talks with softbank, but talks went nowhere. to russia with love, new sanctions on russia, dragging the ruble to a record low as geopolitical risks rears its ugly head. inflation expectations rollover with the oil price, the latest read on deck. david: welcome to "bloomberg daybreak." the dog days of summer am a but governments keep us going. alix: we are in the dog days of summer. david: russian sanctions, saudi arabia fighting with canada, turkey. alix: i wonder if we are looking at such compressed liquidity. david: markets may be overreacting. everyone has gone to the beach. alix: we are here. stocks around record highs.

even though we are not seeing a ton of news flow. it is a risk off currency market. the turkish lira hitting a record low, the dollar up 2%. the lira continues to slide. , the 30 yearts option later today, the 10 year solid despite the yield. crude flat, but yesterday was intense for crude. morning, weekly jobless claims, the ppi for july, wholesale inventories at 10:00. holds an ons evans the record media briefing. also, the u.s. treasury sells $18 billion and 30 year bonds. alix: yes, viacom out with third-quarter results. revenue meeting estimates, $3.24

billion. network revenue, $2.5 billion, earnings $1.18 a share. david: a good beat on earnings per share. to see ifwill look they are if actuating the turnaround. the big issue is will viacom end up with a separate company or part of cbs. it will be curious to see how their operations have done. alix: media networks almost $800 million. we are joined by michael mckee. we are joined by peggy collins. it was the story that has dominated headlines, elon musk and tesla going private. saidd a nice coup that onon musk and moshier sh met on a private buyout. >> it looks like that talks did

not go anywhere and they have not had discussions this year. where is hehinking going to get this money to take this company private, especially if he is planning to do it different than a buyout like dell did. it appears he is banking on his existing believer and mom-and-pop investors to stay with him, as well as the mutual fund advisers. a lot of people may decide private it is riskier, so better to take gains now. have of mutual funds thresholds on how much they can hold in private shares. a scrutiny ofger the holdings for retail and mutual fund providers. david: sort of show me the money.

there is one other problem. you have to ask who, but why. it may be a risky stock. people is -- is it that with the money want? they may not make money on the cars, but the technology is the thing. if you are selling cutting edge technology outside the u.s., then you get into the committee on foreign investment in the u.s. on whether the u.s. would approve any kind of major purchase by an outside firm, and that could be dicey. david: what about if? does he really have the money locked up? this is what the board said.

one of the questions as we hear the sec asking them where is this money, he said he had commitments. that is an affirmative statement of fact. >> it is essentially an affirmative statement of fact. pressure is mounting for him to show the money and back that up. where are you going to get that? potentially sovereign wealth, family offices may be able to ,old the stock for a long time but he is under pressure now to deliver. alix: three statements for a board, isn't that unheard of? david: we are talking about it. he said he had plans to commit it. >> right, totally different scenario. david: we talked about governments being active, the u.s. announcing new sanctions against russia. that sent the ruble down. it wasn't just russia.

we also have the turkish lira plunging. the turkish representatives came away with nothing. saudi arabia has picked a fight with canada, so there are a lot of geopolitics going on right now. on the russian sanctions, it is required by law. you will see this is a law that prevents chemical weapons use. this is coming out of the poisoning of those two former russians. a limit on sensitive equipment thinks ship to russia. buthis is the first wave, congress will potentially go with round to that could affect imports, exports. that is the question as to where do we go from here in terms of how can train -- how constrained

russia will be in terms of trade. alix: mike, how did you understand the movie in the -- move in the currency market? >> you always get an overreaction in the markets, particularly in currency markets with breaking news like that. sanction any companies. they sanctioned individuals. it may be that investors start to go back into russia. gotten good at managing the currency and interest rates to offset the sanctions come up because they have been under sanctions ever since crimea. if they ramp it up, where do the sanctions go, and do they hit anybody's earnings that would really affect investors? reacting to that today at all. yesterday, oil had a steep slide. this is our third story, the five-year and two-year rolling over. what is this about?

>> inflation expectations are contained. the job the central bank said out to do 20-30 years ago, and they seem to have done well, and that is the overriding reason inflation is not going up. the interesting thing to watch with pp i and cpi in the u.s. is how the trade war tariffs are affecting any of the price of goods. we will look for that in ppi today. we have seen some cpi indications they may go up. proctor and gamble saying it was raising prices because of tariffs. does that show up? agricultural prices go down, oil prices down, so there were offsets. we stay in this 2% rate. alix: we have that good ten-year auction yesterday despite we did not get a three handle. are we now playing eight lower

inflation and not that pick up? >> the u.s. is one of the places we are seeing stronger growth and potentially the inflation that would warrant the continued steps of a but central banks across the world, ecb and boe, boj as well, in terms of allowing bond prices to rise, even though the inflation outlook's are more uncertain. central banks around the world are still trying to normalize and stick with this. ,ging and optimization something the world has not seen before in terms of what that would do to wage growth and jobs. alix: let's just say normalization. david: i don't know where normal is anymore. alix: that is an existential question. thank you both very much. usek out all the charts we

. the u.s. looks to punish the kremlin. we will look at the risks with our guests. this is bloomberg. ♪

>> this is "bloomberg daybreak: americas." this is your bloomberg is this flash. tribune media has pulled out of a merger with sinclair, drawing anger of federal regulators. sinclair had hoped to use the transaction to become a powerhouse. a milestone for the home rental industry.

partners sold 3200 rental homes. the purchase was facilitated by a loan from freddie mac. it is the biggest deal in the single-family rental program. morgan stanley adding to the bearish call on the technology or. the firm says it is time to step away from semiconductor stocks. morgan stanley said cyclical andcators are flashing red u.s. chip stocks have the worst risk reward ratio in years. ruble plungedsian to a two-year low after the u.s. announced a new sanctions to punish the kremlin for the nerve agent attack in the u k this year. the sanctions imposed under a 1991 long chemical weapons limit exports of technology related to national security, but exams cooperation on the u.s. international's best a.

