children at the border. democratic sens questioned him and said that is no are near enough progress. were in yourids custody because of the zero-tolerance policy have been reunified? >> i believe we have had a high .f over 2300 children separated 47 -- 2047.2000, >> the brazilian president has welcome -- welcomed vice .resident mike pence regionalhe u.s. backs efforts to restore democracy.

to two men were expected discuss the wider margaret -- migrant crisis. mattis, who plans to visit south korea and japan has press china's leaders for continued cooperation despite tension between the world's two largest economies. he said he is visiting the -- he tweeted that he will meet with militaryo avoid escalation in the region.

global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. live from new york, i'm julia chastity. we are 30 minutes away from the close here in the u.s.. the tech sector bouncing back today. signaling hetrump curve china investments.

he joins us from the next hour. and the power of endorsement. polls in theto the congressional primary race. >> president trump signaling you may take a less confronal approach curving china investment industries. instead, has said a lot to be done. --le the president considers for more on that, senior fellow

on the council of foreign relations. talk us through the options here. speaking, china has tariffs.esponding to to get tough on u.s. companies operating in china. the second is to guide china's own currency. if the u.s. reduces china's -- rts, china could try to use its large

agenciesand also some as it's full of influence. people often cited that one, but it basically contradicts number two. >> pushback a tiny bit. china could shift from longer notes, three-year, five-year bonds to shore dated treasuries. that would have no currency would have an the effect on the shape of the yield curve. the said could respond by or by -- andpolicy

broad terms, that has the same offsetting chinese sales. >> we are starting to see signs chinese growth is weakening. that further limits some of those that you were talking about. don't think it affects is going to put pressure on starbucks. it could actually constrained china's ability to respond with tariffs since many of the , essentially all of chinese-u.s. trade would have an impact.

>> how much latitude today have here to weaken the currency without creating concern from investors? >> i think there is too interesting points to make. china couldnaling -- it could give china the appearance that a chinese currency is in response to have some that my

positive effects. the harder question is how do you keep it controlled? china historically has not want it uncontrolled. risk that the a outflows would become too big and that would test china's tightened capital controls. china has probably -- probably has a little bit of latitude. i think china could manage, but there is clearly a risk. you think they could go back,

but maybe in a smarter way. >> i think there is a couple of questions. weakening.a's the volatility is the desired outcome. i think there are a couple of important differences in china's position now than its position back in 2015. is it led to a big run-up. it has not come back with the same strength.

the second is that china tightened its controls. there is arguably less scope for money out of china than now and the third is a little bit more broadlye and china has transitions against the dollar. that does not mean you can devalue, so i don't think that is decisive, but i think there are differences that might allow china a bit more latitude. back, when youp look at these various options and president trump's willingness, where does the balance lie at this point?

>> i honestly think it is rebalanced. more andimports therefore the u.s. has more scope to put tariffs on chinese goods than china does to put tariffs on u.s. good.that is thp keeps coming back to. said, the u.s. has more investment in china, so china has more opportunity to squeeze u.s. companies and china has much greater scope to use its policy. as not dive much into what it could do against u.s.

companies like starbucks, apple and gm. of the loss of andtility do think that is not being thought of my investors in some multinationals? sometimes a tendency to equate damage to operations to damage to the economy. there is plenty examples of china mounting powerful campaigns. if you look at how china as part of the attempt to counter north korea in the

chinese works that, you saw inside sales in china. thatstarted complaining they were spending too much and not buying enough low-cost chinese parts. you can go through the list and because of the nature of china's economy, there are a lot of toers that china could imply .ake it hard for starbucks the options are pretty broad. luckily, brad brings it.

you can read his full blogs on what would happen to china if they started selling off their treasury portfolio. from new york, this is bloomberg.

