intellectual property. the order gives the office of u.s. trade representative's the .ption to consider a rally in seattle, washington, previously planned for sunday known as patriot prayer drew hundreds of counterprotesters today. andce arrested three men confiscated weapons as trump supporters and counterprotesters converged downtown. authorities said they used pepper spray and blast balls to disperse crowds after fireworks were thrown at officers. the u.k. will try to regain momentum in negotiations this week. prime minister theresa may's government will publish the first outline of its positions. they include proposals for the border with ireland, continuity on the availability of goods, and access to official documents after brexit. a week from today, the symbol of london will go silent for four years. that's how long it will take for renovation work on big ben.

the 14 ton bell in the tower of the houses of parliament must stop ringing to ensure the safety of workers. minutes.himes every 15 it has wrung out largely uninterrupted for 157 years. news 24 hours a day powered by more than 2700 and .nalyst in over 120 countries i'm mark crumpton, this is bloomberg. ♪ live from bloomberg headquarters in new york, i'm julie hyman. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. any minutes from close of trading in the u.s.. julie: shrugging off last week's volatility. joe: the question is, "what'd you miss?" china hits a bit of a

speed bump. plus, business executives from tim cook to others react to the violence in charlottesville, virginia. thisatest from the fallout weekend. investors position themselves for the unthinkable. a default by the u.s. government. president trump's unpredictability has the market preparing in case there is a debt limit impasse. julie: "what'd you miss?" president trump signed an executive memorandum that authorizes u.s. trade representative robert lighthizer to investigate china's potential intellectual property violations. china's economy shall further signs of entering a second-half slowdown. with the latest is jimmy chang, chief investment strategist at rockefeller and company. let's start with a backdrop here. we got economic data from china over the weekend. they must be disappointed. -- numbers on retail sayers

sales and industrial production came in lighter than anticipated and represented a slowdown. are we getting evidence of the prospect that a chinese slowdown is back? mr. chang: i think these are isns that peak growth period probably behind us, which happened in the first half of this year. this is by design. one of the most underrated stories in terms of generating growth and synchronized global recovery has been chinese reflation. it started with real estate markets in early 2016 and it has been out of control. prices increasing 30% year on year in some cities. even now, prices are still going up about 9% to 10% year on year. this is by design for the economy going into the second half where it will take lace. this concern you talk about, particularly real estate, well-traveled territory. evil raising the alarms on this

for a while. have they done enough? ticking time bomb out there that all these wealth management products and private debt will one day explode? what is your rendition of how this resolves? mr. chang: the result is a rapid growth in leverage. the asset number in terms of jet isthe -- debt to gdp manageable. if you talk to chinese policymakers, they point to japan and say their debt to gdp is 400%. the issue is with the housing market. every time we mentioned the housing bubble issue with china, they will say we are catching up to global metropolis pricing. prices areanghai -- now on par if not more than tokyo, hong kong, new york, london. next?o they do

the next sign of slowdown in 2018, will they choose to reinflate the market again? it will be much higher than the rest of the world. i think it's a timing issue. julie: and you have a risk of shocks in terms of geopolitical tensions. oh we see the ramped up tension with north korea affects consumer sentiment in china at all? and by extension, the real estate market? mr. chang: not at this stage. chinese consumers are doing pretty well. job growth has been pretty strong. overall, they are managing this soft landing very well. question is next year. india,der dispute with south china sea issues, and certainly north korea. and usually in reaction to issues overseas, there is nationalism. scarlet: someone say that is

happening in the united states right now. i want to talk about what we heard from the president today about stepping up pressure over perceived intellectual property abuses. the president has enabled or empowered robert lighthizer to begin a study to perhaps launch a criminal investigation. how much impact as that have on the chinese economy? mr. chang: not much impact. look at the two tracks. at one is the leverage the u.s. is trying to gain to influence china over north korea. the other is the longer-term concern about the china 2025 initiative, trying to build up the semiconductor property base. experiences, maybe 10 years ago, we talked about high-speed rail. the leading makers were europe

and japan. today, the leading makers are in china. there.ook over [indiscernible] are the companies in china that western investors should be paying attention to it this next crop of technology leadership in areas like biotech are going to -- mr. chang: there are a lot of state owned enterprises funding these initiatives. so it is hard to pick up your play. y.cently, -- pick a pure pla they are at the very early stages. julie: do you think there will be any kind of retaliatory measures even before this investigation is completed? mr. chang: i think they could send signals in terms of having measures that make it more difficult for american

businesses to sell their products in china. for example, when it comes to cybersecurity. when it comes to consumer goods in general. a safety, food safety issues. scarlet: talk to us about what we can expect their from the beijing government as we get closer to the fall national congress. we'll be a lot more worries about a china slowdown in 2018 rather than 2017. people think things will remain pretty flaccid the rest of the year. you won't see things hit the fan until later on. mr. chang: that's a big unknown. 2017 is in the bag. it will be ok. what this president xi and his new cabinet do for the next five years? scarlet: does he change the playbook? mr. chang: that's a good question because the growth has come from the old playbook. chinese he evolve the