welcome now gregory white from moscow. good to have you. is this a surprise? there is a statute that requires the u.s. to do this. it was a surprise. i don't think anybody noticed the statute and there was a requirement, so when the announcement came out late yesterday, it was unexpected. the market had been selling off. there have been sanctions discussions and congress the last couple of days. certainly surprise people and focus their attention. david: are people focused on the next part of this. , the country that has used chemical weapons, if they have not apologized, which are vladimir putin doesn't seem inclined to do, then it ramps up into diplomatic relationships

and flights. >> right. it, theer you get into more complicated it gets. the second round is quite tough, ,rought import and export curbs aeroflot could get frozen out of flying to the u.s. ever used against pariah states like north korea and syria here it it would be the first time it were applied on a country like russia. nobody knows what will happen. there is a lot of discretion that allows the white house to call for exemptions, but the kremlin has ns show no sign of willing to come clean. for investors, the bottom line is this puts the sanctions issue firmly back on the radar screen.

not getcertainly better, and probably likely get worse come over the next couple of months. david: thank you for being with us. alix: joining us now is jim mcdonald. also the wells fargo institute president and cio. welcome. you look at the response in the fx market, the ruble with its worst day in two years, the turkish lira at a record low. fluctuation in the canadian dollar things to saudi arabia. how do you hedge the political risks? >> i think this creates an opportunity. and russian market are a small part of emerging markets. we think there is an opportunity here. the sanctions and russia will probably pass in a short time. alix: would you buy russian equities and turkish equities? up but it ist come

a small part of an overall emerging-market allocation. alix: typically it feels like dollar-yen and gold would make sense. that is not the case. most traditional safe havens have not been any place to go, and that includes the safe haven sectors. the s&p close to an all-time high. the dollar is up 6.5% year to date, but down 10% last year. as long as the interest rate differentials keep closing as central banks come in and you have the twin deficits of trade and budget, you probably get an intermediate longer-term push down the dollar against those currencies. david: at what point does a lot of noise become a signal? have saudi arabia and canada, u.s. and turkey, u.s. and russia, china trade, and none of it seems to rise to the level of turning around the markets or the economy.

at what point does something happen? >> it is the $50 question. the real issue you have to keep your head around is the trade issue. if trade continues down this , 25%,han the $200 billion china matches at $60 billion, if that comes to fruition -- comes to fruition --

>> the fed will not raise rates as much as they want to raise rates. the stimulus china is putting in will provide some benefits. you talk about how it you position around trade, we have moved money from overseas to the u.s. the u.s. is least impacted by trade problems. david: why do you say the fed will not be able to raise rates as much as it says it is going to. today, but ppi later the economic data does not seem to be discouraging. section ona big inflation and the lack of inflation in the markets. we think that is one thing. they will not be pushed by an increase in inflation. the yield curve now is flat. the yield curve is likely to invert if they keep raising rates.

that is what we have seen in the shorter term inflation expectations. it is the two-year, five year, 10 year breakeven. it is the shorter term rolling over. is this an oil price thing or a sticky rollover inflation expectation thing? it is a good question. inflation expectations are up 40 basis points since november. i am watching the ppi numbers. month that thest $34 billion original tariffs come into play. tariffs were directed at industrial-type companies, not consumer. in inflation push data, it should come at the producer level, not the cpi data at the consumer level. we will see some of that

transmission mechanisms flow through. we will see how much. i don't think it will be surprising, but will have upward pressure on inflation. david: we have had a steady drumbeat in the increase of pp i that has not flowed through to the consumer. at what point does it become too much and the company's have to pass along those increase costs? a chancenk there is the tariffs will be deflationary. what has had a to commodity prices since the rhetoric has picked up? are down,prices metals, agricultural, even oil. so concern about chinese growth has led to that. we don't think there will be a big inflationary push out of the tariffs. alix: how do you played the different sides of the coin? >> we reduced our exposure to treasury inflation protected securities. put that into credits come investment grade and high-yield,

which looks like a good opportunity for 5%, 6% over the next year. we have been underweight commodities all year. with no great clairvoyance to all the trade noise, we did not think the fundamentals justify the price on some of the inflation. if you look at tariffs over time , they are inflationary, so if they flow into the next round into consumer products, that is where you will feel be potential little bit. we like places like industrials now that have gotten beaten up part on the tariffs conversation. you have to be careful with technology and the large overseas revenue exposure come of valuation, crowding, and earnings the celebration. there are ways to structure the portfolio to not fully inoculated it, but insulate it from trade concerns. david: how does your view affect

the sectors when it comes to equities? exposure equity sector , health care has not been a great performer. we like health care. see newtarting to product announcements reflecting better stock performance. the other area is the consumer sector. they will benefit from good income growth, steady job growth , and we would fund of that through the defensive sectors, including consumer staples, where they have expressed some difficulty trying to pass through their cost increases. a weakeryou see dollar, is that a good thing for technology despite the macro issues? >> technology is neutral today. we don't see a bull or bear case for technology today. the concerns on thy wish and are overblown. on evaluations are

overblown. growth 25% to 35%, it has had a justified run. david: where is your view on inflation different on different sectors? you agree on health care. discretionary, where are you? >> overweight. david: where does your view on inflation take a different direction? level.asset class we have is your waiting in inflation protected securities. david: inflation protected securities? >> we had been overweight for some time. we pulled that back about a month ago. alix: what about treasuries in general? we have that solid auction yesterday. is that the way you need to be playing inflation? >> no, i think you want to be underway treasuries. we have kept the duration short.

you can get nice spread still on investment grade corporates. it is probably the time and cycle to be rolling up in credit quality, not down. so we think treasuries aren't quite as attractive today. david: i assume you have a different view because you think the fed will not raise rates. >> we don't expect interest ares to rise, but if you overweight stocks come you have to fund it from somewhere, so we are funding it from treasuries. alix: are you going to upgrade the quality and high yields? >> we are still comfortable with credit risks, even in high-yield issues. financed ande taken advantage of the insatiable appetite for credit today. are a small part of the index, but we expect that growth. alix: even though leverage loans are yielding more than

high-yield? it is still a return to be had? >> there is expectation you will have a 6%, 7% return on high-yield. ast looks really attractive, does the 5% return out of investment grade. mcdonald, wells fargo, thank you both. david: i thought it was fascinating. alix: i don't know what that means. coming up, muska meets son. an investment in tesla and why they fell apart, ego potentially might be one of those words. this is bloomberg. ♪ this is bloomberg. ♪ two, down and back up.

