alix: trump's rap refocuses on europe. president trump europe to china when it comes to trade taxes as the eu offers on auto not good enough. u.s. not backing down on china. trump argues china manipulates its currency and wants to levy tariffs on $200 billion worth of chinese goods next week. august surprises. e.m. weakness. of monthlytring losses in 2015 while u.s. equities a grind out. we made it. it is friday, august 31, the last there the month. i am alix steel. in the market, you can imagine it is going to begin liquidity, then volume. not a lot of risk. s&p futures, a little softer. zero dollar flat on the day

despite the fact that european inflation slowing just slightly as a risk on feel disappears and the yen gaining. 20 basis points, little bit of volume on the back and the curve in terms of the safety bet. brief.w for your morning at 10:00 a.m., we'll get consumer attitudes at the university of michigan -- we will get the baker hughes rig count. senator john mccain's funeral will be held in washington on saturday. george w. bush and barack obama will be scheduled to speak. time for bloomberg's first take. evans.joined by rachel all eyes yet on president trump talking about eu and what it means for auto tariffs. >> is not good enough. -- it is not good enough.

they do a lot more auto business than we will ever do. it is not just tariffs. they will take the barriers down and they will charge is no tax. they will always sell more cars. their cars -- there consumer habits are to buying their cars. alix: european autos up 1% today. you?does this means the market not having a huge reaction. what is priced in? >> i don't know what the markets can do. you are not going to change the european buying habits simply by lowering taxes. if you are a bmw man, you are a bmw man. that goes for american habits, as well. andhe price gets low enough there's an opportunity to cross

and by anake a chance american car but from the fx markets, there's no way to price this, there's no way to do this. alix: the last 24 hours have been interesting. when a deal struck between mexico and canada, it seems like the eu will be alright and then all the focus turns to china. .ow, that is not the case >> the timing is significant. it is easy to criticize a deal that you do not make. once you have a deal that you harder toit is much criticize that deal. it seems significant that we are setting up. see what comeso through with his deal with mexico, who does trump say it is their fault. i think that is where china sets to the fore and that is where the eu myself to the four.

it is deflecting when it comes to how people feel about their lives and what impact comes to them. alix: you have to wonder to the timing. it feels like the better the markets feel in the u.s., the harsher the rhetoric will be for president trump. vincent: it is ammunition, really. you have tied your coattails to the success of the stock market. that will embolden the president to take on what were allies and somewhat make them enemies. with his comments with the eu, you can see where he is coming from. the european union, instead of dealing with one country at a time, you can look at it as this is a tray cartel. you have all of these nations who are against the united states. saying together, they are as bad as china because they are this big union, just smaller.

he also talked about currency mutilation. he said, it is a formula that we are looking at very strongly. as you can see what has happened with you man, they are trying to make up by trying to cut the currency. it is no good. you can take a look at what he is complaining about. come inside the bloomberg. it is the worst losing streak that it has had since 1994. however, vince, they are taking steps to stabilize it. vincent: the formula is the one fix. -- the yuan fix. they changed to make the currency stronger and current -- in recent days. in june, there was a very large liquidity situation in china. their medium-term lending facilities, many trillion yen were coming do.

the pboc put a large amount of liquidities to maintain a smooth , even monetary policy situation on a domestic level. when you do that, the currency weakens. it is qe. they flooded the market with liquidity. it got to a point where markets have pushed it in the pboc said enough. they reconfigured how to get things done. that dropped the currency against the dollar. this nice even trading range. that is not going to change unless my sources told me if trump and ask the $200 billion tariffs. alix: really? interesting. as a fundamental trade situation. if our exports are going to weekend, therefore currencies should we can.

billion worth of goods is tax, china cannot reciprocate that. the irony is with trump talking about a weaker dollar, tariffs do the opposite of that. they make for a stronger dollar situation. it is understandable that china may allow for that to be reflected in its currency. on the one hand, the liquidity we were talking about back in june, they have a lot more coming -- a lot more debt coming due. they need to manage that because banks tend to like to rein in their lending at the end of the quarter so they can meet the regulatory requirement. they are trying to encourage foreign buyers by removing some of the taxation. they are in a tricky situation. they need to try and send a slip

in the yuan. they don't put so much liquidity in their that makes it -- in there that it makes it come full again. alix: it is been a really full august. this is where the one-month move. we see in fx there. -- e.m. fx there. that is the backdrop of what china is having to deal with. can we tell the difference between panic and capitulation? rachel: often it is the week taking panic and people a logical perspective on the market. at the moment, it seems as though we are seeing a touch of contagion. that being said, it does seem as though they are some buying opportunities for investors.

vanguard was saying they thought buying opportunities -- that is the danger when we talk about emerging markets. we talk about it as if it is one monolithic concept. a.m. refers to desk e.m. refers to cut -- e.m. refers to countries in a certain situation. alix: the equities are holding up much better than the e.m. fx. if you compare the u.s. dollar versus emerging markets, you will see the disparity and you see as the dollar continues to depreciate, emerging markets continue to decline. it is likely to continue. while there will be spots to buy, it will be this trend that will most likely continue until november. this continues into the midterm elections. this is a sounding board that

trump has been banging on and it is working. vincentchel evans and cignarella. you can check out the charts. .st go at gtv coming up, more on the risk off they with investors rattled by trade fairs at the end of the month. we will discuss with evan brown. this is bloomberg. ♪

alix: this is bloomberg daybreak. i'm kailey leinz. coca-cola is expanding the hot chicks business by buying a global brand. cook is acquiring for $5.1

billion. that is the biggest acquisition in eight years. both coke and pepsi have been seeking alternatives while the market and should rejects declines. the second-biggest u.s. ride-hailing company lyft will try to be bloomberg. -- try to beat uber next year. an ipo could take place in march or april. apple and 20 other companies is to be the biggest buyers of short-term corporate debt. now they have turned into sellers. that is left a $300 billion a year hole in the market and making it more expensive. the reason why apple and others are selling, u.s. tax cuts are prompting them to bring home cash. alix: president trump is fighting a trade war and he says two of his opponents are equally

as bad. standards that make it impossible because the because -- weests cannot not that the standards are higher. our companies can i get the medical equipment into europe, the big medical equipment. you have to change your ways because the european union is almost as bad as china, just smaller. alix: joining me now is joel trachtman. here in new york is michael keep . i want to start with the facts behind that. can you help us compare when it comes to trade deficit? >> you set me up for my chart. it.s a most like we planned let's go to the chart. this is a chart of the u.s.

