>> i do not think a government shutdown is necessary and i do not think people want to see a government shutdown come ourselves included. and congress and the house has already done work on the issue. mark: the remarks came after he toureda an intel plans in orego. congress must pass a spending measure by september 30. and as it heard on bloomberg news, mitch mcconnell has released a statement saying he and the president are working to andent a -- adding that he the president and their teams are irregular contact. this comes after the new york times reported that the relationship between the two of them was so bad i have not spoken in weeks. that mitch mcconnell has expressed uncertainty that mr. trump will be able to salvage his administration after a series of crises. the stock market has done well since donald trump was elected,

but his wealthiest donors, not so much. 24 trump supporters on the billionaire list have seen their fortunes rise6/10 of a percent since the election. the s&p 500 is up almost 15% since then. his wealthiest supporters including donald bren, where a combined $16 billion. a senior russian diplomat warning against expanding sanctions against north korea, saying it is necessary to focus on a political settlement. the deputy foreign minister said that the scope of sanctions already endorsed by the u.n. security counsel is such that any possibilities of expanding measures have been exhausted. china and russia have called on the u.s. to suspend annual military exercises with south korea in exchange for pyongyang halting their missile and nuclear tests. minister saysior

some men suspected in the deadly attacks in spain visited the paris area two days before hand. speaking images along with -- in major along with the interior minister, they said that officials are working to determine why the suspects were in paris and what they did while they were there. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. ♪ >> live from bloomberg headquarters in new york, i'm abigail doolittle. joe: i'm joe weisenthal. julie: i'm julie hyman. >> we are 30 minutes from the close of trading. the stocks are in the red today.

>> the question is "what'd you miss?" >> the president threatening to threat down the government over the border wall. could it be a showdown? and walmart will not let amazon bulldoze after the whole foods acquisition, the big-box retailer is partnering with google, which could give it the edge it needs. while the rest of the retail world is adjusting to amazon, one thing you may have not noticed his money is still going into the malls. we will take a closer look. ♪ trumpight my president suggested he would veto any spending bill from the federal government if it did not include money for a wall on the mexican border. this could lead to a government shutdown and could complicate the job of raising the debt ceiling. mitch mcconnell just put out a riglernt saying he is in contact with the president and they are working to prevent a u.s. debt default. now we will bring in the global head of research for deutsche bank securities.

great to see you. thank you for coming. we have mitch mcconnell making these comments and we have the president making his comments last night, meantime we have surveyed analysts and have found they have said if there is a showdown over closing down the government over the border well, it could send rates in the u.s. below 2%. do you think it is a risk? guest: i think it is a risk that long-term rates could fall to 2% or below. obviously the short end will be, look it because if there really is a default, you have already seen the bill rates rising around the dates that people are concerned about. it is complicated. but there is potential that if there is a failure to raise the debt ceiling, depending on how long it goes on for, you could see the impact on the front end of the rate curve for longer. joe: you mentioned we thought

reaction in the short end related to the debt ceiling similar to what we saw in 2013 and 2011, but over all none of those having a big impact. curious on your investors, how much are they paying attention and concern on the legislative timeline with these various deadlines the government is facing? guest: i think they are beginning to take or pay more attention. in the past, we have had these fears and comes down to the wire and in the end you get through it. it'll remember the downgrades that took place when people thought it would be a terrible fall in the treasury market, but it wasn't. the equity market tends to perhaps react a little later and closer to the time. and right now, the rates market and bill market, that is showing reaction right now. the actual markets lagging a little bit. joe: let's say that the debt

ceiling, i do not think anybody knows what would happen if there was to be a miss payments -- mispayment, hopefully we do not find out, but talk about a government shutdown. we have had a number of them in the past, not the end of the world. how typically do the markets react during that time? guest: i think a government shutdown is more related to a sort of fundamental concern of the economy. there is a direct impact, but it has seemed small in gdp terms but that is where the economists will focus on and say there could be slightly negative growth. it comes down to how long it continues for. i think it is less important than obviously some kind of debt issue, because the financial system is much more complex than people realize and things that happened could happen to the repo markets, for example liquidity, the banking systems,

and those are the unknowns that could have a big impact on growth and economic opportunism and confidence. will be janet yellen giving what could prove to be her last speech, hopefully not, but it could be at jackson hole. what do you expect her to say? she is in a tight spot in terms of keeping the markets going and staying on the tightening. guest: there is what we expected, what we expect her to say and what she will say, those could be very different. the titleis dynamic, of the symposium will be the dynamic of the global economy. her speeches, she gave us a speech a couple of years ago and it was along the lines of touching on financial and whether or not they were too easy and maybe bubbles were being created. also looking at the stability of the financial systems in terms of banks and getting over the financial crisis. so i suspect that will be the