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s&p futures flat, as well. dippingtocks in europe .8 percent. oil had a tremendous slide asterday, off by him was 4%, seven-week low. trade fears weighing on the index in europe. asset classes, i'm watching dollar-yen, sitting at a 50-day moving average. the talk is the global liquidity world. does it support the yen? that is the big question for the markets. the ruble seeing its worst day two years. we have the 30-year option coming out today. -- a role of. david: now time for headlines outside the business world. emma: russia is threatening to retaliate for a new round of u.s. sanctions. the u.s. is imposing that lt is to punish the government from

the nerve agent attack on a former double agent of georgia in the u.k. officials once again denied any involvement in the attack, but they stopped short of threatening specific measures against the u.s. center of anthe escalating feud appeared the u.s. imposed sanctions, prompting a turkish delegation to raise concerns about a state run banks the u.s. is investigating over sanctions on iran. problems for boris johnson. his conservative party will investigate him for ridiculing muslim women who wear burqas. prime minister theresa may has called on johnson to apologize. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am emma chandra. this is bloomberg.

alix: it was the skip yesterday. in london mosque held talks last year about softbank investing and tesla, including potentially taking the electric car maker private. joining us is alex webb, a bloomberg opinion columnist. walk us through how the talks began and how do we know they ended. i am not sure who reached out to whom. we know the way they played out does not want to turn control of the company. the softbank were not happy with the way it was going to be split. they're going to throw that much money at a publicly traded company to make it private, it is understanding they would want to have the control influence. that is the hurdle that they were unable to overcome. raises the continued question of who would be the big investor if we see tesla go private.

softbank has an enormous piggy bacon likes investing in tech. if you take them off the table, who is left? : not many people. theiror softbank and fund, that would eat of the lion share of it. it depends on how many of the other investors would retain that stock. saudi, news broke directly before elon started tweeting that saudi had taken a stake in tesla. even saudi, that investment comes largely in the form of debt. so their willingness to just buy the equityo might be questionable. there are other huge sovereign wealth funds, but we have not heard of their connection.

we were told the bloomberg spoke to 75 investment banks, and none of them had any investment. and makes it highly unlikely that there is someone lined up. david: alex webb of bloomberg opinion, thanks so much. a recognized authority on corporate governance, john coffee, professor of law i can't be a and director at the center of corporate governance up there and is professor and -- professor of law at columbia. he joins us on the phone. this is the complete statement out of the board yesterday -- last week, elon open to discussion with the board about taking the company private. it included discussions on long-term interests and address the funding. the board has met several times and is taking the appropriate next steps. in the tweed, elon musk said funding is secured, and those

numbers are about $60 million to $70 million. how much authority does a ceo have to have from the board to make that statement? more than he received. this is an extremely amorphous transaction. there is no transaction structure here. we do not know if they intend to leverage a buyout or a transaction that would just eliminate and buy up the small retail shareholders so you can delist from nasdaq and avoid the world that elon musk does not like in which there are short-sellers. institutional investors like liquidity. they are not happy with being large shareholders in an il liquid company trading the over-the-counter market were you cannot get out. so there will be a lot of decisions made by shareholders. the board is sympathetic to what he is saying, but we do not yet know what the structure is. and elon, an inquiry has been

launched by the sec. they are unhappy with two things, one, he said the transaction was one in which he had funding secured, and that is very improbable because the funding could be as high as $70 billion if he were doing a traditional leverage buyout, and that is twice the largest leveraged buyout that has ever been done. secondly, he made his announcement, accurate or not, in a very irregular way, just on twitter. sec expects you to announce things simultaneously with a sec, withing with the a corporate press release on your website, and you can also do it on twitter if you want. but you cannot do it only on twitter and satisfy the sec. there is no more fundamental decision that you take a company private and do a merger. that requires that you let the

whole market know all at once simultaneously. david: let's talk about the sec and put aside for the moment the form of the announcement and go to the substance. the language he used was funding secured. as you said, $70 billion. i want to read and sec rule. unlawful for any person to make any and true statement of material fact in connection with the purchase or sale of any security. in fact, he did not have funding secured, if so, how much trouble what he and tesla be in? >> i think they are a very inviting target. recognize that something like 1.3 billion dollars was lost two days ago by the short-sellers. they're are going to be very bitter and protective. -- the indicative. they will claim that he was trying to manipulate a price spike to punish them. he put up his flamboyant

statement that he had secured funding. that is a super material fact. it sent the market price up, hurting them. that is one group. there are the people who bought the stock two days ago after this announcement. the market has begun to recede a bit, and it may fall off sharply once he discloses finally the transaction structure he has in mind and the limited funding he has today. if the stock price declines, those people will also politely sue. the sec have to prove or at least find intense, and how challenging may that be? >> first of all, you're thinking of the sec suing. i think there would also be large class actions from the various class of investors. they have to find data that he was extremely reckless or this was a knowingly false statement. but it is very hard to choose a funding has been secured if, and depositions, he cannot identify a single investment bank that has made a single firm commitment.

these things just to not get invented. when you are talking about a minimum price of say $20 billion to take the company to arc to buyouts interest to take the company d and desk to take the take the company dark -- this shows most the banks were blindsided. i do not think you will find that there were any hard formal commitments. : we even flop -- david cannot find many people who believe he has this funding secured. assuming he does not actually have it nailed down, if you are on the board right now, what do you do with your ceo elon musk, and given it is elon musk and his role, can the board do that? >> the first thing i would advise this board to do is to disassociate themselves with musk's statement.

they would say that we have made no proposal. to consider ang proposal made to us, but we have not made any representation to shareholders about whether funding has been secured or not. a difference whether plaintiffs can sue only musk or they can also sue tesla. you're talking about a large number here in terms of who will be liable. alix: professor, what happens next? >> the stock price is wavering. it fell a little bit yesterday. sooner or later, he will have to make a corrective disclosure about what funding he has. at that point, the market price may respond. i am not going to predict where it will go. it has never approached to anywhere near the $420 share price that he mentioned, meaning that the market does not think this is terribly credible either, but they're still hoping there will be some premium from this transaction. depending on where the market price corrects to, you will see

whether or not there will be an awful lot of litigation. certain the short-sellers want to sue because they have clear losses and will claim intent. next move will be corrective disclosure. what is he going to say and how will he qualify earlier statement? and the sec may indicate that they are unhappy and will bring an action. if they bring an action, i am pretty sure it will be settled. i do not think he wants to lose in a case to the sec, which would be binding on all future actions brought by private shareholders. so he has a strong incentives to try to settle with the sec and not get a legally binding decision that would precedent. david: professor, thank you very much. that haveother ceo's been in trouble with their boards we could talk to about, but we are talking elon musk today. coming up, investors keep flinging bill gross' i constrained bond fund.

