the u.s.. reports say the eu could be willing to scrap car tariffs. confidence falls in europe while price growth flows. the latest read on inflation up next. emerging markets are the terrible, horrible, no good, very bad august. having the worst august on hikes tos sent fed their lowest. david: we have been reading books. alix: i don't think we're quite at that level yet. markets to be a calm day. there are a lot of headlines bubbling up. in a holiday week, you know you will have swings in the market as well. s&p futures down four points.

beste looking at the august since 2014. can we hold onto those kind of gains heading into the end of the month. euro-dollar pretty much flat on the end of the day. pressuring em and some of the decent currencies as well. here in the u.s., the curve at 21 basis point is where we stand. not a lot of volume anywhere you look. crude up .6%. david: it is time now for the morning brief. we are going to get dollar tree announcement for its second-quarter earnings. all day, u.s. trade representative robert lighthizer and canada's foreign minister will be continuing their negotiations in washington. tomorrow, they have a deadline. now, we are joined by lisa and michael. thosestart with

negotiations both of the president and prime minister of canada had encouraging words yesterday. >> i think canada very much wants to make the deal. i think it is quite be very good for canada if they do. i think it is probably not going to be very good at all if they don't. david: at the same time, president trudeau said he very much thinks that mexico and the americans want to get the deal done. but i've said all along it has to be the right deal for canada. encouraging news out of washington, are they going to make it? lisa: it seems like, yes. it seems like everybody wants to make a deal. i was talking with the correspondent who says he sees this as a tweaked nafta deal. it is not an overhaul. it is also the easier of the trade deals to get through. it is actually encouraging from the idea that president trump seems willing to negotiate. david: at the same time, at least it is a deal.

it was not that long ago we thought president trump was good to pull out of nafta altogether. the analysis of the u.s.-mexico agreement, there's not a lot of detail to this yet. the analysis so far is that it does very little for the macroeconomy. it might actually be a slight negative for the u.s.. it will raise prices for consumers, but trump can claim that it is different and therefore he negotiated something. reportpolitico has a quoting the trade authority in the eu. she said we are ready to go to zero tariffs on all industrial goods. if the u.s. does the same, it would be on a reciprocal basis. we are willing to bring down even our car tariffs down to zero if the u.s. does the same. michael: it is not the president's way, it is the way

the obama administration was negotiating. the idea that the u.s. and eu could reach a zero tariffs regime started under the obama administration.when president trump came to office, he killed that negotiation. eu average tariff between and the u.s. is 2%. there are just some categories where it is different. we charge 25% on light pickup truck tariffs. wonder, iftheless i we are now looking at a world where it is going to be the u.s. versus china on the trade front, and other countries willing to come to the table with something. lisa: i think that that is an ideal situation. this is what a lot of people were saying to begin with. what happens if the u.s. teams up with its allies and actually goes after something specific and comprehensive with china and actually try to negotiate with

the power of other nations? are we getting to that point? i would be a little bit wary --ut saying to my yacht everything is fine. alix: it is interesting when you go to a broader look for what it means for broader growth. china's economy is in some trouble. there are some stories about how close china could be to some massive corporate defaults. they have their own concerns, and there is a pressure point there that the world could use. they're not organized to do that right now. these other things are distractions. if you are talking about a strategic effort to try and pressure china, you have to get rid of the eu tensions with the u.s. in the first place. you achievet that beat any kind of strategic thinking to the administration, getting these trade deals out of

the way would be a good move. alix: it is usually the first move. steel and aluminum tariffs were lowered from certain nations like south korea importing to the u.s. because they want to save the companies here. that leads to the inflation question. u.s. inflation and about an hour and a half. in theory, the headline is over 2%. spain missing those estimates. we do not have a tariff inflation pass through, what does that mean? michael: this point, everybody is seeing inflation rise a little bit. we're looking at core in the u.s. and europe because we are seeing energy prices rise. that is going to pressure the headline numbers. the core rate is what everybody wants to see. up.ation generally picking it is much further behind in europe and the united states. david: that is the point, isn't it. is there will the versions between china and the united

states? lisa: the eurozone has lagged behind the u.s.. one thing i find interesting is that economic indicators have becoming in above -- they have been to the upside increasingly whereas in the u.s., they have been surprising to the downside. you have to wonder whether there is too much pessimism baked into the analysis and expectations of europe, and perhaps too much optimism baked into the u.s. absolutely, the eurozone is lagging behind. a good point especially with the eurodollar exhibiting that trend. that brings us to our third story. this is the yearly percent change of the carry trade index. you are going to short dollars and by higher-yielding emerging-market currencies. they are looking to the worst august since 1999. that yellow is the longer-term average. it brings up the question, is

this a fed thing or an idiosyncratic thing? michael: it's both. generally, there is a fed aspect to it. we are in a different part of the cycle. our economy is stronger. the dollar has strengthened, but much higher than it was to start the year. that is pressuring the rest of the world. there isn't a whole lot the u.s. can do about it.i talked to a lot of people --jackson hole of do the fed does the fed have an obligation to the rest of the world? most of the countries in trouble have these idiosyncratic problems in terms of the way they have structured their economy that gets him into trouble. too much dollar borrowing, for example. they have to fix that, said officials feel, rather than the fed pushing things for them. david: one of the things is argentina.

could you please give us the money a little faster? they are really struggling down there. you can see what has happened to the yield on the argentine tenure -- 10 year. lisa: the head of argentina has been raising rates as quickly as he can. he has been asking for help before things got completely out of hand. the reality is, it is heading toward its second recession in two years. there is a question suddenly raised after last year, the world opened its arms to argentina, which defaulted numerous times over the past century and said, we will lend you money. now, not so much. there is a question, of a going to have to be forced to default? that seems unlikely at this point, but it does seem like they're going to have to have

another recession in order to allow the excesses on the inflation front to work itself out. alix: they would lend money for 100 years, not just 10. thanks so much. a reminder, check out all of the charts we just used on gtb go on -- gtbrminal -- gt go. more on the eu's remarks on scrapping car tariffs. this is bloomberg. ♪

campbell soup is selling its international operations and its fresh food unit. that may not be enough to satisfy some investors to want the whole company sold. campbell says it will pursue a turnaround planned to ignite growth. the company is in a three-year sales slump and shares are down 3% this year. more problems for ford after beginning a costly restructuring. erosion.cited the company faces challenges that could cause an $11 billion in the next 3-5 years. amazon is frequently criticized