trade deficits with the eu and china. china is as much worse than the united states. the european union in 2017 actually improved to its best level since 2013. at this point, no, they are not as bad people at the president may have been referring to is the size or level of the deficit but some of the trading rules. the u.s. and european union had entered into negotiations for a trade deal. the president chilled that. many things they were talking about getting rid of like the medical equipment standards would have been negotiated in that. it is not that the european union doesn't want to negotiate things, they just are not negotiating at this point. they set up working groups to try and ring back some sort of agreement. professor, dylan with

international law, when you hear deals like that, trump threatening to pull out, what is the legality? proposed freehe trade agreement between the united states and europe whatever just things like the car standard and provided for zero tariffs on automobiles coming from the united states to to the united. states -- and u.s. to europe. that would be a disaster from the standpoint of world order, from the standpoint of expectation. , there are to me some who disagree on this but the president does have the power without congress to withdraw the united states from the world trade organization. under the cost of tuition, under the commerce clause, the united states commerce has just

congress has full power over international commerce. trump has used this national security statute and other things to try and take power for the president. same for thet the president and his threats to withdraw from nafta? joel: it is a slightly easier , it because in the statute specifically says that congress shall have more say in the withdrawal. it is the same constitutional withdraw that if you from either of those things, you are really big living commerce and the constitution says that it is congress that exclusively regulates commerce. alix: the other elephant in the room has to do with china. president trump wants to impose tariffs after that comment period is over. you can see taking it to the

max. the red line is the tariff we have now and it will get up to $250 billion if president trump went in that direction. we are going to run out of retaliation from china. what are going to be some the other ways that china can we tell if the just can retaliate -- can retaliate? joel: at think you are right that there is very little -- i think you are right that there is very little that china can do. there are non-cooperative things that china could do. in the economic sphere, there is very little. any said in your earlier segment, china could depreciate the yuan to counteract the effects of iteris but that is the -- effects of the tariffs but that is limited.

this is foot shooting. we are shooting ourselves in the foot for our consumers and our producers. china, retaliate against we are retaliating against ourselves. michael: the remedy would be to bring it back to our biggest subject, go to the wto. does china have a case against the united states? does on thek china section 301-based tariffs that the united states imposed in response to allegations which had some truth that china is disrespecting chinese -- disrespecting united states intellectual property. that is something that the wto requires that you work through the wto's to retaliate against that. asserting atates is

get out of jail free card, the national security card. there's a general exception for national security. it has to be real national security and sometimes this looks like a pretext. alix: joel, thank you so much. both.l mckee, thank you coming up, to buy or not to buy it what do you do with your portfolio when equities are trading at a record high? we will discuss it all with evan brown. this is bloomberg. ♪

alix: u.s. stocks trading around record highs. as investors question if markets have more room to run, one investor is buying. we sat down with warren buffett and he gave us his take. --ren: i am buying stocks

warren: i'm buying stocks because they will be worth quite a bit of money. i do know they are good businesses. alix: still with me is evan brown. this is a short versus long-term view. evan: we chase it. it is going to be a volatile few months. ultimately, the economy is doing well. financial conditions are very easy. it is very difficult to calibrate how this trade news will impact the economy. at this point we are constructive. is datae the fed dependent, we are data dependent. we want to see how this trade news filters through. and is in turn the u.s. economic data -- it has not turned the u.s. economic data.

alix: what indicators would you look at? at instead of financial market sentiment, more economic sentiment. the purchasing manager indexes, small businesses. how they are feeling. do people that do business plan to invest? all those things are pointing in the right direction. if that changes, we will become less constructive. it is quite strong and the trade news have not -- has not obstructed that. alix: if you're going to go -- the growth momentum has not rolled over. how do you deal with that? evan: we look at value versus growth really on a big picture macro perspective. you tend to see value up from growth when the yield curve steepening. right now the yield curve this

flattening. we expect it to continue to flatten as the fed hikes rates at policy easy outside in europe, japan is getting down long-term yield. if that is case, and this macro environment, growth can continue to outperform. alix: if you look inside the number, that seems to be the market -- you can see that for the month of august, health care , the biggest rally at record high. to playthe way you need it? evan: we don't have a strong growth bias versus value. fairly neutral. we are more sector specific. we do like tech and energy here. we do like industrials. i think that reflects the general optimism on the economy and the idea that there is enough upward momentum,

particularly in the u.s. to withstand some of the headwinds that are out there. alix: do you need a weaker dollar call for that? evan: a weaker dollar would help. the strong dollar is really about imbalance growth. it is about u.s. growth of performance. the rest of the world has been disappointing. we are seeing signs of the rest of the world showing some rebound. we got the german ifo index picking up. we're getting chinese stimulus coming soon. that should help the dollar stabilize. alix: evan brown staying with me. the big august surprise in the market. we will discuss. this is bloomberg. ♪ xfinity mobile is a new wireless network

designed to save you money. whether you use your phone to get fit. to find meaningful, thoughtful, slightly-weird gifts. or just to know which way you're facing right now. however you use it, your wireless bill is about to cost a whole lot less. ask how you get xfinity mobile included with your xfinity internet. so you just pay for data -- by the gig or unlimited.

saving you hundreds of dollars a year. plus, get $300 back when you buy a new smartphone. xfinity mobile. it's simple. easy. awesome. click, call or visit a store today. alix: this is bloomberg daybreak's. i am alix steel. welcome to a risk off mood here. s&p futures are down by five. there is a rotation out following weaker european stocks. autos helping the decline lower

as president trump says the eu potential offer on zero tariffs on autos is a no-win for him. he doesn't think it is good enough. the cac getting hit hard. the other asset classes, it was a mixed dollar store. it is a stronger dollar story. fuel to a little bit of that fire is the european -- as the european inflation slowed a bit. off the highs we have seen the session and the .2% spread is now the buying coming across the curve. not by a lot. commodities soft and precious metals on the upside. crude on the downside, down by .7%. not helped by the strengthening dollar. august. prices for the market. -- august 4 of surprises for the

market. eight currencies versus the dollar. you short the dollar and you buy those indices. the yield on a yearly percent change is quite terrible. the long-term average well below that. argentina and turkey sparking fears of contagion. credit suisse ceo doesn't think that is going to spread. taisha: -- >> the countries that are under pressure have a significant -- under account. is not because of their emerging markets. it is important to manage the fiscal situation responsibly. it is important to be the current account office and it is important -- you will find that a lot of emerging economies are in that position.

