taken against russia's bank -- russian banks or currency would amount to a declaration of economic war. the sanctions have sent the ruble to the lowest level in two years in the kremlin has promised to retaliate. the kansas governor said he believes the secretary of state has used his position as these tapes their state's top election official to manipulate votes. he said last night he would stay out of further vote counting macauley remains concerned he may have provided unlawful guidance on how to handle outstanding ballots. there appears to be a light at the end of the tunnel in bilateral nafta talks between the u.s. and the ago. minister saidmy negotiations are progressing well and added meetings with trade representative robert lighthizer will resume next

week. at what her -- ecuador as declared a state of emergency to cope with the influx of migrants from crisis wracked venezuela. local media are reporting the government will spend -- send more immigration officers to the northern border with colombia. the exit is is one of the largest population movements and latin american history. >> since the beginning of the year 500 -- 547,000 venezuela and have entered. then, women and children. the influx is accelerating. the first week of august, 37 that -- 3600 entered the country. -- 36,000 entered the country. has declared a state of emergency.

powered by 2700 journalists and analysts in over 120 countries. this is bloomberg. taylor: live from bloomberg world headquarters i'm taylor riggs. scarlet: i'm scarlet fu. >> 30 minutes from the close of trading in the u.s. stocks are off session lows. scarlet: the question is what'd you miss? a mountpirals into doubt -- meltdown after the turkish president declared his defiance in the face of president trump ordering steel and aluminum tariffs. it is not the thing fault this time.

analysts bring the alarm on the sector. and the way the populism sweeps across the global economy. turkey taking another hit. tensions as quitting while the said -- passes the peso. tosident erdogan told turks trust in god. his message failed to stop the bleeding. president trump piled on profits with a tweak valley to double tear offs -- tariffs. should we have seen this coming? itthe rhetoric needs to get more to this is a great place to invest, not so much retribution. we can manage our political issues.

there are things -- a lot of things erdogan could be saying to say we are still open for business. we see time and again when a government focuses on consolidating control the economy suffers. it never gets better. scarlet: he is back with us. smart guy. you told us we should have known. how does this unfold? you have seen so many instances where a country is on the verge of collapse and then it does. hans: sorry to make a prediction. i think erdogan will double back on his rhetoric. he may have boxed himself in. this is predictable when so many tries to consolidate power. the markets are going to force his hand. you can't keep the economy going with these problems. the issue is the trump tariffs

were the straw that broke the camels back. structurally had too many problems. .ompanies were piling on credit twin deficits running. high inflation. this was bound to happen. at thent your son-in-law central bank. that is not good signaling to the market. i would expect aired want to start normalizing the rhetoric. they called for an emergency session saturday. i would expect a pragmatic economic rhetoric to come out of that. need to see do you to be a buyer here? what news would you need to hear or steps you would need to hear to jump in and feel comfortable? >> we specialize in catching falling knives. i can show you the scars on my

fingers. today is a perfect day. it is bad news. see what happens. when you see the good news the market is going to rally. what was shocking today was trying to buy anything. a lot of the marks were just marks. dealers being scared. there is no volume backing it up. the selloff is fragile. good news can send things higher. in my world, today is the day to buy. taylor: what does it -- romaine: what does it take? i'm not looking for turkey to completely stabilize. we're just looking for a bounce. they are going to have to hike interest rates. romaine: is that going to be enough? hans: it would be an initial signal. they are going to have to do something to signal more pragmatic decisions for the

economy. you have to take a turn away from the rhetoric. scarlet: how receptive would investors be? even an interest rate hike feels like too little too late. hans: part of the problem is you .ave a lot of trapped lawns it is definitely a market driven by hope and fear. it has been fear. you need hope. the signaling, you need to signal things are changing for people to back off the selling. torlet: is their basis comparing it to greece? into hows now looking expose these european banks are two turkish banks and loans. is this fair in terms of the damage? >> it is not as extensive. it doesn't use the euro. you don't have the attentional

for contagion but the big problem we had in the grease restructuring was going through the balance sheets, consolidating exposure and doing a restructuring. i don't think the exposure is going to be as high but you could see -- you saw impact today. talk a lot about hiking rates. some say they need to hike 300-6000 -- 600 basis points. has the 10 year yield up to 20%. one of the things you mentioned earlier about this is the trading and liquidity. when you need it you don't have it. then?s liquidity has it been hard to buy and sell , especially bonds? is not just turkey. it is all of our markets.