by president trump. now, the company is being attacked by bernie sanders. he says he will introduce a bill requiring companies to pay a living wage. that is your bloomberg business flash. alix: president donald trump has said talks with canada are going well expressing optimism. >> we are negotiating with them right now. they want to be a part of the deal. we gave until friday. i think we're probably on track. in any event, things are working out very well. alix: meanwhile, the canadian prime minister says his government is trying to reach an agreement with the u.s.. u.s.ys i understand the and mexico want to get a deal done by friday, but as i have only do along, we will

what is right for canada. if you look at dollar max, it is actually up by over 1%. what does that say about the markets believability of new trade deals? torsten sometimes: when these headlines come through, we're all countries on how important it is. you look at the market reaction and if there is no market reaction, that basically reveals the content and substance, at least for now and details are not particularly clear may not matter that much for the picture, at least compared to nafta. david: has it been worth all this effort? we have heard a lot about trade years.t two if this is a deal we have, how different will the trade patterns be with canada and mexico in the end? torsten: with trade restrictions, if i want to protect my own industries, the bottom line is you can do tariffs barriers or nontariff

barriers. in that sense, a lot of this is moving things away from tariffs over toward nontariff barriers. you can protect and support your industries in many different tariffs.andhan looks like a lot of the things going on here is that we are moving away from tariffs. the european response yesterday is saying we can move tariffs 20 and we will do that if you do and we will do that if you do that. david: let's talk about the european side. there is a report from political ready for there eu side to go to zero tariffs on all industrial goods, if the u.s. does the same. we are willing to bring down even our car tariffs down to zero if the u.s. does the same. is this a big step forward? torsten: a lot of people are table.to the

uncertainty is being eliminated by people coming to the table and being willing to sit down and talk about things. david: if you look a auto stocks, u.s. auto stocks are not moving very much. european auto stocks are moving news.the ironically, it looks like president trump is benefiting european automakers. n: that is also why we have try to figure out which stocks are moving on which news. it is actually somewhat counterintuitive. is this what the administration wanted or the europeans wanted? just because it is not terrorists on your moving to this much more fussy area -- we just wrote a long piece about nontariff barriers that are very critical and how you protect your own industries. there are different from tariffs that are not going away. alix: four make on the broader question becomes if you are a me on a company -- for

the broaader question becomes if you're a ceo of a company, what does this mean? verye situation today is volatile. outsidee of our country america has suffered quite a bit. new ideas and new decisions almost every day. it is often very emotional. it is not fact-based very often. we have a great secretary of agriculture, and therefore agco and our customers are doing fine. lineupow does that affect the overall investment environment in the world? torsten: this sort the horizon of planning for other companies.

if you don't know what the level playing field is or the rules are, of course you start fighting back. we have seen companies holding back and not planning for a very long horizon because you don't know what the rules are. not only in the u.s., this is a global phenomenon. view, some of's the indicators have rolled over a bit because corporate are beginning to say, how long is it going to take? the more you inject uncertainty, the more worrying. david: torsten will be staying with us. coming up, campbell soup under pressure. we discussed the giant's plans to sell its fresh food business. this is bloomberg. ♪

david: campbell soup is trading lower after it reported earnings

for its third quarter today. andell short on net sales reduce its earnings guidance for year.tire at the same time, it announced it is selling it international fresh foods business. to give us a take on their options at this point, we welcome former campbell soup chief strategy officer, mike. to discuss those, knowledge talk about campbell soup. you have this job. what should be their strategy at this point because the consensus seems to be based on the share prices and what analysts are saying is that just selling off the international food business is not enough. mike: it's interesting because the strategy behind selling the business is much more about effectiveness than efficiency. this is a strategy to create three businesses, each one of which you would hope to be more effective because it is

tremendous focus on each segment. and a national have its own --queness, especially with international had its own uniqueness, especially with most of the business being international. that is really the idea behind this whole strategy. idea. focus is one another is how the overall business is evolving. this strikes me as the ultimate legacy company. we all grew up with campbell's soups. when you're competing with some of the upstarts, the more authentic,, the smaller ones how do they compete in this new world other than simply on price? mike: that is the right question because the challenge still remains. at the end of the day, the big legacy brands like campbell's and pepperidge farms are getting squeezed on the low-end by the price brands and on the high-end by the emerging premium, health oriented, less processed brands. i think the challenge for

campbell's and any other cpg in this space is 10 you create the kind of innovation that can compete in that space? how do you beat the lenny and larry's and other brands occupying the space to the place for your not getting squeezed anymore? kenny really create a culture of innovation. the alternative -- can you really create a culture of innovation? the alternative is if you can take the company, and the need -- then you need a whole company good at international growth. it is a different market today. every company has to really go after those consumers and those needs that are much more health oriented and flavor oriented. david: we see that in business after business where you have a

legacy business any say you want to be innovative. it is really hard. at the same time, you are relatively new. who would want to buy them? mike: the opportunity to buy campbell's as an acquisition target, from what dan loeb is pushing, would be more about synergy. heinz, got some synergy, but kraft, got more synergy. someone like that, it might fit neatly into a kellogg's or other business out there from the synergy standpoint. so hard for it these kind of companies to turn around? shouldn't they have been innovating like this for decades? mike: if it was easy, everybody would be doing it. they are smart people at these companies.

the real challenge is twofold. the first is, these companies, at their heart, they have been all about mainstream and scale. today, there is a lot of interest in things that are much less processed and more unique, and more artisan all. -- artisanal. eir product doesn't quite fit that. : mike, really great to get your perspective. coming up, what is the continued growth of dollar stores tell is about the u.s. consumer? we will break that down next. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i am alix steel. that risk on rally, records and the s&p and nasdaq, taking a pause this morning. european equities getting hit.

down five point 4% despite the fact that some arman on makers came back on report that the eu might consider zero tariffs on autos. it is a stronger dollar story. euro-dollar down. a confusing week for the dollar. as well.ghing on em, euro stirring -- sterling also flat. but they say they are prepared for disorderly brexit. crude up .6%. president trump not missing the record rallies we have seen, tweeting this morning that the news and financial markets is even better than anticipated. people making a margin and seen 401k's rise. more good news is coming. david: not quite as good for dollar tree. they missed earnings-per-share by a penny.