>> companies such as harley davidson are blending trade tensions for corporate change. we have been speaking about the impact of tariffs. reprents an extremely small portion of the gdp of the united states. you look at the markets

today, i think they are recovering pretty well. >> is this something you are keeping on the radar just in case? >> at the end of the day, you stand.look at where we that needs to be addressed. my hope is that leads to a ander long-term resolution equitable with more trade relations. >> you talked about custard or -- customer demand. or you hearing concerns that maybe the tariffs eventually catch up and curbs that growth.

saw it last year before it had an impact. tariffs, i look at icing on a cake. before greeted a demand you begin to take effect. yesterdaydavidson movenced they will offshore. are you concerned that more will start doing this? peopleuld suggest that always think of the long-term. tariffs will have

ander true trade balance when that happens, quotas will not be necessary. when that happens, countries that move overseas might regret it. i think my only guidance to all companies would be think what you're doing in the long-term. viewter, we will get the of a ceo on trade tensions. the budget group chairs with the car-rental company and are among

the worst performances. what happened? over at morgando stanley. tose cars are likely depreciate to such a degree they won't be able to offset it. atht now, if you take a look used cars -- -- that is a big piece of it. pressing is potentially going to go to the downside. we are skipping over two hertz

popping higher. protectionurance against 66 basis points. this is not necessarily a great picture. >> that is a credit market think. about thealking more leverage and very large degrees of credit. >> i have to get back to the depreciation thing. >> there are some many cars on lease and they could really provide the oversupply. why more cars are right now?

>> coming up, it is not just the president, it is the eu as well. we have a chart about global protectionism. this is bloomberg.

>> it is not just general electric that has been underperforming. .e had a dramatic exit they have been doing poorly on trade concern. we had caterpillar raising concerns that we were at peak here. is at itse it weakness going back to 2009.

it looks like people got the memo. >> how is the housing market doing? the ceo of homebuilder said combined withbeen short supply of new homes. that is basically as people talk about rising rates. that isr big aspect of .he cycle there is a big tailwind that remains in the market.

what about actual action? they point out 67 new barriers. to 296. the tally russia taking the prize and .hina also as far as the eu is concerned, they actually removed barriers. that is more than doubled clinton 2016. interesting. the market close is next.

butave stocks on the rise, moderating their gains. this is bloomberg.

ulia: "what'd you miss?" stocks and the session in the grain. wtiey g.i. back above -- back above $100 a barrel. joe: if you are tuning in live on twitter, we want to welcome you to our closing bell coverage every weekday from 4:00 to 5:00 p.m. eastern. julie: we begin with arkin its. stocks finishing in the green, but a smaller game than we saw earlier in the s&p 500 cutting its gain by more than half. on thestocks did gain session. consumer energy stocks also strong. tech bouncing back to some degree. consumer staples and health care in the red, offsetting some of the gains as the day went on. let's talk about some of the individual stocks on the move. we talked about ge quite a bit today. finally, positive action as the

company gets out of the health and oil business, a more dramatic step in the slim down being clamored for from investors on the part of ceo john flannery. we just heard about lennar from joe. the company talking about some of its challenges, but at the same time, second-quarter revenue beating the highest estimates. we talked yesterday about netflix, and its decline of about 7%, as it was sort of the poster child for the fang selloff. well, bouncing back. another new bowl on netflix. stephan miller initiates the stock at an outperform. the street -- on $503 a share. he says there's no competition for the content available at the price point it offers. finally, we saw intel shares on the decline. he got a downgrade over at bernstein. we will be talking a little bit -- excuse me,how

it was not specifically from tony, but from his colleague, but we will be talking with tony broadly later in the show. the stock getting downgrade to underperform from market perform. joe: let's take a look at the government bond market. nothing going on there basically. i could just skip right over that basically. yield flat on the day. much more actn, however, in the commodity world. let's look at oil and gold prices. texas intermediate back above $70 of their old. people start to perceive the supply and demand perspective to -- west texas intermediate back above $70 a barrel. estimates of saudi arabia will increase to the most ever,

though perhaps still limited. bottom line, lots of moves in the oil market, sending the price up three point 5%. finally, i want to look at when industrial metal we have not talked about lately, which is very ugly. zinc futures. stock files building. .oncerns about trade in china on its longest losing streak in three years. julia: let's look at commodity currencies here, to take up what joe was saying. a mixed bag. were talking a couple of hours ago about the prospect of canada actually trying to take measures to prevent dumping to even the response they have to do as far as the united states. you can take your pick there as well. we can take a look at some of the broader risk currencies we would ordinarily talk about.

