criticized president trump's order, banking and commodities training -- trading, oil sales in november. he said he is open to negotiating with the u.s. but not while sanctions are in place. update in the criminal case against russians accused of interfering in the 2016 election. judge reviews pretrial evidence for prop -- national security issues. the council will ensure that any sensitive materials provided by -- continuing activities in russia and elsewhere. president trump endorsed secretary of state kris -- over sitting republican governor .

tomorrow's primaries despite concerns from the gop establishment. a victory for the challenger could open the door for democrats to win the governor's race. in italy, cameras captured a fatal accident involving a gas tanker in a highway today. authorities are investigating the cause of the explosion that killed at least two people and injured up to 70 others are the last set up secondary explosions in a parking lot below and the incident caused the highway to collapse. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ >> live from bloomberg world

headquarters in new york, i'm taylor riggs. scarlet: i am scarlet fu. >> i'm in for joe weisenthal. >> stocks rising for a third session, the s&p 500 at its height level since january. >> but the question is what to do you miss? jamie dimon is raining -- ringing the alarm even louder. the chief executive warns investors to prepare for treasury yields above 5%, going one step further than his previous call for a 4% yield. ingenuity, losing -- stepping down a ceo after 12 years at the helm, setting the ranks of female ceos in the u.s. saudi arabia gets tough. trade and investment with canada, making his this -- it is the second that saudi arabia has cut ties with in less than a year. and, jamie dimon ceo of jpmorgan, making it bold call on yields. he says he thinks rates should

be 4% today and you better be prepared to raise 5% or higher, a higher probability than people think. the partte a column on of the yield. he joins us now. brian, break it down for us. let alone even at 3% 4% and we are already talking about 5%. >> it seems like a market is obsessed with round numbers. it was curious that jamie dimon made this call. theas after we made 3% for -- since after 2014. we are looking at five right now. i think what struck me was the idea that rates should be higher. it is something you hear all the time from across the globe. rates should be higher and it doesn't make sense to go this low, but they are not in the market is telling you something in that price. >> esp. name your investor or chief executive. when jamie dimon made his 4% production in may, he said it would be wise to prepare for the

tenure to get to 4%. he specified because of gdp in inflation, it could push the fed to raise rates more than anticipated. did he give any rationale or conditions for why he thinks he yields could get 25 percent this time question mark >> at least in the comments we reported, not much -- not so much. the things he talked about her coming to fruition. we saw last week, gdp very strong. people made a lot of it. yet the 10 year yield could not sustainably break 3% inflation has been pretty solid overall and decent relative to history. and yet the 10 year yield is still at 3%. there are a lot of factors weighing in but you look at the forecast for the fed interest rate hikes, and people think it will stop around 2019 or 2020 a max fed funds rate of maybe 3% or will the tenure get much higher? history says no. >> how do you reconcile the fact that we had rate even tips

basically going up for most of last year and this year and now we have reversed going in the downtrend. how do we reconcile that with what jamie dimon is talking about? >> that is a big question. i was checking to see how great did today and they declined a little bit. we sort ofnt, plateaued on this inflation trend and it is possible, i would say maybe that the trade war is going to make inflation go up in the u.s., but it is a one-time deal. tariffs causing prices to go up one time on certain goods. i am not sure if it is necessary sustainable inflation but what the fed is looking to see. >> i love that it also allows them to save face if this does not necessarily pan out exact as we all want. lack of specifics, it sort of gives us wiggle room? >> yes. i think that is the art of the prediction, that you are able to without necessarily

specifying. i tried to say, let's say he means 2020 or 2021. that is roughly the 2-3 years he specified for the bull market going on. you can sort of see what he is saying, but it is not a eckley clear when this will happen. this function on your bloomberg terminal, you can see the protections that a lot of analyst folks are making. none of them have it higher than 4.5% by the end 2020. he is an outlier on the spectrum. >> i have pulled it up just to show the magic of the bloomberg here. a 10an see if you look at year yield for the first quarter of 2020, 3 .45%. fourth quarter, 3.24%. but he firmly in that range. certainly, thanks like jpmorgan benefit from higher rates. >> certainly. i am not sure -- i think there is a certain element of hawking your book

here, obviously. you are a bank ceo and we have sort of dissected how the jpmorgan reports show that interest rates, no matter how the yield curve moves, higher interest rates benefit jpmorgan's bottom line. he would certainly love interest rates to go even higher. a lot of the higher movement we have seen in the past few years has gone to banks and less to conservatives -- consumers that use it. i what else can you tell us about what this means for foreign investors? an interesting question about yields in the u.s. are higher relative to anyone else in the world when they are still in the you interest rate policy, have foreign funds coming in putting pressure still on the u.s., you just jump inside my terminal here, we have the 2200 day moving average. technical analysts here, it is providing them support, not resistance over here.