fixed income markets not having liquidity. we have had to adapt our strategy to these gaps in liquidity. it ends up being tricky. if you want to buy into something you can't be picky. you just figure out what is being sold. you talk about catching falling knives but if you have institutions changing risk limits, where is the reinvestment going to come from? hans: if you buy on a day like today you need headlines that will drive the prices higher. this is not a bad day to stick your toe in the water. i'm not advocating this as a trading strategy for a majority of viewers. in terms of changing sentiment it is going to take a long time. turkey is by far and away the most south american of all the european countries to the extent it is a european country.

it has been years of economic mismanagement. to bring it back, to get it close to being investment-grade is going to take a long time. tradingin terms of a situation it is not a bad thing to play around with but long-term investment, and you make an equity bet over three or four years, this is not the turning point. bondrkey is holding markets. who is going to be bidding? would you? hans: defense. you are going to have local institutions almost obligated to do it. that incident being the problem when you get a crisis. you start jamming the sovereign debt into local institutions and you get a house of cards.

they will probably try to stabilize over the weekend but they are going to lean on domestic institutions to participate. think turkey is going to suffer a downgrade before trading begins? what difference does it make at this point? us there'seople like no difference. institutional investors it could force more selling. it depends on one notch or two notches. for my purposes, from the interview, i made light of the rating agencies a little bit. taylor: you talked about the straw that broke the camels back. they didn't release the american pastor. see more sanctions do you coming if any? how much more does that hurt? i would be surprised if

you saw more sanctions. it depends on erdogan if he starts picking a fight. trump is the wrong guy to pick a fight with. irrational.be erdogan doesn't have a lot of options. you have seen a lot of the countries engaged in these tariff tiffs have had to retrace their steps. i don't know why you would want to hammer turkey more than you have. taylor: you are sticking with us, we will have the latest read on venezuela, next.

scarlet: a fast food check that

brings up to 20 million. the boulevards hyperinflation makes the most menial transactions a hassle. venezuela has called the best emerging-market story out there. the president recently survived a drone attack. is there a viable path forward? what is a viable path forward here? need to do some comprehensive restructuring of the economy coupled with repro falling of the dead. the only way he can happen effectively is of sanctions are lifted. you need a political solution before an economic solution. taylor: when do we get that? hans: this is a situation in flux. there was a presidential election. we don'ta sense that

have to wait six years for something to develop. there is clearly political instability. ofne attacks or the influx refugees from venezuela, it is unstable. something gifts. the options have been put on the table comment internal military coup, cross-border from columbia, or you could see signs that the regime understands cutting a deal with the u.s. makes more sense than following a path with china and russia. always amazed. it always seems so risky. if what we see in venezuela gives us any sense of what we can expect out of turkey, are there parallels? hans: the broader emerging-market parallels are there. turkey's geography will stabilize more.

erdogan has gone as far as he can politically. i don't think he can run as far as chavez did. they'd have a different history as well. reward, whatrisk is it you see that is attractive there? any time they are that low you can see the upside but it seems the risk is so great. hans: your breasts, you have the sovereign and semi-sovereign risks $.20 on the dollar. it is not the performance as much is the timing. it is good in perspective. $80 billion of debt in oil reserves. there is a debate from the

creditors and the imf in terms of whether this is liquidity or solvency. the turnaround in the oil industry to the performance of the bonds, the solution, we have done variations on this. we have done things like this in ecuador. are there.es we cannot talk to the regime now. we need a political transition of some form or sanctions to get lifted. scarlet: you need a political resolution at some sort. gene: there seems to beam -- hans: there seems to be more rumblings and concerns that by cutting venezuela out of their orbit you let them play into russia and china's economies.

so, i think the u.s. is cognizant it is good to figure out some solutions. we have to see where it goes. in the past we have seen enough flexibility with sanctions. look at zimbabwe. all of a sudden everything is fine and the zimbabwe delegation are the darlings of davos. there is enough precedent to show myanmar as another example. let's see. i am not going to predict. given the pressures it probably will happen. if you looked at his speech post drone attack me he attacked those from venezuela mother far right of columbia. he did not mention the u.s..

