♪ closing mixed, treasuries are rallying after fed minutes. joe: "what'd you miss?" scarlet: u.s. stocks near highs. with one technical strategists who says a 4% to 5% pullback is likely. fed staffer breaks down the language of the fomc statement. cuts up to 14,000 jobs, earnings out in minutes. scarlet: we begin with market minutes. u.s. stocks finished higher. they were bouncing around after the release of the fed minutes. losses,overcome earlier utilities rallying to offset

declines. the minutes show to split among officials. earlier,ere down treasuries and stocks, then both snapped back after the minutes indicated a perceived dovishness. the dollars and represented by the bloomberg dollar index on your terminal. the s&p and white was down before the minutes, and the dollar out. after the minutes, the dollar fell and the s&p rose, which would signify that investors considered a rate rise not as imminent as bill dudley made it sound. financials continue to rally. you can see utilities of the biggest gainers because a weak

dollar is good for that, but then financials as well. not nearly as big as utilities, but the second biggest industry group. ,f the fed does not raise rates then margins won't have a chance to expand. joe: interesting things in the government bond market, u.s. -- no,ent bonds portuguese government bonds, yields a jumping on the 10 year, bad,rned the dbrs is raising questions about government debt and whether it would be eligible for buybacks. dbrs is the rating agencies. now it is back. two year and 10 year yields dovish minutes push back

expectations. scarlet: the dollar fell after the fomc minutes showed officials split. -dollar did take a leg up, and it has given back some advances, bust highs level since june 23. the other currency is the korean today, theg the most worst performing currency today. you can see that line at the far right, the dollar rising in value versus the won. foreign investors have been bidding up assets like the won. ae: let's take a look at ch chart of gold, ultimately not changing much on the day, but you imagine on a day where stocks and bonds are up and

everything is up because it looks like the fed will be on hold, you got that initial pop in gold. those are today's market minutes. let's take a deep dive into the bloomberg. i'm looking at the data out of the labor market resilient and july, unemployment at four point 9% come the lowest in the decade, wage growth is holding up. job vacancies moving down after a record in january. this indicates increased caution on the part of companies when it before and after the brexit vote. this trend along with other survey showing investment tensions are weakening could represent the early signs of a slowdown in recruitment. finally getting the hard to data, and it is not falling off a cliff yet, but the signs are starting to emerge.

were saying that some of the data was already starting to turn pre-brags it. rexit.-brag yield and safety plays, you really see that in utilities stocks. this is a chart of xo you versus lu versus thex a s&p 500. hasuch investor enthusiasm been about anything that pays a dividend, anything not volatile, anything save not risky, and that piqued in june and lately it has been selling off. matt: it has come back well today. joe: it did get a bounce today. matt: cisco is out. scarlet: fiscal fourth-quarter adjusted earnings per share of $.63, better than analysts

anticipation of 60%, also an improvement of $.59 from last year. revenue $12.6 billion, higher than as to men's, but does represent a drop from last year. you're looking at a third quarter of revenue decline for cisco. , $.58 toof the outlook 68's sense per share for earnings. for earnings.are gross margins, profitability at cisco in the quarter that was , 64.6%, consensus was for 64%. cisco has been shifting towards services and software, higher margins. will cut 55 hundred jobs, a layoff announcement expected, but the report has said 14,000 jobs, so assuming

this is the extent of the less thannt that is what that report had said. nonetheless, 55 hundred job cuts at cisco, the stock down just over 2.6%. on those jobils cuts, action begins in the first quarter of 2017, so given that we have just reported , theh-quarter numbers restructuring will focus on security, internet of things, data, and the cloud. matt: they just keep cutting and cutting and cutting. nine job cut announcements and since 2000 eight. let's bring in cory johnson in san francisco to talk about tech companies restructuring, is is one of those companies? >> i don't think so. if you look at what they have job cuts, but the

employment numbers go up at cisco. sec is paying attention to non-gap numbers, often trying to exclude restructuring costs. the employment at cisco continues to go up, so that is part of what we see. the numbers are pretty much in line with expectations. we have had three consecutive any growth from cisco, bad news for sure. joe: scarlet mention cisco wants to get into things like the cloud and so forth, how are they doing on that? went from 0% growth to