but again, it all depends on foreign investors coming in and that is capping how high the yield can go. >> definitely something that people do not always recognize is the impact of the hedging costs on yield as well. when you look-- at what the bank of japan did recently, allowing their yields to move a little higher in their yield curve control, there is some concern that if rates start to get competitive on the japanese side, maybe some of the japanese money will stay home rather than go into the u.s., aen like a 1% yield on japanese 30 year or 40 year bond, it starts to look pretty good when history has an even lower than that. >> a bizarre world that we live in. bloomberg opinion columnist, thank you very much. you can read it on your bloomberg. we have some breaking news. the u.s. laying out its

arguments in the heel of the at&t time warner merger. the mergeray that should be reversed because the court ignored fundamental principles of economics and common sense. u.s. also saying the judge's errors distorted the view of evidence. referring to judge richard leon. are shares ofere at&t edging lower, but it is not much of a reaction given that the deal has already been improved and has gone through. lastconversation in the hour of what this means for other vertical mergers, depending in the health care space for instance, this could have all sorts of implications and judges involved, cavanaugh a lot of different moving parts and the broader implication. >> yesterday credible analysis saying the appellate court also has judges appointed by president obama, so they are seen as perhaps more sympathetic

to the government's argument on how this would snuff out competition. the irony. continue to monitor the headlines for you. the u.s. again saying focht -- ruling that at&t should be allowed to take over time warner, should be reversed. coming up, the trump administration restoring sanctions on iran. aboutl hear from michael: what effect it will have on the oil market. this is bloomberg. ♪

>> trump administration reaffirming plans to impose tough itself is come november 3 michael: two bloomberg about the

act on oil production. take a listen. >> iran has a large stockpile of and some onity land. not a lot onshore but significant on -- offshore. one thing to keep in mind is there are other offsets. saudi arabia does have some capacity and can continue to raise its production levels. market isthing is the dynamic. prices move higher, than the u.s. pressure may not be as severe as if prices stay lower. that is a in -- an important takeaway from our discussions. that this is yet another cook in the kitchen trying to keep prices lower. >> president trump said he doesn't like multilateral trade deals. he likes bilateral. when it comes to sanctions,

bilateral is not so effective. which --e any sense in to the extent to which these may be going around by other countries, whether in europe, china, india? >> actually. china and india pose a lot of problems for this. of cooperation with iran, and on the china side, as well, he realized they into a large trade deal with iran, one road that goes all the way through -- through eurasia into iran. how do you curtail arian food oil question mark question to not quite understand the theory. >> for the administration, a lot of it is putting pressure on iran and talking separately with chinese authorities as well as europeans to come on board with the new sanctions policy, but we have not seen this as very effective in public yet it obviously, a lot of happening. .

as mike mentioned, there will be continued pressure on everyone to get on board. >> while this is hanging over their head, not to mention china and the u.s., if you look at oil, both russians in long and short, total positions andlue, crude oil futures, crude oil futures in the -- in white, it seems that people are kind of holding back because there is an uncertainty about which way it will go. it sounds like you have come to the conclusion that it is not necessarily going to have a price boost effect. >> it is important to understand the the bias is toward upside, clearly. a whole host of disruption possibilities as we move into the end of the year. signals thatdemand are not as great as they were at the beginning of the summer. we see the broader market balance is not that conducive at this point in time to seeing

prices rapidly go higher. i would just say that as you look at u.s. production, it is also continuing to increase and will continue next year. the market balance is not as tight as many had expected as we move into the summer. that is causing skepticism and the other thing going on is the broader question about the macro economy. when you look at hedge fund positioning not just in oil but in other commodities and you look at commodity race activity outside of oil, prices are moving down and that is part of what we're seeing the pressure from. >> do you have a particular year -- year-end target? smit 70's. we have forecasted all the way up to $80, we have forecasted down to the low 70's. we think it will move higher in ie next quarter but as mentioned, the iran sanctions issue is another thing where the u.s. government could play a

role in price formation along spirit question that point, president trump has another agenda item, the midterm elections. want to put pressure on the iranians but he does not want to be too high. >> absolutely. the way looks now, i think the democrats have a clear advantage , in that they can flip necessary seats. for president trump, he obviously does not want to give control to democrats in the house. investigative powers in the roadmap he has for a 2020 election could face a lot of obstacles if democrats control the house. >> that was barclays michael: speaking to bloomberg earlier today. toestors taking a shine harvey shine, one of the biggest gains in the s&p 500, currently trading at its highest since october. harvey shine is the stock of the hour in with us is tatiana, although the gains have faded a little bit in the afternoon.

had some analysts saying maybe investors are getting ahead of themselves because numbers, while they look good, they indeed boost the lower end of guidance. headwinds are still out and that is on the mind of some investors. >> what are some in -- some headwinds? >> the main one is amazon. as for retail stocks, amazon is a big threat. dive into my bloomberg, you can see in my chart actually, the short interest has risen to 16% hovering around the highest level in more than 10 years that we were able to track on market securities. acceleratingonly also due to amazon investors and analysts are concerned that would take a bigger share off of consumables. >> what really accounted for the enthusiasm you're seeing in the stocks today? there, thenst is

you are seeing a share game like this. >> exactly. they manage some of those expectations. investors were concerned they were about to lower guidance. they managed to keep it while seeing some pressures. they did see some of those .onsumables and sales rising on the consumables side, they have growth that was the highest quarterly growth since 2015. so while the challenges are looming, we are not seeing it in numbers yet. >> wonderful. thank you. our stock of the hour. up next, stepping down as ceo of pepsico, making the already short list of female chief executives in the s&p 500 even shorter. this is bloomberg. ♪