scarlet: interesting. taylor: we will have to have you back in a few months to hear about your call. thank you as always. time for your bloomberg business flash. a snapshot of the biggest stories in the news today. elon musk and investors seeking a white rate of investors to go public. the move would avoid concentrating ownership among a few large owners. tesla is holding early discussions about the structure of a deal. our stock of the hour, shares tumbling after the company said it will invest more in the australian cable network fox tell. seen the biggest drop since it fled from 21st century fox in june of 2013. news corp. cfo said there would be short-term reinvestment to

attract subscribers. as well as added cost associated with a new streaming service. provides financial news and services. write your here to join us. our investors having second thoughts? >> it has given pause. this was supposed to lower their cost and improve their business. when they split off 21st century fox, news corporation got the dogs of the company but fox tell and those assets were supposed to be the growth portion of the company. just not there yet. scarlet: let's continue our conversation with stocks moving. a spotlight on semiconductors. we are seeing pressure on the stocks now. this is bloomberg. scarlet: ♪ ♪

romaine: traders of technology

stocks have been focused on one chunk of the sector recently. semiconductors and the pain involved over the past two days. what is going on here? these were the leaders of the pack. down 3%. >> several forces at play here. demand is strong. cycles for the product have gotten extended. the we have seen in several years. is question is for this usually the precursor before the cycle starts to wane. you are then left caught with inventory on your hand and you have to deplete that. of ais the data point classic peak of a semiconductor cycle. -- what it nights

the dried brush year? it could be the tariffs. it could be a company warning. covers the company. his thing was look, we have a lot of inventory. there could be weakness in sales coming. >> we have been seeing analysts notes that have pounded the sector beyond cyclical concerns. how much do you buy into that, the boost we got with the other factors that boost these stocks, that that is gone. look at semiconductor cycles of your and compare them to today they are different. they are disappointed nature of all of the participants in the technology food train -- food

chain, people are not doing the boom bust thing we were. across the board hardware makers, companies, all of these are now cramped down on inventory. the supply chain is disciplined. we do have one off the facts. it is different. quarters, howfive , it is that was visible unclear. there could be sticky wickets for a company like nvidia. scarlet: down 2.9%. the biggest loss going back to june 25. notable. thank you. we have the market close coming

up next. a global equity selloff, certainly turkey at the center of it. european stocks tumbling. the dow off 188 points. this is bloomberg. two, down and back up.

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>> "what'd you miss?" major averages are closing in the red. i'm taylor riggs. scarlet: i'm scarlet fu. romaine: and i'm romaine bostick in for joe weisenthal. we begin with our markets minutes. u.s. stocks end on a down note with the dow off by 196 points. the s&p losing 7/10 of 1%. europe andoming from emerging markets, turkey namely. romaine: that really saps the life out of the market this morning. and, for the week. at -- we take a look at couple of the individual movers. one of the biggest gainers in the s&p 500 got a little help from institutional shareholder

services pushing back a little on icon. walmart is the biggest mover in the dow. the trading volume was huge. trade here, a stock -- trade desk, a stock that we don't look at the mosque -- look at much. dropbox their suffering a little bit after the coo departed about after four years with the company. let me take a look at the bond picture with equities little lower. is off aboutyield four basis points. the 10 year yield is lower by five basis points. take a look at that. remember earlier this week when we called for the tenure to be at 5%? the memory seems to be fading. that's as the 30 year yield is down for basis points closing in on 3% levels.

that yield spread now it's 15 basis points. turkey has been so much in the news today. taking the look at the tenure turkey yield, it is off to 20%. scarlet: just when you thought it could not go any higher, it goes higher. there's only one fx charge you need to see today. this is it. this is the lira drop versus the dollar. the u.s. dollar rose as much 23% compared to the lira. it is a biggest -- the biggest rally ever. the lira wentook, from 5.6 per dollar to 6.1. the president says they are doubling the steel and aluminum tariffs against turkey and they plummeted. romaine: can you imagine being a currency trader today? scarlet: pretty hairy. to put this into perspective,