-2% in the quarter that just passed. cisco is an enabler of what happens in the cloud. the problem selling switches and routers to take information off the cloud, but the fundamental problem is that companies don't have to set up all of their own systems anymore when they can go to the cloud and use the very latest of coming out of a ws, microsoft, rack space, or even google with its cloud hosting business. you can see the pain the hardware makers feel. a chart that compares cisco to idm, hewlett-packard -- , allhewlett-packard, dell faring worse in this cloud-driven economy.

see how bad that has been for those of their companies. i don't know about your chart, but i made a chart -- you made an important point. i think we should say that again. cisco continues to add to headcount. cuts,s we announced job the blue line on this chart is total headcount going back to 1990, so even though we have 25,000, 30,000 job cuts, they continued to add more people to the payroll. where are they cutting from and where are they adding to? this is a growing company. >> as every year with a cisco, on softwarere focus and security, so those are the things we will listen for in the conference call. into ticket of the software softwareetworks,

connection he divide up different parts of the network and run multiple networks on a single device. that is a very hot area in routing right now. been in the ceo has place for just over a year. has he put his imprint on the company or is it still john chambers'cisco. >> john is still the chairman there. chuck will do things in his own way. the opportunity for these layoffs is to decide where they want to cut, which parts of the company will be less strong and which will be starved. very much. you cory johnson talking about cisco. beating estimates and saying it will cut 5005 hundred jobs, but this company continues to grow as far as headcount. jackrow, don't miss

robbins, cisco ceo, 9:30 a.m. , 630 a.m. on the west coast, and he will talk about the results on the headcount. scarlet: coming up, is the stock market more vulnerable to a pullback. our next guest says it could be a buying opportunity. stick around. we have the charts. this is bloomberg. ♪

the firsts time for word news. american investors lost considerable confidence in donald trump. politics poll, registered voters with money in picked trumprrowly

over hillary clinton, 42% to 50%. the cleanup continues in the louisiana after devastating flooding. the red cross says more than 1000 volunteers have been mobilized from all 50 states to help. is expected to top $30 million. at least 11 people have died in the flooding and tens of thousands have lost their homes. the red cross says it is the worst natural disaster since superstorm sandy. the international task force killed boko haram militants trying to cross into nigeria. i say 50 heavily armed fighters tried to get in hidden among cattle when they were ambushed. amnesty international says 500 people have been killed in

cameroon by militants since last summer. a newis developing military that will force a reset over the east china sea islands. the financial times reports they have developed a missile that will complicate enemy planning and will have the longest range of any built by japan. it also reports the japan will seek funding on a budget request to be submitted next month. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. joe: "what'd you miss?" stocks climbing to fresh highs, boosted by earnings. valuation the highest more than a decade. says the pair for a downdraft as earnings season comes to a close.

and also rally, you think it is time to get nervous? so, just about 4% or 5%, and that would be healthy. we had an awesome rally and a nice catalyst with earnings season. with the removal of that catalyst, we are more profitable vulnerablek -- more to pull back. itself in mysted indicators. joe: we have a chart from you indicating that momentum is fading. the momentum is down at the bottom. what is going on there? >> that chart is longer-term. momentum, butove we have to short-term momentum. the improved momentum is coming on the back of the breakout we saw in july, so the s&p 500

reached an all-time new high. setlet: does this pullback us up for a buying opportunity if long-term momentum is improving? >> that would be the idea. as soon as we get a new catalyst, then that is when we want to revisit stocks that already broke out in july. becomes morerd compelling closer to support levels. aspiring chartist, i appreciate your art here. i wonder how important the rsi indicators are. if i look at your oil chart, i you can lot of times get into an oversold situation, which is what you see on the bottom panel there, that does not result in a climbing price, the top panel there. >> that's right. to me, overbought and oversold measures are important.

they rsi would be a great example of one. i would say use one, but not both. -- my point is that you can get out of an oversold situation without having the price rise or out of and over bought situation without the price falling. >> absolutely. an overbought or oversold measure will have less validity in terms of a longer term trend. reacting to what were intermediate-term and oversold conditions. confirmed byhat any other indicator in other asset classes? >> there is. countertrend by signals that some lows. what we have noticed is a

take-up in sell signals on a short-term basis. joe: there has been controversy and debate about the direction of the dollar. , and i haveart here to say i don't know what they are. i am very excited that you are on set and you built this chart. what are they and what are they telling us? >> i don't want to get into too much going detail. i call it the cloud model. these indicators become self-fulfilling, that is fine with me. i still want to know what they are saying. when you look at the dollar index, it has rolled over relative to the cloud-based resistance, and it shows the range over the long-term really the beginning of a prolonged downtrend. the: we were talking about