>> time enough for a look at some of the news right now. starting with facebook, shares rising on optimism it is forming deeper relationships. the social network says its partners and credit card companies offer services like customer chat or account management. the its messenger application. but it denies asking for transaction data to facebook says customer account leaking is completely opt in. the $47 billion merger that the world's largest industrial gas producer. the german company is considering the sale of additional assets in the u.s. to gain antitrust approval. sell already has agreed to billions of dollars of assets. japan softbank considering an offer -- offering for the what

could become the biggest ipo ever. reserve the business in the offerings were about $30 billion. alibaba made its debut -- debut in 2013 with a $25 million ipo, that is the biggest so far. that is your bloomberg's newsflash. >> some big numbers. shakeup at pepsi. stepping down as ceo after 12 years at the helm of the company, heard up archer will make the already short list of female chief executives at much shorter. she will be succeeded by one of her top lieutenants. joining us now for more is craig, who covers the food industry. guess the question we always have to ask is to what extent was this a surprise question mark she had appointed la guardia. >> i don't think this is a total shot -- total shock. always a surprise when the press release hits and you get the news, but there was widespread

collision she would go with the administration of hillary clinton. then last september, they put the sky in place as number two, seeming to create the situation -- not a huge shock to get the news today. >> there was a lot of concern toward the tail end of her career that they were not doing enough and were not inquisitive enough for engaging enough with coca-cola and other competitors. new person has basically been there for so long, will he really change anything or will it be the same strategy? >> a great question. one thing people are keen on today is mainly overseas. last september he came back to new york to take a global role. prior to that, sub-saharan africa. i think there is a feeling that pepsi needs to focus a bit more on the international market. >> and wonder if that focus on comenational business, into my terminal, a decent performance, to not get me wrong. up about 80% under 10 year.

but that has underperformed coca-cola, for example. ceo's dayally the new one, come in and really look at that international is offset, slightest -- sluggish north american sales? do about northo american beverages. it is a key business for them. so to consumption is at the lowest level in more than 30 years. coke, meanwhile, a longtime rival in the coal awards -- cola wars, is doing better. a lot of pressure for them revitalize the north american beverage unit. >>. pepsi did not do as well -- a change in leadership race is maychance that investors push the cl looking to separate the north american division. that is something they had resisted for a while. >> she did. she fought him back. she was asked about this on the earnings call the other day and basically said, it is really nice complement, as far as

frito-lay. it would be a big and transformative idea and it has been out there for a while. the poplars is what we would see in the short term. >> what is the likelihood of that? what is the trade-off? >> coke and pepsi have gone back and forth. sometimes they like to have it outside and the feeling right now is coca-cola recently franchised it. feeling now is maybe pepsi is spending too much time and attention running the operation and it would be better in the hands of independent people who know the markets they work in. >> very quickly, what is the number one legacy? >> she tried to shift to healthy but still trying to sell soda and shifts. -- and chips be are people like salt and not sugar these days. that is the story of pepsi. >> salty and not sugary. thank you. the market closes next to take a look at major indexes. we have games here for the dow,

the s&p, and the nasdaq here the nasdaq leading the way up 45 points, the dow adding 33 points. trading overall is kind of sleepy. it is august after all. from new york, this is bloomberg. the ♪

>> u.s. stocks ending higher for a third straight season, the climbing to or's 5 the highest level since january. kate, i'm scarlet fu, i'm in for joe weisenhall. if you're tuning in live on twitter, welcome to our closing bell coverage every weekday from 4:00 to 5:00 p.m. eastern. et's begin with our market minute, starting off on a high note, gains across the board for indexes. major if you look at the different sectors and how they performed, nine out of 11 groups homeland etailers, builders and automakers leading advance following by financials. of those ds, more defensive names are linked to treasuries as well. if you look at what happened in classes, the dollars and treasuries advanced. it was an up day all around

here. what about individual names? >> you take a look at facebook movers, erms of point biggest point mover, s&p 500, a on of optimism in that stock the reports that it might actually be moving into some of he banking sectors that will link up some of its customers with some of the products there. biggest gineering, percentage mover in the s&p 500 the , on the flip side, biggest percentage decliner, a lot of concerns regarding china nd trade and then, of course, also on the china trade front, 1 .2%, e alibaba, down days.ix straight scarlet: i can't get enough of these bond options, not doing on, they're not giving me very much to talk about there. a lot of bond options on the $34 billion on tuesday, another $18 billion for hat three-year option on thursday and the 10-year, we just got this, can't touch 3%

5%.alone we are looking at that 30-year-year-old, again, not much. we're looking at the inflation data out on friday, under 3%. >> not seeing anything that gets as close to 5% that jamie diamon put out there. in currency land, the dollar grinding higher. versus the g--type of currencies, paying attention to a pound, falling a11-month low versus the dollar. of a no put the odds deal brexit at 60%. the pound is the worst g-10 currency today, lots of data this week, at the nd of the week with production and trade could change that trajectory. looking at roe factory orders fell, trade tensions are taking a toll. i don't know if you want to call this in the currency land, but today, bit coin dipping below