comparable store sales were up 1.8%. looks like they are trading down right now, about 3.7% in the premarket. it seems that sales for the full year, they still see $22.97 billion. full-year earnings on the high end is $5.05. interesting why they might be down, same for dollar general. they look solid, but we must be missing something. david: dollar general looked like a beat bank across the board, but they are down and premarket, as well. alix: what does the graphic about dollar tree tell us about the u.s. economy? the average dollar tree custom-made from arkansas has a median income of about $38,000. more than 8% of customers are unemployed. more than 17% on disability. more than 9% of veterans. of realon a backdrop

wages they cannot catch any steam over the last five years. so you have dollar tree and dollar general. some solid numbers, but they are relying on low-income workers. how does that play out with wages? >> the business cycle has been going on for almost 10 years now. we are getting to the point were jobs are being created, but everyone with an education has jobs, so this should actually be bullish for names that cater to lower income groups and lower wage groups. , we said, the problem is have not seen much wage growth for such a long time, not seeing that yet come around despite the fact that the labor market has looked overheated. here, it is two stories

real wages, which are down over a period of time. on the other hand, consumer confidence is spiking up. the consumer seems to be much more confident, even as average weekly earnings are going down. >> the chart shows average --kly earnings is a mistry. mystery. it has been surprising that it has remained below. but some people are coming back, and that is holding wages down. but the low-end consumer, we're getting to the point where there is anecdotal evidence that it is getting more difficult to find work. is atople quitting jobs the highest level since 2006. so we have a lot of issues, and the labor market should be really strong for high, middle,

and low income consumers. alix: looking to the dollar tree earnings report, gross margins decreased and operating income margin fell by about 1% year on year. that means these retailers can hold up if they're willing to spend more and sell the items for less to get customers in the store. how long can something like that sustain itself? costs arer that input going up. commodity prices are going up for the average company in the u.s., two thirds of expenses is labor, meaning workers. if you start to see a shortage of labor at the low-end come -- sector sector, sectors were skill requirements are not long educations, that is telling you maybe there is more margin pressure. that might be a recent also why we are not seeing the reaction we are expecting. david: is that a timing issue or is it more structural?

>> the longer this expansion continues, the more you will expect that to put pressure on wage growth and then on income growth. margins becomes an issue of how much topline growth goes up and how much wage growth goes up. you will have margins expanding, and it becomes about topline growth rates and wages. if you expect wages to grow up and -- go up, you will see a squeeze. alix: but the pricing power of certain businesses then become very idiosyncratic. overall, pricing pressures have decreased. are able toke 3m pass through versus something like walmart or dollar tree. how you -- do you does english that? -- is how do you distinguish that? >> those companies that are globalized have very little pricing power.

trade suggesting where monopoly power and the u.s., more pricing to thingst speaks moving higher. david: we will find that out and about an hour in some numbers. seehose move up, will we that for pricing power? [indiscernible] there is a lot of time spent in 2 meeting asking, is 1.9% percent? if you go to the other side of 2%, the risks start to rise. it would be the first time in a decade, so finally sink inflation overshoot, and that would change the narrative in the long-range. alix: what is the trickle through to emerging markets? to me, argentina is the best case study. they are getting pressured by the u.s. dollar. they had their own rates and

then had to ask for money. >> some say emerging markets are the innocent bystander. investors were forced to take risks in emerging markets and all caps of asset classes, and now the fed is saying we want risk-free rate, we want the fed , and that to go up could take dollars out of emerging markets and risky assets and back into the treasury curve in the fed funds rate. so emerging markets are also being moved around here. it is also by the fact that the fed funds rate down to zero and the risk-free rate was zero. now that is going up, and people are coming back. they can take much more risky assets. togetherchart putting the gold u.s. 10-year and the fix and expositions. it shows that people are not looking for safety right now.

they seem to be going for risk. >> gold, a risky assets, so thatar rates, so what does mean for inflation? important ingredient for this chart, if you begin to see inflation, maybe the risk-free or interest rates would go up much faster. so there is really no place to hide for investors at the moment. do you want to hide in emerging markets with much war volatility now? or do you want to hide in treasuries or in gold? it is going to wobble. the number today is important. andt begins to grow overshoot's inflation target, which it has not done for the last 10 years, that would again to mean that risk-free assets could be much more risky because we do not see much fear of inflation at this point. alix: but that is the market expectation versus what the fed sees. that is what this disconnect continues for years and does not seem to resolve itself.

2018, ok, everyone seems on board for two hikes. it for 2019, the market sees like six hikes total. expectations to growth, 2.8%, 3%, for the next several quarters, basically by the end of 2019. expectations are we get to the inflation target of 2% and then go sideways. that has never happened. david: so is it different this time? that is what you are pointing to. alix: do you ever want to say that? it end and we have the amazon and we have the amazon affect. >> why is the fed so keen on hiking rates? that really is the question. they say that we will see inflation, and the market says come a what is a tug-of-war

between the old-school theoeconomic thinking among professors of the fomc and people in the market saying that you have talked about this for eight years and it has not happened. your are you changing model? >> we are not at we're trying to refine them. we tried to identify variables. it is difficult. funding something significant. these things, and go. but a lot of the fed working allrs -- jackson hole was about this, saying, do we really believe those old models or should we throw in the towel and say we're leaning back and eating popcorn until we see inflation going up? right.ll bank,n slok of deutsche so good to see you.