we will discuss the drop and reasons behind it next in wall street beat. live from new york, this is bloomberg. ♪

emma: this is "bloomberg daybreak." coming up in the next hour, wynn resorts a board member. this is bloomberg. now to your bloomberg business

flash. riteaid and outward since agreed to scrap a merger that would reshape the health care industry in the u.s. one proxy advisor says rite aid shareholders would not have ownership interests in the combined company. a company going private and a deal per -- valued at $6.5 billion, including the following firms. a boost from the soccer world cup. a german athletic wear maker had beatts at the estimates -- estimates. they sold a record number of soccer jerseys. that is your bloomberg business flash. beat,time for wall street

three things wall street is buzzing about. indexty bets on zero fee funds. how can they afford it? gross' want fund falters. investors pulled a record on redemptions in july. and new york approves a cap on uber and lyft. us.d: jason kelly joins welcome. two new funds announced on august 1, and they said they will charge a zero for the funds. jason: if it was some sort of johnny-come-lately trying to make a hold, but this is star manager put forward these people whose and we can manage your money and we have the smartest, mostly guys, guys on the street. yet, we're in a passive versus

active world. david: you have to open a fidelity account. two, it aside to our own generated index. and a it is quite clever lot of ways, and you can see why they are doing it. i think one of the reasons it is catching so much attention is because it is fidelity. these sortsgoes in of things, so goes the market. alix: and other players, can they even do that? now to another fund manager that is having a rough couple years. , money pulled from his bond fund for the fifth month to $200 million in reductions last month. jason: that is a sad trombone chart, womp, womp.

when you look at how much it grew when he took over, that was a big deal. bill gross was set pimco and went to janus with much fanfare. it rose steadily in terms of assets. as you say, this is a trend. saw the monday, i article with him and his wife. i was like, oh, man. and then you get hit with this? he needs to start giving it away for free, like fidelity. much of bill gross' money is in that fund? jason: i do not know the exact amount, but he has a pretty substantial amount as we understand. we will see how that goes. it evokes a lot of the hedge fund guys. i do not think bill gross has the ability, like many friends in the hedge fund world, to just convert to a family office.

alix: also not good headlines. a programming note, we will hear from janus henderson ceo it today, 10:00 a.m. eastern. you do not want to miss that. david: now something that really matters to those of us and new york. dude, where's my car? i saw that movie. alix: you did not. [laughs] , lyft, this is a hot issue in new york city. city council is saying, ok, let's put a freeze for 12 months on the licenses for uber and because they drive around and create a lot more traffic and a lot of them are empty. they have a huge campaign going on to keep this going. jason: this is a new setback for the new leadership at uber. they had been working in the post travis environment to show

that they were a new kind of company. they got a reprieve in london. here in new york city, this is the major market. fidelity being fidelity, but as new york city goes, a lot of people may follow this. david: you can see how dramatic has gone up.ing jason: in new york city, when you are about the impact uber and lyft had on the taxicab industry, it is brutal. david: literally, taxi drivers are committed suicide, a tribute hailingese ride organizations, so it is a big issue. jason: and the economy of the taxes alone has utterly changed. david: it used to be like minting money. alix: i live in brooklyn, i am

not going to hail a yellow cab. i need uber to drive me around. david: and they will not take you a lot of the times, taxes. jason: uber's argument is that ultimately there hurting the people whoghs and actually really rely on them to get around in a way that they just and not have access to other forms of transportation or david: jason will be on the radio with us this afternoon starting at 2:00 this afternoon. jason: i will be looking at a couple things, including the cover story of bloomberg business this way, the profile of steve mnuchin. interesting how that guy has managed to hang on, talk about a wall street besat, may -- once the united states may sell dollars as a weapon in a trade war. alix: don't forget, you can watch tv go online.

check it out ♪. this is bloomberg. ♪ ♪

david: economists are starting to take seriously the idea that president trump could act on his preference for a weak dollar. that we cannot rule out a turn toward a more interventionist policy, particularly since the current it.nistration has hinted at if it were to happen, we believe the fed would fall in line. joining us is michael mckee, bloomberg's international policy correspondent. down anuchin talked it yarn a half ago, didn't he? michael: and realize it was a mistake. he is been a traditional secretary for all of the trump

administration's policies, so this would be an interesting dilemma if the president wanted him to intervene and currency markets. ever since bob ruben kim, the u.s. treasury has all but stopped doing that. they did it in 2000 and help the euro when it was very low and to help japan in 2007 after the earthquake. as a policy rule, they do not do it anymore. alix: how would they? michael: there are obvious ways you intervened likely into currency markets. but unless you get everybody in the world to do the same thing, currency markets are so huge. you have almost no effect. what seems to have more of an impact as if you talk it down here and we saw that with the president when he was talking about the fed. we saw the dollar get a little bit weaker. the other way he could do it is by imposing tariffs and really raising the tariff level. we are seeing that in asia right now are the jpmorgan bloomberg index with tariffs of light on

china, china is one part of the equation here because so many products flow through china. we are seeing asian currencies drop across the board, as well. if the president reversed that, you might see a better impact for the dollar in terms of weakening. david: we have tariff for tariff. alix: michael mckee, thank you very much but we will hear from michael for rowley, jpmorgan chief american economist, later this morning. -- michael feroli. says why it is time to get defensive, and he does not like tech. this is bloomberg. ♪

alix: musk meets son.

cox went nowhere. -- talks went nowhere. and the u.s. hits russian with more sanctions. tensions rise with turkey. in china retaliates on trade. mike wilson of morgan stanley stays difference -- defensive. inflation expectation rolls over with oil prices. david: welcome to "bloomberg daybreak." i am david westin. right here with alix steel. we cannot stay away from the muskra -- tesla and elon story. but ppm may be more portent. alix: it will be interesting, especially on the dog days of summer. s&p futures pretty much going nowhere, sitting right around the record high. the currency market is one to be watching. a lot of whipsaw action based on geopolitical headlines. lira with another record low.