economy to be truly more consumption driven? and by being consumption driven, the government has less control. we initiate infrastructure projects and control how fast we grow. and it's up to the consumers and affected by sentiments, the government will have less control. scarlet: it comes back to what you were saying as well. thanks to jimmy chang at rockefeller and company. bloomberg daybreak: americas will be speaking with wilbur ross tomorrow at 7:30 a.m. eastern time. china u.s. trade relations are sure to come up. coming up, does tesla's latest bond deal show we are reaching a peak in credit markets? will hear from kathleen gaffney. from new york, this is bloomberg. ♪

julie: "what'd you miss?" the summer bond binge, lining up to buy from tesla at a record low coupon a 5.3%. gaffney whatleen is driving the demand for corporate debt. ms. gaffney: it is the reach for yield. what seems like a safe investment isn't always safe. it is a good yield today. but dialect forward one year or two, and investors may not be so happy. >> what we want to talk about is why the price is lower and investors keep buying. not just the yield, but the coupon you get and the total. investors have been winning. thatte what we're hearing yields are too low, they keep going lower. the return is pretty good. >> they have money to work and is ainvestors saying tesla

big name, a brand name. why aren't you buying that? kathleen can talk to us about that as well. you got to put your money somewhere. your money somewhere is one thing, you talked about getting burned at some point. where they sit on the capital structure of a company like tesla, at some point, it has to matter. us is unsecured debt. when are these kind of things going to matter? an eightey: you have year maturity, so you do have time. a lot of investors are working with that runway. wall, you look at the have a fair amount of convertible debt coming due next 20 19, and 2020. that's what i would be concerned about. >> how much leverage are we taking on in the system? everyone has a different kind of opinion.

you think investment grade is much better but they have issued just as much debt and their spreads are super low as well. ms. gaffney: i think it is really a timing question. spreads are tied, but if you think about it relatively, it seems like a good deal today. with bonds, it always comes down to bond mass. it's a question of when rates eventually do start going up, there will be an adjustment in the markets to compensate for credit risk and for rate risk. that is clearly not being priced in today. >> where do you invest in corporate credit? ms. gaffney: that is a great question. it has been a challenge this year for a lot of investors. i think there is a fair amount selectively, if you look beyond the u.s. and even the developed world. do hold, irkets think, a lot of good value in the market today.

and importantly, long-term as well. fundamentals for certain countries are far better than what we are seeing in the developed world. >> people are going to gm and buying the index. what are they buying exposure to? ms. gaffney: that is a really good point, jonathan, because for the dedicated investors who do have to buy them to mark issues, you are not seeing as much value there. republic of iraq come the week before last. deal was oversubscribed. it is really the corporate issues less known in the marketplace. and some of the sovereign debt where, if you are looking at local currency, you will get much better total return potential. --rock sovereigns over this oversubscribed. i don't even know how. what will be the investment-grade company we will be excited and gauge how much risk investors will take on?

>> amazon will be back in the market this week. they have the big deal looking to raise money. we are looking at $20 billion to $30 billion issuance this week. >> there are a lot of reports about lt's raising a lot of money. >> that is why they are having to go to the equity market. with $60ing something billion of debt. that is a lot of debt. ahmedt: that was nabila and kathleen gaffney earlier on bloomberg. is time for the bloomberg business flash, a look at some of the biggest business stories in the news right now. jb holdings has placed another shoe company on the auction block. it has kicked off the sale process for valley international to bring in $707 million. focus on to

acquisitions after acquisitions of green mountain coffee and krispy kreme. jana partners continues to bet on groceries. has aetimes activist fund stake in the delivery company blue apron. --a owns 600,000 shares and jana reaped a windfall after selling its stake in whole foods. the company behind lee and religions has added dickies. they are betting on work where as other categories of retail continue to slump. the deal is expected to close in the fourth quarter. and an activist fun has built a $400 million stake in danone. the fund considers the french yogurt company significantly undervalued.

and that is your bloomberg business flash. ,oe: absolutely surging today bitcoin up about 20% since friday. reason we are going to take into it, we will talk about the reasons with abigail doolittle. abigail, what is going on? is this a full on mania bubble? abigail: that's a great question, joe. it is one that's on everyone's mind. i was trained, one of my mentors was you johnson. in my first month, hugh handed me a book called "manias, panic, and crashes." unstable demand or bubbles. media the phases included attention, enthusiasm, greed, delusions. that is up for debate. time will tell. the cryptocurrencies came into conception as an alternative to the fiat currencies. i love this chart, g #btv 30.