$7,000 level. thanks for the positive sentiment that represented it 6,000 last below month. that may e are saying have triggered some selling. he had no interest in bit coin, laughing right now. move on to the commodities omplex, oil higher as production cuts in response to insufficient demand are and thisg supply fears comes right when labor strikes have resumed in the north sea. not helping dollar as well. metals lso looking at zinc lower.r and trade war concerns continue to industrial of the metals. those are today's market minutes. markets r more on today, let's break it down what

today, ng the s&p hitting a key resisance level up 28.50, earnings, more to the story? >> today was a lot about turning ways.the clock in two in a lot of ways, this reminds me of what happened when we got season.ast earnings we're always thinking when we get in earnings season, what is the next catalyst and what is to happen in the markets. i'm telling you dollar up, curve latter, domestics performing, may and june, we ripped it up and that's exactly what we're seeing today. it's that playbook. we're not worried as much about trade. the way we can tell is that x.l.i. is treading water as opposed to back in june with big headlines upping the ante, it's traditionally been the most sensitive to that kind of thing. so other than that and in kind of how much the realized has ility of the s&p 500 fallen, how much employed correlations are still staying

low. volatility has been absolutely crushed. it's starting to look in that respect a lot like 2017. pick how far you want to turn back the clock, for me, that's what today's trading is about. >> pretty unbelievable at an 11 handle, the lowest in quite a while. right now if you look at it, lowest since january 2018, it's bouncing around at close. >> you used the word drifting. am i supposed to be about what we saw in the market today? like stock seem sort of powering higher. it seems like a drift. so when you talk about the next mean, what is the story? what is the narrative that people in this market have to hat on for the next month or two? luke: i think what you kind of are there is why people probably bullish, the idea that this isn't, this doesn't have euphoria of january or seeing indexes all over at kind of ht levels thing. i think the narrative or the bullish narrative is that in in tech, you and

have fairly sizable breathers. so, for instance, right now the 500 is kind of at around that 2850 kind of butting up break outere it could and approach the january highs seen the q.q.q.s being nearly as overbought as hey have been in previous stretches. those previous market leaders, kind of a chance to get back into the game. i think that's what kind of are looking for right now. the other amazing thing i think we have is hopefully we have a of this is that the short u.x.v.y. trade, so vixe.t.f. a 2x long dialed down its leverage. t-vix a two times long e.t.f., those are near their year-to-date ends all time lows. vol low-up of the short trade, they are approaching record lows.

crazy, blowing my mind, short vol, if you knock out have been a profitable trade this year, insane. >> i want to talk about tech breather. we reported last week how apple reached the $1 trillion market week.vel last there is a lot of fanfare there. do you think it's a positive technology or as mike wilson of morgan stanley says, a sign that tech has peaked? reading the research out there, are people leaning towards one the other? luke: i think there has been kind of this move and you have research notes, marco has raised the idea and j.p. morgan raised the idea we'll face this value shift now. doesn't mean that things are bad for markets generally, a segments of the market and financials, industrials get a chance to rebound. think a lot of that will be dependent on the curve and will be dependent on trade headlines

ecause when investors have gotten worried but still wanted to buy things, it's been ok. u.s. domestics and structural tech, so one thing i have kind of found interesting know,at the big names, you x apple, has really been taking a breather, so coming into longest ey're on their weekfully losing streak, the nasdaq, lative to the 100 on record since its inception back in 2014 i believe that index came around. is a long time that we can have catch-up for tech as a within tech.ying scarlet: i'm glad you brought up x.l.i. earlier. pointed out at was a couple weeks ago. it shows the industrials and how perform relative to the s&p 500. you can see this nderperformance here of late and it kind of brings you back o 2015 when china made the surprise devaluation of the yen to 2012 with the european dead crisis. well and theing up

u.s. is driving growth, you shouldn't see this happen. >> i agree. part and as david noted, you have the bounce. heading into s, earnings season, expectations were so low. there was one point where the 18 industrial companies all beat on the bottom line. we got that bounce kind of right expect to see relative support. peak growth, we're not going from of 0 to zero. room for the global growth story and for industrials to continue improving. point where there was nowhere to go about up. deal is it.f a we're pulling out of correction territory. give this ugh to market another leg up if we were to cross that threshold? a e: it will be self-fulfilling prophecy either way. we break it decisively, that's waiting for. if we butt heads and you see kind ofadlines start to

affect the markets more, i'm sure it will be pick your arrative, very path dependent based on how we deal with this. however, i do think the idea getting back to and theack to domestics other egg cements of the market getting hit at that time, the industrials, if they're just treading water or upwards, that's basically a headwind that is gone for the markets. those nds you of adventure books. luke, thanks for joining us. might be funds getting a boost they need from goldman sachs, we have the is ils on what the firm doing with crypto currencies next. this is bloomberg. ♪