when i started doing this business, i remember we had a lunch and everybody was making fun of ben bernanke's beard and saying all economists have beards, and i was like, what is going on with these nerds? headlines fromt outside the business world. kailey: the european union is reportedly willing to scrap tariffs on all industrial products, including cars, and trade talks with the u.s. the eu trade chief made the offer and remarks to the european parliament committee. last week, and offer to include cars and negotiations was reportedly rejected by the u.s. meanwhile, president trump is optimistic that the u.s. and canada can reach a deal on the north american free trade agreement this week. givingsident says he's canada until friday and "i think we're probably on track." justin trudeau of canada says his government is trying to reach an agreement with the u.s. business you must sacrifice a

goal of getting the right deal. and iran's teetering nuclear agreement will be at the top of defenseda went the eu and diplomatic officials meet in vienna. the pressure was turned up on europe. france and germany have called for the eu to adopt policies to sidestep u.s. sanction threats. 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'm kailey leinz. this is bloomberg. alix: keeping with the week of retail sales, abercrombie & fitch getting hammered, down about 8%. the earnings were not terrible. shareade six cents a versus an estimate of a loss of four sales. cells were not bad. holdingidual brands not up. it fell 4% and international markets even know they rose 7% in the u.s. international markets weaker,

and inventory down by about 3%. really ugly quarter for them. beid: you do not want to -- you so want to be in between right now and retail. alix: anything that mildly disappointing retail -- david: you are up against amazon and walmart. alix: particularly these specialty retailers. david: coming up, the crash that forged a giant. press isinancial shaped the business of black rock. that is next, and this is bloomberg. ♪

kailey: this is "bloomberg

daybreak." i'm kailey leinz. coming up, ken solomon, tennis channel president. now to your bloomberg business flash. credit suisse is having second thoughts about doing business with the owner of the national inquirer, the u.s. supermarket tabloid at the center of a scandal involving hush money payments to him and who say they had affairs with donald trump. credit suisse wants to back out of the deal to help american media refinance about $425 million of debt. the world's largest luggage maker says the trade war between the u.s. and china is having an impact on its business. said the dispute has hurt sentiment among chinese customers and that will lead to slower sales growth in the company's second-biggest market. if more tariffs are enacted,

that will at 10% to the price of samsonite products. cash strapped atm maker may avoid a liquidity crisis. we have learned that the lenders have approved a $650 million loan. the company will use the money the remaining shares of the german rival it took over in 2016. also refinance existing debt. alix: we turn now to wall street the. from, blackrock's rise financial ashes. after the financial crisis, blackrock transformed into the world's largest money manager. then mcn dividend disaster, the company plunging. gets laid off. lack of information is the reason cited. jason is joining us.

start with blackrock you at we know it is awfully big, but when you see this bar chart, it is amazing. jason: it is incredible. almost exactly 10 years on from the crisis, september 15, the day they filed for bankruptcy. there became a lot of have-nots on wall street, but the haves really went to blackrock and firms like it. blackrock, in particular, made some unbelievably crucial moves. .arry fink comes to the floor a remarkable rise. david: houses they do it? jason: the biggest single thing they did was they bought barclays' etf business. that went up for sale, and they were one of the few who could do it. a pretty good price tag. at thes the biggest bet time when the world was shifting that way, but it was not totally clear to everyone.

blackrock had undertaken a study that said this is where we need to go to it we probably cannot do it organically, and we need to make and acquisition. and here comes this ishares business. the other thing they did was they stepped into a lot of businesses that the bank said get out of, investing businesses. one of the things that i think is the most important branch of this is power on wall street shifted from the bankers to the investors. blackrock embodies that. alix: the concern for me going forward is when you have blackrock saying you could hit $12 trillion for the global -- you talk to people on wall street, and they are most concerned with other markets are going to move if there are mad rushes out of etf products, from the corporate bond market to less liquidity, like real estate. it covers all the assets.

jason: i do not think any of us know the answer, but i think there will be questions as we think about the big risks around corner. the folks who run these firms would say it is not the case. one of the most notable things that larry fink did was convince regulators, because he was helping shape the law and a lot of ways. he is a counselor to presidents and will leaders. he was able to get blackrock out of that too big to fail bucket. we're always fighting the last war. alix: that is the thing. and usually regulation that comes down sows the seeds for a financial crisis. next, mtn thank you. on bestanking, a telik telecom company in nigeria. the story is standard charter wrapped up in this, as well as iranian sanctions, equals more penalties for them. jason: absolutely.

all of this when we read the story were like, weren't we just talking about somebody facing an uncomfortable and very financially terrible situation with money being repatriated and the government stepping in? we have this. and mtn is the biggest wireless carrier, the biggest market in nigeria. they are about to list something in lagos. they are deeply into this country, and this is a huge amount of money, $8.1 billion. the stock got absolutely crushed. david: let's go to work. wework. they had that news from moody's. they said, you are not telling us enough about your business to get a rating at all. jason: i found this fascinating. the demand for this offering were huge. people love wework. everybody has seen the rise,

especially in a big city like new york, you have seen them sprout up. they are wonderful facilities. alix: gorgeous. david: i am hearing there is a maturity mismatch. real liquidity issue coming to? alix: when they had their bond offering, they had to boost this as of the deal like 40% because there was so much demand. agencies wereings sort of pinned up on this. so moody's once more information. david: many thanks to bloomberg's jason kelly. listen to him daily from 2:00 to 5:00 eastern time. he will be coming from the u.s. open. alix: so hard to work there. david: he will cover the u.s. open brilliantly. coming up, what would you want

to know from one of the world's most legendary investors if you had a chance to sit with him? him. a chance to sit with more on that next. this is bloomberg. ♪

what i am watching and thinking about today, i get to interview warren buffett at 11:30 this morning. what questions should i ask him? alix: obviously, what are you going to do with your pile of cash? what do you want to invest in? he probably will not answer that, so i am interested in how he determines what is value these days. you can look at a value investment, you can find a value stock, but that does not mean they're actually doing well. says price is what you pay for a stock and value is what it is actually worth. when we see the stock market at record levels, is that price or is it value?

valuable or are people bidding them up? alix: i am interested in how he looks at the huge change across the world and the political landscape and the tension we keep seeing, how does he look at that? does that create opportunities? does he ignored? i am interested in how he interprets these headlines every day. david: and what comes next? because there will be a next. alix: people can ask you questions. david: yes, give me your ideas on twitter and i will do my best. alix: next, katie stockton, technical analysis. do not miss that. this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. alix: canada and eu could cave to the u.s.

canada is a trait deal with the -- a trade deal with the u.s. searching for inflation, confidence falls in europe well price growth slows in saxony and spain. and shopping for confidence, dollar tree and dollar general down despite meeting estimates and a hot retail environment. abercrombie & fitch gets crushed. david: welcome. i am david westin with alix steel. apart from dollar stores, the markets are going up and up and up. alix: president trump saying, hey, look at your 401(k), it is great. today, a pause in the record rally we have seen over the last few days. as a be futures now down by about five points. .1%.dollar down by also not helping is the german august inflation slowing to 1.9% . the median estimate was 2.1%.