purpose of her speech. how she links that to the dynamic of the economy i think will be monday and, in the sense that it will be about we are doing the sort of things so there will not be a problem in the future, and watching for any signs of excess liquidity, but we do not think there is anything there yet. some people are trying to argue that just because financial conditions have eased over the last year or so, the fed should continue to tighten and even accelerate tightening they have done. one analyst talked about the easing of conditions. i think that is completely the wrong response. you have to understand why financial conditions are ease d. the bigger issue is low inflation. if you go down that road, you can't answer the question, -- ca answer the pressure, whichn should be how you foster the economy? you allow financial conditions

to do it they are doing, which means the markets do even better which means the fed is not raising rates. they can take a timeout. you can accept that the yield stay low because of inflation. the stock market is not in a bubble, he can improve because yields are so low. and you made an interesting article earlier today on comparing the 1999 and a big difference was the rates were higher, so valuation seems a tight. can be stay low, stocks better. and if you go down that road, you can get into things like investment booms and recovering productivity growth, because in an aging economy, where else do you get the growth? you will get it from productivity, nowhere else. that is what we should be doing to foster dynamic growth. in the global economy. julie: we will continue this discussion. is sticking around.

we will discuss more of the thorny issues central bankers will reckon with tomorrow when they meet at jackson hole and for the remainder of the year and beyond, the issues are not going away. from new york, this is bloomberg. ♪

♪ abigail: "what'd you miss?" mario draghi said today that central banks and governments should not be resting easy. >> policy actions undertaken in the last 10 years and monetary policy and supervision have made the world more resilience, -- more resilience, but we should continue preparing for new challenges. julie: we are back with dominic konstam from deutsche bank, and

certainly there are multiple challenges that are presented along with the various central bankers around the world. i want to button up what we were talking about before the break, when it comes to the fed in the u.s. and their struggles to understand inflation. when you look at those struggles, where do you think the fed will come out? will they acknowledge that inflation is not going up right now and keep the rates where they are? will they come around to that? dominic: i think they will. and it is a problem on central banks have had, they have struggled to justify inflation targets they have had, even though the ecb does not currently have a target. they keep on missing what is the target and pretending that this is part of the memoranda. and raising the target does not do anything either. you are not reaching it, just raising it, so there must be a point where they change the discussion they have and recognize it for what it is. abigail: we have a great chart

here. everybody talking about the unwind of the balance sheet as related to the rate. this is a long-term chart. and the 10 year yield in blue, we see the balance sheets at $4.5 trillion. what is your view in terms of rates, if they are going to unwind could the chart suggest we see those rate come back lower. 2%.adjusted 2% -- suggested dominic: the balance sheet is very important. the first thing in the unwind that they have, the signal that they are going extremely slow, even by my expectations they are taking an extra 4-5 years to unwind it. it is what we would consider normal levels. the important thing is when they ratesbout -- interest

rose at the same time, so when people remember the damage on the interest rate market, it was less about the talk about taper, it was more the rate expectations going up. what i think we are doing is the balance sheet unwind is in the context of not having many more rate hikes up their sleeve. especially in our world with inflation. that is why it will be less of an issue. the s&p is very interesting because i sort of agree with the view that the s&p has the premium metric that has been rather cheap to bonds relative, partly because the balance sheet shows the yields low so there is concern it will not do well as the balance she comes down. but with low inflation recognized for what it is, the yield behave well. you do not have that problem with the s&p either. i think it will be ok for both s&p and bonds. joe: i want to go back to the question about inflation from a

metaphysical standpoint. all the concerns about why or why it is not manifesting itself. this particular cycle aside, how much overall soul-searching well there have to be in terms of trying to understand the drivers of what has caused the inflation in the first place? dominic: in my world, the phillips curve is more important than just regarding the wages and unemployment, it links to the inflation targets, the central bank basically telling workers and employers what they should do with wage increases and price increases that would be acceptable. if the phillips curve has broken down and it does not recover, and we do not think it will because of structural forces, then the logic of the inflation target is no longer valid. now you have companies and employers deciding what they will pay. and the central bank is in the background saying, listen to me, i have in inflation target and you should be asking for higher

wages and putting up prices for more. that is a problem. joe: before you go, i want to bring it around to the u.s. again and the legislation and the rates market. there has not really been any policy, i think people are skeptical that they will get meaningful tax reform done, but they will still try. we have seen the u.s. rates sort of at the bottom end of the range, despite the economic data around the world looking solid, so to what extent do you think that reflects politics? we have nothing politics show up in volatility in traditional ways, but is there a sense in your view that the stagnation in the u.s. is dragging down the rates in the dollar? dominic: it definitely drags rate down without question, because it was easy to justify is the most, remember the border tax that could have raised inflation expectations. all of that, the lot of that has been unwound because of the failure to do tax reform. i think the politics is helping. whether or not we are going to