this is what the selloff looks like over a three-month. . that was today -- three-month period. that was today. major pairs like the euro-dollar and euro-yen to not usually move more than 1% in a single day. today is an exception. the euro is getting cross in the carr fire of donald trump hitting turkey when it is already down. the euro is collateral damage. the european central bank raised concerns on exposure to turkey. expect, the lira sped to emerging-market currencies overall. mentioned,we should -- mention, weakened for a fourth time. just a quick glimpse into my bloomberg for look at the last five days for the week. a bloodbath here for em

currencies. out of the 24 young currencies that we track, only three did not fall. asian currencies are doing the best year. those are doing better. just a quick look to commodities. a lot of big moves there as well. but for the up, week, it is down for the sixth straight time. that is the longest losing streak since 2015. look at soft commodities. soybean, cotton, wheat, off by better than 2%. the crops report showed bigger u.s. crops than analysts had expected. those are today's market minutes. "what'd you miss?" our next guest says fundamental conditions are supportive of equity prices, but trade is a wildcard. market is a global strategist with america prize financial and joins us now from detroit.

anthony, great to speak with you and thank you for taking the time to read before we get to your call -- time. before we get to your call, we want to look at turkey and emerging markets. how much stock do you we -- do you put into the stock? were today's moves and reaction to the collapse in the lira exaggerated because it is a summer friday in august gekko -- august? anthony: i think it is important to keep turkey in perspective. they represent 1% of global growth. it affects the goal overall -- its effects on the market are relatively small. as you mentioned, it is august. you typically see volume drop and rise. august is generally the worst month for the markets out of the whole year over the last 20 years. the average return on the s&p 500 is down about 1%. where we stand coming into today, the fundamentals are strong.

i think you will get a little break once in a while. good thing it was friday. taylor: talk to me a little bit about the fundamentals. you said they were strong going into this, was there anything about this weakness that makes you buy today perhaps? anthony: i would stay away from emerging markets. we are under way all year. we favor the u.s.. when you look at the united states, you see economic growth becoming stronger and trends strong. you see consumer spending and incomes rising. all of that is a fundamental factor to be positive on the u.s.. we're getting through earnings season right now. we have had two quarters, when you count to this quarter, up 25% growth in eps estimates. earnings growth is not just about the tax returns, it is about the trends of the united states. sales are up almost 10% in q2.

from our view, there is a lot of positives to be keeping investors in the market right now. will talknthony, we you about the sustainability of the earnings because it seems to be a concern going into this earnings season. do you really want to stay procyclical the market where you have -- in a market where you see these geopolitical issues? anthony: trade is a wildcard and i think you do. from our perspective, we have been procyclical and progrowth. that means looking at things like consumer discretionary with momentum that is their right now. that continues -- there right now. that continues as long as you see that trade tariffs not affecting global growth. it changes if tariffs start to a road profit margins. then trade changes. then, you will have to look at more insulated companies and sectors from global growth.

you have to look at things like telecom and other things more insulated. companies that focus on services, there would be -- they would be better areas. romaine: talk to me about the broader market. we were bumping against the january highs earlier in the week which faded. are we in a market now where it is not about what the broader market does and about what the individual sectors does -- sectors do instead? anthony: they tell when we have seen over the past five weeks has been this trend about earnings. we have seennd over the past five weeks has been this trend about earnings. going into the fall, you will see macro conditions play a larger factor on stock prices. things like economic growth, trends on development and trade,. -- trade. that means there will be volatility in the marketplace going forward.

we have a 2875 target on the s&p 500. if you backed out and look at earnings, based on multiples, you can see the s&p 500 at 3000. we do not live in a bubble though. in some concerns around interest rates will squash markets around a little -- slosh markets around the little. isrlet: what surprises me that the vix did not climb that much today. it is above 13, but given the selloff we saw at the start of the day, we thought it might have climbed more. why are people not seeking out protection more? anthony: our view is that there is complacency in the market. earnings season has been a fundamental driver for stock prices. momentum has returned back to growth and the technology. when you look at those stocks in the sectors over the past few weeks, they have performed well. a lot of it has to do with, when

we talk about trade and emerging markets, they are not affecting u.s. growth yet. when you get into a cycle where interest rates are rising another two times from the fed, financial conditions tighten, emc continues pressure, you have to go back to s&p 500 companies and say what is the trajectory for profit growth. with a stronger dollar, there could be headwinds coming. taylor: moore that's growth and momentum trade we hear about with anthony saglimbene of america rise financial. coming up, casting a wide net. elon musk and advisers are sickening -- seeking a deadpool of investors to take the company private. weise be to one analyst two things the deal could happen. this is bloomberg. ♪