rrg function on the bloomberg. it coincides quite well with his picks for sectors, tech stocks, , those are stocks the two sectors moving into a leading area out of improvement into leading. utilities, materials, energy, all moving down to weakening. when you think about this rrg function. >> i think the function and the message are great. it shows positioning in this latest rally we have seen in major indices. if you look at the shorter-term version of what you have shown the audience, it does tell a front story and would be supportive of a pullback. up.: i have just put it >> more defensive sectors are starting to outperform, indicating a pullback.

in a day late cents, you see financials among the leading sectors. if you see the fed move towards normalization, financials are a strong pick scarlet: third thank you for joining us today. wereg up, what currencies the worst performers this month? we have the chart that reveals the answer, next. this is bloomberg. ♪

scarlet: i am scarlet fu. "what'd you miss?" the world's worst performing currency is mongolia. there correlates with the drop in copper prices. i inverted it. for 23dropped 423

straight days. mongolia talks about how there is this slow down and neighboring china, a big factor, but its own anti-investment laws mean foreign investors don't want to do much with it. aboutongolia was warning its ability to pay one of its euro, running out of cash. scarlet: the imf is in town to help advise. joe: no help from the copper decline. there is an interesting note from ubs that argues that there is not a fundamental recovery in emerging markets, and the rally is part of the yield chase.

here is a chart i made. the white line is the ratio of of msci to msci world. things go back-and-forth. it does speak to this idea that perhaps some of this emerging markets rally might not be about the improving economic more abouts, but easier conditions and people are reaching for risk. scarlet: liquidity is certainly helping. i have target same-store sales number. the you are thinking about u.s. consumer, which is everything behind u.s. growth, and it does not look good as far as target is concerned. their first quarterly same-store sales drop since

2014. it has been a weakening picture as far same-store sales decelerating growth since the peak in 2015. now they are down to negative and the stock price has come down. scarlet: it's a pretty sudden drop. ak day forall a we sales numbers. scarlet: coming up, cornerstone macro joining us with his perspective on the july fed minutes. had said a september rate hike was 50-50 previously. this is bloomberg. ♪

mark: i am mark crumpton. let's get to first word news. hillary clinton on the campaign trail talking about one of the most incendiary issues in american politics, gun control. clinton sought to reassure second amendment advocates that their rights will not be threatened if she becomes president. >> i am not at all advocating the repeal of the second amendment. i am not at all advocating any program that would in any way take peoples guns away. alive so help you stay

that nobody who should not have a gun in the first place gets one and hertz you or other people. clinton reacted to news that donald trump is shaking up his campaign staff, saying that donald trump can hire and fire anyone he wants, but he is still the same man. president obama has been briefed louisiana.forts in the president spoke with a fema administrator and order the agency to "utilize all resources available to assist in response and recovery." more than 70,000 people in louisiana have registered for assistance under the federal disaster declaration, with at least 9000 having filed flood insurance claims. angeles, ast of los wildfire has forced 80,000 people to evacuate their homes. buildings have been destroyed, but the exact number of losses is not known.

a fire official who flew over the blaze asribed devastating and said many families will come home to nothing. be new security measures for this year's oktoberfest. munich is banning backpacks and other large bags from the celebration. be erected, and the number of security guards will be increased to 450. last month, germany was rocked by a series of attacks. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. scarlet: thank you. let's get a recap. the fed minutes were read these. officials were split on the strength of the labor market. it basically quell talk of that rates could rise in september. we saw stocks give up earlier losses and finish higher.

the nasdaq little changed at this point. joe: the key development, we had seen stocks down and yields higher, both of those reports -- reversed. matt: when you're looking at stocks this year and last year, two major issue driving stocks and oftral bank activity the price of oil, right? the price of oil has not then in as of focus lately. if you look at this chart on the bloomberg, 2811 in the library. u.s. crude output has surged, and indeed the biggest search we have seen, 152,000 barrels since 2015. if you follow, for example, the baker -- baker hughes rig count,