saxony inflation and spanish inflation also slowing and missing estimates. not an enormous change, still trading around 2%. but a little slower than expected, and that will not be helpful to the euro today. will be interesting to see whether we are going the same way as europe or whether there is a divergence in inflation between the two. alix: totally right. good tease. david: let's see what is making headlines outside the business world. kailey: the european union going to scrap tariffs going to scrap tariffs on all industrial products, including cars, entry trade talks with the u.s. eu's trade chief made the offer and remarks to the european parliament committee. negotiationsd --

were reportedly rejected by the u.s. for nafta moving towards the next in line with signs of optimism. president trump says the u.s. and canada are probably on track on an agreement by tomorrow. he says negotiations are going well. saysa's foreign minister the u.s. is showing a spirit of compromise but warns there is still work to be done on details. the international monetary fund is considering argentina's request on the credit line. the president says the country needs the money to show it has enough cash on hand to fund next year's budget. that is as the argentine peso is plunging to a record low. 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'm kailey leinz. this is bloomberg. alix: the s&p closing above 2900 the first time yesterday, and president trump is positive summit tweeting this morning for the news from the furniture market is even better than anticipated.

financials from the market is even better than anticipated. more good news is coming. what do the technical's say about the sustainability of that equity rally? katie stockton, fairlead strategies founder, joins us. so s&p and tech leading the way here. -- thiss the momentumn is the momentum in tech. what does this tell you? >> we see breakouts. even defensive stocks are exhibiting some momentum. outperforming is coming from technology, consumer discretionary, the more offensive areas of the marketplace. the breakouts are bullish. i agree with trump, it is good news. you have seen the s&p 500 clear its january high. that relieves the market of any resistance levels. see follow-through.

alix: what is the level where you start to get worried? like, ok,int are you this is a blowoff top? >> i look for signs of things like the stochastic oscillator. alix: that is not jargon. you woke david up. >> you see the signs of extortion -- exhaustion. sometimes there is overly bullish sentiment. send a bit right now to me is the only risk to the marketplace. we have some extreme ratings. but they're not concerned with other readings. david: talk about industrials. thes breaking out above 200-day moving average. what is driving it? >> and us financials, which seem positively correlated lately.

they are relatively oversold versus the broader market. as you are seeing industrial stocks breakout, that tends to be a positive. industrials did well this week for me. alix: the question has become, what happens to the dollar? we have the dollar spot index in the terminal with support levels. >> what we thought we saw was a breakout in the dollar index. that was about longer-term resistance. but the subsequent retracement of the breakout pullback, so made have been false. now you see the dollar index was some short-term support. if that level breaks, it would further negate that breakout. it would support a weaker dollar and stronger emerging markets. alix: if you have the dollar not being able to read grain its peak and we see more of a selloff, what does that mean for

able to regain its peak and we see more of a selloff, what does that mean for em? >> it has recaptured momentum in a significant way for the first time in months. that is significant and would enhance what we are seeing and having the potential to break down. emyou're looking -- we view as a relief rally. not looking for new highs but certainly participation on the uptrend. alix: so good to catch up with you. katie stockton the fairlead strategies. david: joining us now is kevin holt, invesco cio. is a look, showing the 10-year yield has grown above the dividend yield, and that is dividends along without the

valley of the stock. what does that indicate? simplistically, it is talking about the yield on the market, for the s&pverted 500, looking at it relative to the 10-year bond. things are getting relatively tight. history says, looking back over 30, 40 years, that when the 10-year compresses relative to the earnings yield and the s&p, the market is at risk of a correction. short-term,nically, who knows, but i think we are in a little bit of cautious territory here. alix: so how do you deal with that as an investor, when consumer discretionary, health care, tech wind of sitting and records, you do not want to miss out, so how do you deal with it? where do you go? value investor, so probably much like the conversation you will have with warren buffet later on today, we are looking at the fundamental

value of the stocks. market, i would argue we are in a risky position. so over the next 12 to 18 months, stockpicking is going to become an inherited of the at we have not had that in a while because we have had such a strong momentum market, particularly in technology, for eight few years now. alix: where is the value? >> you talked a little bit about financials, some comments on technical indicators. i think financials and nine to 10 times earnings still look interesting. it is a different industry now. balance sheets rolling over 10 times, not 30. most of the companies are buying back between 6% to 10% of their equity with the capital they are making, paying 2% dividend yield. i think financials, which are traded down with some of the china trade concerns, are real

opportunities short and long-term. david: so financials are what you are interested in. what else? and the market that is just price, as opposed to value? -- what do you see in the market that is just price? i would say financials are the value of a company does not change, but the perception of a company changes. energy is another one, coming out of a cyclical downturn. people felt so much pain in 2015 and 2016, they do not believe the commodity price is sustainable. we try to build our model backwards and we say if 65 is sustainable, which i think it is, what are the stocks worth? 30% to 40%them worth higher in most cases from today. alix: wow, that is a call. kevin holt of invesco will be sticking with us. coming up, we are to look at how tariffs and farber -- farmers

subsidies are affecting things. that is next. this is bloomberg. ♪

kailey: this is "bloomberg daybreak." selling itsp is international operations in its fresh food unit. it may not be enough to satisfy some investors who want the whole company sold. campbell's says it will pursue it turnaround to ignite growth. three-years sales slump and shares are down 17% this year. a record quarter for a company in the u.s. spirit americans took out more loans and turned to discount services of td ameritrade.

and more problems for ford after getting a customer restructuring. moody's cut their credit rating to one notch above junk for private erosion and the global business position. it said the company faces charges and implementing the restructuring that could cost $11 billion and the next three to five years. that is your bloomberg business flash. the u.s. department of agriculture and out to his farmers will receive $4.7 billion worth of initial farm aid, but tariffs and trade tensions are looming large. farmers remain cautiously optimistic. they have a lot of pain ahead shipments to china will punch 37% to 12 billion dollars. how does that affect what they spend money on? i spoke with the ag cochairman and ceo. verye situation today is

very volatile. the image of our country as that america suffered quite a bit. ideas and newnew decisions almost every day. it is often very emotional. it is not fact-based very often. but we have a great secretary of agriculture, a thereforeg -- therefore agco and our customers are doing fine. alix: $12 billion in aid going to farmers. what do you expect them to do with that kind of money? did they purchase your equipment or pay off debt? >> hopefully they do that, hopefully they purchase equipment. but i am not 100% sure. american a farmers had some difficult years. but that level is maybe lower than ever before. but they might reduce the debt further, and they will invest in their businesses for sure.