>> let's get to the first word news this afternoon. resident trump's former campaign head paul manafort is back in court. this afternooned in virginia. rick gates was expected to take but tand at this hour, prosecutors have been pushed ack for testimony in favor of different witness. embezzled millions of dollars boss and manafort's falsifying tax returns. a new pentagon order will defense personnel from using fitness trackers or other cell phone applications reveal their location. memo that copy of a outlines limits for using the sensitive or high risk areas. in chicago, police say weekend hootings across the city left at least 11 people dead and about 70 wounded. he violence peaks with several shootings yesterday and authorities believe gang members the summer crowd to

cover in some cases. there say violent crime has declined overall. n official in the democratic republic of congo say health authorities will distribute a to help contain the outbreak of ebola. killed 33 ed to have people in the country in recent days. in may also tbreak left 33 dead. on al news 24 hours a day air and on twitter powered by ore than 2,700 journalists and analysts in more than 120 countries. i'm jenna, this is bloomberg, to you, scarlet. scarlet: more breaking news on justices at&t of appeal. at&t's general counsel mcatee responded. david mcatee responding appeals not do combrovers. he said after a long trial, rendered the leon

evidence and has a decision that showed the many holes in the government's case. there is nothing in the brief today that should disturb that decision. course, he made the comment after the government filed its saying that the court underjudge leon had ignored knicksntal principals of and common sense. you're not looking at much of a warnern in at&t and time doesn't trade anymore because the deal was completed. >> interesting, the implications for other an companies in vertical mergers ike we have talked with the supply chain and new supreme court judges coming in and the politics behind that, of course. >> we'll see fountainhead of the .o.j.'s antitrust division can redeem himself perhaps with a win at the appeals court level. any keep you posted on further developments. >> bit coin nearing its lowest three weeks, goldman sachs could offer a boost to coin.etting on bit

it is considering custody offerings for crypto. would this work? what is goaltendedman proposing or thinking about here? a it's essentially safekeeping service. if this comes to pass, this could be a significant step for universe of crypto funds out there. crypto believers say they don't approval. stamp of at this point looking at how the year has gone for them, they probably do. in that space is trust. the big issue is how do you assets from getting stolen. you have a large wall street institution saying it can offer safekeeping service, that would be helpful. >> is this going to create a for people onment who maybe aren't believers in crypto now to now enter into the space? >> certainly. at the audience here, or a lot of the up and coming crypto fund manages, they need to convince investors to hand to them.r money you have to think about it in a largehat incentive does a

investor have in handing over or r money to aly lennall some 25, 30-year-old. when you know that there is a good chance that the money won't stolen, the money will be safeguarded when it backed by he larger institutions, more people would be willing to get into this space. that would arguably give it a boost. >> correct me, it seemed like they were able, by being a cuss into the space, dip their toes in, but not jump head first into the pool, does sound right that they're not necessarily creating a fund, way to cuss stowedan, a get involved slowly but surely? >> the best way to look at it is the first of many steps they want to take. already the banks are clearing futures. first step they took. what else could they do, custody with that, prime broker ago and trading physical. once you have all of the wall treet heavyweights come into the space, what you do is add a layer of credibility and that

asset lows for this clause to go really mainstream. >> so goldman sachs hired justin earlier this year as head of the digital asset markets. what has he done so far? other than create a store ith his man bun on the trading floor? >> that is something, i have to say. >> a lot of the time in the few months, it's an education tour, talking with enior folks within the bank to figure out how comfortable they could get with crypto and the asset space in general and with different arms of the bank, help them set up their goldman cture so once flips the switch on, they could do a lot more in the space. the legitimacy of it less appealing to the to it primarily because of its ill legitimacy. >> a possibility, who knows how contrarians think. >> thank you very much. out,t some earnings coming

second-quarter revenue beating $132 ighest assessment, million for the website, looking on average $127 million. $132 million, higher than the high assessment which was $130 million. as for the second-quarter cents a profit of three for the quarter, seeing full 35%.revenue from 33% to merchandise sales from 18% to 20%. catches my eye, they're raising the fiscal year $136 million. that comes down to the margins as you know. interesting to hear that they're raising their guidance versus some of the other companies that we have seen, perhaps lower of that.and all that catches my eye. > we also have our eye on hertz, the rental car agency. i don't have a lot of headlines right now. read, the l second-quarter revenue beats the 2.39age analyst estimate of

billion is the reported amount, the estimate was for $2.31 billion. so hertz beating on the top line. 'm still waiting for some more of the numbers to come out here. we have to dig through the filing a little bit. initial n see, the reaction here, at least in fterhours training is to the .11%.ide, trading lower from new york, this is bloomberg.