evan joining me now is brown us to with me. fine.cro thing, that is on the ground, it is really painful. surprise iit was a guess that august happened to be the month in which turkey voted. a lot of people were looking at this as a problem area. after that happens, it is reasonable for investors to go, i don't want to be subject to this and look at the areas most similar to turkey. that is south africa and argentina and the exit procedure that can help even more damage for the trade which is mainly what we saw in august. there is dispersion in some areas. some areas not getting hit. that is what happens when the dollar strengthens. alix: we hurt -- we heard

president erdogan speaking in turkey. they cannot make this nation need with dollar. continuing that hardline rhetoric. coming if you take a look at the contagion potentially, you can see the bond market, the brass. you got brazil, russia, south africa, argentina. those are the countries. where do you see the opportunity? evan: of the country's that you mentioned all have current account deficit concerns about their fiscal outlook. places where we think the governments are more in control, on top of things. india, mexico -- this broad selloff in emerging markets is going to create some value in places like that where you have a better fundamental story. alix: where? is that a mexico thing? southeast asia? evan: the countries with the

biggest surpluses tend to be in asia. we are dealing with the trade tensions. we do like mexico. presuming that we do get this trilateral nafta deal announced today, not definite, but if we do get it, you have a u.s. economy that is surging in no emerging-market is going to close to get more than mexico for trade issues. you have a good story and mexico. india, we like as well. reform momentum is still there. it has sold off because of these deficit concerns, but if you look at it relative to five is ago, current account is way narrower. budget deficit is way more in control. there's going to be great value in those countries. alix: you mentioned the dollar. that is going to be the fed which brings of the global growth scenario. i have this chart that i want to bring up.

the u.s. versus asia financial conditions index. it is shooting up. we haven't seen these levels since 2013. are we looking at a global growth divergence? is that capable to sustain? luke: it can only persist for so long that what amazes me is asia is not the sick man of em. to see this kind of divergence, it suggests and overshoot perhaps that asia has gotten a little caught up and oversold in this broad em selling. that would be my take away. without it having ripple effects that contiguous growth. alix: you can see it in euro-dollar. what is the best way to play short-term that divergence? short-term that divergence? luke: in the short-term, i think

it really depends on how the data is coming out. what we are watching closely is this china stabilization? every day we are getting an announcement, monetary, regulatory and if that really sucks to come through -- an overnight we had pmi's that were better in china. maybe that is creating some value in asia, especially if you get some settling down of these trade tensions. alix: it depends on the dollar. the dollar had a very confusing month. has it beat? -- has it peaked? >> the turkey and italy situations helped to give a last gasp into a greenback rally. the -- we have these political -- you realize underneath all this we have had a broad convergence of economic conditions with the eurozone, g10 emerging markets. surprise indexes converging all

over the u.s. now that we have reached the point we are going ok, is the story more that they growth is converging? -- that the growth is converging? are we in a flight to safety mode as he thought about turkey, argentina and trade wars? that is kind of where we are. and, bank of america merrill lynch came out with their weekly report saying there is no summer canary. we saw high-yield corporate debt. what happened with ford and how it did trickle over to other parts of the corporate bond market. >> this is stolen from sebastian boyd at in life. it is a great chart because it is an encouraging sign for investors when you get something that should be bad news and it doesn't cause contagion or calamity for the rest of the market.

worried that the space but for ig in general and the divergence for high-yield, i think it continues to be -- asset managers don't like holding duration risks. helps explain a lot of the divergence but it is encouraging for ig investors to see that you are not getting caught up. all the supply come on the september is going to freak everybody out. what do you like in corporate deck? spreads,ory about there's all this supply coming. we know that supply is coming. we think that is already priced in. we are not too concerned about the increase in supply leading to a blowout in deals in either treasuries or credit. alix: do you like or credit? onwe are optimistic

equities. the cycle turned sooner than we think. usually it is credit that gets hit first. the value you get in credit because spreads have compressed so much is not so much there. it is not so much a negative view on credit, it is a hedge. alix: loop, -- luke, and evan brown, vicki so much. kailey leinz is here. >> the big story is that bloomberg interview with president trump. he is talking about the european union is still it is likely to be his next trade target. he told bloomberg that the eu is "almost as bad as china, to smaller." -- china, just smaller." meanwhile president trump is preparing to ratchet up the pressure on china. was to move ahead with it plan to impose tariffs on $200 billion on chinese imports as

soon as next week. said he thinks the u.s. and canada is close to a deal. negotiators have stepped up talks try to meet the administration's deadline today. the president told bloomberg that canada will make a deal because it has the choice. we are told that it cannot despicable m&a deal is likely to -- that april m&a deal is likely today. no one can make turkey neil with dollars. anyone -- erdogan says no one will make turkey bow to pressure. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. alix: thank you so much. coming up, combating the opioid crisis. we are going to come up -- we're going to look at changes. more on drug prices as well.

this is bloomberg. ♪

kill eco--- coming up in the next hour, peter cheer. now to your bloomberg is a/. president trump is stepping up

his criticism of technology firms he says are favoring liberal points of view. google, amazon and facebook may be in an antitrust situation but he said he could not comment publicly on whether they should be broken up. turns out that google and mastercard that a secret deal to track retail sales. the landscape google unprecedented assets. select advertisers contract whether the ads lead to a sale. the companies never told mastercard holders of the arrangement. there's a report that wells fargo is working with nonbank mortgage lenders. the bank is looking at lenders whose borrowers tend to be low income are first-time homeowners and they are backed by the u.s. government. wells fargo is not commenting. that is your bloomberg business flash. alix: the fda is taking steps in fighting the growing opioid

crisis. alan krueger says the opioid prescription that account for .6% of the decline in the labor force participation rate. a very judgmental affect to the overall economy. the fda wants to implement a focused approach to pain medication. jenny now is scott gottlieb. thank you -- joining me now is scott gottlieb. they key for joining me. talk to me about this new guidance. scott: what we announced this week is is a series of new guidance talks we are going to be issuing a rethink is going to lay out a more efficient pathway project developers to bring medications to market that treat pain. previously we had guidance laid out in a document that we issued in 2014. that document is outdated and laid out a pathway to markets that we think was too burdensome and it discouraged investment.