the ruble sinks to a two-year low. yesterday-year option despite the fact he did not see a three handle on the 10-year. today you get a $2 billion of 30-year notes at 1:00. we sawter the rout yesterday on a china headline on tariffs on products. david: that really is what you cover. we should talk about why it went down. it was in inventories report, too. alix: feels like part of it is potentially thin trading. inventory report was mildly bearish. but if you do not purchase u.s. products, you need less crude. david: and today is thursday. alix: oh, commodities show. we will be talking about it. david: i look forward to that. this morning, we will see weekly jobless claims and the producer

price index for july, followed by wholesale inventories at 10:00. afternoon, the chicago fed president will be holding an on the record media briefing with reporters. the u.s. treasury sells $18 billion of 30-year bonds. we will find out whether the bond market holds up. for now, emma chandra has first word news. emma: turkey is refusing to release detained americans after an escalating feud. the u.s. opposed sanctions over the matter, prompting it took us to zig -- delegation to visit washington. aboutrks raised concerns an investigation by the u.s. with boris, problems johnson. his own conservative party will investigate him for ridiculing muslim women who wear burqa's. prime minister theresa may in the chairman of the conservative

party have called on johnson to apologize. russia is threatening to retaliate for a new round of u.s. sanctions. the u.s. is opposing the penalties to punish vladimir putin's government for the nerve agent attack on a former double agent and his daughter in the u.k. russia was defiant and officials denied any involvement .global . global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am emma chandra. david: thanks so much. the russian ruble has plunged to a two-year low. we welcome from moscow gregory bloomberg's russian economy and government coverage reporter. talk about these new sanctions. greg: political reaction has ut reserved in

some sense. they were unhappy about the sanctions but did not take specific measures. has been a tough issue for the russians. they have had words from trump, warm words from trump about putin and helsinki last month. things have turned run as the climate in washington has got much more chilly. tough for investors to follow the back-and-forth. keep: it is important to separate the sanctions, so many imposed or about to be imposed are being talked about. these sanctions have to do with that alleged attack, the nerve agent attack on the u.k. couple some time ago, earlier this year. it is not allegations of russian intervention with u.s. elections. those are still pending. is there any back channel discussions we are aware of where we're trying to put things

back together with the russians? gregory: not beyond what we hear from the sort of highest level where we had the president trump summit and efforts to pull things back together. pompeo mayscussions, have a meeting in the coming months. that has not generated any concrete steps towards improvement, while there is pressure for sanctions. right, the ruble started taking a beating yesterday with this wave of sanctions. there is a proposal and congress for a new sanctions law related to election meddling. david: thank you so much for terrific reported from moscow, bloomberg's gregory white in russia. alix: you have geopolitical risks and then strong warnings. more than 90% of s&p companies have reported quarterly results, 80% beating estimates.

bloomberg's romaine bostick joins us and mike wilson of morgan stanley. romaine, walk us through earnings season. >> almost done. about 450 of the s&p 500 companies have reported. rates,k about the beat near historic highs. revenue beats are also strong. gross margins in aggregate have come down slightly from the previous couple of quarters, and some analysts say this is a sign we could see maybe more disappointing results going forward. inputof this is side to costs, rising cost of fuel, rising cost of steel, aluminum, things like that. alix: let's look at that inside bloomberg. operating margin for s&p is the white line, and the blue line is the s&p. ate wilson, how do you look margins, and will it be the driver of s&p prices?

we felt like earnings would be strong this year. that was not a surprise. we think the market is smart enough to know to buy things are going on. number one, this is a one-time taxpayers. second, all of the boost is happening below the line. below the equity line. companies are spending excess cash flows on, labor, maybe price competition. that will eventually erode operating margins, and we are starting to see that already. i think it will trickle down. david: the market has discounted a lot of this in most sectors but not all sectors. what is compressing the margin? is it input costs? is alwayst discretionary. if somebody's are getting a windfall of higher profit of free cash flow, they are spending and now. thisf the big stories year's capex is now increasing, but that is a cost.

because companies are making more money, you are seeing companies instigate price competition. some companies, think jamie he has used a muscle of the tax benefits. it is the second order effects of tax cuts, which are negative for earnings. the first order effexor clearly positive. now we had -- the first order effects are clearly positive. alix: and you talk about competition. look at fidelity. david: it keeps the cost down to the consumer. >> you're seeing price competition in the restaurant space, consumer staples, and a lot of the consumer discretionary names. it is really fierce are go back and look at what the restaurant stocks are doing. i think that is a good primer for what you're going to see play out in some of the other industries and to the rest of

the year. alix: what i still find puzzling is earnings revisions keep rising for 2019 and 2020. i get it for 2018, but the blue line is 2019 and the yellow line is 2020. where do you think the revision is stumped? >> the reality is that most people do not forecast more than a year. it is very difficult. a side note, the worst thing that ever happened to financial forecasting is excel. you just copy the last cell. i do nothing 2018 is at risk it off. i think it will be a solid year for earnings, but the market knows this. the risk is really for 2019 and 2020. david: what about next weekend retail? >> you have a lot of big retailers out, macy's, home depot, target, and that will give perspective that consumer spending. the data on the government side

has been strong. most of these committees reported pretty good results in the previous quarter. we still rely a lot on consumer credit and fiscal stimulus to power the consumer through. we will see if that carried over. alix: we are going to talk about the different signatures -- sectors, so which ones have priced in the risks in which have more downside? >> we think we're going to this rolling bear market where multiples have corrected kind of sequentially across the market. trade plays into this, too. but talk about aggregate numbers. the s&p 500 p/e multiple on a forward bases is down about 10%. the meeting contraction is about 15%. the median sector contraction has been enticed 20% or two sectors have failed to derate, technology and consumer discretionary. why is that? because people are forced to cram themselves into areas where

they thing growth is going to be better. that is a fallacy. the idea that tech comedies and consumer discretionary comedies are not economically sensitive or will not feel the effects -- we have it in the restaurants, retailers, the weaker ones in particular, and tech companies, too. our analysts downgraded u.s. semiconductors today. our asian team has been underweight there for a while. we have been bearish on tech. it is not priced yet. alix: we are to get to all of these calls over the next 20 minutes. romaine bostick, thank you very much. mike wilson of morgan stanley will be sticking with us. a companyor shinier, that experts lng, it will have a trade sensitivity. their revenue is about $1.45 billion. they had a loss of about seven cents a share.

were the last to sign a long-term agreement with the chinese company. is tryingldman sachs to buy an lng tanker from cheniere. so the details a really important. david: yesterday, china really put lng on the table when it comes to trade. think we may actually go after lng. alix: you need long-term investments to build. pay attention to that earnings call. much more coming up with mike wilson and how he is trading the market. this is bloomberg. ♪

emma: this is "bloomberg daybreak." tribune media has pulled out of a planned merger. anchored federal regulators. sinclair hoped to use the transaction to become a nationwide broadcast powerhouse. a milestone for the home rental industry. front yard residential has bought property manager haven hearst partners. $485 million. the purchase was facilitated by a loan from freddie mac. the biggest deal they have done in the single-family rental program. and morgan stanley is adding to last months harris call on the technology sector, saying it is time to step away from semiconductor stocks. morgan stanley says cyclical indicators are flashing red, warning u.s. chip stocks have the worst risk reward ratio in three years.