>> and president trump plans to roll back the emission standards a fight les but not from california. we spoke with the state's attorney general. sued ve actually already

on a previous action in the e.p.a. and the administration redetermine what they had already concluded beforehand several years ago and so what trying to do is make sure followe e.p.a. and nitsa their own laws that require us to move forward in cleaning up it air rather than letting get more polluted. >> they would say certainly, sir, they are moving it forward, the standards that they are are tougher than the federal standards used to be. there was this exception, rather unusual exception from the state of california, it's time to get it all the same. why isn't that consistent with statute? >> you have two different issues. act and thelean air e.p.a. started to regulate clean air, we have been doing this for while. close to 50 years now, california has had the ability standards. own that is it different from what the administration decided last to undo o, which was

the national standards. california right now is not have separate standards from the rest of the nation. we're living with the national on dards that were agreed some five to seven years ago. the administration is the one that's trying to break those and back slide from them. we're saying what they're trying to do not only is a violation of law, but it's arbitrary and capriious. i am a little confused. the government can change its mind once it has a rule in it's not cast in stone forever. they're saying we still are tightening standards overall had been, it won't be as tight as it was under president obama. that the right, david, government can change its mind, but the government can't change mind on a whim or cavalierly because americans rely on the law. driving 65 miles an hour on the freeway and today going ernment says we're to change that to 45 and you have not had an opportunity to or to find out

about it, that would be a violation of the law. ashtray and capricious. we're saying they have acted against the law. they are undoing standards that only hemselves set, not that, but they're violating the requirements under the laws that them to them that require to continue to make advances to clean up our air. lawsuit, e from the how open has the government been in negotiating coming to the you?e and talking to >> not open at all. that's why we're at this point here we have to likely sue the administration to try to stop them from violating the law and sit they were willing to down and actually have serious conversation, perhaps there some be a chance to make progress. for the past year or so, it's been clear from their actions not been have interested in really speaking because they keep taking actions not only violate their own laws, but show that they're not interested in having serious conversation. this, how long do you

expect this litigation to continue for? oneell, that one is a tough to answer. it depends on how obstructionist he federal government is in providing the data. remember, none of these in place s is put without long periods of comment and ith lots of facts science put into the conversation and discussion. didn'tinistration really do that. how much they're willing to reveal of what they used to them in trying to undo, to ack slide will determine how quickly any lawsuit moves forward. >> mr. attorney general, let's years.it's going to be you and i have both been involved in complex litigation. get resolved right away or go to trial. what happens in the interim? in i'm a major auto manufacturer, how do i know comply with?o thehe automakers understood

value of having national standards. five to seven years when those a great ed to, it was accomplishment with the automakers at the table reaching right ational standards, now it depends on what the court existing regard to the matchup standards. >> will they agree with the trump administration that it's break the standards without the right evidence or agree with the states that would isiah say those standards should stay in place until we can reconcile the actions. regardless of that, then you get into the subject of california have had a that we waver for years to move forward to keep our areas clean as because as you probably know, california, it's crucial improvementso make on air quality because it's what's required for us to keep forward, be oving the economic engine of the ountry and the fifth largest economy in the world. >> that was the california attorney general earlier.

saudi arabia crown prince takes a big swipe at canada. fallout next.the this is bloomberg. retail.

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>> let's get to the first word news this afternoon. he trump administration will likely nominate alison lee to be the new head of the securities exchange commission. lee has worked as an enforcement ttorney and was an aid to an ex-commissioner. lee would replace her former democratic seat on the panel.'s fivemember netanyahu statement, said the move shoulders by the regional ock iran's aggression. he urged european countries to the trump d

administration decision and take more measures against teheran. teresa may still believes the brexit deal with the european not. is more likelier than her spokesman says the deal is in the best interests of both parties. the remarks came after the trade ecretary told the sunday times this was a 60% chance of a no deal income. for a lack of flexibility in the talks. hundreds of tourists are as they at the airport wait for flights off the island. a tsunami warning issued shortly sunday's magnitude 7.0 caused locals to leave the island and it was withdrawn a short time later. killed at least 98 people. a day on s 24 hours air and on twitter powered by ore than 2,700 journalists and

analysts in more than 120 countries. bloomberg. >> let's get a recap of today's market action. all u.s. stocks with the s&p gaining a third of 1% back to its highest level january. the nasdaq, the big winner, up of 1%. >> we're less than 1% away from that all-time high pulling out of this correction. >> exactly, out of this range. movers, the iggest same stocks, facebook, amazon, all up. >> volume is still going to be pretty low. it was low today. and we had the jobs report, we had the fed last people were off. >> that volume can help us in a certain way. when you don't have the big volume, you get big moves, they push us up. >> "what'd you miss" saudi at canada ng a swipe

diplomatic calls to activist.jailed women there is an increasingly policy from eign the crown prince. for more, we welcome bloomberg's barton, executive editor tick tock. us here in isiting new york. the foreign minister of canada is giving a press conference the spat between saudi arabia and canada. you can see her in vancouver right now. is after saudi arabia expelled the canadian ambassador. comments as well. let's pull up the headlines. speaking e is following comments, of course, criticizing the kingdom for arrests of women's right activist. >> she says canada is deeply envoy ed by saudi's

expulsion. the words and rhetoric continue, stepped up here. context ive us some about what the crown prince is doing here because you kind of to see this part and arsell with what saudi arabia did with germany, recalling the ambassador with germany and utting ties with german companies. >> i don't think you can saudy arabia has done with what the crown prince to do.ng they are trying to completely reboot that economy. bring about to societal changes that very few gone under any, have in a very short period of time. how does this relate to canada? out and criticizes them for the detention of this ctivist and says she must be released immediately. saudi arabia says hang on a section, we have our own laws and process. it's a very traditional society.