these new guidance documents, the goal is to be more focused and allow the developers to develop drugs for specific kinds of pain. also allow them to seek indications -- if you can demonstrate that your pain drug conspiracy use of opioids, you can get -- on the basis of the claim. alix: opioid use might be slowing but the drugs you use to get off opioids is picking up. how do you measure success? scott: is a great question. -- it is a great question. we see prescribing going down in the medical setting. at the same time, we see the use of illicit jocks, particularly fentanyl going up -- illicit drugs, particularly fentanyl going up. some of that across the border,

a lot of it through the international mail facilities, that has grown at a bigger proportion than the decline in prescribing. even as we bring down prescribing in the medical setting, people who become medically addicted from drugs that they get, more people are transitioning onto the illicit drugs. we have stepped up our enforcement work in the international mail facilities. to try and interdict more drugs. there's a very risk flow of drugs. alix: what are the metrics? is it going to be in prescription? how do you measure success? scott: by looking at what is happening to people, what is happening to patients. our overdose deaths going down -- are overdose deaths going down? what we are looking at in the new term is more of an equivalence.

that is how you measure how much opioid your delivering. we're looking at morphing equivalence. how much opioid is being consumed by the publishing. that is going down. we're looking in terms of seizures. we have completed a big operation with customs. we look at what was coming into these mail facilities to get a more accurate picture on what is coming in. a representative sample of how many illicit drugs are coming into those facilities. that is going to give us an indication. alix: good detail. this is one part of what the fda has been doing. county you prioritize your first ?ime at generic approval what is going to be a formula?

scott: we do prioritize first in class generic approval. generic approvals, we have three drugs within a category. the big price reductions for consumers happens after you get that third drug in the category. that is where you have risk competition. with respect to the complex drugs like the epipen that we had several weeks ago, we are prioritizing trying to give more guidance to generic manufacturers on how they can develop generic copies. copyomplex drug is hard to . we give additional guidance to manufacturers. we are going to be releasing more information on when generic companies are trying to bust patents, when they file paragraph for certifications -- four certifications.

the goal of disclosing this information is creating a more competitive marketplace for the generic manufactures so they can place their bets more efficiently. alix: obviously, the hope is you are going to have a lot more innovation, a lot more r&d that brings down drug prices. on the flipside, companies are going to need high drug prices to go into r&d, to make those drugs. if you attack drug pricing, how does that trickle-down into tapping r&d? >> we are looking to create more competition. alix: you want to bring it down at the end of the day. the price competition, your product competition. my job is product competition. after patton slaps, they should be subject to generic optician. on the flipside, when you look

at new drugs and you look at a lot of these drugs that target medical needs, what we are seeing is if drugs get approved for a narrow indication for the treatment of a rare cancer, the following innovation, the ability to come into that same category with a second drug is taking longer. you see drugs come to market and have monopolies for longer periods of time. we have data showing that. what i want to do on the new drug side is making more efficient for a second developer to try and develop a drug similar to a drug that gets approved. you can have competition on the new drug side as well. alix: thank you for joining us. we returned to business week eight. first up, the white house that wall street built. public sentiment following the financial bailout ushers in a .ew era of washington politics the world's next superpower,

there is no doubt that china will be one of the world's greatest powers. social media goes to washington. twitter ceo makes his congressional did you next week. joining me now is jason kelly and carol massar. first up, go. >> this is your must-read. >> basically, the financial crisis helped to pave the way for president trump. >> all you need to know is this is josh's take on the financial credit and what it wrought for politics. he wrote the book about steve bannon. he knows the nuances that are than anyone. the story starts with tim geithner in 2010 saying, i am growtha choice here on and in doing that, i am not going to dispense this sort of justice that some people might be looking for on wall street. >> when josh where to story, it

is like a novel. he talks about the sun coming through the window. the whole point is a year ago the world was falling apart. we thought they would be contagion and you would've thought and josh has been working of the story for several months. he thought it would've been a victory lap. realizing that maybe we missed something. ultimately, he did. what is interesting. >> it came on the left and the right. both occupy wall street and the tea party. reminder, don't ignore the public. citigroup, he said to general motors. you did prevent another great depression from happening but people lost homes, people lost jobs. they were angry. they were angry that nobody went to jail.

don't ignore public sentiment and you saw that play out politically. alix: the next-door has to do with china versus u.s. is it going to overtake the u.s. in terms of power? >> the question here is china may already be a superpower but it doesn't want to be like the united states. we are doing this careful dance around not being or pursuing hegemony. it is very uncomfortable with this idea. >> this is a great chart. to become a superpower you are going to have to spend a lot of money. we have seen china spend a lot more in terms of military. that is part of being a player on the global scale. it comes at a time when china is seeing its population -- looking at demographics. in asian publishing -- in asian

population. it is going to be like guns for elderly care. alix: guns for butter. the third story has to do with tech going to washington. sheryl sandberg but particularly twitter in jack dorsey going to go. that is going to be the highlight. alix: it really needs everything that it is getting from president trump and from the conservative side, and yet, it is under attack. it is in a very uncomfortable spot. a lot of questions to answer around russian hacking but influence in the president is going to be watching those hearings. >> how is the u.s. open yesterday? >> it was hot. we were outside. >> the weather will be nicer. >> players walking by. alix: were you staying for the whole evening as well?

>> the williams sisters are playing together. alix: guys, thanks so much. jason kelly and carol massar. listen to them every day on bloomberg radio. from the, more interview with president trump. his thoughts on the eu and china. we get market reaction and insight to jim fulton. what he says the stock market is near full capacity on this last day of august. this is bloomberg. ♪ xfinity mobile is a new wireless network

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smaller. alix: trump's raft, focuses on europe's -- focuses on your as he compared europe to china on trade, and the offer on autos was not enough. the u.s. not backing down on china. more from our exclusive interview from the oval office or -- oval office. he wants to lead the tariffs on chinese goods next week. and your august surprises. e.m. weakness. facing the worst string of monthly losses while equities grind out the records. welcome to "bloomberg daybreak," on this august, 31st. i'm alix steel. david westin is off today. on the margin, it feels risk-off, but liquidities will will notnd investors take a lot of risk heading into the long holiday weekend as futures down six points. euro-dollar down by .2.

bidl catching a safe haven but less so than yesterday. 20 basis points, not going anywhere. crude. -- crude pairing some of its earlier losses down 1%. at 10:00 a.m. eastern time, we will gauge sentiment for august. at 1:00 p.m., we will get the number. and on saturday, senator john mccain's funeral will be held. barack obama and george h.w. bush will be speaking. -- george w. bush will be speaking. from the globets daily mail that canada officials say they are doubting a nafta deal by friday. optimism came into the market earlier in the week where a deal could be reached.