we have got the dollar index on session highs. it did touch earlier on in the session as well. we got comments on trade from the chair at the white house council of economic advisers. shotnited states is a good . at world currency rankings. just want to give you a look at the one-day performance. bit of a mixed bag. by 1.5%, buthigher as you can see, we go to the downside. those are today's market minutes. ulie: "what'd you miss?" mental scarring according to our next guest. he is with us in studio visiting here.

mental scarring from 2008. we are still sort of in ptsd mode in the markets. but it seems like markets have overlooked that for several years in between then and now. >> a think at any point in time, this didn't things going on with market psychology. areis that investors investing on past experience. we're not in 2008. it's a very different environment and we are struggling to understand that, but what i mean by mental scarring is the immediate assumption there is recession risk. if you look globally, recession risk objectively is extremely low. there is no global inflation, and the financial sector has reform globally in all the major geographies and looks very strong. what is intriguing is if there is objectively a risk of recession here or if this is

again tears and echoes, which we all experience. any investor, anything that happens, we worry of this is 2008 again, and i think that mental scarring is creating opportunity. joe: before we get into opportunity, let's press on the idea that people are scarred. into back to last year january of this year, we saw incredibly low volatility. some might even call it euphoria of growth potential. where do you actually see the evidence to back up what feelsedly, intuitively like we are still very scared? >> the further you go from 2008, it is almost as if the memory is the paying. so people start to get comfortable. you saw that because the evidence has continued to deny it. to understand last year, you have to think back to what was happening in 2016. you may remove or february 2016. the oil price was falling. a lot of people set there was going to be a recession.

all of those beliefs, and again, that was a 2008 echo. anything goes wrong, any time you get back news, people say this is 2000 eight again, recession risk on the alert, then what typically happens is it unwinds, so i would not at all be surprised if we kind of get a rerun of last year, which he actually see volatility declining and you see a return to risk assets. julia: you say we are too nervous about recession risks, but we have china and eu warning about the impact of trade? chinese in fact cutting rates because they seem to be a little more nervous. are we underpricing, or are we ? knowledging the damage

>> i think we are far too worried. the current regime is the new regime. the question is if you trust people's interpretation of it. i'm very skeptical of people's interpretation. the question i would be asking today is not about the recession. i would be asking if it is inflationary, if it will hit corporate profits, what it means for capital versus labor. we are entering a regime we do not fully understand. all the major economies are growing pretty strongly. there has been a deceleration of growth. you don't want to distract -- to extrapolate on one or two quarters. julia: define what growth slowdown looks like in these markets. let's take recession risk off the tabor -- off the table. >> i take it with a big pinch of salt. if you extrapolated the growth -- we got a huge positive surprise less year. if you had extrapolated that,

you would be on the right side of what effectively happened this year. you do not want to be using three-month data slowdown. if you look at cyclical indicators, these surprise indicators, if they have one indicator, it is that they tend to mean revert. joe: if people are overly anxious, they are getting overly worried about some random data and trade, you look at the market. where are people throwing the baby out with the bathwater? where's the opportunity to take advantage? >> the simplest way to the devout this is if bonds are recession insurance and you want to go long recession risk, you want to own stocks, right? the volatile as it versus the perceived safe one, that's where you see the big opportunity globally, the difference between the implied real return on equity's, you are barely getting above the real return to lend to the u.s. government over 30 years. when global equities, you are earning something like 7% real

implied returns. to really find out where the value is, you go to the things that people who are volatile and most exposed to cyclicality, things like a italian banks. now trading on single-digit pe multiples. have been recapitalized, so the psychology tends to be we go recession risk, we worry about cyclicals, we worry about europe, and then we wake up and say that was just a nightmare, not the real thing. the real thing actually happened five or 10 years ago. joe: so by caterpillar and then go on vacation? >> that's the idea. julie: what about emerging markets, quickly? >> imaging markets are starting to look extremely interesting. the turkish lira has been .utperforming all of a sudden if i had sent to anybody with a portfolio two weeks ago, the you,sh lira will diversify if risk assets fall, people would have thought you were mad.

that is actually what is happening. i think emerging markets start to discount an awful lot. julie: did you do that two weeks ago? >> it a couple of our funds, we have turkish era exposure. our predisposition is to look at increasing those kinds of positions. julia: stay with us. remember, bloomberg users, you can interact with the chart can see a host of charts we've been talking about of the last couple of hours. the russell 2000 outperforming the s&p. obviously, a bit of weakness yesterday. you saw that we were looking at the relative out performers, the underperformers. from new york, this is bloomberg.