a lot of people aren't happy with the pace of change and so hen canada comes in and does that, it sort of puts him a tricky position. he is trying to bring about the changes, but at the same time he placate. go after canada, it's going to come at our pace. >> what is the message being if you're market, trying to reboot your economy and market, you need those outside foreign investors. of message does it sends? >> that's exactly right. so he is it probably making that if i send this message out to other countries to back off, what is going to be costs.ortunity it's certainly not great for investors when you're making long-term investments that things can be upended like that. is bringing in movie theaters and bowling lanes lot of opportunities for companies and countries. if things can turn on a dime give some it may

people pause. i'm sure that's something that have thought about. they have moved very carefully on this front. >> i want to bring this back to bit.da a little we had a great story out saying that canada's prime minister get a little boost at home for his own women's support because of this. this may not hurt them despite the twitter things and could boost.m a little >> we'll see where it goes. trudeau is stuck in the polls, and neck, a few trips haven't gone well. he came one where under a lot of criticism for some of the antics there. an opportunity for the liberals, trudeau's party, to reboot. this is something the prime minister feels very strong about. e is an advocate for women's rights. he would be on script, on message for that one. analysts are saying maybe a good for trudeau to get a

little bit of momentum here as we come out of the summer on front. what will be the opportunity costs? if they're not going to back arabia as we saw with qutar will escalate things again. win on both ends. m.b.s., king solomon, how does he fit into this? trying to placate the high does he sit? >> the power behind the throne. to be part of the team to have met with him. he has followed through with his plans. has a very clear idea of where he wants to know. books, very he concerned about what may be saudi arabia, the king the power ere, but behind the throne, the one who is driving the social and m.b.s.ic changes are >> even with the spats, how much other oes it appear that

world leaders seem to have in saudi w direction that arabia is going? >> you had trump there dancing in riyad and his on the hotel ed there. from the saudi arabian it's concerned about iran, trying to wean itself off oil and decide we are firmly in the u.s. camp, kushner a good m.b.s. have relationship. is it wise to pick fights with canada, that's saudi arabia's policy objective, i don't know. put a ce they haven't risk is the ties with the u.s. those remain strong. >> glad you bring that up. to what extent this is the influence of the trump administration, too. picking fights with canada and to be the two countries that the u.s. has been exchanging words with, well.words with as >> right, that's a good point. i don't know. say that 's fair to

trump, president trump has emboldened saudi arabia past e action that in the it might have been hesitant to do so. we saw in qutar when the were first raised and saudi arabia.th genie is out of the bottle, it's going nowhere. is happening on that front. >> we're lucky to have you here story. york for the andrew, executive editor for tic-toc and editor for middle east and africa. tensions are weighing on global economic growth. at south korea's umbers and what it might mean for global knicks. this is bloomberg.

>> we continue to grow, very few

revenue.ow we positive leverage that have positive. >> we have some breaking news. we're looking at shares of illow, plunging in afterhours trading, the everyone commerce website that is expanding here, to ought a mortgage lender help with the home flipping business, a forecast that missed the lowest analysts estimates, $347 million.to when analysts were looking in million range. it gives you a sense of how off

it was with the top line. full year revenue, sales, they were looking for 1.5 billion. again, missing on third-quarter missing on full year revenue. stock of ths ago, the the hour with you and joe, we were talking about zillow entering this business. said that, you know, it wasn't going to cost too much, to be cheap. we were questioning maybe the timing about why. sound think we have a bite available, but we do know -- we do. into that, i'll introduce it, we spoke with managing director, the big short. we had to ask him, he did say in zillow was his next short on listings that te they were sort of getting involved with, that its growth thatlowed dramatically and this new business of flipping homes was a terrible business,

let's listen in. >> the growth in the company's business has slowed dramatically as a he last year and result, the company has entered a new business which is they're investing nd they're their own money to buy houses and flip them. a terrible 's business. it's a cyclical business, a low business. the irony is it when they announced months ago, while it was capitol intensive, they capitol.need last month, what did they do? they raised capitol. >> we didn't get a comment from zillow after that. interesting. >> it has announced it's going start writing mortgages as well. a full-on mortgage lender as well. rallied a little bisince that announcement, iflly going to see some gain it holds up tomorrow. >> i spoke too much by saying bay to , not the right put it. buying and selling homes,

homes is something with interestning rising and slowers. president trump said the tariffs on chinese goods are working big time. our guest said to look at the neighbor, south korea. who joins us now. tim, great to speak with you. your really intrigued by report in which you made the case that south korea is an ideal yardstick for measuring trade tension. tell us why that is. yeah, well the gdp for high, it's not purely an export economy like for example singapore. economy with a diverse base of economic growth, reliant ont's pretty exports. to that extent, when the global begins to r trade look either especially encouraging or especially