this is a currency class to pay attention to as we wrap up this week and this month. u.s. stocks are trading right around the record highs, strategists are raising their year end forecast 11 out of 11 sectors in the s&p posted gains -- and the s&p posted gains. you can see which areas did well. tech, health care, consumer discretionary, and real estate leading gains in the s&p. to help us wrap up the market polson ands jim rachel evans. news was the grinding higher of the record rallies we saw, are you equity -- you can? jim: 8 certainly go higher. i always wonder in the summer, the dog days of summer, how meaningful these moves are? next week, we will start to find out when all the players come back, and will they look at this

as an upside breakout, or look at it as a stretch valuation dude for a pause --due for a pause. i serving think the market could trend higher, but the biggest issue for investors probably still lies ahead here. i think the market will continue to struggle. i actually believe the u.s. economy slowing down, and that might be a challenge here the rest of this year and data starts to cut in weaker, challenging wall street's earnings estimates. i think there are challenges ahead, but that does not mean the contest 3000. alix: true story. rachel, in the market, there is a question of rotation. we started to see health care take leadership from tech, etc. how does that play out in september? rachel: we have seen that health when itstarting to lead

comes to drive in s&p 500 higher. on a monthly basis, it is tech taking the lead, but health care will play leadership role. that will be a big debate in september. we talking about growth stocks rolling over. maybe tech stocks -- maybe tech stocks turned less of a role. the question is will that be more of that to come. amazon, apple, microsoft -- they been the leaders for the five to six months. where will we see those guys pair up. is it health care? we can see sides of the s&p 500 when the are done. alix: jim, what do you think? where would you be betting on leadership? jim: i would be moving more defensively, alix. if you look at the ratio of cyclical to defensive stock performance, it tends to move very closely with consumer confidence, competence is way up -- and confidence is way up.

if you think about how much mortgage rates have come up in gasoline prices, those are two very significant determinants of consumer confidence. i think it will move lower, and that is going to hurt cyclical stocks much more than defensive. i would look at these beat up defenses a little bit, staple stocks, utilities, and so forth a little bit, and wait for that. i would cap myself on the back if you own these and let someone else have those popular few names right now. alix: jim, that is a legit view. morgan stanley agrees with you about selling defensively. we expect to see tech rollover and we expect to see a defensive come into play. why are you so convinced that now might be the time? jason: -- jim: first thing i would point

out, it is interesting to me. if you take a look at the ratio of s&p 500 technology, alix, to s&p 500 utilities, utility stocks have an matching performance stocks all the way back to february or march of this year. -- it as not been the case that it has not been the case that tech stock seven documented -- it has not been the case that tech stocks have been outperforming. it is not as popularized the some of the defensive stocks, maybe they are not doing well year today, but they have been doing well for the last several months. the last three months, for example, even during this market rally, a lot of the leadership among the last three months's performances is made up of the defensive sectors. i think some of this is already starting to happen, even though it is not widely perceived that

way. to me, to me, we have a dangerous combination that has emerged here where we have peak optimism coming off 4.2% real gdp quarter and a massive earnings numbers. with theme time, monetary tightening we have been in place, argue that we may slow the economy, so a slowdown with high confidence the mother could be a lot of disappointment coming, and that would favor the defensive stocks finally. alix: and to support that in a broader map docents, you can see -- and to support and a broader macro sense, you can see how it is outperforming. rachel, is it possible for us to diverge that much? rachel: that is a great question. that is the issue we had been grappling since the financial crisis, so what extent does the leslie the rest of the world or grow by itself? we have seen how quantitative

easing has occurred around the world. now they are tightening. we saw japan looking like it may taper is quantitative easing. the question is if we see the rest of the world playing catch-up with the u.s. as the u.s. drops off. we have seen data coming in relatively strong in the u.s., but to jim's point, we see rate hikes coming through, can the u.s. maintain that growth is emerging markets, asia starts to pick up? it is always hard when you see markets diverge giving the trade links we see an tariffs. thoseifficult to see how positions are insulated from one another. alix: rachel evans and jim paulsen will be sticking with us. bullish on corporate credit. we will speak with the head of macro strategy who says all the

drama about the supply coming on september might be overblown. this is bloomberg. ♪

♪ >> this is bloomberg daybreak. i'm kailey leinz with your bloomberg business flash. coca-cola is expanding and a hot drink business by buying global brand. it is requiring a british chain for $5.1 billion. that is his biggest acquisition in eight years. both cook and pepsi have been seeking alternatives on the market in sugary drinks declines.

the second-biggest u.s. ride-hailing company lyft will try to beat the public markets. they will start taking pitches next month. an ipo could take place in march or april. and apple and 20 other cash-rich companies used to be the buyer of short-term corporate debt. now they are telling -- now they are turning to sellers. in the left a hole market, making it more expensive for other companies to borrow. the reason why apple and others are selling, u.s. tax cuts are prompting them to bring home the overseas cash flow that had been invested in short-term debt. and that is your bloomberg business flash. alix: thank you. there is no canary in the credit coal mining. the inflows into high-yield credit illustrate a recovery in the credit market. here is what happened in august. the orange line is investment-grade credit and the white line is high-yield. you also have leverage loans returning half a percent for the month.

turning to break it down is peter tchir. and still with us, jim paulsen. outperform a going forward, what is your call? think high-yield is trapped right now and is very expensive. but evenloans are ok, what the fed starting to become -- you not get much pick up on interest rates. there is less price discovery going on in the leverage loan market then you to the bond market, high-yield, or investment-grade. alix: september is a huge month for corporate supply in the ig market. you look at the supply estimates, and what we see the first week is gangbusters. what is the reverse of that conversation? peter: a lot of that is priced in. we are about 90 billion light since the end of june.