mark: i am mark crumpton with

first word news. senate judiciary committee people announced that kavanaugh -- senator scrutinize the 53-year-old judge. president trump's second nominee to the court, and if confirmed, whewell replace anthony kennedy retired and seen as the courts swing vote. mitch mcconnell praise president trump's tough trade actions against china. he said any efforts to block tariffs would "likely not be achievable." he told workers at a manufacturing plant that the chinese have been "eating our lunch for years." the taliban launched in early-morning assault on afghans of security forces a keeper venture-capital.

authorities say at least 14 policemen were killed. the president of afghanistan has called an emergency meeting of his top security officials as his army ists that withering under the taliban offenses. the saudi assault in yemen killed nearly 50 people and half of them were children. when committee called for a recent state of violence targeting civilians. >> this is the single worst attack since 2015. children hasr of been killed in one such incident before. >> children are starving, children are dying, because of the violence and its consequences. mark: antonio guterres called

for a prompt investigation into the latest incident. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: "what'd you miss?" it has been quite a week for tesla. >> elon musk of tesla now tweeting that he is considering taking tesla private at $420. >> elon musk likes to use twitter as a platform for talking about what is happening at the company. you have to take it seriously. >> one of the incredible things as brilliant -- of somebody as brilliant as he, going private not make sense. scarlet: even though he treated

funding has been secured, it is not on the blog post to see how someone would see that this is financed. >> there is an initial reaction of, is he kidding? >> everyone is focusing on when mr. musk said funding secured, was funding secured? >> no one has come up to say that the funding is lined up. >> everyone has been talking about this as a leveraged buyout . you cannot do a leveraged buyout of a company that is burning cash and that needs to spend more cash to keep growing. >> i don't understand the idea of what was suggested in the potential of them to go private. that is obviously an incredible large valuation to taken and into the private market -- take in and into the private market. seeking investors are -- being seat to take tesla

private. joining us now is a senior analyst to put it all together. keeping in mind the latest reporting about avoiding concentrating ownership to a few holders, what this kind -- with this kind of structure make it more difficult to get a private deal done? >> the details matter. assuming all of these investors will roll into private investors is a pretty big assumption. going from a liquid position to an even quick position -- e -liquid position is difficult. if the existing shareholders go to private, it is a different type of wind. it's not necessarily saying asset managers are managing tesla and the public fund versus a private fund. there is no guarantee that the existing shareholders will roll over to private investors. romaine: this is a stock that

has an average price over the past year of about $318. how do we get to for 20 -- to $420? even if we get to above where we are now at 355 or the stock closed today, how do you justify a valuation like that? rajvindra: i don't. i think that is an absurd valuation. $200ink we are closer to which is why we haven't underperforming. their current liabilities close to $9.1 billion, current assets of 6.1 billion so they are deficit of almost 2 billion. would burnd they through about 2 billion free clash flow -- cash flow next year. we don't know the true reservation number for the model three and how many of the reservations are for people who thought they were going to get a

35,000 base model. the base model will not be in production any sin -- anytime soon. taylor: you talked about free cash flow. we turn did this on a quarterly basis. you are projecting about $2 billion in the latest quarter was $740 million. i think that is better than expected, but the real reason for staying public is that you can continue to be profitable and they said they would be profitable in the third quarter going forward. so then, why would they want to be private? rajvindra: that's a question i am asking myself. he tweets that he wants to go private one week after he had good results and the stock pop. mainly because there is a short squeeze and use consolatory to the analysts. he's following a week of positive momentum and indicating he will go private for q3 onwards. if that is the case, you would

be crossing the short. one third of the float is a short. even though the valuation is high, a third of it is due to short. if you can demonstrate your profitable, the short will be covering and you will be getting a change. if things are going well on the model three, they will have high margins at 15% or 20%. so why ticket private now? -- why take it private to now? scarlet: brett wallace talked to us earlier and said he observed elon musk enjoys everything about being a public company. adoration, the publicity, but what he does not like is the short-sellers. this is a way to solve that problem. do you agree that is what is driving everything? rajvindra: i don't know his intentions. i think he has had an antagonistic relationship with investors and analysts.