go a lot lower because of politics, hopefully not. i think a lot of that euphoria has been taken out of the market. whether we can go high with something as possible, but basically rates are not going anywhere except to maybe maximum 250 range, but there are other things to worry about. abigail: good stuff. thank you. dominic konstam, from deutsche bank securities, thank you for joining us. julie: time for the bloomberg business flash, a look at some of the biggest business stories right now. blackrock vanguard group lowering uber valuations by as much as 15%. the company has struggled with lawsuits and boardroom battles and the ceo was ousted in june. the company did not respond to requests for comment. bill gates, richard branson investing in a startup called memphis mea--

which will producets animal cells not with slaughter. analysts say there is a possibility of sustainable cruelty food, especially from millennials. wholeld foods -- the foods deal needs approval from regulators. the $13.7 billion deal with amazon is expected to close before the year's end. and that is your bloomberg business flash. fascinating story. self generating meat. abigail: as a cruelty free person i do not know how i feel about it. time now for our stock of the hour. la-z-boy, the committee known for the recliner is falling over 20% today, the most since 2009. emma, what is going on? emma: poor earnings. full disclosure, i do not think i am the la-z-boy customer, but

i did read today that some of them to have a drink cooler and a heat system. joe: absolutely. i used to have one. and i am remembering how awesome it was. now i think maybe i want to go get one. emma: the problem is people are not buying them. the stock in the below expectations. i want to show you the terminal for a moment, because trading volume is at about 13 times the average, on pace for more than 4 million shares to be traded today, so that is interesting on what is happening with the stock. in terms of what happened with earnings, revenue missing estimates. higher costs and a squeezing margins, and while the sales did grow, they do not grow by that much. we have another chart widget shows the written sales, when people go into the stores and at place an order, put down a deposit. those hardly group at all and they have been -- grew at all

and they have been choppy. delivered sales have also fallen, so that is not good. the ceo said that the earnings were lackluster. joe: i wonder if there will ever be anybody that you'd a cruelty free -- that eats a cruelty free hotdog in a lazy boy chair. that could be a venn diagram. julie: if this industrywide furniture issue -- is this an industrywide furniture issue or is it just lazy boy? emma: it has pulled the whole sector down. practically off of the charts. ethan allen has fallen, restoration hardware, even way fair the online furniture company, they have all fallen today. joe: thank you very much emma chandra. basically we will see

la-z-boy -- if you have a bloomberg terminal, check out tv go, you can watch is online, click on our charts and graphics and interactive eckley. go on your terminal, here is the la-z-boy conversation right now. you can see all of our charts, get a quote on la-z-boy, and anything you want like that. check it out. from new york, this is bloomberg.

♪ i'm julie hyman. "what'd you miss?" let's say how buybacks relate to capital spending. this is from civilian global markets, which said we could see a curtailing of the stock buybacks as we see more u.s. capitol spending and it could lead to gaps. they looked at the first quarter of 2016, showing them exceeding by cash on hand. this is according to figures

comes out from the federal reserve. civilian said the trend is accelerating in 2017 as global growth is firming. we are looking at capital spending, that is in white. internal funds in blue. as you have seen, but of them going up. underpinnings of the u.s. equity market has been some of the buybacks, so if you start to see that abate to some extent, that could be one more thing that is perhaps limit teen this -- limiting this bull market. abigail: financial engineering has certainly been a tailwind. taking a look at my chart. this is out of the election, the bloomberg dollar index initially spiked, then it started to drop around the time that president trump took office. this is the gallup poll disapproval rating. as it climbed to about 56% right now, the dollar index has dropped about 4% since the

election, down 9% this year. the worst year ever. interesting relationship. joe: i am also looking at the intersection of market and politics. after the fiery speech last night, it little more concerned coming into the market about september and the debt ceiling that we were talking about with dominic konstam. this is the yield curve analyzer and i want to focus right here, because this is comparing today's rate curve on the treasury market versus yesterday. mostly across the board, the rates are lower except at the one-month where they are higher. not massive but we are starting to see in the short-term bills market, more concern about the debt ceiling and people demanding more of a premium to hold those assets. julie: at the very least, people want to hedge against that possibility. the market close is next. leslie and four minutes away. -- less than four minutes

away. we are red across this grain. all three down. from new york, this is bloomberg.