on the top, we have bitcoin absolutely surging. the point i want to make is that bitcoin was going along flat, flat, flat. up in a very strong uptrend, nearly parabolic. and look at this uptrend. it truly parabolic. almost 90 degrees. according to physics, it can't hold that slope. if we go back to silver in 2009 are 2011, we had silver go from less than $15 up to $50 and we remember the sales crash. joe: that was a bubble. >> you should rank your top 10 bubbles of all time. -- it beinge of the a cryptocurrencies. that is part of it. but today, there is a bloomberg news article that points to the possibility of faster

transaction time as a potential catalyst. pretty interesting. optimism that there will be technology and it will spread if the transaction time surrounding bitcoin -- i don't know the ins and outs of how it works. but if the transaction times are faster, it will spread more. nvidia is trading sharply higher up 6% on bullish comments. stocks will be strongly correlated to bitcoin. the chip stocks are used in bitcoin. a lot of times, they will trade in tandem. scarlet: they are used when people are trying to mine for bitcoin as well. when you look at the numbers involved, who is winning here? bitcoin or the chip company? abigail: good question. it depends on the time frame. #btv 626 three. if we use the very arbitrary time. of three years -- time perio dof years, absolutely stunning.

the reason analysts are saying there is an entry point. here is bitcoin up 637%, lagging at that. it looks tame in comparison. but top this out at five years, and there is bitcoin. up 32,000%. nvidia's gains looking kind of lame. i don't know. bubbles -- joe: thank you. julie: at least top five. european blue-chip companies have made gains as well, so what does that mean for european exporters? is there concern on the horizon? from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" european stocks on friday capped off their worst weekend nine-month. which isn't all that surprising given the gains so far this year.

the msci european index hasn't had a correction in more than a year. if you look at the potential catalyst for a stronger pull back, consider the euro. the blue line here is euro dollars, the dollar. the white line is revenue for the stoxx 600 companies. if you look at the far end of the chart, both are currently an upward trends. that yellow channel. that clearly won't last because the stronger euro makes exports less competitive which would at the biggest companies. it's just a matter of how long that takes until we start to see it. switching out u.s. stocks and into european stocks. currency is always a wild card. so, too, perhaps, our tweets from our very own president donald trump. one ceo said he would be stepping down from the president's manufacturing council. an hour later,k criticizing fraser and drug

pricing within the industry. but offares are higher the highs of the session. we wanted to go back and see how this compared to other trump tweet reactions. and we have traditionally seen another performance of stocks that have been targeted by trump in tweets versus their benchmark indices. a relativee is underperformance, but not a huge one. boeing, lockheed martin, gm, and toyota are companies specifically called out by name by the president for darius -- various any fracturing practices. they doant to see what the following month to see if these are good buying opportunities. a lot of anxiety in the market overall. i'm taking a look at the bank of america merrill lynch skew index. it's a little bit like the vix that it tries to use the market to gauge anxiety. but what it is really looking at is extremes.

people buying puts or calls that are deep out of the money. people betting on big moves. greaterer it is, the the premium people pay for downside protection. this has absolutely rocketed higher. the highest level since right around the november election. the vix and markets selling off -- [indiscernible] volatility highest since the election. so too is this skew, the amount people are paying for protection . puts shooting higher. julie: like it never happened. scarlet: don't worry, people are calling for more turmoil in september. take a look at the market close. not much turmoil right now. gaining, andhe s&p the nasdaq the best performer of the bunch. we will look at markets and talk with peter board sean what is ahead. borscht york -- peter on what is ahead.

new york, this is bloomberg. ♪ ♪

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>> "what'd you miss?" stocks are bounding. up the most in a single day since april 24. julie. >> i'm scarlet. >> and i'm joe. if you're tuning in live on youter, we want to welcome to our coverage every weekday 5 eastern. >> we begin with our market minutes. u.s. stocks building on friday. tepid gains. we have the s&p 500 posting its more than three months. biggest gain since april 24. adding 132he dow points. the nasdaq, the best performer, gaining by 1.3%. when i look at the sector breakdown, 10 out of 11 groups are higher. lag -- we're getting a sense of where the big investors have made some big moves. start with danone, the

french yogurt maker. volume was not plentiful but how theood proxy for stock is performing. corvex management began building the company. viewed the company as undervalued. off by 3.6%, china's second mall.t online it boosted marketing spending to sales. 8.5%.at chrysler up by they see hidden value in several company's brands. >> let's take a look at what government bond world. rates higher, not a ton of action to your yields. bit. 10-year yields gaining 2.-- 2.22%. day.ctivity of the mexican bonds, yields rising a bit. my terminal into

and take a look at argentine spreads. argentinespread of government bonds relative to u.s. treasuries. you see that spread plunging today. bit that's a function of the success of the president's party in some elections. some optimism that he'll do well and that will pave the way for more reforms. people very bullish on argentina today. >> and people breathing a sigh we didn't all go up in a mushroom cloud over the weekend, not that trading really that last week. but currencies reflecting this action as well, because the yen, which fell today against the u.s. dollar, the the swissa bit and frank as well, losing steam against the u.s. dollar. pair that we're watching here. the euro-british pound. parity, butt about this is a currency pair that more folks are calling for parity now. we've got morgan stanley