alix: funny enough that we have mike wilson here for morgan stanley. doingou have investors this, the question is how much risk you want to take on to we spoke to market strategists as to how they should be playing the market. here is what they said. >> we have highlighted several factors people are very concerned about and think could possibly undermine both economic growth and this bull market. we have gone through most of them and said that they are not a significant concern. >> i would argue to listen to what the companies are already saying. they are saying that we are in this incredibly strong demand environment. >> not so much things will roll over. when things move higher, which are less positive. things go low, we turn more positive spirit -- positive. >> for the moment, these are a substantial size. alix: we heard your call on getting defensive. >> we turned defensive in june.

calld been signaling this all year, that is some point we felt like a change would be in. it would be time to get more defensive . we time to quite well. defensive sectors performed extraordinarily well in june, better than we had hoped, quite frankly. so the market is telling us in no uncertain terms, that it is worried about growth decelerating, worried that rates may be peaking here. i do not think there is any mystery. i think it is happening. we have our views. we like to verify them in the market. the market is verifying our views across the board. whether or not we get a major correction of 10% or more remain's to be seen, but the rotation is happening. that is as important as making a call on what the sec is doing. you need to be positioned in the

right places. cyclicals are underperforming. we think it is a function of growth decelerating, which is very visible. variables that are forcing people to move more defensively. david: we do not know if it will happen or not. talk about decelerating growth. talk about how much of that is about globally taking money out of the market. >> the first part of our view that growth is decelerating, it will happen whether trade gets resolved positively or negatively. that is baked in the cake. pmi's were so extraordinary last year. gdp growth at 4.2%, that is not sustainable. peak numbers, so they will decelerate. will it decelerate into something really ominous like a recession? we are not making that call

right now because we do not know, but the risk is out there. if the trade thing really escalates in a way that is damaging, it could get much worse. alix: so the pushback will be buybacks. we will see a lot more buybacks, and deutsche bank said the same thing. august, you see a ton of buybacks and continuing throughout the year. how do you view that in relationship to your more conservative view? and wecks are constant made the same callbackin may after the -- the same callback in may. end of april, stocks are at their lows. that is a major difference. second thing it would point out is i do not disagree with the idea that i backs are going to be greater this year than last year. but the rate of change is going to be lower in the second half. pace isst half buybacks cas

extraordinary. second will be extraordinary, but sequentially it will be down. i am not convinced we will see the same magnitude in the second half. and companies now are sounding a bit more concerned about things like trade and to sell it in growth. that is what the pmi's are telling us. the question is, if stocks selloff, are they going to be as aggressive as they were in february or as they were in may when stocks came in? i do not know, but my sense is they will not be as much. david: what does it say about the see sweet and their attitude and theirhe c-suite attitude? where are we on capex investment? e, there is a -- qe,

there is a financial arbitrage. one of the big things going on now is, because the qe era is over in companies need to invest and grow, they are. they have been doing that for over a year now. it is not a bad thing in the long run. it is a very good thing. but there is a shorter term cycle in the near-term or markets have to digest that in the form of lower margins, like we talked about earlier. that is what the market is dealing with right now. you mentioned rotation, and that leads us to check it you had been underweight tech. you mentioned downgrading semis. so if tech gets its turn on the ifatility roller coaster, growth and momentum strategies mean the pain will spread beyond the tech sector, how and where? nuanced call, but it is important to understand.

. have a chart here to pull up alix: i love wind gusts have charts. >> the momentum strategy, they follow price momentum. the short price laggards. in june, the price laggards started to outperform defensive stocks. july, we downgraded take on july 9, and that began a period of price leaders starting to underperform. first leg was defensives outperforming, the laggards. second, tech stocks had their hiccup in july when facebook and netflix missed their quarter. it is a momentum strategy trying to come back. this is what the average portfolio looks more like. the average portfolio, active managers tend to be trend followers.

that is what they're doing here. trend following strategies are not working right now. this is not what the s&p looks like. this turns down again, this could lead to more selling. the risk is elevated of something like that happening liquid,n markets are il people are on vacation, august and september. david: if it continues, does that mean tech was overvalued? is it more structural or is of the overall growth you're concerned about leveling off a bit? >> first of all, they are crowded and have been forever. that is not a reason to think stocks will selloff. the valuations have gotten so stretched relative because people have been forced into these areas thinking they are immune to cyclical slowdowns. i disagree with that wholeheartedly, that technology

companies or consumer discretionary stocks are immune to a deceleration in growth or will be less susceptible to trade issues because the consumer is more domestically oriented. i would say opposite. technology, if we are right about business confidence fading, technology companies are very dependent on spending. i think these two groups of the last two groups, u.s. growth and small caps, and they have to correct to complete this rolling bear market. can they can move on. until that happens, i think this risk remains. it could turn into more of a market event. alix: where is the value than? >> i think the value has already corrected. in the last month, growth stocks were selling off. people have rotated towards the value stocks, not just defensive like utilities and staples and perhaps even health care, that

they have also rotated back towards financials and industrials. why? those stocks have already de rated by 20% to try for percent. -- 25%. david: talk about the bond market for second. we are borrowing a lot of money. treasury is going into the market again today. when does the start to catch up with us, and what might that due to equities? >> the common wisdom would be if yourre borrowing money and unfunded budgets, your cost of borrowing should go up. it has not happened yet. a lot of bond bears are frustrated this year with that idea. where is the demand coming from? it is because rates are even lower outside the u.s., so there is still this bid for u.s. treasuries. at 3%, we do not have a problem with where multiples are today. 10-year got above 3.25%,

towards 3.50%, that is a problem for equity valuations in the u.s. the u.s. equity market has corrected at the multiple level, but a few areas have not. alix: we will get the latest read on inflation next, and we will break down the july producer price index data, which will encompass the first round of tariffs. what will be the producer impact, and how will that come out on the consumer prices for tomorrow? we will break it all down for you. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i am alix steel. the latest read on use inflation is around the quarter -- corner. one to watch as the yen continues to grind

