said about her nomination to head to the e.c.b. but how hard would bit to fill draghi's shoes? president trump is nominating two members including one who is at least flirted with tying monetary policy to gold. and a charge your engines. the car maker who beats delivery estimates by the tesla by a mile and the stocks responds in kind. welcome to "bloomberg daybreak." i'm david west on in new york london. et fu in scarlet: it's yet another world cup final with the victory yesterday, this is team standoff's 11th straight win, surpassing norway which has strung together 10 straight victories.

david: if they could get the pay equal to the americans we would have all -- would be all set. finals on sunday, right? scarlet: yes, it should be a great match. can't wait. david: neither can i. scarlet: looks like we're going to have a higher day on wall street, building on gains after the s&p set two record highs the last two days. a lot of data coming up over the next hour and a half. we've got factory orders, durable goods, i.s.m. services and euros, slightly firmer against the dollar. p.m.i. improved in june. but all the growth is really in service, not in manufacturing and the demand for havens continues. you can see the green color showing buying and treasuries, bringing the yield down. 1.95%. and with that demand for havens, extending.g gold euro's six-year highs. david: it's time for the morning

brief. this was coming up today. we're going to get u.s. trade balance data for may may. around 9:15 this morning, ford will be releasing its latest sales for america. and we get june market services and composite p.m.i.'s for the united states. but right now, it's time for bloomberg first take joined by uke in new york. let's start with that big story that broke yesterday. christine lagarde is going to be nominated. she has to be confirmed to be the new head of e.c.b. she said i am honored to be nominated for the presidency of e european central bank --

this is a surprise because i didn't hear her name mentioned until the last couple of days. >> it was a little bit of a surprise because it feels like she was kind of a come-from-behind nominee until yesterday, we really didn't get a sense of how far she was into the process and then yesterday evening, that news broke here in europe and suddenly, we got the nomination news or the confirmation. and so yeah, it's quite a surprise but it seems to be a cautiously pleasant one for markets over here. we spoke to some investors yesterday and it looks like they're viewing her a kind of consensus building sort of candidate to succeed draghi. investors are always concerned when it comes to central bank whether it's a case of continuity or a case of radical change. every time there's a leadership change in central bank and it looks like for the moment, investors are judging her to be more of a consensus builder and therefore, a sign of continuity

at the e.c.b. scarlet: christine mentioned continuity, mario draghi set the table to do more easing if necessary to bolster the european economy. how do investors view madam lagarde's approach towards quantitative easing? >> she's open to it. this is one of the positive to her and even beyond the policy standpoint. what's fun that's brewing here is it's almost the same situation that we've got at the fed. you've got a lawyer going to the top and then someone, the number one will probably be leaning on is more of a policy expert at the fed. and at the e.c.b., lagarde will be able to draw upon lane quite often who have a similar dynamic nd that's something that she enjoys. i would rather have a more political savvy and political

influential head of the e.c.b. than when i -- ivory tower type based on the challenges that region faces. david: so christine, to pick up on what luke just said, how much of the background of christine lagarde to indicate europe said they needed at this point? how much is economics? and how much is politics? she's very skilled politicians right in the middle of a crisis. well, david, mario draghi's line is monetary policy cannot lift off the european economy alone. they need fiscal policy and this is where christine lagarde might be able to help. she might be able to get that traction from the euro area governments. a lot of them are very desperate. and finally, bring those politicians to the table and help them meet the e.c.b. in the middle when it comes to helping the euro area economy both from the monetary and fiscal policy side. scarlet: let's turn to the

second topic which has to do with the federal reserve because the president has now picked two federal nominees. luke, he's done both, right? he's picked some conventional nominees and some really out there nominees and shelton kind of being the candidate that's out there but nonetheless, both are likely to present the president's more devilish tendencies. >> in the case of mr. waller, we have someone who has been a longtime friend, longtime colleague of james bullard and james bullard has easier policies right now at the federal reserve and was rumored and came out and said she had been approached for a board of governor seat. and on the other hand, i'll just read off a quote from the policy director at the employee america and this is kind of a take on

the obama era monetary policy. you can see how changes from january, 2013. if we continue to allow the fode underrate deficit spending we will witness the steady, demoralization of democratic capitalism. this does not sound like a lot of things she's saying now. people will have the same concerns they had with war ren cane. david: this might further weaponize curtains yu. -- currency. she really thinks she should be looking around the world to see how come dating other central banks are. >> yeah, david. and it just speaks to how central banks globally are increasingly aware of what their counterparts are doing. and years ago, we've seen an insistence from policymakers that they're only looking at their mandate which is to mind their domestic economies but increasingly because of the