the end of 102 by march, which would mean further upset. they're saying we'll see parity by year end. you have uncertainly over brexit also have the e.c.b. expected to further wind down its purchases. what'sthat affecting going on between the euro and pound. >> let's take a look at commodities. crude falling a decent amount, 2.7%. gold selling off a little bit. there, downown 1.1%. we talked earlier about some of mediocre chinese data, perhaps taking the wind a little bit out of steel. and minnesota wheat down to its lowest level in seven weeks. getting -- the soft commodities getting hit, continuing to be weak today. and those are today's market minutes. miss?"t'd you a spike in volatility last week,

markets treading off the biggest. where might investors expect a correction to come from, if one due? let's bring in peter borish, chief strategist for quad group. we're all looking for signs that a correction is near. at every single time, we have draw down, everyone comes in to buy, including today. >> so i love the name of the show. "what'd you miss?" you missed a correction last week. >> i did. thing.d the whole >> it was one day. it's ironic, because the last here, it was right after july 4. we talked about how much fun a supply shock is and how, when that unwinds, it comes down quickly. that's what will happen here. it's not there yet. day, time there's a down if everybody is screaming the top is in, it's unlikely. lots and lots of warning signs. to say the endme is here. thei wish i knew exactly

day and the time that that would be, because then i would be a at wealthier and be selling lot more futures. but all i'm doing is looking at the weight of the evidence. of the evidence is volatility has picked up a little bit. know, the transports, you they bounced from their moving average. bottomed.l and bounced from a 5% correction. so we're not there yet. you just have to be patient. frustrating for everybody, both bulls and bears. >> i have that wheat chart you on myalking about terminal here. i'm pretty sure you were here like within a day or two of that peak in early july. absolutely plunged since then. this is spring wheat. a question. you talk about -- you just look at the evidence. last week, we got a little bit of a pickup in volatility. it's gone today. evidence look like when you see it? what are those things you're looking for that say, okay, this a two day blip? >> so we're looking for the

surface.under the ary pressures are counting to mount. you have the internet, the machine deflationary ever built. if you need it tomorrow. amazon.go to visa and minute maid park, useher -- and mastercard, use that. they're still near their high. that thelling us consumer is not quite done yet. energy prices. we talk about that repeatedly, here.time i've been on lower end of the range. it can't get a bid. then you combine the uncertainty to start washing over washington as we approach whennd of the summer, congress comes back with the debt ceiling, with the budgets.

i don't think the president has helped himself too much here by picking on mitch mcconnell as an example. as i'm not a political analyst an international specialist to be able to talk about north korea. justeedless to say, as you said at the beginning, we're like, wow, okay, we're here after the weekend. sign. a good that's not going to make a sustainable rally. looking at allre these things, which one of them guess --olling over, i it's difficult to predict which one. gonna have tou're see something roll over, in what, a more sustained of a fashion? >> we call ourselves a combination of fundamental and quantitative analysis. the fundamentals are going to we think that the fundamentals are turning.

have seen that with the slowing of wage growth. you're seeing that with deflationary pressures. things that people aren't really watching. look at education inflation, that's down. health care inflation, that's down. again, energy prices. but technically, the market isn't there yet. takes a long time. we've been so overbought for so be your ally, to which in our business, we're schizophrenic. you're here every day. the market is down, up. you want to have an answer. the answer right now is terrible forch is guys like me. >> what's your thoughts on bat,nies like tesla or boat loads ofsell debt in this environment? investors as a result? to buyuld not be one long-term debt at low interest rates of highly volatility

underlying equity prices, because you can lose many years rate income with a small move in the underlying toity, which is going transfer into the price of that particular bond. so -- do?ut how many people >> yes, so that goes into what we're talking about previously having to be very patient and aat the fact itself is in period of time where it's overbought and people are optimistic. things go down when it changes. those are investigation investi- indications that it's not ready to go down, not now but soon. >> so, peter, what you're of the about is sort classic disconnect between the economy and the markets, right? going up,arket keeps even if you're starting to see things happen in the economy. so you're saying you have to be patient. but how do you make money while you're patient, or do you just you're not while waiting? >> sometimes you don't, right? so not trading is a choice.

a trade.tually very difficult to do. you feel like you're sitting in the screen all day. you have to do something. this is a business where, if you survive, you win. for yourto wait opportunities. if we want to use a trite phase baseball, fan that i am, you wait for the fast pitch. it's hard. because you get up to the bat. you're like, hey, i want to swing. but no. patient.to be it's super frustrating, not only for the manager but it's even the frustrating to investor, because the investor keeps calling you up, saying, why aren't you doing anything? i don't know what's going on, i say i don't know what's going on. money easily.r it's making it that's difficult. us a little more about that pressure, because it's great to sit out a market comfortable in, or where you're getting mixed signals. but that pressure when other lot of moneyking a in whatever it is, maybe in video today, and you're sitting

say to clientsu who want to know, who are underexposure? >> so the outlier is always there. up,e's always a stock going a stock going down. there's always a market that's moving and after the fact, it's obvious. what did i miss? i should have bought on friday's close. today what iu should have done this morning. not particularly helpful. toi try to explain that investors as well. take a little to bit longer time frame. orre not saying years decades, in the case of hedge funds, where our time frame is shorter. you at least need to look for quarters and six months and annually. doesn't doday, that anybody any good. >> peter, much like you, waiting for the opportunity, people are to have to wait just a few minutes. >> patience! borish, he's going to be sticking around with us. >> we have headlines here.