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500 headed for its first tech line in three days after president trump threat to shut down the government over the border wall. scarlet fu is off and julia chatterley is on assignment. we want to welcome you to our closing bell coverage of every day from 4:00 to 5:00 p.m. eastern. let's begin with market minutes. areks drop today after talk the president last night that there could be a government shutdown over the border wall. all three major averages trading near lows of the day. and consumer discretionary stocks the worst performers. there were some standouts to the upside.

lowes lower as the company has been benefiting from the rebound and remodeling, but outpaced by home depot. home depot same-store sales better. eagle same-store sales of 2%. analysts had been predicting a drop. around, justrned barely, .2%, raising its revenue forecast for the fiscal year and projecting annual sales higher than analysts had estimated, shares at a record high. they had been lower for much of the day. fiat chrysler said it is , including aptions plan to spin off missouri maserati and alfa romeo.

a record high at in u.s. trading, up 7%. joe: the government bond market, rates lower. is concerned about the debt ceiling, but rates pretty much lower. 1.31%,r yields down to 10 year yield set 2.17%, not quite at the bottom of this year, but getting close to the bottom of the range. >> currencies now, risk off tone matching small declines. the dollar against the swedish , considered one of the safer currencies. the dollar falling against the yen, the yen a safe haven currency. zealandook at the new dollar against the dollar, risk on pair, also down.

we have a risk off pictured looking at currencies. look at an intraday chart of the mexican peso. the dollar climbed against the peso, the pace of down almost 1% after president trump did reiterate the promise of the border wall, willing to shut down the government to do it. some action there for the mexican peso. joe: on the commodities front, green across the board. for wti.1% gold getting a bid, the treasury rally, moving in tandem. nickel and aluminum, a very big theme this year, the big rally in industrial metals. every day there is something, copper, zinc, cobalt moving.

today, nickel up 2% and aluminum 1%. those are today's market minutes. >> some breaking news here, uber. gross bookings up 17% in the second quarter. the number of trips taken rose 150% in the past year. this is according to numbers provided to axios. googler drivers have earned $50 million in tips since the program started. earnedler drivers have 50 million in tips since the program started. uber has gone under turmoil since travis kalanick resign. jitters came back quickly when president trump went off script about a government shutdown.

michael regan is the senior editor of the bloomberg live blog. i'm sure there is some algorithm that can tell, looks for the word teleprompter or can tell whether he is on or off teleprompter, but certainly markets are paying attention to when he goes off script. >> it is probably an oversimplification, but i look at the market reaction after his speech on the word afghanistan. whether you agree or not, it was a presidential speech. he did not go off on any tangents. the rally was maybe not all because of that. there was a story on the progress on tax reform. last night, decidedly off to script and throws up the notion of a government shutdown, and here we are with the risk off today. is morethe market

comfortable win he is giving a scripted presidential speech than one of his campaign rally speeches. joe: this is not the first time. he gave a speech earlier in the year and did not say anything policy wise, but everyone was saying this is normal and stocks went crazy. >> and charlottesville be other example on the flip side. he initially gave the scripted remarks, then a couple of days later said stuff that was more controversial, then we had ceos resign and a risk off mood after that. s we do have a risk off around president trump recently. the s&p 500 up 14%, no indication of policy.

conceivably the reason for that rally. what is going on between this disconnect the between investors and increasing drama? this kind of turnover at any fortune 500 company, the stock would be down significantly, but the s&p up 14%. >> we had some very good news abroad, the global economy seems to be in sync, doing well and to allowed investors discount expectations on tax cuts, infrastructure, and maybe hold them out as a future benefit, but not focusing on it. time, there is more on knees in the markets. unease inr -- more the markets. one of your colleagues looking , 3826, looking at the

curve in white, specifically third month versus first month 20 day average, and the s&p 500 in blue. selloffs in the past often ended when the vix curve began steepening, but it has not been steepening. >> what it is doing, it is the ratio of futures three months out to first month futures. tips --have had these freakshe front month vix out, people get nervous and they goes higher and pushes that ratio down. once it settles down, that ratio goes back up, where the front month comes down and the third month is stable or where it was. as you can tell, that often

signals the bottom of these dips. that bottom hasn't quite happen in that ratio yet come so based on that indicator, which is not a perfect leading indicator, it is an interesting observation, but may the selloff isn't over yet. you would be more confident if you so that ratio begin the climb back up. >> thank you very much. you can get the latest analysis from our macro strategist throughout the day. mliv . we do have breaking news on hp earnings worse is $.42, beat on revenue of

$13.1 billion versus $12.3 billion. , so some is down nuance investors aren't liking. we will come back to you on that. from new york, this is bloomberg. ♪