there has -- it has been a very, very slow summer. we had that in that should create pent-up demand. i think traders are lightly positioned. so many evil are positioned for this huge supply -- so many people are positioned for this huge supply. alix: the other side of the coin is that there's so much issuance and triple b's. it will throw the whole id market out of it. peter: that is a legitimate concern, but i don't see it happening. i think more and more companies have decided that triple b is the place to be in the ratings. you have flexibility for share buybacks. but if they have any credit pressure, they will perform and make sure they keep the investing great rating. earnings have been off the charts. a lot of these metrics people's -- people get scared of. see year or so, we will that tax reforms have had a big impact. credit concerns are overblown. the rating agencies have been

conservative, too. i am not concerned about these companies going down. i think they are well-managed. we are underestimating the earnings power and the equity market caps. alix: jim, let's talk about the earning power. it is not only if they are going to refinance, they got it -- they got to get the earnings. is there enough to -- the dead in the market? jim: there is no doubt about that. we have been having phenomenal earnings, but the big story in six to nine months might not be how much, you know, earnings have exploded to the upside, but how much the growth rate slows. the degree of monetary tightening that we employed here with the money supply growth 4%, doubling of all yields across the curve in the last 18 months, a big flattening of the curve, and then if you

couple that with high-energy another commodity costs, corporate operations, if we did not have this fiscal stimulus, i think it would be a lot more pupil -- a lot more people concerned about economic slowing and credit risk just some the degree of monetary tightening put in place. i am curious what peter would say, which would be worse, peter, for credits right now, slowdown in the economy, or if we got a hot wage number and a few other hot inflation numbers that took the 10 year yield towards 3.25% to 3.5%? peter: i think the companies can all handle a rise in rates, especially for a steeper curve, they can manage that risk. a lot of people have taken issue. -- i don't think it will have an impact. a slowdown would worry me. jim: i'm sorry. does the monetary tightening

bother you, peter, in terms of that? to the degree of how tight monetary conditions have been the last 18 months? peter: yes. i am definitely concerned about that. the fed has been a bit too aggressive. you see some impact in autos, housing, and you see the companies relying on short-term financing. i do see some pressure and i think the such a slowdown. we had zero monetary policy for 10 years. why are we in a rush to get to 3%? i would like to see a slower monetary hiking just so companies can adapt to that. alix: the other bearish case for overall credit is leverage and. issuance has been high and there are so many investors in these products that there is no other creditor. , theyompany cannot pay are first in the chopping block, even if they are higher in the corporate structure. peter: that has been a phenomenon that has changed. there have been leveraged loans that i liked before and not

currently. they used to have become a robust capital structures. give public high-yield bonds and the senior secured debt, so it was easy. lots of people were trying to price that part of the structure. we have moved heavily towards alone-only capital structures, so you could smaller issuances, maybe $500 million. i think there is less price discovery. that is the thing we will wake up one day, and loans are down 5%, not because much happened because that is when a buyer steps in. that is the area most susceptible to a dramatic pullback. i think the prices are less than they should be. alix: great stuff, peter. thank you so much peter tchir and jim paulsen will be sticking around. european commission headquarters in brussels. the secretary speaking right now. the commissioner chief made a statement, saying they need a more detailed solution for

ireland. if there is no backstop for ireland, there is no brexit agreement. very firm sentiments from him. they are looking at protections of data as one of the issues amongst separation issues that are still outstanding. it is the data protection, but really, it is that irish border front and center. they are saying the solutions on the irish border must be workable, potentially looking for a little more flexibility when dealing with ireland. they are committed to working on a potential solution, saying they made valuable progress. seems like harder lines wanting to end forward to some -- wanting to inch forward with some progress. the two gentleman continue to speak in brussels. coming up, downward dog, upward shares. the best thing i read all day. more on yoga wear lululemon.

this is bloomberg. ♪

♪ alix: time for three companies on our radar. up, the biggest acquisition for koch. the u.k. coffee maker. this is interesting when pepsi goes ahead and makes a purchase. >> this is a brick-and-mortar coffee shop and have a lot of locations, especially in the u.k., and you are seeing consumers buying under pressure. coke interesting to see splashing out in a big way on this where there is a lot of different -- you know i'm a different -- a lot of different factors in place that doesn't fit into their core strengths. it is an expensive deal, too. alix: and they had to diversify.

you are not going to drink the sugary drinks, but also you going to drink? sparkling water or coffee at the end of the day. the other company -- the other story i found interesting was tencent. they have a regulatory wall in china that keeps growing and analysts are still bullish on the stock. >> is interesting to see the reaction. because tencent seems to be a stronger gaming company and it is being proactive about reducing childhood dependence on games and reducing the screen time and a steps in place that maybe it won't as hit some of these regulations, it is certainly a time shift -- a tone shift. this is really a growth area. anytime you see a step back or an aim to curtail usage and the rollout of new games, that is something you have to watch. alix: especially when you look at tech in china. it is baidu, alibaba, and tencent. it is a very different

proposition for the market. >> especially in the short positions rising in tech stocks, that is one of the concerns, is regulation. in the u.s., it is about privacy, but abroad, the rca crackdown on the nature of screen time there -- we are seeing a crackdown on the nature of screen time. back from a come company that had put up -- for so long. >> there were comments over discriminating about different types of women's bodies. they have had their fair share of leadership drama. you have seen lululemon breakout and do really, really well. this is her second guidance increase already this year coming off, you know, really strong performance last year as well. e-commercerowth, 47% sales. abouts fascinating to me

this company, if you look at their gross margins, they had 55% growth margins in this recent quarter. that is better from what we have seen from nike, under armour. i was also looking for broadening that out to the s&p 500. that is more a can to what you will see -- that is more akin to what you will see from qualcomm. this is a company really starting out -- that is really standing out on the profitability front. they are bought for a certain purpose. they're not like t-shirts or underwear you may buy and throw on. people are willing to pay up for the lululemon brand. alix: entirely interesting because i feel like the brand name and awareness is a detriment to them. and now it is a positive, particularly when it comes to underarm and. dick's got hammered. it will be interesting if we see margin pressure split it a more as under armour gets back into gear. >> is a distribution question.

lululemon has been pushing more product online, which is why you're seeing a significant e-commerce sales pop. under armour is also trying to change the way it fails its products, moving away from a department store feel, and looking out where can we get the most bang for our buck? arguably, lululemon sticks out. alix: thank you so much for digging down to the company stories. coming up is our inclusive interview with president trump. you will bring you some of the highlights to what he said about the european union, china, and capital gains. this is bloomberg. ♪