that has been clear with his last earnings call. i think what he does not might understand is that the analysts are a proxy between investors and management teams. needeed to invest -- you to communicate properly to the investors a we can communicate to the base. not being clear with or cash capx orving -- with cash flow, that has issues. scarlet: there will be a board meeting next week, what do you expect out of that quickly? rajvindra: they will scramble to figure out how they will finance this deal. he willk math is that have to raise anywhere between 24 billion to $54 billion. $54 billion assumes none of the existing shareholders convert over to private, and he will have to finance 80% of the share if you owns 20%.

it innot going to be do the death market because he has such a bad down sheet. it is a difficult situation i believe. taylor: thank you very much rett wallace -- they you very much rajvindra gill from needham & co. more ahead. this is bloomberg. ♪

taylor: "what'd you miss?" social media payoffs and major startups are looking to leverage unlikely metrics including their social media following and app downloads to get investors to take a risk on them. are askinghers

investors to counter their clicks, and it is paying off. for more on that we invite claire boston. walk us through this. this is incredible. clicks infavorite your story is that the instagram followers do not pay the bills. these are being used as metrics though. >> we are seeing this in some of the bond offerings in the marketplace. cosmetics company and they have 17 million instagram followers. when they were marketing, they say this counts for something. since they did not have to spend as much in advertising because they got so much free social media advertising, maybe that means they should pay a little bat -- less. investors sort of bought it. scarlet: it tells you about the hunger for yield. one invented a metric to convince investors to plenty of

cash. >> we were looking at community adjusted even the -- ebida. we think it is an interesting case because when it was issued, we saw it tank right out of the gate. it want to about $.92 on the dollar. taylor: not to interrupt, but you can see that on the screen. >> that is not really what you want a new issue bond to do. investors have gotten more comfortable with the story overtime. it also helps that softbank kicked in new money. romaine: why not do this? it worked and the bond markets to an extent. >> sometimes you can look at this like an additional fact. anastasia, the makeup company, they were profitable. it was one more data point that helped sell their story to the loan market. managerwhat is an acid

say in terms of doing basic fundamental research? how do you plug this into your model and other taking into account the real risks? >> i think they say that they are. the line you are hearing over and over is i want to see free cash flow and ebida. some of them think there is some value here. they are not sure. if you are paying less for advertising, maybe the does matter. it is kind of a work in progress for most investors. scarlet: it is a brave new world and people are giving companies a little leeway here. >> i think it is a story about how hot the markets are now. scarlet: claire, thank you so much. you can read her story on the bloomberg. retail reports earnings next week, will investors be satisfied or looking for a refund? when home depot and walmart announced results.

from new york, this is bloomberg. ♪

mark: i am mark crumpton with first word news. at this hour, the prosecution in the trial of paul manafort is trying to wrap up its case after an unexpected recess earlier. federal savings bank executive testified his boss was pressuring him to low -- loan manafort more than $60 million because he wanted a job in the trump administration. manafort is being tried on charges of tax evasion and bank fraud. ecuador has declared a state of emergency in its northern provinces in an effort to cope with the growing influx of migrants from crisis wracked

venezuela. the government will send more immigration officers and health workers to the country's northern border with colombia. they say the exit is is one of the largest population movements in latin american history. >> since the beginning of the venezuelans47,000 entered ecuador at a daily 2700 and more. influx is excel a rating. in the first week of august, some 30,000 venezuelans enter the country. that is more than 4000 a day. mark: in response to the situation, ecuador declared a state of emergency in several northern provinces. the former chilean president is the new u.n. general consensus choice to be the next high commissioner for human rights. her mother was tortured after a