♪ it is time now for first word news. foreignpresident and minister met with jared kushner today hours after the trump administration cut nearly $100 million in military and economic aid to egypt and delayed $200 million in military financing, citing egypt's poor human rights record and its crackdown on civic and other nongovernmental groups. cairo tohner was in

explore ways to revive it israeli-palestinian peace talks. a top united nations body on racial discrimination has taken the unusual step of calling on the united states to reject racist hate speech and crimes following the violence and charlottesville, virginia. without referring specifically to president trump, the committee pointed to "the failure of the highest political level to unequivocally reject racist, violent events in the u.s." missouri governor eric greitens if the person who expressed hope president trump would die does not resign comes steps will be taken to remove her from office. the governor hinted that further calls tos resisted

resign after posting the comment last week. she deleted the post and has since apologized, but governor brighton and his lieutenant governor say senators should remove her from office if she does not step down. a prominent russian theater and film director appeared in court, then placed under house arrest, facing charges that he embezzled government funds allocated for one of his projects. he denies any wrongdoing in the is seeninst him and it as part of a crackdown on freedom of expression in russia. crowds of supporters gathered inside and outside the courthouse. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> president donald trump dolled up the pressure on lawmakers to deliver on his agenda.

paul ran counter the presence remarks while at a news conference. a governmentink shutdown is necessary and most people don't want to see a government shutdown. congress and the house has done its work on this issue. is our with the latest reporter in washington. i'm not sure paul ryan was going against the president. he seemed to be saying we can get this done. what are you hearing on lawmakers willingness to get this order while done? >> republican leadership in the house and senate does not want the showdown over a government shutdown. they tried this in 2013, and it did not work out. this landscape is looking similar to 2013, because the president is digging in, saying categorically that if we have to forsake government shutdown, we will.

republicans need a democratic senators to get a border wall and a government funding bill passed and they only have 52 out of 60 needed. one side will have to cave-in or there will be a shutdown. joe: one big difference between now and 2013 is that it is the same parties controlling white house and the congress, so how does this play out? this is a signature issue for trump. of democraticance support for the wall. can you envision some face-saving scenario. on ae house boats government funding bill and sends it to the senate. mitch mcconnell tries to put it on the floor and get it passed, democrats filibuster, then he strips it out and sends it back to the house.

that way house republicans can say they pass the bill and blame it on the senate. senate republicans who support the border will can say they voted for it. president trump is the managing to kill the legislative filibuster. this does not matter for tax reform or obamacare repeal, but does matter for the border wall which needs 60 to get through, so mitch mcconnell will have a tough decision if he feels the pressure from the base, keep the filibuster and surrender on the wall, or kill the filibuster and make massive changes to get it through. >> clearly it is hard to get in the mind of president trump. is this brinksmanship here? what is the president's goal? we had a brief bear market for the major equity indexes. we have to be thinking about that, plus all the other

real-world consequences. what is the goal here? >> the president is inking about his base. last night, the most applause he got was when he talked about immigration and building the wall. it was a centerpiece of his campaign and he has continually promised it since president. he said he would fight for it in august and september. if he can't get it now, how can he go back to his constituents and explain it? he has to show he is fighting for it, whether he thinks he can get it, and that will probably take us to the precipice of a government shutdown. talk about the potential conflict between the president and mitch mcconnell, the new york times reporting that they have not spoken in weeks.

what exactly is going on here? clearly simmering tension between these two men, who are as different as they policy could be stylistically. with ae a president freewheeling, spontaneous style that is contrasting with mitch mcconnell's disciplined and rigorous and methodical way of doing things. i don't know there is a particularly warm relationship there, but mitch mcconnell knows anything that hurts president trump hurts his majority. that's why there is this attempt to turn down the volume and ease that has this feud gotten a lot of press attention by saying we have a shared agenda and shared goals because mitch mcconnell knows they are joined at the hip politically and he needs trumps based to

keep a majority and for his numbers to survive. >> for better and for worse, thank you very much. coming up, the war over groceries is heating up as walmart and google team up on a voice-based shopping service. should this give amazon a cause for concern? amazon just got approval in its whole foods acquisition. from new york, this is bloomberg. ♪

>> walmart and google joining forces in the fight against amazon. walmart customers will be able to use voice activated google home speakers to buy hundreds of thousands of items for delivery. next year, the service will

include groceries. amazon shares were a little lower on the day, perhaps related to that news. for more, let's bring in the bloomberg intelligence u.s. retail analyst. there is this a bareknuckle fight between amazon and walmart. how much of a leg up will this give walmart? tool in thether arsenal that walmart has in its fight against amazon. there is some integration work that will have to take place, but it keeps walmart in the running in that e-commerce sector. joe: what is the big thing to watch for? the deal is going to go through. what in your view in terms of strategy will you be looking for from amazon once they start the integration process? >> once amazon integrates with all food.