it has been up seven of the last consecutive reports, and people are going back into the shale. it is interesting to see the output continues to grow, or starting to grow again, even at these low prices. scarlet: whether that puts a cap on the price of oil is a question. a battle over rates continues to simmer at the federal reserve. our next guest says the july fed minutes contain different and contradictory views. what are we to make of it? explain this. what were the contradictions in the minutes? >> thank you for having me. there were a number of contradictions and conflicting

messages, but there was one very clear message. -- forecast fomc that fomc forecast that fomc members had had has not changed. everybody wanted to raise rates as of threeherefore weeks ago, everybody wanted to raise rates this year. that is clear. regard toion is in the timing. the minutes were unhelpful in discerning that, but the main message is a rate hike this year is still a very good case. scarlet: with all the fed ,fficials speaking this week trying to keep september and play to give themselves maximum optionality.

it creates a risk of damaging its own credibility. if they try to keep an option alive for too long and then keep not doing what they threatened to do, obviously the market doesn't particularly believe .hem i think you see this from the probabilities that the market attaches to a move in september, which are fairly low. i think that is a consequence of the fact that the fed tries to keep the option open, but then does not follow through. matt: it is interesting when we hear john wayne's talk about the neutral rate and where it should be, may be lower, when we hear that we need to nurture this inflation baby so we can get something out of it. probability to a

fed cut or more qe, why do you think that is? i think the fed would use policy if there is a chance of recession. at the moment, that is not the case. survey ise news important not because it calls for an easier policy, but it gradual pace of rate hikes. have been thinking about the fact that it has been low now for several years. the fed hoped the neutral rate would come up over time, the activity base would increase, but day to does not support that, and now finally the fed is it will be at a lower

level for a longer time, implying two things. the funds rate where the andcan go as close to 2%, second, the pays to get there will be even more gradual, so not three rate hikes per year, but probably two if you are lucky. there have been interesting discussions about the future of monetary policy. out with ams came note on friday proposing some new ideas. beendent bullard has talking about new ideas for a while. the signs that these rethinks are starting to seep into official communications, or if not, do you expect them to gain more influence and start guiding policy more? >> what i think is that especially williams started a

debate, a debate that will continue for a long time, in terms of years, not weeks. there are difficult complicated issues that threaten the next 10 years of fred policy. -- fred policy. it is good the debate takes place, because what has been done so far has had less of an effect on the economy than the fed thought. policy should change, but they want to be careful and not rush and so they will start talking about it now. all together.his how does janet yellen a dress new paradigm that john williams is proposing? what kind of signal might it's into the markets without her intending to route to people if

she talks too much about it? >> i don't think janet yellen would want to go to jackson hole and speak on it. i don't think she will do that. i think what she could do and has done in recent press conferences is referred to the fact that interest rates have been very low, so there is a growing chance that it will stay low for a long time, so that lower, slower pace of tightening than the fed indicated in the past. will she talk about the way the fed interacts with banks in the financial system? inhave seen more of that europe, more direct interaction, especially in their quantitative easing. liken't have anything that, but do think that will be part of the discussion? >> probably not.

first of all, it is a delicate subject. second, europe is in a different situation. less of a need to address that subject at this particular time in the u.s.. i would be surprised if janet yellen focuses on that. joe: thank you very much. scarlet: coming up, clinton versus trump, which candidate investors prefer for their portfolio. this is bloomberg. ♪

scarlet: i am scarlet fu. time for the bloomberg business flash. cisco planning to cut 5500 jobs.

the move underscores the company struggled to adapt as they shift towards a software-based systems. to move into security, data center, and cloud. earnings per share feet analyst estimates. sale in russia's biggest asset sale in a decade. the company to sell to plug its budget deficit. collapse of the crude prices, pushing the country into the longest recession in two decades. at no warned it would pull out affordable health care program. theceo says it would impair

insurers ability to keep dividing plans under the affordable care act. that is your business flash update. matt: "what'd you miss?" donald trump's stock is dropping according to a new poll. boaters with money in the market never really -- narrowly picked trump. contrast from a june poll, where trump lead investor confidence by 17 points. thank you for joining us. what is it that is going on here with donald trump? he seems to be losing momentum. is that something i am perceiving, or does that shine through in the polls as well? >> the latest poll mirrors the other sentiment.