pandora media, the streaming radio service, has announced a c.e.o., roger lynch, the former head of sling t.v., as c.e.o. this is the fourth leader in less than two years. his goal will be to revive the struggling company. the cofounder stepped down in june. shooting up,s are relatively speaking, up by almost 3%. beand coming up, we're gonna talking about the debt ceiling and what it means for markets with peter borish. new york, this is bloomington. ♪

>> i'm mark. it's time for first word news. the associated press reports an eight-year-old girl is dead and least five people were injured today when a car slammed

café of a pizza restaurant, east of paris. the drivercials say has been arrested, but it's unclear at this point whether deliberate. was president trump says the justice department has opened a civil rights investigation into the violence that occurred at a nationalist march in charlottesville, virginia over the weekend. at the white house, the president said hatred and bigotry have no place in america. >> racism is evil. cause violence are criminals and thugs, including the k.k.k., neo-nazis, white supremacists and other hate groups that are repugnant to everything we hold dear as americans. >> president trump went on to say that anyone who acted charlottesville will be held accountable and, quote, justice will be delivered. america's top general met with

south korean president monday reassured president moon that a diplomatic solution to tensions with north korea is the priority. that echoes comments from other u.s. officials trying to tamp nuclear war. a house speaker paul ryan is hold a town hall next week, his first open to the public in nearly two years. opponents have criticized the speaker for not holding a public of 2015. since october he's held invite-only meetings at businesses in his district and over the telephone. the event in racine is being organized by cnn. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. >> "what'd you miss?" congress has made no visible

progress on extending the debt ceiling. what should investors do if no deal is reached? borish.ill with peter this is a theme that joe has been hammering in his morning now. for a few weeks and he has noticed, as well as our bloomberg rates team, that seeing less demand for treasury bills as people gear up for this latest debt ceiling battle. do you think it's gonna end as it always does, with a midnight come to anhere they agreement, or is there gonna be here?f a meltdown >> so i always have to begin with my disclosure, i'm a democrat that believes in markets. so you can take that with a grain of salt. is that it gets and more difficult, because you have segment of the majority party right now that was to washington not to do anything. and they're actually that.lishing surprise, surprise. you elect people to do

something, they actually do it. is to pass the debt ceiling, you need to get together a coalition to do something. so ironically, the democrats hold the cards, because they're able to pass it without their support. gonna i think that it's go further down the wire. i don't know if we're gonna go over the cliff. but it does remind me a lot of peter and the wolf. we've seen this before. like, the wolf! and guess what happened at the end of peter and the wolf? the wolf came and nobody believed him. and that wasn't a very good outcome. so i'm concerned. part of that in the treasury. so we looked at today's rally. go, oh, 10 years. we're at 222. come on! when we went up to 240 and then we were at 260, everybody was oh, we're off to the races. listen to the markets. fun.p is there are other t.v. channels to

want to catch up on gossip. this is a great t.v. channel to to.en >> awesome plug! here's another plug. one of my favorite functions, news trend function. i think this really speaks to point. it scans various news wires. this is every time a story the debt ceiling. you see that massive spike in but, slightly smaller pretty big in 2013. it's not even showing up right now. we're covering it, but most people -- >> it should. >> korea and russia and all this thef, this is so far off radars of so many people -- no one is even writing about it. regard's my point with to people get numb to something. get immune toof it. but if it happens, it doesn't terrible foress the markets. and so as i said, the fall looks be a bit dicey.

and historically, if you look markets, you have, you know, some important tops in the july-august time frame. have seen the chart that's been going around with the sevens and the seasonality year offirst presidential cycle and you add there with sort of the dysfunction of -- and i keep uncertaintyo this aspect that many people were complaining under president that there was uncertainty. there wasn't. you may disagree with the policies but you knew what you were getting. now, the uncertainty is seen it.n i've ever that ultimately cannot be healthy for the equity market. ask you just gonna about the year ending in seven. but you beat me to it. 1987, that crash, that asian in '97.l crisis 2007, the meltdown going into the financial crisis. random?just >> we can go back to 1907.