1973 coup led by a right-wing general. father was a general and accused of treason and died of cardiac arrest after months of torture. >> they have been a formidable figure in she lay as she has in the united nations. she is known the heights and depths and is the first woman to serve as the country's president , and also as a survivor of rotella t -- brutality by the authorities targeting her many decades ago. mark: in addition to being her first to lay -- first fema president, she had yuan women, the agency to promote gender -- first fema

president, -- female president, she headed the agency to promote gender equality. scarlet: u.s. stocks falling in europe, asia, and the u.s. the lira is collapsing. thanks to get another record low the s&p 500 is down about 20 points. forwant to keep it in mind half of the declines being a little exaggerated given the economic fundamentals of the u.s.. romaine: one of the narrowest ranges we have seen as the week of christmas. taylor: we were expecting the s&p 500 coming off of five straight weeks of gains. scarlet: it fizzled. taylor: the nasdaq though was up last week and looks a little bit higher at one point. "what'd you miss?" earnings season is all about fundamentals and that starts next week. it is all about retail and home depot, jcpenney, along with

others reported earnings in the coming week. sarah hall effect, thanks for being here. i want to look at some of the earnings on tuesday. home depot is a big one. i have a chart in my terminal talking about home depot versus lowe's. home depot just continues to crush it. what do you think about home depot? what could we expect for the sector? trophyhere was some given out in the retail industry for steady, strong performance, it would go to home depot. they have really managed to draft off of the strong housing market well. they have made really strong relationships with the general contractor. home depot has built really strong relationships with those customers. i expect we see that in the quarter's results.

romaine: let's talk about macy's. this is the one of the most surprising stories in the previous quarter. i'm a little curious. what is unique about macy's itself? when i look at the retailers, the winning formula is to survey niche. macy's is basically the opposite. sarah: [laughter] you are right. i think that is what is puzzling for me about the fact that their stock is up 60% year to date. i think what is happening is that they hit an inflection point where after three years of declining sales, they achieved positive comparable sales in the holiday season and the first quarter. i think there was a little bit of an allusion going on. there was a friends and family sale typically that would happen in this quarter that's got moved to the first quarter. it made the results good and i think investors got starry eyed. i think we will see the flipside this quarter and we will be back through raining -- wringing our hands into the digital area.

for your question, there's not much unique about macy's. i think that will come into effect that quarter. scarlet: when does macy's become the benchmark from which the measure -- from which to measure other department stores? jcpenney and nordstrom work at different ends of the spectrum, but it looks like one report becomes the standalone that everyone is compared against. it becomes the barometer because they are the middle of the road. they had some luxury brands in some foreign tourists like nordstrom does. i think we will see a different picture from these guys this quarter. jcpenney, things will look challenging. i think investors will be looking to see what the future of the company is now that marvin ellison has left. this is a ceo that steer them away from disaster that ron

johnson had put them on. leaderless. we don't a what their strategy is, and i think there will be questions about that showing up on the quarter results. romaine: tapestry surprised me last quarter. when you look at coach's come back, how much of this pops the narrative that amazon was the reason why all of these retailers were suffering? when you look at what coach did in refreshing its brand, does this give a little more insight on how retailers can better compete in this environment we are in? sarah: i think it does. the narrative is often oversimplified that amazon is this guerrilla stomping all over sales. that has not been the issue for companies like tapestry which sells luxury brands like kate spade and coach.

was thatr issue was they became too ubiquitous. they were on sale for 40% off all the time. that did not feel luxurious, and they were in a dumpy department store location. their new ceo has pumped the brakes on that and has really restored the brand cachet. we are seeing that showing up in the results and i expect we will see the next week. looked a friday and foot locker into the inventory turnover ratio which is really creeping up at a brisk pace. i wonder what you make of the inventory turnover. are there any concerns of the fly chain issues and iteris from china or is that not a concern? sarah: i don't think that is a concern yet. .t could be in the future

it has been a tough market for basketball sneakers which had -- theird-and-butter bread and butter. we are more moving toward a casual look like skater sneakers. what we are looking for is did foot locker get the right inventory in the style, where the able to establish themselves as a destination for those and bring in the right foot traffic? fromet: sarah halzack washington, we will check in with you when the retailers report the results. populous and authoritarian oversee a major chunk of g20 output. we have more on the economic output at -- impact ahead. you can subscribe to our weekly podcast on itunes and you can enjoy it over the weekend. this is bloomberg. ♪

authoritarian leaders -- there we are. dismissing should we be so confident that

their prescription does not work in this new era? >> i think first of all, we should be humble about democracies running the economy. it was the kind of textbook economics which led us into the global financial crisis. clearly no one was getting this super correct to start with. -- our populists getting it wrong? in some places they are. in turkey, arguably in italy with the big spike in sovereign bond yield immediately after the northern league in the five-star movement came into power over the summer. globally, we do not see it so far.ak to deterioration in aspect of governance, it is