♪

mark: i'm mark crumpton with first word news. president trump says the supreme court decision in favor of his ban on travel from several mostly muslim countries is a great victory of the constitution. during a white house meeting with republican lawmakers, the president also called the high court ruling a tremendous success. >> we just have to know who's coming here. the ruling shows that all of the attacks from the media and the democrat politicians are wrong, and they turned out to be very lookingnd what we are for as republicans, i can tell you, there's strong borders, no crime. mark: the president added that the ruling shows that all the

attacks from the media and democratic politicians are wrong. meantime, the council on american islamic relations says the court ruling gives the trump administration a free hand to reinject discrimination against a particular faith back into our immigration system. >> the supreme court decision ignores the fact that this and candidate has targeted a particular faith community, which is muslims, here and abroad. unfortunately as a nation, we still have a long way to go when it comes to equal protection and living the american ideals. mark: lawmakers in the netherlands today approved a limited ban on face-covering clothing, including islamic veils and robes, such as the burger, in several public places.

the approval came after over a decade of political struggles pushed by right-wing politicians. the ban also includes ski masks and fullface helmets. global news 24 hours a day on air and tictoc on twitter, than 2700 more journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. joe: "what'd you miss?" we are back with imaging -- m&g 's fund manager. i want to talk about donald mode of dealing with our trade partners. >> i think one of the challenges is people are affected by the presentation and style. joe: undoubtedly. >> absolutely. there is an assumption there's insight,f strategic whereas actually, i would say if you stand back, what he is doing in one sense is highly

conventional because he is actually challenging the whole thesis of global imbalances. if you were the imf looking at the global economy over the past 15 years, ben bernanke is said there is a global savings glut. largely, that was asia running trade surpluses. central and eastern europe are running current account surpluses. italy is running a current account surplus. germany's current account surplus got bigger. this is a rerun of the global class. trump if you stand back as the first international leader to say that's not acceptable because european fiscal and monetary policy is effectively free writing on global demand. we say it's just national accounting. the private sector is going to run a surplus. the public sector is going to run a surplus in europe, which ,eans we run a trade surplus

and that is by design. trump is the first person who has called merkel out, and merkel has gone on the defensive, because she is suddenly trying to pretend germany does not have a trade surplus. -- e is a point and a logic joke: if his style were different, he could fit in right a davos? >> absolutely. julie: you cannot sort of separate him from the style, seemingly, so even if he has a point, even if in other circumstances, public intellectuals might be supporting him, he is still donald trump, so will he be able to get any traction with this type of thing? >> we will see. the big debate is if you can target current accounts. the extentltimately of these are bad fundamental preferences, so if you have

limited control over your ability to target, but i'm not interested in his style. i am actually interested in the substance of the policies. i'm very skeptical about the kind of tit-for-tat tariff behavior, but on the fundamental strategic point, is european economic policy sustainable and appropriate to the global economy? i think there is a very valid point to question it, and this is the first time it is being questioned properly. julia: we're looking at him tackling asymmetry and trade behavior, and his right in many ways, also intellectual property theft in china and tackling that approathstanng is right, too. what is interesting to me is the approach europeans have taken with china. they could tackle china at the same time because tho struggle with this as well. instead of which, we had xi jinping in the french talking buying more airbus, versus boeing, which is struggling and

concerned about what their relationship will look like. is europe missing an opportunity to push back at china, to? a huge lack of intellectual leadership in europe. there's no doubt about that. with china again, we have to stand back and look at the bigger picture. if you look at the chinese current account, it's close to balanced. it would not be surprising if china were to move into a current account deficit. i think trump is pushing on an open door with respect to the chinese. china is being a global citizen. the other deep irony is china has just reached the point where it has got intellectual leadership, technological leadership in lots of areas. china should embrace property rights in ip -- absolutely because china is going to start producing vast quantities of ip. the chinese should just cooperate here, be supersmart about this, say let's tighten up