they have to focus on improving operations, profitability, same-store sales back on track. at the same times, they will need to extract things that can help them grow their own business, but there are contractual issues that could influence how well amazon is able to progress with amazon fresh. at the same time, the foot rent is still relatively small. about $16s has billion in revenue. kroger is $115 billion in revenue. 172 billion dollars in revenue just around food. it is small relative to its competitors. foods is largely about experience, organic food. it could be the same experience picking up your deliveries from walmart.

how do you think amazon can keep that whole foods cachet? do ist of what amazon can the power of integration and its technology ability to help foods run a better business here at you may see some amazon pickup points as well, but it is a different food in different customer than those frequenting walmart, so amazon will try to leverage prime members and get them to be whole foods shoppers and held that base. >> i want to look at the grocery industry as a all as well. we have seen an underperformance , somerocery stores disappointing earnings from kroger, concerns over a price war in the industry. when you look at amazon getting into the book industry, just

decimating it, but it does not seem like grocery stores would go away to the same degree we saw that happening in some other industries. >> i agree. the bookon went into industry, it was new. the retailers for books were not prepared. what is different today is kroger, walmart, albertsons, they have been watching what amazon has done to other sectors in the retail landscape and they have plans in place and have been building their own e-commerce strategy, so this is no longer a case where amazon can walk in and take share. amazon will have to work hard to take share away from these players who are fully engaged in an online e-commerce strategy. talk about legacy grocery stores and their e-commerce strategy like kroger, have they found significant traction in the markets where they operate? >> what you are finding is they

are getting traction. kroger bought a company a few years ago, so they have an online store where they can deliver to homes. to beal future seems ordering online and picking up at the store. suburbans well in areas for people who are busy with families. kroger has over 700 locations with that option. walmart has over 900 and eight with that option. people convenience for with a needed and where they live and a strategy they are doing pretty well with. >> very helpful insights. thank you for joining us. whyng up, we talk about money is pouring into shopping malls despite retail struggle. this is bloomberg. ♪

>> breaking news. the federal trade commission has cleared amazon's acquisition of whole foods. shareholders today approved the deal. the ftc approved it. shares are little changed now in after hours trading. they have come back down. this deal has been cleared. amazon's acquisition of whole foods. let's get to first word news. respondingryan was today to president trump's threat to shut down the

government if a border war with mexico is not funded. >> i don't think anyone is interested in a shut down. while we work on doing what we said we would do and what we have done already and what we need to do, control our borders, so you don't have to choose between the two. mark: ryan made the remarks where he discussed tax reform. has responded to a rash of accidents by firing the admiral in charge of the seventh fleet. , the navy saying it lost confidence in his ability to command days after the uss john mccain was involved in a fatal collision. there have been for accidents under his command this year, two of which have been fatal. authorities in brazil say seven are dead and dozens missing after a boat carrying 70 people sank on a major river in the

northern part of the country. officials say 25 people were able to make it to shore. there is no word on the cause. england's all-time leading scorer has announced his retirement from international soccer. wayne rooney said now is the time to bow out. he will still play for everton. goals and 119 appearances for england. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> let's get a recap on earnings. hp put up a beat and raise revenues,eating raising the range, but the stock is down because they tighten the fiscal year in eps, raising it 66m $1.59 to one dollar

cents, but consensus is $1.64, so maybe that is why shares are lower. >> i'm looking at the owner of brands like calvin klein and tommy hilfiger, the company out with earnings that beat estimates, shares rising 3% in after-hours. raisingany also rai its forecast. that is five cents ahead of estimates, revenue ahead of vestments. kleinamerican calvin comparable sales down 2%, but up 6% internationally. ,ommy hilfiger comps flat internationally up 6%, so it looks like international growth is driving things. joe: speaking of apparel brands, is surginguess? after hours, up 13% after that company beat estimates.

q2 eps of 19 since beating net revenue $.10. of 570 3.7 million dollars beating estimates of $559 comesn q3 revenue up 6% to the market's liking what it is seeing. >> what did you mess? knell of the american mole has been ringing, but spending on construction and shopping centers the largest in june since 2008. here to talk about what is going ,n is kenneth bernstein president of a real estate investment trust specializing in open-air properties. thank you for coming in. there had been talk about retail, even as numbers showed it has been a mixed picture for sure. talk to us about what you are

seeing. certainlyalls have done better over the past decade than the traditional closed malls, right? >> it is dependent on the assets and headlines can be misleading. we are focused on open-air retail, and we operate under what we call a dual platform, meaning we own a host of assets and primary gateway markets, washington, d.c., new york, boston, chicago, san francisco, and soul general partner of an investment fund backed by institutional investors where we can be opportunistic and value added focused. the baby been thrown out with the bathwater when it comes to malls? anything mall related come people have dumped indiscriminately? >> here is the confusion. atailing is going through