associated with one aspect. in many countries, it is not associated with deterioration in a government effectiveness or regulation. it is government effectiveness and quality of regulation which are more strongly associated with growth and quality of .iving scarlet: thank you so much. a fantastic story. worth a read. street making it on wall street -- women making it on wall street are not on their at all. we will take a look at that's next. this is bloomberg. ♪ -- that next. this is bloomberg. ♪

scarlet: "what'd you miss?" fewer than one out of 10 -- managersthe u.s. are in the u.s., and those that are, -- in today's business of equality, the ongoing conversation about the bottom impact -- bottom-line impact of diversity, i spoke to those of morningstar. >> i recently did a story looking at women and -- women fund managers. after the fact, i finished the story and said a lot of the women doing well in senior levels are on the west coast. there are a lot of firms in san francisco. i've been hacking around and talking to people and went to morningstar and said, could you rock numbers?

i anecdotally see this and lower in the numbers and found a lot of the top level ones were on the west coast that had charles schwab, for example. it's interesting on the why behind matt. ofyou have been called one the most influential people in manager research. three years ago, you co-authored a paper on it. how hard was it to dig up the data to back up what liz was suspecting? morningstar has been collecting data on mutual fund managers for more than 30 years. the 2015 study, we had not looked specifically at the gender of managers. we had to do digging initially, and we found that women are very outnumbered in the industry. less than one in 10 managers in the u.s. are women.

we saw instances of firms based outside of wall street that have higher percentages of women fund managers. a lot of fund companies based outside of the new york boston area pride themselves in that. they like being outside of the mainstream of the industry. i think we are seeing that in numbers in terms of diversity. >> that is interesting. as laura mentioned, some of it may be the company taking it and owning it. how much do you think its corporate culture driven versus geography? >> i think it is a mix. i spoke to the principle of global advisors in the middle of they'vetry and she said done a lot on organization. she joked that we cannot go around the corner and find new people. we are looking at can this woman

get to this point, we will nurture her and try these initiatives and maybe she will be there a few years to be a fund manager. she kind of almost once to stay in geography and it should not matter, but it does. inhink at least four women asset management firms, on the west coast, they have talked about a lot about this. initiatives, how to make it more suitable and meet the women's needs. we've talked about that before at all levels. organizations trying to teach that at all levels. scarlet: laura, let me come to you. a lot of those would say that it is a priority to increase scope.ty and female do they need to promote from within and cannot go around the corner as liz mentioned to hire whoever is available?

havethink the firms that been most successful in terms of gender diversity are working at early, right out of college ranks through. they're very deliberate about mentoring women to leadership positions. many of these firms are successful and they can hire whoever they want with a deep pockets -- with their deep pockets. diversity is a plus, and having a diverse number of individuals around the table when you make investment decisions, it will lead to better results for fund holders. scarlet: what do we know about the performance of female lead portfolio funds? of the numbers better -- are the numbers better? >> we've seen women outperform men in some areas like fixed income. overall, women and men perform the same, which is what we would expect. scarlet: so at the very least, it argues there should be a perry do their. there. parity

liz, did it just happened that way? >> i think it was a mix. kristi mitcham at wells fargo like she had companies that factor and when she wanted to be on the west coast for family reasons, they brought her back and forth and let her work in new york. some felt like they had to be in the hub, and the right culture made it happen. was laura of morningstar and liz mccormick discussing the business of equality. coming up, what you need to know for next week's trading. this is bloomberg. ♪

don't miss import and export prices coming out on tuesday. romaine: and i look at you with retail sales and wednesday. taylor: and thursday has reports earnings. scarlet: that does it for "what'd you miss?" taylor: "bloomberg technology" is next. romaine: have a great weekend. this is bloomberg. ♪

emily: i am emily chang in san francisco. this is "bloomberg technology." in the next hour as we close the chapter on earnings and big take names, they are hovering at record highs. can the bullish sentiment hold or will global headwinds change the tide? tesla's wild week as well. elon musk shocked investors to take the company private -- investors by his plan to take the company private.