our ip standards because there's lots of chinese businesses now that have technological leadership. doia: xi jinping cannot that, though, politically. >> we will see. that is a diplomatic challenge, but strategically, a lot of what people are asking from china at think the chinese are willing participants. germany, anyone who has criticized germany has been effectively undermined, so the germans have this sense that when europeans criticize their policy, they are free writing, but when america tackles what europe is doing as a whole, what germany is doing, that's a very legitimate question. nonetheless, it would be politically damaging to concede to donald trump for many of these leaders. felon, a, a convicted would-be president, and the first statewide official to take a chance on then candidate

donald trump -- they are all on the ballot today as voters head to the polls in seven states. we will have your primary preview next. this is bloomberg. ♪

julie: "what'd you miss?" president trump's touch will be put to the test today. in new york where infighting from both parties is on dramatic display and one candidate is busy assuring voters he's only technically a felon, here is what to watch with bloomberg's

congressional reporter. i don't know what -- where to start with all of this. in new yorkhere with technically a felon michael graham and if his pivoting toward president is going to help him. >> the problem is that the president has already endorsed that race, and he has endorsed dan donovan, the current incumbent. graham is competing for the seat he resigned in 2015 before he went to jail for tax fraud. well-known for his comment about threatening to throw a reporter off of a balcony, but that will be a close race. the chair of the republican campaign committee said -- you seen polls that have a close, but at the same time republicans worry that if graham raines -- if graham wins, that becomes a democratic seat. joe: it's interesting that at the time were you have a candidate threatening to throw someone off a balcony, and that doesn't even move charts.

do in a republicans have a shot ? unseat incumbent democrats >> no. alexandria cortez was an organizer for bernie sanders' campaign. that it's more that it highlights this difference between the establishment, even fairly progressive members of democratic establishment, and the activist sort of bernie sanders wing of the party, but it's getting a lot of attention. it's going to force some candidates to change the weight of a campaign or change the issues you talk about, but i think that crowley is safe -- it's going to force some candidates to change the way they campaign. julia: we cannot avoid the discussion that has been prevalent the past several days, and that's the immigration

crisis the country is facing. how prevalent is this going to be? >> i think we are seeing it in that new york race. it's not enough to condemn the fact that families are being separated at the border. a lot of democratic candidates are calling for completely abolishing the immigration and customs enforcement department, which is a very extreme position. that is a new position that is imaging, and you look in colorado where there is a democratic primary to face off against republican mike coffman, who says steve miller should be fired. he went down to the border this weekend and his trying to make his case that he is for immigration and immigrant families. julia: great to get your contacts. thank you for that. but next, ryan lance will join us from the world gas conference. we will get his take on how increased trade rhetoric is in cracking -- is impacting and could impact his bottom line. this is bloomberg. ♪

mark: i'm mark crumpton would first word news. the first muslim elected to the u.s. congress says the supreme court's ruling upholding president trump's ban on travel from several mostly muslim nation is unjust and will someday serve as a marker of shame. democratic congressman keith ellison of minnesota likened the court -- likened it to the court decision that upheld japanese internment camps during world war ii and separate but equal laws during the jim crow air in the u.s. south. president trump is not on the ballot, but he has invested time, energy, and political capital in a slate of primary contest across the nation today

that will again test his clout within the gop. voters in several states are headed to the polls come up with a contest that matters most to the president is in south carolina where he appeared at a rally to help gov. henry mcmaster. the governor was one of president trump's first high-profile supporters and is in a tight race. the vice president told reporters he was grateful for brazil's leadership in confronting the humanitarian crisis in venezuela and said the u.s.-backed regional efforts to restore democracy there. he also offered solidarity to the suffering people of venezuela. the men were expected to discuss the wider migrant crisis as well as integration into the u.s. the european union trade officials said the u.s. new it would face consequences if it put tariffs on steel and aluminum imports.

motorcycle manufacturer harley-davidson prepares to move some factories from the u.s. , the eu is brussels looking into if steel and aluminum is now arriving in europe due to the tariff move. >> this is an investigation that will probably take until the end of the year, but as you say, we are seriously contemplating provisional measures, and i would say in the july. exactly what form that will take is still under discussion. malmstrom also said protectionist trade barriers are unjustified. i'm mark crumpton.