1907, back crisis in to world war i in 1917. to obviously '27 was the start. '37 was the secondary top with regard to the 32 low. then you had the '37 top. decline into '42. you had a lot of sevens there. don't get me started, because i'm terrible with names but if you want to know what day something topped, at.'s what i'm good >> if we get a crash later... >> peter borish, chief strategist, sticking with us, because coming up, chinese rels been -- real estate stocks have been dropping. it's one of the things we'll be exploring. from new york, this is bloomberg. ♪

>> "what'd you miss?" let's take a deep dive into the ploorg. you can -- into bloomberg. and we're still here with peter borish from the quad group. something i've been looking at. share prices for major chinese developers clearly rolling over since the start of the month. talked on the show, we about some of the weak data coming out of china over the weekend. radar, something on your that concerns you? people seemed very excited about recovery earlier in the year. now people are starting to get concerned again. on our radar,tely because it's all part of this global deflationary symptoms that we're seeing. is another data point that we spoke about earlier. slightlys to try to be ahead of the curve if we can from a risk management perspective. people get excited because it rallied. so you had a segment before i came on. everybody is talking about bitcoin.

maybe it's going up. risk/reward point of you, where do you put your stop? you'reyou know when wrong? the issue with china, it comes down to the oldest lesson we talk about every time. supply and demand. you're building like crazy. slowed, evenas though it's stronger on an absolute basis relative to the slowed.t it's where is the marginal demand coming from? supply, less demand. you get your charts. >> i have a chart here on bitcoin as well. been an absence of volatility but there's plenty of volatility here for bitcoin. theper cent change is yellow line. that's how much bitcoin has since this period. the white line shows the 30-day volatility. 112%,now it's at about which indicates that if you take the returns from the last 30 days, it would be within reason see this 112% move on an

annual basis. a risklook at bitcoin as asset, as a safe haven asset or as just kind of a proxy for china craziness? >> i think one has to be realistic that if it goes down 112% from here, it would be negative. one has to really understand the implications for volatility and be some options, trading strategies embedded in that. risk asset.'s a it's not that particularly liquid. we don't really know the supply demand dynamics to it. it's all exciting. of block chain. i do think that the technology is evolutionary, as in most things. but if you look at the history of technology, almost all of tend tost to market fail. i mean, just go back to what was before xcel. what was before word. right? there were all these products behindhand. they -- before hand. they failed. bitcoin going to fail? i have no idea.

but am i going to buy it at 7:30 and my risk stop is going to be at 330? wow. that doesn't make a very good ratio. >> i know one of the bull arguments people make is they institutional money is going to come into it. is that something that you ever about?om clients do they ask about it? >> i don't think a whole lot of institutional money is going to in. everybody wants to know something that's gone up a lot in, and that they haven't participated in. i'm going to tell you what my classic definition of a quandary is. do you stay out of a market and watch everyone else make money and thereby cause it to immediately crash? if you're in that quandary with i suggest you stay out. >> well said. so much.ish, thank you >> business executives speak out about the violence in andlottesville, virginia the president's reaction to it. from new york, this is bloomberg. ♪ got you outnumbered.

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mark: i am mark crumpton. it is time for first word news. french officials say a driver who drove into a crowd at a pizza place acted intentionally, but at this time, they have no reason to suspect a terrorist motive. the driver was arrested. a rally in seattle, washington, previously planned for sunday by the conservative pro-trump group known as patriot prayer through counterprotesters today.

weapons asiscated trump supporters and counterprotesters converged downtown. police say they used pepper after fireworks were thrown at officers. in greece, wind is making it tough on firefighters battling a fire north of athens. the blaze has damaged 20 homes and is threatening more as it burns uncontained. the fire is also forcing evacuations. no injuries have been reported to thus far. mexican drug king el chapo is trying to have his defenders replaced with private attorneys, but questions remain about how the lawyers will be paid. a federal judge said he would guarantee that the fees would not be seized because they are paid with drug money. el chapo is accused of running a

murders andoversaw kidnappings. global news 24 hours a day powered by 2700 journalists and over 100 20 countries. i am mark crumpton. this is bloomberg. recap.: let's get a the dow adding 100 35 points. the s&p 500 having its best one-day game -- gain in just over three months. april 24, although it has not been as long since we have seen again like this on the nasdaq. that was late june-early july. scarlet: i knew that julie would have the numbers. julie: executives are speaking out in the wake of racist violence. tim cook tweeted -- and dow chemical ceo,

who heads up trumps manufacturing council, did not say if he would remain a member, but he said -- kenneth frazier, merck's ceo, said he would quit the panel as a matter of personal conscious. cynthia, i want to start with you. denouncing racism, the kkk, and is pretty easy for anyone, you would think, but of a merck ceo is the only one who criticized the president's response. others have been vague. raised theier really bar and started a conversation today. i don't know if this would have been a conversation among

corporate ceos. i don't know if anyone expected this. other ceos also came out, but they did not go as far as he did or step down from the council. what he did was put pressure in a real way, took the dialogue and made it public. thelet: in charlottesville, police are holding a news conference. we will be monitoring that to see if we get any news out of it, any more insight into the incident in charlottesville where the car mowed down protesters, killing one woman who was there to protest the racist protesters who were in charlottesville. as we talk about the ceo response,whether -- whether to trump himself or the offense over the weekend, talk about the importance of the relationship between these ceos and the white house. how badly does trump need their support and how badly do they need the backing of the white house? >> it's a very important.