significant transformation right now. run, it will be a healthy re-organization of a host of different companies. there will be some exciting new retailers and brick-and-mortar will be part of that. there are ups and downs. retail real estate is much more stable. the confusion has been around looking at the retailers, we have always seen retailers come and go. and we equate that immediately to the real estate. >> one pressure against retailers and real estate has been e-commerce. internet-proof your business? >> you don't. the answer is not that e-commerce doesn't exist, it certainly does. it is only 10% of retail sales, making sure you

have the right real estate, the right retailers, and in brace the omni channel. all retailers have some type of online initiative, and more exciting than that is watching the original online only retailers move into bricks and andar, screens to stores, you will see over the next couple of years that this combination of omni channel where retailers are using physical bricks and mortar differently than they used to to make sure they are connecting with the customer and that they are providing convenience and it is the most profitable channel of all of them. not about malls, but you mentioned owning assets in new york city, which anyone who has walked around new york city has seen these vacant storefronts. there was a great article in the new york times about this and the fact that rents have surged.

why is it that the market has not found equilibrium faster? why do people who own commercial real estate hold out for so long, willing to accept in some cases many years of empty storefronts? all, ownership is fragmented in new york. you do not have one landlord deciding what to do as you might in a mall or shopping center. in 2013-15, we stepped to the sidelines because rents were growing faster than sales and it was a warning signal. again, don't confuse landlords pushing rents, being too patient , with e-commerce. this is a more traditional, cyclical issue that will result. it is a great city and a great place to shop.

don't confuse traditional cyclical issues within the longer-term sector. >> what are your vacancy rates in new york city and around the country? occupancy,id-90's 94%, 95%. it is maybe 100 basis points lower than our peak. even as we get the space back, we are leasing it for higher rents. to beear, we expect rents higher than last year. ?> you are renting it to who we hear about these companies closing down stores, right? in chicago, for instance come up we signed with tj maxx, doing quite well. we are expanding with lulu women. -- lululemon. the list goes on. it is more interesting to who areretailers

struggling, and there are a host of retailers who lost their way and have to rediscover it, otherwise new ones will come in. >> what about pop-up stores? a great wayores are for nontraditional retailers to , andre a given market temporarily they can work well, so i think you will see more of those here at >= i'm looking -- more of those. >> it looks like rental income in 2016, you saw some quarterly dips and rental income. >> it still grew. it's not going down. the growth rate is celebrated. >> even -- growth rate decelerated. >> do you think we have seen if it is cyclical a bottom in the retail cycle? >> the devil is in the details. retail is a location-driven

business, so for some assets, absolutely. we have raised a lot of capital. we do think it is an interesting time to deploy capital. >> thank you so much. great insights. >> thank you for having me. >> coming up, president donald trump keeping investors on edge. we hear from one ceo why he thinks we are on the cusp of a 30 year bear market next. this is bloomberg. ♪

>> "what'd you miss?" market share says we are in the late stages of an -- bull runle run

and staring at a 30 year bear market. he made his case earlier on bloomberg markets. >> it seems like a strange call. the dow adjusted for inflation from 1999-2014, a 15 year bear market. stocks are more overvalued than in history and more public involvement, with central banks boosting the markets more in history and now trading down, 40 your bull market for bonds, it is obvious we will see a 30 year bear market meaning you will not make money over the next 30 years in real terms. >> this chart you put out, inflation adjusted dow jones industrial average. is notuld say the dow

the best indicator, but you say we are well overvalued here. >> the price sales ratio has not been this close in history. if you look at the broad market, no chief sectors. in 2000, the internet sector was overvalued. the russell small caps were undervalued. now more stocks are overvalued than they have been in history, so it is difficult to make a long-term case for a bull market over the next 10-15 years. >> timing is key. if you missed that timing in february, you might have missed out on a 14% run. when does the start? >> i thought the top came in august. you had an s&p decline of just the 10 day basis, the put-call ratio was greater than march 2007, so many people

were expecting a bear market to begin and large correction to begin while the s&p declined less than 3%. we think you will see another rally of 3% to 7% before the bull market ins. we told our clients to get long yesterday. >> explained that chart. >> the 10 day average adjusted for the 100 day average. when it it is more than a standard deviation over the norm, you get a buy signal. the minimum rally was 7.08%. >> fascinating. waking up toors the risks right now. bearishty on the rise, options multiplying, small caps falling, a we that investors are starting to smell the coffee. >> bear markets begin under

their own weight. over the last few weeks, too many people recognize the risks in the market here it -- market. when you get investors complacent, that is where you will see the decline. small caps have been underperforming, which is a negative. we have 30,000 indicators we look at built up over the years. at this point, it is most likely a bear market will begin soon, maybe september or october. was milton berg speaking earlier on bloomberg markets. >> ginni rometty reveals she now accepts she is a role model has a female executive in tech. more highlights of her sitdown with david rubenstein next. from new york, this is bloomberg. ♪