alix: he is agco's chairman and ceo. you can catch my full interview later on today at 1:00 p.m. eastern. inre was a huge drought europe and australia, so farmers are getting hammered on all sides. they might not have the crop to sell, so what does that mean for equipment buying? david: farmers in europe have been having a tough time, and that was before the uncertainty of trade. we hope they are going to buy equipment, but how can a farmer plan? alix: and he has done it well. those farmers have to make under 125,000 dollars a year to qualify, and those are not the farmers that will purchase a majority of the equipment. that will be the high-end, larger farmers, and they will not get that kind of bailout. at 11l get former incomes :00 am today, already expected

to be down 7% this year regardless of trade. a lot of farm experts in the united states. alix: that is right. how much of a headwind is it really? david: we will find out. let's bring back in kevin holt of invesco. you invest longer-term. over the longer-term, do you see trade as a challenge for companies in which you might invest? >> our hope is it will not be an issue longer-term. it appears a deal with mexico is pretty much done. hopefully a deal with canada, and as you mentioned, agriculture, but dairy in particular, in canada is a big issue with how it is managed. if we can get those things behind us, and you mentioned the auto tariffs, that was set the stage for kind of a last showdown to meet china. i think it is in china and u.s.

best interest to get this behind us. i think it is a transient issue, and to me, that is six to nine months. we need this to happen. david: is it the last showdown? we still have brexit pending. it is not just the united states. countries liket italy coming to the floor. even australia has issues now. are you concerned that we have seen a high watermark of free-trade around the world? >> yeah, i mean, i still think we're heading in that direction. i think the china issue with intellectual property would be huge. i think some of the emerging market weakness we have seen over the last three to six months with dissipate to cem -- to some extent. that you cannot deny the populist movement, which usually goes to more of a central controlled economy by each of

the individual country governments. that will be a marginal nugget for trade as we go forward. it is a longer-term issue, not a shorter term issue. it is one to be concerned about it alix: you said "we hope that trade will get resolved." are you hedging the hope? said that mean, you nothing in life is known. what seems to make a lot of other investors, you just never know politically. will a deal get done? i really think a deal with china and u.s. will get done, but will it be done by year-end or will it take a year? that is the question. david: you have longer-term concerns about china, quite apart from trade issues. there seems to be some slowing with growth there. president trump was talking about the fact that he that china was really having a tough time. globalhave to take

growth into account when you make value investments? >> you have to look at the companies that have exposure. the fundamentals. how much exposure do you have with china? from a macro perspective, we look at the electricity consumption within china, an indicator that maybe it is not as easily changed at some of the other economic data. that still looks relatively strong, conflicting with some of the other data. a government-controlled economy, hard for us to understand. will beally think china fine in the next couple years. will he grow slightly slower? possibly, but the whole world may grow slower. the economy has been pretty strong enough for a few years. sense ofnally, give a your time horizon. over 20 years or 30 years, you probably see more growth in asia and africa than in europe and the united states. do you take that into account or

are you thinking three years, five years? >> we're looking at a three to five-year period. i was looking at a chart yesterday, and you look at the msci and like of appreciation over the last 10 years and compare that to the u.s. equity markets and then say, what is the potential growth in those economies? i think that is something you have to recognize. is this something that will take effect in the next 12 months? who knows but i think there are some international markets let look pretty attractive. u.s. stock manager, our companies are exposed to those at thef we can buy them right valuations. i think that is nothing but upside. david: that is kevin holt from invesco. he is staying with a spirit coming up, ford teeters towards junk. more on top stories. that is next. this is bloomberg. ♪

david: we look at three company stories. first, ford. ford is nearing junk status on their bonds. if you look at their bonds and the indication, the extent to which the value of those bonds has gone down right here. they need to do a lot of restructuring. they have said they need to invest a lot of money. it will cost like $11 billion. people are concerned. alix: and some of the divergence between ford and gm over the last six month has been so eminent. people thought the new ceo is crazy to borrow so much money. they have the money to restructure then. now it has flipped. alix: retailers reporting this money, the most interesting one is dollar tree. very solid across the board, but the stock hitting hit in premarket. market, andis the

-- margin, coming in a 6.9%. beatlso had mixed,, like a and dollar tree stores but a mess and family dollar. your numbers might deliver, but how much do you have to investigate people and the store? in the market is punishing you for that. david: and you have wages going up, and it is a discount store. alix: and real wages are not going up either. bring in brooks sullivan for our third story, campbell soup. campbell soup is cold today. alix: she has been wanting to say that. earnings did beat analysts estimates. that was a very low bar. those estimates have been coming down significantly as people were concerned about campbell soup outlook. their margins have been under

significant pressure, and part because they bought snyder's, snack products. those tend to be lower margins. the big news is they're looking to divest their international business and their fresh food business. i look at this as an undoing of allocationpital decisions made by the former ceo . at was the of th cookie business. they have had to take theificant breakdowns on businesses she bought. alix: it highlights the problem of you want to get healthy and fresh, and you have to buy. then you get punished for it. this is also a semi-when for dan loeb. brooke: it is to the stock initially plunged on it. ceo, interim ceo, was clear

that all options are still on the table and we are still considering everything. thisreports show they view is making the remaining company march active for potential buyers. the fresh foods business has all of those problems that someone will have to fix versus the snacks. david: proxy fight? brooke: they are willing to consider options. this is a pretty quick response to an activist coming in here. alix: we will see how long. brooke sutherland, thank you. coming up, the fed's preferred inflation gauge, july pce. dana peterson of citigroup will join us. this is bloomberg. ♪

pce: moments away from data. welcome to "bloomberg daybreak." i am alix steel. up by about 4%.

dax down. potentially the eu will consider no tariffs with the u.s. on autos. the dollar is kind of flat on the day but the euro is weaker as inflation data disappointed for eurozone, as well as germany. in the u.s., core pce -- wow, pretty much in line with estimates. year on year coming in at 2% on a month on month basis. line with estimates, and grinding higher, up .1% month on month from the previous read. personal spending also pretty solid.. income missing on estimates, up by .3%. spending coming in in line, .4%. steady as she goes. this will not rock any boats.