iscouraging, it tends to be kind of a canary in the coal are for where things headed. >> you said that net exports becauseood, it was also imports were a little bit lower and so then just on a percentage net exports looked better. is that a concern of yours? a : yeah, that is certainly concern. it was probably the more elevant consideration is we exclude exports alone that didn't go negative, but they double-digit percentage growth rate in the first quarter to just barely positive in the second quarter. that some ndication of the mounting concerns here about trade are beginning to some of the actual vital statistics. it's a comment that ended up up in the latest meeting of the bank of korea talked about that as a key threat, economic growth for korea. >> you mentioned singapore earlier. wonder if you can compare and

contrast as far as global trade. is south korea more of a nexus or technology, for consumer electronics, where singapore is more for global commodities? also as we look at copper and zinc fall on trade war concerns. that you ervations made are broadly accurate. in the chart, in the report, i other handful of economies where exports are a large share. singapore is at conspicuously missing. have skewed the graph to dramatically, 170% or along those lines, so it's really pronounced there. based almost nomy entirely on trade where korea being a little bit more diverse. in that -- a few years it's already shrinking

60% today. and here in er confidence, the u.s. it feels relatively strong. concerned are you that trade tariffs have just yet to hit the consumer? like we haven't seen them hit just yet? >> i'm particularly concerned, so on the u.s. side. it's pretty close to the highest levels we have seen since 2000, 2001, you kind of circle those history when you're at these kind of very peaks, they the high also precede recessions. not saying that's a recession call. there is not much upside room for confidence to go higher. it's not factoring into consumer at this point, to the extent that these tariffs start effect on prices

financial markets and consumer confidence declines 401(k)s, estment of that would be a more worrying concern. >> tim, you provide analysis not just on u.s. macrotrends, but that of major foreign economies, canada, japan, south korea or australia. here is this conventional wisdom that trade is just not that big of a part of the u.s. economy and won't be enough to recession. is that reasonable flawed? tim: it sounds like it, to say , doesn't we can go around willy-nilly starting trade wars and it won't economy. if you look at the contributions of gdp growth for the exports consumer economy like ourselves and one in which our trade is tied up in trade of a fair , it's sort of -- china is less than 10% of overall exports exports to us are closer to 20% of their exports.

observations, you can fairly make the case that we don't have all that much to lose. what i worry about is the shadow that this will cast. these international trade ties take years to develop banking correspondent relationships and overseas vendors. i think that we'll be sort of on u.s. is weigh exports for a very long time. >> we'll have to get you back to or us an update in a month two. thank you, that was wells fargo quinnland.nomist tim apple hit their trillion dollar lags in the second largest market for smart phones. how tim cook is trying to hit reset button in india. that's next. >> this is bloomberg.

>> apple notching a trillion dollar prize with its market cap sell 1 't managed to million phones in india this year. c.e.o. tim cook is trying to hit reset button in india. the story from san francisco, india in ly mentioned its latest earnings call on july 31. of how visible or invisible the company is when it comes to its presence on the in india? >> a real contrast with china which apple talks about all the time. in india, they don't have any of heir own stores, iconic stores that you see all around u.s. cities and that's really the strategy for apple in developed countries is having the amazing stores that bring in.le in india -- most of the phones apple has to build

relationships with thousands and thousands of these little stores have relationships, but so far the relationships haven't been working out very well. >> how much is a retail issue actually ch of it might be a manufacturing issue? >> that's a good question. toindia has, if you're going set up your own retail stores in india, india has a requirement of you either make a lot the products that you sell in india or that you source a lot components and other things that go into that product in india. one of those two things and they have spoken bout making a lot more iphones in india, so that's one part of it. it is on the of actual end product side of things where iphones are still expensive in india. in china, that's also the case, wealthye are a lot more people in china compared to india, so those iphone prices

a lot more when you're comparing to a phone like from other companies. >> you took me right there. company that is cheaper than the comparative also in india, it is better technology, a better battery, a better camera, better next for apple? how do they get the technology to where it needs to be and then where it needs to be to compete with a competitor? strategy really is to take phones, iphones which when were amazing and some of the best reviewed devices out there. nowadays, they're one or two ears old, the iphone 6 range that came out a few years ago, that is on sale in india. model, a a lower price smaller one which has more up to date components, but not quite good. again, those phones are actually still more expensive than some

phones which are more up to date. the company has a difficult decision to make. specificallyprices in india for some of the hottest phones, the most up to date phones. that's highly unlikely. the only other thing they can do is to build better relationships with these retail outlets while launching some of their own stores. you, that was bloomberg from san editor francisco. >> coming up what you need to know for the day next, this is bloomberg.

>> "what'd you miss," the threat of u.s. sanctions, we'll continue to monitor this through the night. coming up, the numbers for china's >> foreign exchange reserve for the month of july comes out tomorrow. >> disney's earnings report the bell tomorrow. >> [pa] if a john reports earnings.rter that does it for "what'd you miss." bloomberg technology next. have a great evening, this is bloomberg.

emily: i have emily chang in san francisco and this is "bloomberg technology." coming up, the bulk of u.s. tech is behind us. morgan stanley says a tech selloff is about to start. plus, google wants back in in china. the search engine left the censorship policies, and is now working with the chinese pop -- government to curtail results, to this agreement -