it's connected. their views are connected to him getting big items through his agenda, whether related to manufacturing, trade, taxes, or health care. onsident trump does want him -- wanted them on his side. ironically, the force stamping out over racism could be the free market. companies do not want to be associated with it. we even saw the maker of tiki torches denouncing the neo-nazis in charlottesville for using their product. what was the tipping point for trump to finally speak out on this? it came 48 hours later. he said all the right things, but people are wondering what took them so long. youlet: in the meantime, have a major ceo of a major company quitting. , can you talk more

about ken frazier? servingame time he was on a manufacturing counsel, he was talking to trump about drug prices. when he announced he was immediatelyn, he tweeted back now he has all the time in the world to bring down prices. >> we really haven't seen much action on that front. while that tweet came out and it looked like maybe trump was bringing the dialogue back, and until we see something meaningful in terms of reforming drug rices or away the government can moderate it, that is a challenge trump and congress phase. there is not a way to legislatively deal with drug prices in the u.s. has been dialogue, there hasn't been much action. -- while there has been dialogue, there hasn't been much action.

joe: i am looking at a chart of job approval falling to -20%. it seems like that makes it easy for any kind of ceo to call him out. what does this tell us about things like the debt ceiling and the budget? if his approval continues to plumb the depths. rating ising to that a poll that shows that his approval is at 34%, an all-time low, and his disapproval rating is at 61%, an all-time high. what this means for september and what republicans have to do is not quite clear to me. it seems like it would be difficult with an approval rating as low as this for president trump to get through big items, funding for the wall.

democrats are obviously not going to go for this. the fact that he poll so poorly with the general public and their base gives them no incentive to do that. he would need eight democrats to get it through. there are things like the faa reauthorization and the debt limit. there is not a lot trump is demanding beyond keeping the lights on from the republican congress. but look, anything that hurts his approval rating hurts his political capital and hurts his agenda and ability to get things done. we are already eight months into this presidency and he has no legislative accomplishments to brag about. scarlet: and a huge to do list. you miss?t did some of the nations biggest hedge fund managers are reporting what they bought and sold in the second quarter. we have been getting insight into their investing, and for a look at three of the highlights, let's bring in some investing reporters. they have been trickling in over

the past several days. away some you pull themes. there are also some big individual investments that stand out. where'd you want to start? >> i want to start with david pepper and appaloosa management. big filings come out within a couple of hours on the last filing day, today. the big thing, i think, with the new stake in alibaba. he has been big on alibaba for a while. it will now be his third-largest position. appear bloomberg, you can see that. $520 million. that's new. a couple new investors getting into alibaba as well. sam druckenmiller's family office, discovery, and viking, other hedge funds.

that's number one, alibaba. number two i know we have been talking about a little bit, the market take on blue apron and snap. these are new ipo's. has he actually bought some of these? blue apron was up today, anosly due to janice -- joh disclosing a stake. snap shares rallied on filing day last quarter, 8%. now we have seen many of those investors who went into snap pulling out. we have seen third point, we have seen discovery, and we have seen appaloosa pull out of snap. julie: when it comes to blue

it is people think maybe going to get active. >> they can think that, sure. julie: when do they have to disclose if they are going to go activist? >> this filing is not one in which they are saying i am taking a passive or active stake. that would come in a 13 d filing . that requires that you pass a certain threshold. that said, many investors talk to management and even if they , i passive, they say hey think i might be doing this, but you don't know when they are part of, and that's a why people pay hedge fund managers the big bucks. they agitate behind the scenes. on wheregive us a take

investors are positioned when it comes to tech names. there have been record highs. you have to wonder if the pace can continue. mixed.ar, the picture is we are hoping over the next few hours to have a good sense of that, of aggregate ownership saying there have been a few people soft on facebook, but that is not widespread. viking and google were pretty noble -- notable. we are still waiting for all the numbers and all the fighting to come in. which will happen tonight. thank you so much. appreciate it. scarlet: coming up, north korean tensions ease for now. how long will the call last? what is the endgame? from new york, this is bloomberg. ♪

scarlet: less than a week ago, the specter of nuclear war with north korea loomed ever larger, but over the last few days, tensions have seemed to ease. on abc mcmaster spoke this week. >> we are not closer than we were a week ago. but we are closer than we were a decade ago. this is a problem we have procrastinated on for a long time, and now it's coming to a head. korea, notfrom north only to the united states, but to the world, is very, very clear. it demands a concerted effort from the united states and with responsiblend all

nations. scarlet: here to discuss is a -- is a professor of political science. talk about the comments from h.r. mcmaster and the cia director. it seems like tensions have eased a bit, but have they deescalate it? >> there has been a step back, but it has had some impact in the last way for hours. it lowers hostilities, but we have to remember that the exercises begin in a few days between the united states and south korean forces. that will lead north korea once again to engage in rhetoric. another korea tests missile, which cia director pompeo allows room for, that could cause concern, especially long-term. of: it is shocking for some us to hear trumps rhetoric because we are used to the way that politicians and diplomats talk about the threat, the

