the economy was doing well before the brexit vote. joe: wage growth, unemployment levels, percentage of people working in the publishing, high by historical measures. you remember last year there was that talk about whether boe -- scarlet: could move ahead. joe: obviously, that got blown out of the water. matt: we don't expect inflation to change at all. joe: not immediately. scarlet: down the road, though, it will. matt: down the road it may. mark carney seems to be honest rooting for these horrible consequences of brexit, patting himself on the back, saying "i told you so." it will be interesting to see public finances. before brexit the forecast was for 2 billion pounds surplus for july. after the forecast was dropped to 1.2 billion pounds, so

substantial drop. even though they will be getting back to 315 million pounds a week -- joe: imagine that. obviously, any slowdown in economic activity has a negative impact on the tax base. it will be interesting to see whether the government is ultimately forced to spend more money to counteract any slowdown . people have speculated there will be some sort of stimulus or something and say we could see increased deficit on both ends. matt: all right, i'm very excited to watch "what'd you miss." scarlet: joe weisenthal will be back at 3:00 p.m. we will be speaking to the merrill lynch chief strategist.

vonnie: 2:00 p.m. in new york. i'm vonnie quinn. shery: i'm shery ahn. welcome to "bloomberg markets."

we are live in bloomberg world headquarters in new york over the next hour, covering stories out of san francisco, washington, and london. stocks hovering at record highs once again on very low volatility. hy hedge funds are holding massive short positions. vonnie: big move for economic data out of the u.k. the clearest picture yet of a post-brexit british economy, and the forecast is not good. shery: dropbox is taking a big step towards going public. details on the potential ipo including white ceo it might be time -- why the ceo thinks it might be time for the company to take the next that. markets close