david: you can say it is grinding higher, which is right. this of the target was 2%, and they are at 2%. -- they said the target was 2%. alix: consumer spending is extending gains we have seen. when you look at a fed that differs from the market in terms of their hikes, this supports the fed's hiking cycle, does not support the market's view of a weaker hiking cycle in 2019. claimsinitial jobless came in exit in 1000 above what was expected. spot on, as well. disposable income only came up .2% after a .3% gain. something to keep in mind. still, pretty solid. david: we bring in dana peterson, citigroup global kevins economist, and

holt is still with us. what do you make of the numbers? >> i think it is fantastic that the fed is thinking about continuing its normalization process. powell is signaling that september is a go for rate hikes. if we continue to outperform and deceptions and markets, we may actually have a fourth rate hike this year. david: all the deceptions about trade not seem to be affecting any of this. >> indeed. consumers are focused on the fact that they received big bonuses, as well as lower tax burdens with tax reform. we have seen consumers are actually spending their tax reform windfall. so consumers are not really paying a lot of attention to the trade wars, even though they are concerned about it. and we are definitely seeing good news with nafta where the u.s. and mexico came to an

agreement earlier this week and also maybe tomorrow the u.s. and canada will hash things appear that will help calm some fears with respect to trade. alix: disposable income getting .2% to are the savings rate fell. are we in a situation where we have to because his of the wages not coming in and in order to support consumer spending, we need to dip into savings -- is that the dynamic that will play out or am i reading too much into it? >> the savings rate is a complicated measure. the bigimportant in revisions made an savings is the savings rate has actually been a lot higher over the last five years than we thought. we thought it was getting close to 3%, and it has really been in this kind of 6.5% area. in one month where it is off a little bit, i would not worry too much.

when i look at disposable income, it has been rising pretty strongly this year. that is a function of a very strong labor market and underline growth is powerful and robust, but also because of tax reform. most people are seeing somewhat larger paychecks. when we look at consumer spending and say, what if we income, aock on positive shock, from tax reform? we see higher spending. we see higher spending in areas where our data say that consumers are buying, buying autos, buying highly discretionary goods and services like restaurants. i am not terribly worried about one print when it comes to disposable income or even the savings rate. how does theholt, prospect of inflation figure into investment decisions? chart encore and headline pce the goes out to 2010. the white number is the core number. we have not been at 2% since

2011, early 2012. .o we have gotten back up to 2% how does that figure into your investment decisions? are you concerned about keeping going above 2%? how it plays in is i think a lot of the progrowth stimulus the current administration has put in place, you are seeing the fx -- effects. the fed given a raising interest rates, and growth is picking up in a pragmatic fashion are up ece is moving up, which is good, some semblance of economic growth. that i think it is in a very structured, as we said, grinding fashion. i think this is good for the financials. one thing to watch over the next few months is what happens if the long end of the curve with the 10-year, 10-year came down

from 3.1% back into 2.8% area with some trade fears. if trade fears dissipate, does that move back up? i think there are fears of an inverted yield curve that will abate. alix: i want to go back to the fed rate hike, dana. you can see the expected number of fed rate hikes as predicted by the market for this year, almost four, the white line. the yellow line is for next year, coming in just over one. the data is solid. the fed seems convinced they're going to hike. and we got canadian gdp moments ago, and that faltered. is this a central bank divergence world? if so, how long can we last in that environment? >> sure, first of all, both howell and paul would say the policies are independent of any other economy, in particular with respect to the fed. the fed needs to continue to

normalize interest rates, because it is concerned about not having enough monetary policy space for the next softening, the next downturn, the next recession, whatever that may be. with a nominal fed funds rate, and markets say maybe 2.5% is appropriate. i think the fed is saying to markets, please, come along with us. the last 10 years, we have paid attention to your signals, but now the economy is much stronger, a more normalized environment, so we need to normalize interest rates. with respect to canada, yes, canada is also raising interest rates. they have been almost in lockstep with the fed. there is not much of a divergence. theave been thinking that bank of canada would raise rates in october, so the september meeting is not really on the table. we thought maybe this gdp number that came out just a few moments ago would be a factor that maybe

the bank of canada would go in next week. i think the difference between last year and the serious last year you have three or four for strong data, and this time around, second quarter was really somewhat of a bounce back from the first quarter, and the bank of canada can feel confident that they can wait to implement the next interest rate hike, likely in october. david: kevin, what is normal in terms of interest rates for an investor? chairman powell talks about whether it is accommodative or not. from your point of view, what number is it beyond which it may affect equities? thus far, it has not heard equities at all. >> i think that goes back to our initial conversation on the equity risk premium. history tells us as interest rates go up, multiples compress. that is what the equity risk premium is trying to get up. who knows exactly where the right rate is going to be. i

think the mid-3% range is realistic. but i think it will be tough for the market to hold a 20 times multiple. so earnings will have to do a step function change quicker, which they're already growing quickly, or equity markets may trade off a bit, which is were active management and people like warren buffet and myself come into play, looking for the stocks that are so an extensive and maybe the market will sell. alix: you mentioned you like energy. where in energy do you find the value with the inflation grind? it inhave talked about the past, i think there is still good value in the exploration and production stocks. we like marathon, a company at about four point five times cash flow. unconventional assets, free cash

flow generation to initiate a buyback hopefully in the next few months. commodity prices, we think that stock is probably discounted 50. then we do larger stocks like royal dutch, kind of measuring their capital expenditures, generating a lot of free cash flow. they are buying back stock to get into the market. stocks.those are two if we can get oil prices to hang in here, we think energy is one of those areas that even in a tougher market, slightly down market, can work over the next one to two years. alix: dana peterson and kevin holt, thank you both. data inflation coming in in line with estimates. electronic arts coming in and saying they're cutting their full-year fiscal 2019 net bookings guidance. they were delayed by a battlefield five launch. they see about $150 million of

the charge they will have. that is because of fx. david: it indicates all sensitive that is this is, the videogame business. delayed by four weeks, and there are troubles. alix: activision and competitors are falling on the news. an update onget what is making headlines outside the business world. president trump says the future is bright for investors. he tweeted that news about financial markets is better than expected. for all of you that have made a fortune in the markets are have seen your 401(k)'s rise, more good news is coming. the s&p 500 closed above 2900 for the first time yesterday. president trump has backed off some of the barriers of begin his administration's hawkish stance on trade.