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you are seeing the biggest decrease in european equities and more than two weeks. the dax is one of the losers as european automakers get hit on the index. another asset classes, it is a mixed dollar story. euro-dollar down by .1%. that may be a safe haven bid any other is european inflation slowing unexpectedly last month leading to a downside in the euro. the safe haven bids still in full force, although off the highs of the session. and 19 basis points. buying coming in on the margins all across the curve. not a lot of risk-taking on into the holiday weekend. and like liquidity. we have headlines coming out of the european commission headquarters in brussels. barnier, the european chief commissioner and dominic made a statement. here are some of the highlights i can get to you. barnier says november, at the

latest, is the deadline for a brexit deal, but they are still any for an october breakthrough. harder, he drives a very line when it comes to ireland. if there is no deal on ireland, there is no deal at all. and then you have dominic rob speaking earlier commissioning more conciliatory, saying there is more risk to do, the irish border must be workable in the have made valuable progress, but he declines to give odds on an brexit breakthrough by october. the euro is dead flat on the day, so the hard deadline is november. raab is not convinced he can give the odds of a brexit breakthrough. president trump fighting a multi-trade war. two of his opponents are equally bad. he said in a six loose of interview with pres. trump:

bloomberg at the white house -- pres. trump:they create standards that make it impossible because they have standards, like with medical equipment, they created new standards. not that the standards are higher, they are different. what companies can't get the medical equipment made by philips and others. you have to change your ways because the european union is almost as bad as china, just smaller. --x: 20 me from washington joining me from washington is our correspondent. what happened to that handshake? it looks like we're back to conflict. >> the president is basically saying, even if the europeans go to zero tariffs on cars, he would not be satisfied. he still wants to take some punishment towards the european union because he believes the european union is taking advantage of the united states, despite the fact there is an alliance between the u.s. and the e.u.

the president has said that trade deficits between the european union and the united states is a problem he wants to fix. he said that the e.u. is almost as bad as china, an indication that despite the handshake and the fact that he came to the white house recently, the president is willing to take pretty tough actions on the european union, potentially, tariffs on cars coming from the e.u. was: yesterday, the news the e.u. will be willing to go to zero tariffs on autos. the president trump saying yesterday, you know what, not good enough. >> that is exactly right. the president said that is not good enough because he talked about the fact that there was to be a trade deficit on autos because he believes the european market favors european cars. european consumers like the mercedes rather than the chevrolets. he is not satisfied with the

idea of zero tariffs on both sides. he wants to punish the european union with various tariffs. his ultimate goal is to get rid of the trade deficit, which he says is $150 billion. he is looking at different options for doing that. it is important to separate what the president says in this interview versus the negotiations going on with various counterparts on the u.s. side and the european side. it is possible they can come to a deal. but based on the president's rhetoric, he is committed to driving a very hard bargain. the president is not satisfied. he wants more from the europeans. with he is not satisfied the requirement to label a particular currency a currency manipulator. there are requirements each fx country needs to meet. here is what he said only evaluating that dynamic for the u.n. pres. trump: it is a formula. and we are looking at the

formula very strongly. as you have seen what has happened with the wan, they are trying to make up for lack of business by cutting the currency. it is no good. you cannot do that. alix: and this comes on the heels of a trade war issue not over yet with china. what are the odds that he can actually change what the it asements are to label a currency manipulator? >> the president is not on the same page as his treasury secretary who has said the exact opposite of what the president has just said. it will be those agencies that will make the final decision on what happens with china, and it is not clear that they are reading from the same playbook. the president looks like he is trying to drive a hard bargain with china. he has even complained about not having the fed on his side. he said the u.s. has a strong dollar and that makes it difficult in this era of trade

wars where he believes the chinese and europeans are cutting their currencies. it is not clear that other cable within his administration agree with him. they have not labeled china a currency manipulator, and it doesn't appear that the actions over the last two months have added to the president's side of the evidence. based on what the treasury secretary said, china is no longer, or not at this point, cutting its currency. alix: thank you for joining us outside of the white house. also with me is jim paulsen. he joins us from minneapolis. the backdrop to this conversation about currency manipulation is, president trump says he will impose tariffs products on china after next wednesday. you can see where we are now. jim, what is your base case? know, ihink that, you

really think the trade worth, alix, is likely to wind down between now and year end for a few reasons. president trump has put increasing pressure on the rest of the world. so inshowing up more international economies that are starting to flow under the pressure a little bit. if we go to $200 billion on china, they are already suffering a little bit now, and could suffer more. i think, you know, the fact that mexico has agreed, and of canada comes in and be getting north american agreement, that would put pressure on europe and china as well. the pressure is heating up, which probably bring some sense of conclusion to this. i think in addition, trump faces midterm elections, and he will want something resolved before then. and i think that is why we are seeing the north american thing coming together now. and finally, if the economy does

slow down a little bit, alix, the pressure on president trump will increase dramatically because everyone appoint a finger that the trade war slowed us down. and., weetween now will wind -- i think between now and year end, we will wind this down. alix: you say global slowdown with the trade issue, but for example, if you take a look at china pmi, services and manufacturing, there is no indication that any kind of trade issues are seeping into the data. what do you make of that? if we don't see anything seeping into the data, will it make a difficult case to come to a trade agreement? jim: i think so. but i do think we are seeing data out of china that is getting them some pause. and they have backed off their tiny in china and moving towards -- in the have backed off their tightening in china and moving towards easing. there is pressure, but i think

you are right. if this does not bring pressure to international economies, then i think ultimately, president trump is going to probably have to find a way to the back out of this -- to find a way to back out of this. i cannot see how he can continue this aggressive approach when people are going to start pointing their fingers at him for responsible for slowing this recovery down in the united states. alix: jim, such a pleasure to get your perspective. jim paulsen, pleasure to chat with you on this friday. we want to get an update on what is making other headlines outside of the business world. kailey leinz is here with first word news. kailey: canadian officials reportedly don't believe a nafta agreement with the u.s. can be reached today. negotiations hit a roadblock last night. canada has offered concessions dispute mechanism, but the newspaper says u.s. trade representative robert will

not go for it. president trump is considering a new tax break for capital -- he told that they may issue a regulation that would index it to inflation. figuring if it can bypass congress. erdogan is something to find about the u.s. and president trump. he says no one can make turkey neil with dollars or succumb to economic pressure. president trump said erdogan let him down by not releasing an american pastor being held in turkey. 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. coming up, it is been a rough month for emerging markets, but it is getting worse. of emerging markets global strategy is next. this is bloomberg. ♪

♪ >> this is bloomberg daybreak. i'm kailey leinz in the hewlett-packard enterprise green room. equity's, a global strategist. ♪ kailey: president trump is stepping up its criticism of technology firms.

the president told bloomberg a company such as google, amazon, and facebook may be in an anti-trust situation, but that he cannot comment publicly if they should be broken up. turns out that google and mastercard cut a secret deal to track retail sales. that theyhas learned measured retail spending. google advertisers could track whether the ads they let online led to a physical sale at a store. the store never told consumers of the arrangement. bank fargo is working with lenders to package home loans and sell them to investors. your post says the bank -- the new york post says the bank is looking at first-time homeowners and are backed by the u.s. government. wells fargo is not commenting. and that is your bloomberg business flash. alix: thank you. it has been a very rough month for emerging-market bonds.