previous leaders didn't seem to do anything to slow down the ambitions of north korea. is there a room for a different term -- not necessarily trump has rhetoric, but a break from the past and how we have handled north korea? assurancesstrategic and accountability. however, bellicose rhetoric is not the way forward. people don't expect it from the u.s. president. it sends an unwieldy signal, and it's hard for u.s. allies like south korea and japan to know how far the u.s. will go. clearly, they are trying to ramp it back. but to joe's point, how much of the circumstances we see with north korea are the result of what president obama did or did not do? he had a policy of strategic patients.

>> that was a policy through four presidents. lastet: but it was in the eight or nine years that north korea made a lot more progress. >> and certainly in two thousand two under the w bush administration. what we have seen is a rapidity of technology. what happens if north korea a sixth nuclear ton? what could that mean in terms of response? we saw the market response this time. they took it much more seriously than they have in the past. that has rebounded, but cleary -- clearly, they have had in impact. speaking of rhetoric, we heard from defense secretary james mattis in the past hour. he said if north korea follows through with this threat and fires a missile toward qualm that could hit it, this could escalate to were very quickly. he said if they do that, it's

game on. it's difficult to know what game on means or what fire and fury means back we -- means .xactly in your experience looking at the history of kim jong-un, if this approach doesn't work, what is the correct approach to deal with him and get him to not do these things? >> the correct approach is diplomacy, which is what tillerson has called for. and that is with taking place. what we don't know is what happens in the event of miscalculation or misfire? what happens if something hits qualm? what happens if one of the four missiles threatening qualm lands question mark that creates a volatile situation, and the nature of the korean peninsula is such that escalation happens rapidly.

the results of that could be devastating to south korea and their neighbors. how difficult is it for seasoned diplomats or seasoned military people to work under this rhetorical regime, so to speak? they have an approach, a bullish stance, and then president trump talks about fire and fury. seemingly off-the-cuff, and then they have to scramble or find a way to justify that. how much harder does that make their jobs? >> very hard. it's got to be hard, because you have to walk it back. that's what we have seen this week with seniors ministration officials. clearly, they are looking to check or rain and where the president has gone with this. we just don't know. so difficult to get to a solution on the peninsula. story in the new york times today said north korea is sourcing some of the elements for its missile from ukraine. could the u.s. and international

community be doing a better job of cutting off that supply from it may be?wherever >> you are absolutely right. and they do try to. the united nations and others are extremely active in trying to curtail actions by north korea and ukrainians. there are other entities we need to be careful of because they have transferred technology to north korea, and north korea has taken it and advanced rapidly. no one expected this capability this soon. much. thank you so tomorrow, u.s. commerce ross will talkr about the president's policy toward trade and china. from new york, this is bloomberg. ♪

scarlet: it's time for the bloomberg business flash. fiat shares climbing to a record high after morgan stanley says there is substantial hidden value in the car brand. shares jumped almost 10%. it has gained thomas 32% this year. it is make or break week for taking over stock up. stada. with just three days to go for bidders to secure 63% of the outstanding shares. metlife is facing resistance from bondholders. they say stakeholders believe they should be paid more than its offering. payife's offer will

bondholders $2.50 for every $1000 in printable in return for payng up the authority to dividends on common stocks. target is taking another step toward improving its online business. the discount chain has bought brand junction which manages local and same day delivery. the terms of the deal were not disclosed. that is your business flash update. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: u.s. stocks recovering from last week's declines and the s&p 500 had its best day since april 24. tensions with north korea appear to be easing a bit for the moment. julie: although, as our last guest pointed out, that might not last long. germany reported second-quarter gdp data at 2:00 p.m. eastern. joe: i will be looking at earnings tomorrow, home depot and coach. scarlet: a glimpse into consumer

health. speaking of the consumer, u.s. retail sales data at 8:30 a.m. eastern. that be role is of people shopping in austin. julie: people shopping in austin and everywhere else. commerce secretary wilbur ross will be on bloomberg daybreak tomorrow at 7:30 a.m. lots to talk to him about, including china. joe: have a great evening. this is bloomberg. ♪

>> you are watching "bloomberg technology." press reports and eight-year-old girl was killed and at least five people injured today when it slammed into a

pizza restaurant east of paris. officials say the act was intentional. the driver has been arrested. signed antrump executive order to launch a trade investigation of china for the alleged theft of u.s. technology and intellectual property. the order gives the office of the u.s. trade representative the authority to consider the probe. a news conference is underway in after president oj opened anhe d investigation. the president also called out white supremacist for the role. there had been backlash for his initial failure to identify hate groups by name. the man accused of running into protesters will remain in jail until he has an attorney. the judge declined to set bond at the hearing today for james fields who faces second-degree