this is bloomberg. julie: let's get a recap of today's market action. all three averages finishing in the green, something of a rebound from yesterday's declines, although they are down considerably from the highs of the session. energy stocks, big winners on the day, and a bounce back in tech as well, amazon and apple, the two biggest point to the s&p 500 gains. ge rallying as well on news it will share its health -- it will care and oilth businesses. ulia: "what'd you miss?" leaders in the world are gathering in washington, d.c., the national gas conference. : i'm here with the ceo of conoco phillips. ryan tends to be very much ahead of the curve. good to see you. impacts between china,

u.s., and the u.s. and the rest of the world -- how is that impacting your business? >> generally, we are impacted -- we're watching a pretty closely eerie hopefully it does not escalate into a full-scale trade war. that will not be good for the world. for a company not having a huge impact in 2018, but at this persistence of 2019, 2020, and beyond, the cost is rising and it has a material impact on the companies's as we go forward. we use the steel in the tubing we put in the ground, the pipelines we run across the surface to move our product around, so certainly, over the long haul, it was there to have an impact. not so much today, so we hope a lot of this gets solved in the near term so does not have a material impact going forward.

alix: what is on the demand side? china starting to buy more oil from the u.s. do you sell to china? how much should we be worried? lance: we do sell to china. today, we have not seen a large impact to that demand. we will see what happens if they place a tariff on the liquid side of it. the market will rebalance itself and will be sending volumes maybe not to asia, but to rotterdam into south america. i think all eyes are kind of upon that. today, i understand it is excepted from that, which i think is a good idea. i think certainly a lot of our natural gas in the u.s. is finding its way into asia to meet some of their growing demand, so as are watching that very closely. some of our gas makes it to that export channel as well, but we are hopeful that gets solved as

we go through this. alix: what would you have to see for you to start making different business decisions? seelance: we would have to the longevity, how long we think it will persist and, really, what happens in the short-term or can he we are used to a lot of volatility in the short-term market. really, it's trying to make that assessment over the medium and longer-term that will then drive capital allocation decisions within our company and changes to where we are investing and the mix of oil and gas that we are investing in, but largely today, the gas production is rising pretty well in the u.s., and it will continue to do that, so we will have to find out, and if it's not to china, it will have to be to europe, which is the backstop, and south america and other places that need the lng. : regional differentials in

the permian have been blown out. but you have a lot of supply, specifically a natural gas and not a lot of takeaway capacity. you don't have a ton of work going on in the permian, but are you reallocating rigs or cash? ourlance: we learned from igo for the experience, that you have to understand the optimum way to develop over time, and if you in the permian. require if it techniques and different technology and you first have to figure out how to optimize that, and we are in that mode of trying to optimize, but before you get into the mode of full-scale manufacturing, have to make sure you have that. we did not see it coming this quickly because the rigs have risen pretty quickly and productivity has come online pretty quickly, much higher than people were expecting. we are in that kind of mode today.

transportation coming, but not for a couple of years. we're looking at how we reallocate capital. why would i drill internet headwind when i could reallocate capital somewhere else? we're looking at it very closely right now. alix: what would you put capital? mr. lance: we would probably move rigs to a go for it. andave spare capacity infrastructure today. we're in full manufacturing mode. we know what up among completions are, and it's a very low cost of supply investments in our portfolio, so we are quite excited. we are able to access the spare capacity, moved to the coast and , so to sell spare product it makes sense for us to be thinking about where you would move the capital and what you might do in terms of rate deployment around the u.s. you are also sending rigs

to alaska. what opportunity sets do you see in those regions at $60 that you may not have seen at $50? where are you trying to funnel more capital? mr. lance: in our company, you have to have a constant supply of low 50's. the effort we're doing in alaska will be identifie words, that a $50 price equivalent you could make an after-tax rate return on your investment. we think they will ultimately create a lot of opportunity. we have some austin chalk potential in the upper texas gulf coast. we made an acquisition of about and we will be testing that later this year. in alaska, it has been a bit of a renaissance for our company. we bought out one of our and we had our busiest

expiration season in probably a finde, and not only did we existing reservoirs we were searching for, we found new play types on the slopes, so we have been gathering at the acreage and gathering our positioning and having a strong position to fully develop. that combined with spare capacity is really creating a renaissance today in alaska. ix: and it's close to china. is that part of the story? mr. lance: it certainly can be. to asia or to the west coast, to the u.s., isending on where the arm open. i would mention, i think, too, the government and alaska has created a more stable fiscal system with the passages and work they've done over the last couple of years, and it has