turkey is taking a hit, the biggest loss. argentina and brazil is not far behind. joining us from boston is geoff dennis, ubs had of global emergency market -- ubs head of global emergency markets -- emerging markets. do you feel there is panic or is a capitulation? geoff: i do not think it is capitulation. we put a note out a couple of weeks ago where we said, we thought a lot of evidence was deteriorated badly in em, but we are far from capitulation levels. what you saw were to delve phases of selling. we had a rae food week -- we had a very, very week of selling driven by the crisis in turkey. thespillover effects on euro being weaker, the dollar being stronger. then we had a bit of a pause with a nice rebound as the

dollar softened. and now we are back into a price environment. i think we should not overdo the price environment. what is going on here, it is making the asset classes look obvious a rather weak at the moment again. alix: let's break down some of the brats. i want to start off with turkey. we want to look at what happened to the currency so far. a record low after record low. the deputy governor set to resign. not going to participate in traditional monetary policy like in argentina, but on the sidelines. but that is not working either. is there any solution on the monetary front for turkey? geoff: there is no doubt that the solution for turkey on the monetary front is a sharp increase in interest rates, combined with much greater confidence than there is today about, shall we say, the prudence generally of economic policy. fiscal policy is too loose and

monetary policies too lose. the situation in august was exacerbated by the political spat that broke out between the u.s. and turkey. and you had a strong dollar, which i have said many times on your program, is a problem for pem. these things have made what were poor fundamentals in turkey really stand out anyway with a large current account deficit financed by short-term capital flows. this has not been inadequate response in our view from the turkish central banks. the most important thing you could do in turkey to really improve his start to bring money back would be a sharp increase in interest rates. we are waiting for that. alix: but you have argentina that did it and that is not helping them either. if you come inside the bloomberg, the top panel is the blue line. that is rate hikes. you can see it is soaring right -- and is at aces 600 basis points.

the peso is continuing to rise. the bottom panel is turkey, they are not doing anything with rates and the lira is still falling, so you cannot win on other fronts. geoff: every country is different in argentina is facing a complicated situation. if you take it back a period of several months, it has been driven by confusion about the direction of economic policy. it has been driven by a parent compromises on the central banks. they have not been able to get inflation under control. the growth of the economy is very, very weak indeed. it has been may work -- it has been made more complicated by not a good messaging process with respect to any imf loan they have been seeking. and now they want to frontload that loan and the imf has agreed to that. you have to have talks about that. it is a more complicated situation in argentina, which is tried to recover after many, many years of very, very poor

economic policy. otherfair, alix, these two weakest, although argentina is not part of the emerging market indexes at this point. but every country is different. meanwhile in august, a number of other countries, most of asia, except for china and parts of emerging europe, have been rising. it has been very idiosyncratic in our view. alix: 100% accurate. em equities holding up, which speaks to that china divergent story. but wrapping up with brazil, talking about idiosyncratic risk, how much more downside do you think is left in brazilian assets? geoff: our view is the dollar is going lower by the end of the year, not by much against the euro. that means in rw, there will be a rally in the reality between now -- a rally in the real. is the issue in brazil

upcoming election come around one commercially october come ofund two, second week october and it will require a lot of turbulence during the period. the once that period is over, when a president was elected for the first time, we will see policy stabilizing and interest rates be raised, and the currency will rally. their problem has been the election not going as well. the markets want to see more of a right-wing reform candidate coming through in that has not happened yet. and the economy has been shockingly weak compared expectations from the start of the year. in a year with the dollar has been very strong. we have a bit more turbulence to go. but you should get a rally in brazilian -- [no audio]

alix: some say that large-scale defaults in turkey won't impact em in asia because a difference in the macro stability, but if turkey winds up blowing up the dollar and the euro market and strengthens the dollar, that is the knockout effect. what you think of that pass through? geoff: i had to relearn to my basic rules because i did not think turkey could blow up the emerging markets, but it did in the first half of the month. the consensusgh of european banks and got a lot of exposure to turkey. if you are going to get a full on milk down over and above what we are getting now, which we do not believe will happen, by the way, but if that were to be the case, that would impact emerging

markets because it would be dollar positive and put the euro under pressure, which would put all em under downward pressure. gloomy ofhat is too the scenario given how low -- turkey equities are down and the currency is down will over 20%. to get too gloomy with widespread default is not correct. alix: geoff, really appreciate your time. geoff dennis of ubs. the mpr -- more on jerome powell's fast start next. this is bloomberg. ♪ ♪

♪ alix: the emperor hikes back. we are getting creative with our titles. i love it. jerome powell is floating the idea of a fast start by jackson hole with a rate hike compatible with financial stability. is it -- is that appropriate? joining me is the asset

reporter. talk to me what the change could be. note thatpowell did the past couple of cycles, destabilizing forces have come through financials. that prompted bloomberg economics to raise the concept of, she we be looking at a fast start for an interest rate compatible of financial stability compared the fed's current star that is an interest rate compatible with full employment inflation? that is the actual objection. that is why they are looking more at those. it raises the issue as we have to the fed companies said in 2010, he doubts there would be a fed past and prevented the access of the financial crisis. it gets back to this argument of, what are we looking for in terms of monetary policy's ability to stabilize the economy? and our rate the proper told to do that?

a recent paper suggests you can almost have a free lunch if you are an advanced economy, using more matt oh tools to tweak ratios, and not having that effect your inflation or unemployment objectives. another fun thing is, are higher rates even something that work against and reduce financial excesses? i will jump to this chart here. is rulelly, what we see 72, the amount of time it takes you to double your money. it was fairly low. alix: i love it. and these references, how can you beat that? that wraps it up for "bloomberg daybreak: america's." ♪ ♪

we arerom new york city, 30 minutes until the start of trading, and this is the countdown to the open.

escalating trade tensions. president trump saying the e.u. is almost as bad as china. the president reportedly pointed round of tariffs on chinese good. a hot august for u.s. equities, grinding out new equities. we made it to the last day of august. we made it to the long weekend. here is how we sit. a bit of a risk off feel in the market. euro-dollar down by 0.3%. heart of that is a stronger haven currency. the other part is european inflation slowed down, unexpectedly. two-year yields are now down by about two basis points. crude down by 0.3%.