before this year, three countries accounted for almost a fourth of u.s. steel imports. iran is teetering nuclear agreement will be at the top of the agenda when the eu top defensive diplomatic officials meet in vienna. president trump is a position to pull the u.s. out of the deal has turned up the pressure on the u.s. france and germany have called for the eu to adopt policies to sidestep u.s. sections threats. 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'm kailey leinz. this is bloomberg. david: coming up, the u.s. is underway right here in new york. we will talk to the manner i think of as mr. tennis, ken solomon, the tennis channel president. that is next. this is bloomberg. ♪

kailey: this is "bloomberg daybreak." i'm kailey leinz. coming up later today, david westin will sit down with warren buffet, berkshire hathaway ceo. now to your bloomberg business flash. the world's largest luggage maker says the trade war between the u.s. and china is having an impact on its business. the samsonite ceo says the dispute has hurt sentiment among china consumers, and that will lead to slower sales growth in the second-biggest market. more tariffs will at 10% of the

price of samsonite product spread amazon is frequently could assess by president trump, and they are now being attacked by bernie sanders. he says they will introduce a bill requiring large importers such as amazon and walmart to pay a so-called living wage or else face a tax. amazon says sanders is making misleading accusations. and credit suisse is having second thoughts about doing business with the owner of the national inquirer are the supermarket tabloid is at the center of a scandal involving hush money payments to women who say they had affairs with donald trump. credit suisse wants to back out of the deal it south american about 425nanced million dollars of debt. that is your bloomberg business flash. david: the u.s. open went underway this week in flushing meadows, and it started out with a bang. seed onalep, the first the women's side, did not make it out of the first round. president of tennis channel kevin solomon -- kenneth solomon

is joining us. w -- arthurhur and ashe won the first open. there were hard-fought battles, and the pros used to not be able to play so the open was meaningful and fun. it is exciting, here we are 50 years later. david: tell as about the turn at this year. who are the favorites? i think the winner might be the open grounds itself, the new armstrong stadium. virtually every single court except ashe has been done, and ashe stadium has the roof. usta has done a phenomenal job in taking it to new places. it is interesting with this amazing crop of great young players, and you have rafael nadal and roger federer coming in at one and two. novak coming off the bench after

two years of being questionable. he wins wimbledon. you have serena, maybe the story whohe world, the mother into the finals of wimbledon, which i do not think anybody expected. a great story of challengers. and then you have the tight rope with someone like simona halep going out in the first round. david: what does it mean for tennis channel? how are you guys doing? this is a ken solomon reckitt -- racket. kramer founded the pro tour. for us, it has been if stored in a. -- it has been extraordinary. ratings have been up dramatically. this year alone, already up 50% with our live morning show,

which i hope is not cutting into the ratings here too much. on the actual coverage, match coverage, we are up 79% for the first two days versus last year. part of that might be that there is an overall growth in tennis. david: is their overall growth or is it becoming more diverse? with the ratings, he used to be cbs, now espn. go back to 2010 or something. they are going to drift down. seeingink what you are is more of a pattern of how network television's single event tv has gone.

playing cilic, not as much as post to a roger or rafa final. david: you have your streaming service. covering theen u.k., and there has been controversy. >> tennis needed this technology . for the first time in history, fans and hopefully fans and the net -- and the making, hundreds of bracketed matches leading to one winner. one left standing of the end of two weeks. extraordinary. and you can watch them all on whatever app you want. all the streaming services are looking at sports. ared: netflix and amazons moving in.

will they push out espn and tennis channel? >> i would put espn almost more on their side than our side. we are an example of how personalization and media overall is having an incredible renaissance that never existed before because you can go as deep as you want to. with one shopping, these guys are huge. amazon is selling products, as well as content. netflix has a great advantage, but they will have to do it with original content. david: kenneth solomon, always great to have you here. alix: cars and tennis, not fair. i have to talk about commodities. the u.s. and china trade war, how it is affecting companies involved in agriculture. more on what i am watching next. this is bloomberg. ♪

alix: what i am watching his china and the u.s.

you have potentially canada, mexico, u.s., and eu moving forward on trade, so where does that leave china and companies? i spoke to the ceo of agco. we talked about the ways he is changing or not changing his business based on trade issues. a tradehelp me quantify war with china and what that means to you? factory we have a big and have invested $500 million in china, a big state-of-the-art factory for smaller tractors, mainly for the domestic market. we made a necklace-ish in and fully own -- we made an acquisition, so we do not export very much to china and we do not bring a lot from china to the united states. we produce is that locally, produce close to the

customer, and that makes us independent. less and china buys soybeans from the u.s. it goes to buy it from brazil. how nimble is your business? get hurt andrs brazil farmers get helps, what does that do for you? >> for us, this would be a wash. i would expect the american business going down or the investment of american farmers slowing down, which we do not see right now. at the same time, the brazilians would invest more. of ourans, because global footprint, it would not hurt us, but it would hurt the american farmers. alix: that was the ceo of ago. -- agco. get the full interview today at 1:00 p.m. what is interesting is this is not the first i have heard this,

that they want to develop in the country they will be in. david: going on in autos. alix: petrochemicals, same kind of thing. he is optimistic, but we will see. i am looking forward to warren buffet david: i will sit down with him to talk about his views on investment and what is going on in the markets right now. alix: do not want to miss that, the value man. david has to go do his interview. coming up, the open. i will be joined by a ceo, michael shaoul. this is bloomberg. ♪

30 minutes until the start of trading, this is the countdown to the open.

>> canada and the eu could cave to the u.s.. canada nearing a trade deal with the u.s.. reports say the eu is willing to scrap tariffs. u.s. trading near all-time highs. is it a rally or a melt up? a rough month for emerging markets. political turmoil in turkey, result, and argentina. in the markets, a little bit of a risk. s&p futures down by about five as we take a break from the record rally that we have seen with the s&p closing above 2900 for the first time yesterday. in the market, euro-dollar down a little bit weaker. european inflation missing estimates whereas u.s. inflation -- curve, basisof the points down by two basis points on the 10 year. crude a little bit haggard -- higher. trending