>> it is time for the bloomberg business flash. apple planning on building a data center in iowa. state officials published the meeting agenda for the iowa economic of element authority board which will consider incentives for the company tomorrow. mcdonald's cutting global antibiotics use in chicken. changes start in january 2018. europe, australia, and russia will follow suit. to have theoal is policy and fermented before january 2027. venezuelan bonds falling on concerns of the u.s. trading band. the trump administration is considering additional sanctions

on president nicolas maduro for suppressing the country's democracy. venezuelan bonds have posted the world steepest losses since mid-july as violence protests and a crippling recession have weight on markets. that is your business flash update. >> "what'd you miss?" since 2009, 19 female ceos have that down, and only three were they replaced by another woman. set down with david rubenstein in the latest up the sign of the david rubenstein show, peer-to-peer conversations, and discussed her position, management style, and mentoring women in business. >> do you think a woman's rise to the head of ibm has to be better than men? >> i don't think it made a difference. >> supported and's come to you and you don't like their ideas, do yell at them or scream at them or are you more quiet about it?

had you let people know you're not happy? >> i am not a screamer. i never was. i'm not a thrower. the waylways believed to challenge things is to challenge them is to be intellectual, so i would say, look, you need to know what you are talking about. i have no trouble asking questions. that is the best way to challenge things. a certainl responsibility as woman ceo to mentor other women and speak out on issues relating to women? >> i have grown to be comfortable without role of being a role model. i think many of my colleagues would all say and it is something where you want to be noticed and rewarded for something you did come your contribution, and this has nothing to do with gender, almost blind to that.

over time, i came to learn and see that it is important there be role models and you have to accept the fact you are a role model on appropriate things, so at one point, that was another image that sticks in my mind, maybe 10-15 years ago, down in australia, giving a services presentation and thought i had done an ok job. some people came up to me afterwards and i thought there were going to tell me this is great or they disagree, and one man said, i wish my daughters had been here. it is funny the moments you remember. that's why you do have to realize that any of us in any of these positions in any kind of influence are role models, and women do need role models. we are still i small minority that run these companies. we need role models to say that

as possible and i can be that. >> are you disappointed or that there are relatively few female ceos still? >> i would have hoped by now there would have been more. i think this is a conscious effort, and when of the biggest things is to keep women in the workforce. there is no doubt that when women have children that they will come in and out of the workforce. one thing you can do is everything you can to keep them in and your audits are higher that they will keep going. one of our newest benefits is shipping breastmilk for mothers who are nursing so they can keep working if they want to. women in of keeping the workforce is one of the most important ways to create the pipeline for these roles. >> that was ginni rometty. you can catch the full interview

tonight at 9:00 p.m. eastern on the david roman stein show. -- david rubenstein's show. that thet got the word amazon acquisition has been approved. the stock did pop briefly. chart, 8686. this it is one of my favorite charts. is we haveo be made walmart andap of amazon, amazon trying to take on walmart in terms of this grocery store business, and amazon has a much bigger market cap, but sales, look at how walmart sales are dwarfing amazon's sales, so an interesting dichotomy there. >> it's all about the projected growth of amazon. when you seeting that disconnect when you see the size of walmart, the sheer

revenue cloud the company has. has all those costs, while amazon turns those costs into businesses themselves. coming up, which you need to note for tomorrow's trading day. this is bloomberg. ♪

>> don't miss this, the jackson hole symposium kicks off tomorrow. at can catch our interview 7:30 a.m. eastern. >> i will look at paul ryan holding a town hall in washington. that is at 12:00 p.m. ,> lots of earnings tomorrow abercrombie & fitch, lots of retail. >> we will see with the ups and downs look like for those. that is it for global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> have a great evening. this is bloomberg. ♪

>> you are watching "bloomberg technology." let's start with a check of your bloomberg "first word news." the stock market has done well since donald trump was elected,

but his wealthiest donors, not so much. fortunes have risen just 0.6% since the election. the s&p 500 is up since then. chancellor angela merkel says she understands the support for the america first attitude, but she believes it will only hurt the country in the end. many see globalization as something that benefits one country at the expense of others. she says her view is that everyone can win. the israeli prime minister visited russia today to voice concerns about iran's expanding role in syria. after meeting with president putin, netanyahu said most of the conversation was about itselfattempts to base in areas where is long state is defeated and leaving. french president macron wants to protect workers in france and other countries in western europe from cheaper alert -- labor.