incentivized more investment into alaska, which has been helpful as well for companies like ours to get that durability, predict ability, and that understanding that this will persist for a period of time. predictability of oil prices at opec has everybody's back now. what does an opec ready to come into the market and supply with oil mean for ryan lance and conoco? lance: we look at supply demand as balanced today, but cautiously so. inventories have come back down to five-year average levels, but it does not take much of a geopolitical impact to go up or conversely, a demand impact if demand were to go down, prices would fall, so i think it is tenuously balanced. i don't necessarily worry too much about the increase that opec has talked about because it's really getting up to where they are today and recognizing -- sure. you are right, but a dusting to

imply there will be a caps on prices. can you live with that? mr. lance: absolutely. we have decided to embrace volatility, decided not to chase the cycle of or down, try to operate at the mid part of the cycle, know that you can run the company well at $40 or $50 should the price go down to that because of demand reasons, destruction reasons, or other reasons. we know what to do if it's 70, 80, or $90 a barrel, but we try to set up the company to work at 50 or below and we can break even at $40, which is one of the lowest in the industry. x: average across all your assets? mr. lance: we can cover our portfolio. go to be.that is where you've you got to get a low sustaining capital and low sustaining price. we know what to do as the cycle goes up. one quick question on

venezuela because you were among the first to put their feet to the fire. can you give me an update on if there is any kind of settlement coming down or if there is more enforcement we can expect? mr. lance: we were given a $2 billion reward in their arbitration. we have been applying pressure. it's important because it is against the company, nothing the country, so we can go after assets, as you suggested, in the caribbean. we are trying to be very aggressive in order to bring that to the table and talk about what we can talk about for the future, but right now, we're just pressing them pretty hard and understanding that it is the rule of law. you broke the law, expert created our assets illegally. the tribunal has ruled that way, and you os money, so we expect to get paid. : such a pleasure. i always love catching up with you. julia: great interview, as

always. julie: "what'd you miss?" tech stocks posted strong growth in the year, and the question turns to if that growth can continue. a research analyst at bernstein joins us now. it's always great to sit down with you. coverike many people who the industry, are looking at valuations. there has been some level of hand wringing about this big run-up we've seen in tech and if it can continue. what did you see when you are looking at valuations right now? >> tech has been a terrific sector for the last four and a half years for the market but when we go back and look at 2014 to 2017, what we found was that tech just had better earnings growth, and it did not become more expensive. it just had better earnings growth, and that is why the stocks outperformed. when we look this year, in part largely because of tax reform, tech earnings have been slightly before -- slightly below the overall market, the tech has still outperformed, and the reason is because it has gotten

more expensive, and that is particularly the case with high growth, high valuation tech stocks. at iat we've seen, and it's a bit of a deviation from what we've seen in the last four years, and that makes us incrementally a little bit more cautious around tech because prices cannot go up forever. julie: how much has fang morered into that getting expensive? >> it has been broad-based. we actually saw contributions last year, but fangs have been really strong and shooters. netflix has done extremely well this year. there iss as well, but growth has been spectacular, so fangs have not done were expensive, per se. we've seen valuations rise across the tech sector and not be driven by a select handful of stocks. julia: it's driven by a number of things, clearly, but we had discussion about the ongoing growth versus value. we had one guest say to us value

investors are now looking at buying into tech stocks. you've got people just buying the momentum trade here as far as tech is concerned. we just had a conversation earlier with morgan stanley saying they are increasing their overweight in utilities and you .ee that how vulnerable does technology valuation? t of the >> it's a really tricky call. what we have observed is that the growth versus value trade in tech has been the strongest in favor of growth in any half year in the last 15 years, so we've had growth tech outperform, so the most expensive tech stocks outperform the least expensive tech stocks by 30,000,000% year had -- the we've whole market has moved towards growth, but it has been a really, really pronounced in the tech sector. it's difficult to say. we advocate kind of a balanced approach of both inexpensive and