what is interesting is that people with less than $50,000 were more likely to support trump than large investors. today we got the news that donald is shaking up his campaign, the guy running breitbart is now the ceo of trump's operation. the interpretation everyone had is that donald trump is going to , angry, his core base populist-type, and not try to expand his operation to people in the middle. does it look like donald trump is doing anything to appeal to that demographic? are think smaller investors more likely to be in the trump demographic than larger investors. this is purely my opinion, but i imagine larger investors are

likely to be conventional, mainstream republicans that might have joined the never trump crowd or don't like their , anddate a whole lot smaller investors are likely to be base supporters for trump, so he might be doing the right thing for them. we are seeing ultra high net worth individuals feel more comfortable with hillary clinton. quotet because the status on wall street will remain within the clinton in the white house? >> i suspect wall street is pro-status quo for the most part, and i think that is likely are under hillary clinton than donald trump. scarlet: one individual who supports donald trump is carl icahn. if you come into the bloomberg, you can see the u.s. election special report. whereis a video session you can see carl icahn's conversation with bloomberg.

question as to whether he would form a super pac to support the candidate. if he did, would it move the needle in any way? >> i don't know. there is already one super pac backing donald trump, and he has had problems in the past with him. pacs that supported better if crowe icon joined forces with the existing super pac and put money there. joe: it looks like donald trump is going to hit the airwaves. he has been avoiding tv ads. do we have any idea what kind of message he will send? will it look like conventional tv or more like instagram videos? >> i think it is almost unpredictable. our reporter tweeted this morning that the ads sounded

pretty conventional, bash hillary and try to puff up trump , pretty much what any candidate does with their ads. i don't know what this ceo of right or it has in mind. joe: thank you very much. , teaming upll ahead with tech companies to survive. why the korean company is talking to google. this is bloomberg. ♪

scarlet: i am scarlet fu. "what'd you miss?" hyundai seeking to transform strategy and more open to tieups with silicon valley giants, and that includes a partnership with

google for autonomous vehicles. what kind of discussions have they had? it is preliminary right now. i feel like i need to do for to our auto guru here about hyundai. it is lonely being just one, right? be what hyundai is faced with, a go it alone strategy for so long. they said everything we will it might beever come new models, technology, they are doing it all in house, but it seems with this rapid momentum of self driving cars and technology, they can't be alone anymore. according to the president of hyundai, the company is having talks with google.

the partnership is not there yet. google has partnerships with several auto companies. matt: fiat chrysler has a partnership with google. raises the question of who needs who more, and right now it is the korean automaker that need silicon valley. matt: that is all of the automakers that work with google. they need google more than google needs them. customers are clamoring for google technology. are now putting google maps in their car navigation systems. customers were demanding that technology. >> which makes perfect sense. my understanding is that hyundai has been trying to be much more technologically savvy, and they

the been able to integrate apple system into their models could you can also retrofit their older ones quite easily and quickly and cheaply. matt: if only car play were more useful. apple car play only allows you to use apple maps in the navigation system. are used to the ze,lliance of google or wa than having to fall back on apple maps is a real bummer. does team upoogle with hyundai, does that mean it will limit whatever cooperation it has with a company like apple? it is a great question. i could not answer it at this point. matt: the ceo of fiat chrysler has said that we are happy to

work with google, and it is a great partnership, but we are still open to our partnership with apple. ferrari has also used apple. >> these car companies need tech companies more than the other way around. do we know or is it clear when these cars finally get commercialize, particularly cap the self driving ones? andt still speculative terms of what it will mean to the business at this point? >> i am still skeptical of self driving cars by 2020. matt: it is a great story. stanley andt morgan another analyst have been at the forefront of this research, and they have been saying you would see at first in urban centers,

tech companies partner with carmakers to create pods that will take them from the airport to the hotel, and then it goes from there. scarlet: i see that in a contained system. >> i don't know about mass adoption. matt: we will find out together, betty. thank you so much. you can catch betty at 7:00 p.m. new york time this evening for " bloomberg daybreak asia." you can watch it on the bloomberg terminal as well. it is a fantastic program. scarlet: coming up, which you need to know to gear up for tomorrow's trading day. this is bloomberg. ♪

scarlet: china releases july property prices tonight at 9:30 p.m. walmart earnings tomorrow

at 7:00 a.m. on bloomberg . joe: u.s. initial jobless claims tomorrow at 8:30 a.m. scarlet: that does it for "what'd you miss?"

♪ mark: donald trump has shaken up and expanded his senior staff with three months until election day. , oneominee added to names dr viewers and wa almost every tv watcher across the fruited plain. that is kelly m