higher. is there a reallocation of global liquidity out of other markets and enter japan because of rising bond yields? that is the question. the ruble continues sliding down , a two-month low. due to have spread continues to the 2-year spread continues to be flat. looking at energy year on year for july coming in at 2.7%, a little light. on a month to month basis, up by .1%. shocker, final demand coming a bit light, 2.2%. this is the first real reach through from tariffs we will get. david: not showing up strongly at all. alix: producer prices increased 3.3% from a year ago, but core

just 2.7%. overall prices unchanged in july. joining us is michael, bloomberg international economic and policy correspondent. mike wilson from morgan stanley, as well to it are you surprised? michael: i was just looking at the more specific numbers. take this chart here, ppi steel. you see an increase in steel prices and the price of things that are made out of steel in the ppi. at the same time, we will go to this other chart, and we are seeing what we kind of expect, soybean prices rolling over. ppihis is offset in the some a which is maybe why we are seeing more of an impact, bringing it done a little less than expected. in have had the tariffs

steel long enough to see in a packed but the other tariffs the president just put on, not enough time yet. alix: tariffs in an inflationary, does that have nuances to it? michael: it definitely has nuances. if you get slowdowns in other countries, it could be deflationary. we're waiting to see what the overall impact is. washingdard answer is machines, the president put tariffs on washing machines, and we have seen prices go up significantly. but that was a single item. it depends now on how many different items start to be affected and how quickly. david: is it important what the volatility? if you are running a business, you want predictability. >> that is right. it is also the speed of the change. can't adjust quickly, and if you have a shock like a tariff, that will hit them immediately. which i thinkd,

the tariffs are speaking to that. not overly concerned about some real mess of acceleration in a way that is damaging. i think it is just the companies will have to deal with this for a long time. alix: what is the reach through for tomorrow and cpi? michael: it takes a lot for the ppi two feet into the cpi. companies often absorb a lot of the increases. they keeps, can absorbing these? procter & gamble announced that they cannot and have to raise prices. so we may see some terror of effect in there tomorrow. in general, it takes a while for that to show up. we have not seen a lot of price pressures on the cpi. 2.9% for a headline, which is elevated, but we do not see a sign that it is really accelerating from there. david: as an equity investor,

there is the trade risk. we saw two sectors affected very differently, steel and soybeans. >> and the market has been pretty efficient in that. steel input costs have been hit hard. companies that make washing machines have been hit hard. companies that and if it from lower agricultural input costs have done ok. once again, i think the market has been good about discounting a lot of the risk this year with the exception of a few areas where does it the areas that are now potentially at risk. michael: one of the things about the ppi and the input cost rise, a lot of this affects small companies that make the intermediate goods. ppi picks some of the debt. but it then goes into the final products, and the companies that make those are generally smaller and often private companies. we do not see it affecting the markets until the price increases to two feet into the bigger companies. alix: interesting.

a member of morgan stanley changed her fed view, no four hikes in 2018 and only three in 2019. -- now four >> hikes in >> 2018. are responding to data. the outlook continues to be pretty good. inflation is not running away from us but it is clearly at the fed target. financial conditions have tighten this year but are not extraordinarily tight. if i am the fed, i cannot ignore that. that is what she is responding to, zynga chance of them hiking is much higher -- saying the chance of them hiking now in december is much higher. i think has been bothering the market more than anything this year is effect of the fed is being much more deliberate in their tightening this year than we have seen in , meaning they're reducing their balance sheet consistently, hiking every other meeting 25, and i think the

market has responded by hitting the weakest links sequentially all year long. now jamming into the areas that are perceived to be safer. if the fed keeps going, it makes me more confident. the fed said what they are going to do in late other plan. as long as the data keeps coming in the way they're coming in, no big surprises for equity investors are other investors. michael: exactly right that we have not seen any data that moves them off the track yet. we might have average hourly earnings with is a price to the upside, but that is not happening. as long as inflation stays it is steady as she goes. alix: where does that leave commodities? >> we are bullish on energy, bullish on oil prices. oil prices are in an interesting spot right now.

we know about supply constraints and sanctions potentially. non-opec regions around the world are having a hard time producing oil. a hard time getting oil to the markets for lack of infrastructure. the supply side is clear, not a lot of excess capacity. economy is growing, so demand has been better than expected. our view for oil prices is they are probably going up between now and year-end. it will be constructive for energy stocks. agriculture is difficult. it is very hard. weather has been erratic this year. alix: that is a nice way of saying the hottest ever. commodities, and in the equities market, it is not that big a deal. it is all about energy. michael: it is 2019 that will be interesting if tariffs continue. alix: there was an article

comparing living in new york right now to living in a swamp because it is so hot. side note there. broader picture, it feels like it is a question of liquidity, you mentioned financial conditions. with the dollar-yen, it is about money leaving other regions and going back into japan and that really changing the dynamic of liquidity. how do you view that scenario? obviously, the bank of japan and the ecb are still buying bonds, but the bank of japan is buying fewer bonds. they are buying more bonds to meet their target rate. it does not require them to buy as much. that is absence of liquidity. i would throw in china. last year, it was tightening aggressively on monetary policy. they have backed off now. the big one is the fed. not saying they

should stop or they will cause a recession, i am saying the market does not like it. i know that because i am watching how asset classes have traded all year. that coin isnt, making new lows potentially here today. to me, that is a sign of the ultimate speculative asset, and that is the one that gets hit the hardest when liquidity tightens. david: the market does not like it, but it is good for the market. how much of the valley of the assets was because the fed was pumping so much liquidity into the marketplace? longer run, it may be healthier for the market. >> the fed is doing their job. they should be doing this. my job as equity strategist is to figure out how to trade it. we were wildly bullish on the stock market because we do not think it was discounting the stuff we're seeing now. now we think it is kind of priced.

year?t about next i do not think we have a valuation bubble, let's be clear about that. i think we have an economic cycle that is running its course, and we're getting closer to the end.alix: you are such a glass half-full guy. you are. half-empty though because bad things actually good for us. a little discipline, you know? alix: thanks to michael mckee and mike wilson of morgan stanley. david: an update on what is making headlines from outside the business world. russia is complaining that the new round of u.s. sanctions are not in line with the constructive atmosphere at the helsinki summit. the kremlin is threatening to retaliate. the u.s. is imposing sections to punish the vladimir putin was a government on the nerve agent attack on a former double agent and his daughter in the earlier this year. there is a report president

trump has suggested privately that he is open to broader sentencing reforms and he previously backed. according to abc news, the republican has met with republican centers to discuss comprehensive prison reform legislation. and italy is about to battle the european union over its budget. the deputy prime minister says he's ready to complete the tough tactics they used to win concessions from the eu on migrants. they want to do it without breaking eu budget restrictions. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am emma chandra. this is bloomberg. overall, up by 3.3% ppi, core of like 2.7%. market reaction, goldilocks.