expensive technology stocks historically, stocks at the end of the spectrum have done well, stocks with middling valuations actually have not done well historically in technology, so we are still advocating a balanced barbell. joe: it seems like one of the things we've seen lately, maybe in the last month or two, has been this incredible spreading we've been talking about. fiv --ares and shop a wayfairs and companies people were not talking about six month ago shooting up in a matter of 30 or 40 months, is this a sign that people are just dashing for anything? >> on a little torn on that. yes, we are seeing continued momentum in growth stocks, which , butto be more expensive

at the same time in a rising rate environment, it is typically those stocks that do well. on the one hand, we are nervous extending.ions are on the other hand, historically, the light cycle, lower dividend paying higher growth stocks tend to work, so i am a little -- my bias would be to add selectively on the value side rather than on the growth side, but there's certainly rationale for why this behavior is happening. ifie: give us some names, you could. if you are looking at a balanced barbell, what is on either side? >> on the highest multiple stocks, you have google and amazon, which have not had multiple expansion year today. earnings have outgrown their valuations. on the value side of the equation, one of the things we like a lot and cover directly is

hewlett-packard, a printer and pc company. the stock has done reasonably well year to date, but we still think that represents attractive values. n-sexy as its u comes is printer ink in tech companies. >> it's a value name. it will not grow very well, but a 10% free cash flow, for names that are less expensive, we like that name. julia: great to have you with us. a privileged to have you in the studio with us. andng up, high deductibles the americas and corporations are finally starting to take notice. we will have that next. this is bloomberg. ♪

ulia: "what'd you miss?" the health-care system continues to be a hot topic, but what does not seem to be getting enough attention on a high deductibles bracing the insurance system. great to have you with us. this was a fascinating article for me for teen of reasons, primarily. one, the sheer quantity of people that have these high deductibles, for workers now, so explain that, and the second thing is how few people could .fford a $400 emergency >> over the past 15 years, a huge number of american workers and families are in health plans where they are responsible for the first $1000 or $2000 or sometimes $5,000 or $6,000 of medical expenses before the insurance plan starts kicking in. there are trade-offs.

premiums are lower than they would be if the plan was paying for the first dollar of coverage, but it means this whole layer of risk has been put on employees. said, there are employees who cannot afford it. john: there's a lot. the shift to higher deductible of coincided with deterioration of american household finances. this took place during the housing crash, the financial crisis, and the period of wage stagnation, so there are a lot of families that cannot afford emergency medical expenses. people fortalk to the story who filed for as auptcy multiple times result of this. why did this happen? you said we started to see this upswing during the financial crisis. john: the first thing to understand is that health care been have for years

growing faster than wages, faster than the american economy. high deductibles in one sense were a response to that, trying to restrain costs. part of the justification was sortif we give employees of skin in the game is the phrase that was often used, that they will be better stewards of their health care dollar. they will shop. they won't use unnecessary medical services, and i think what we are finding out or have found out is that they cut back on good care as well as unnecessary care. preventative is supposed to be covered, but there are sort of things like if you are diabetic, kind of maintenance medications that control your diabetes. if you don't have money to pay for those, your condition can deteriorate. joe: this is key because in the early 2000, people thought this would be the future and we would all become empowered health consumers, and you just say people are making bad decisions.

it's complex, but the expectation that this is going to be a magic silver bullet to restrain health care costs has not been borne out. julia: what's the fix? are growing quickly, but some employers are beginning to rethink them. jpmorgan's ceo recently made some comments saying essentially that high deductibles have not has taken the company some steps to effectively lower deductibles for some of its workers. julia: this is separate to the amazon/jpmorgan/buffet -- john: it is. there's also talk about the this about how putting financial risk onto patients is not necessarily a good thing.

julia: thanks to our bloomberg health care reporter there. don't forget to check out our prognosis page where we check out the cures for tomorrow and the financial forces behind it all. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

julie: "what'd you miss?" a bounce and markets, albeit a modest one. i'll be watching the economic data. durable goods orders out at 8:30 a.m. bloomberg technology is up next. joe: have a great evening. this is bloomberg. ♪ retail.

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emily: i am emily chang in san francisco, and this is "bloomberg technology." the left up in court upholds the travel ban, giving him a legal and political victory on a controversy that helps to find his presidency. we will hear from a leader speaking out. plus, a judge has ruled uber cannot operate