buying coming to the front end of the bond market. stocks holding onto gains. nothing dramatic. the fed can go, but it will be slow and steady can the market is reacting. david: a quiet august is not the worst thing in the world. alix: no. how do young up, solve a problem like tesla? we will talk corporate governance with betsy s. atkins, wynn resorts board member. this is bloomberg. ♪

emma: this is "bloomberg daybreak." coming up later today, an kkr'ssive interview with director of macro and asset allocations. this is bloomberg. rite aid and altered since egregious groep a merger that would have reshaped the health-care industries in the u.s. the transaction was opposed by two proxy advisors. one of them says rite aid shoulders would not have gotten fair ownership in the combined company. commercial providers going private in a deal valued at $6.5 billion. buyers include a private equity firm. bradstreet profit has fallen.

eddie does got a boost from the idas gotorld cup. -- ad a boost to date beat estimates, driven by growth in america and asia. this older record number of soccer jerseys even though the national team at sponsors lost backedworld cup to those by rival mikey. david: thank you. elon musk is the latest in a group of prominent important ceo's whose conduct has raised questions about the companies and relationships with their boards of directors. welcome now betsy atkins. she serves on the boards of several public companies, including wynn resorts and volvo cars. she is author of "behind the board room doors." welcome. >> i have a lot of scar tissue in pattern recognition. david: start of with elon musk in the tesla board.

he had a tweet saying he was thinking about taking the public-private and that he had learned of the financing. the board get this statement, last week elon opened a discussion about taking the company private, including how could better serve tesla's long-term interest, and addressed the funding. the board has met several times and has taken the appropriate next steps to evaluate this. that falls short of saying we have financing lined up. >> first of all, elon musk is a brilliant innovator, but he is just a disaster as a public company ceo. you cannot treat your shareholders like their private investors, and you cannot behave like you are a private ceo when you are a public one. the board has to assert themselves. the board themselves are acting like a private company board. they are being reactive, not proactive. when you look at it, the board looks a little bit not ideal. you have got a lot of co

-investing, cross relationships. that is not what you look for in a company that has been public for eight years. david: john coffee, a corporate governance expert, was on earlier, and we asked what the board should do. he said the board -- he said the board should start distancing themselves from what elon musk is saying. >> i think that is ridiculous. the board is responsible for the ceo, and they are the oversight mechanism for the shareholders. if they have a cowboy, they have to reel him in. you have to be proper with your communications about the market. you do not get to dribble out information or say you have financing when you do not have financing. the sec will look into this as potential fraud. david: and the second board problem is complex.

they were in the middle of a fight with shari redstone and shareholders. and then you had the allegations with les moonves. it is a difficult situation. >> when you are a public company director, you have a duty of loyalty to shareholders, a duty careful andmake a informed decision, and then you have to make a business judgment. their loyalty is to the cbs shareholders. of loyalties.ty viacom, partl of of it? do you take the lion gate deal? simultaneously, they have to run a special committee. this special committee investigation has to have a scope. you're looking at the ceo or the whole company or david: talk about the special committee investigating les moonves. there is the cofounder of home

depot. he knows les and had conflicting feelings, which a lot of people feel. >> les moonves was and is a friend of mine. and i do not judge anybody, whatever it is, if you do that, it is bad. there is no rationalization for none of that. but if each of us don't remember the kindness of people no matter what their sin, something is wrong with us. david: on the one hand, what he did was bad if it is true. on the other hand, you cannot forget the good he has done. ceo inerformed well as a terms of the performance of the company. that is a consideration of but not in what this mess -- what the special committee is going to look at. alix: seems like we have dealt with two boards that are not there. what is not taking action in terms of cbs. and with elon musk, they are

asleep at the wheel. intel is the third story that may have gone too far when they ousted their ceo and left the company in a little bit of chaos. i think you're absolutely right or it when there is a question of impropriety on behavior, you have to take it seriously. but companies have to look at their fraternization policies and refresh them. of everyone meets their spouse or boyfriend or girlfriend at work. you need a clear policy. in silicon valley, soccer people howasking human resources, many times can i ask someone out, 3, 5, seven? well, when she turns away from you in the hall, it is a hint. you have to have guidelines. you had the board make this decision. you heard the shareholders -- you hurt the shareholders when

you leave a company without a ceo. there is contraction, no leadership, a void. you are working for shareholders, not the morality police. david: you make a great point to if you are on a board, you can move too fast or too slow. other boards might let it drag on. but you can also jump in too quickly. how do they get that right? sayingou make a decision every penny of mine, my family, my village is invested here and i am making a decision for the interest of everybody, if you make that with your true norman go quickly, your find. it is practical commonsense per do cannot leave a company without a leader. you cannot leave a company with a predator at the helm. that is not the right thing. you need to be sure you have succession strength within the company.

there are a few guidelines. crises will happen. be prepared. you cannot be like united airlines cut on your back foot and then call a meeting and two days later you come up with a lawyerly statement it you need to be authentic. thanksthat's the atkins, so much. we will talk next about what i am watching. live from new york, this is bloomberg. ♪

>> did you convince him to david: ok, one of the things i am watching, turns out there is a building on 3rd avenue at 51st street owned by a chinese company, and apparently the reports are that we are about to see is -- seize it. in part, because there is a police station on the ground

floor. so seizing building stuff from china. and the coming at 1:00. 10-year was pretty solid. looking at the appetite of the 30-year. david: records amount -- record amounts raised. alix: that does it for bloomberg daybreak: americas. coming up, the open. michael feroli of jp morgan and his call on how president trump did use the dollar as a weapon in the trade war. this is bloomberg. ♪

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coming up, a double blow for em currencies that currencies. no let up in currents -- in turkey. lira plunging. get a deal. tesla facing the same questions for three days. from wall street, and washington, show me the money, elon. 30 -- 30 minutes away from the opening bell. euro-dollar, just a little bit -- at at one hundred debt 115.98. u.s. announcing new sanctions against russia. not letting up on turkey. currencies into a bit of a tailspin. >> the moment neither of these are of substantial size. >> you have the ruble and the price action,