trade war and just the increasing connectedness of the global economy, they've been able to do that less and less. so now, it really is a heightened awareness that they do have to pay attention to what their colleagues are doing and based on the recent shift in global central banks we've seen, it does show that they're paying attention to each other. and so with regards to the currency, that would apply too, that they'll be looking at each other's currencys and they'll be thinking about the interconnectedness and the impact of their respective economies on that. i would expect the fed nominees to be increasingly mindful of that. their global -- their place in the global face from here on out. david: let's go to cars, specifically tesla. really shot the lights out. did much better than was expected and you can see their stock went up as a result. so luke, the question i guess i really have in my mind is how

much of this is true and how much of this is timing? people were racing ahead of the cutting of the subsidy from the u.s. government? >> yeah, it's exactly like what we think of when we see u.s. exports jumps in the rate. some are worrying about that dynamic even bullish analysts of the company, less warm lately has highlighted that dynamic. there's the other concern with the company which is, essentially, they are potentially self-cannibalizing and that they're more affordable option is becoming more and more popular and other things that analysts are harping on is that they didn't really effectively and explicitly reaffirm their full-year guidance and subsequent ones in order to meet that target. so there's a lot of good in the present results but as always arc lot of concern and

questioning and doubt about whether sustained profitability is in the cards for this firm. david: thank you both very much for being with us. scarlet? scarlet: thank you so much. we do have some breaking news on a canopy growth. there is a board chair. john bell has been named as board chair and bruce clinton will be stepping down as co-c.e.o. on the company. as you can see, the stock down in entry market trade. from new york and from london, this is bloomberg. ♪

that exceeded the best mark set at the end of last year. this current quarter could be a bigger test for tesla. beginning this week, the tax incentive for car buyer was cut by half. david? >> thanks, viviana. yesterday, christine lagarde was nominated to succeed the e.c.b.

at the end of october. she said she is honored to have been nominated and she step back uring the nomination period. how much of this is the europe really said we want christine lagarde and how much of it was it's a package deal that includes the head of the commission and the head of the council? >> macron was beaming yesterday. you could argue he was the big winner of the day. he got a french woman at the helm. this is the job that really matters. everyone in the new commission speaks french. he made a reference to that and fundamentally enough, the new commission president, if she is

approved, may be german but she was his choice he put her name on the table so you could argue overall, it's a very good night for macron. no central bank experience but leaders hope that the factions will gain her credibility with markets. scarlet: maria, alicia lavine has told bloomberg television that christine lagarde is a political figure than an economist. is she seen as an political figure, who would be her biggest supporters? where might there be friction among the e.u. leaders? >> that's right. and that was a big concern that came up yesterday in multiple press conferences, the idea that the european central bank could become more politicized and you're right. christine lagarde is a lawyer. she comes from the i.m.f.-and-she does not have any

central bank experience. leaders hope she can translate some of those political skills needed to gain consensus at the european central bank. but it's a very good question. the two big jobs that the european central bank are now in the hands of two former politicians and the focus will now turn to phillip lane at the european central bank to get technical more experience. scarlet: of course, when you look at how the markets have reacted, we're going to point ou to g-tv go on bloomberg and this shows euro dollar. and you can see it's been coming down over the last year or so

but it's now at the lowest level since 2007 on lagarde's nomination to the e.c.b. so markets clearly quiet on the back of this nomination. we want to bring in some perspective and we want to invite paul richards, medley global advisors president to join us to give us his thoughts on this decision. paul, great to speak with you. i guess the question now for investors is what does this mean when it comes to mario draghi's promise to keep q.e.-as a possibility? is it lower or higher under mario draghi? >> first of all, i would say that the important thing is for the market, they didn't get -- the market you're seeing the reactions there in that -- is a reaction that i've got -- they've got somebody that they like and that's the thing about lagarde. she's got credibility with the

markets and i would say with european politicians. given the fact that she had four years in the helm of the finance ministry in france through the financial cry is and did a brilliant job at the e.m.f. so i think what she's going to do is inherent what draghi is likely to do in except the odds of him going more devilish and giving some more policy in september remain very high. she picks it up and continues to kick in and that's why i think you're seeing european higher as well. david: put so i aside q.e.-for a sect and the bottom red line is two cuts and the second line up is one cut. and what this say is there's more than a certain chance of one cut by september and then by a year from then, it's going to be two. is she going to have a tough time meeting expectations?

i mean, mario draghi set up the expectations for being pretty lenient. >> yes. it's very similar to what the fed is doing. that one cut, that move in september, similar to what the fed is going to do in my opinion by 25 basis points, not the 50 the market's looking for. that is insurance. that second perceived cut is if trade negotiations go awry. so i think that the developments we saw over the weekend were very important. if the u.s. and china cannot do a deal, then that second cut comes into play on both sides of the atlantic. scarlet: and you'll have to navigate that very carefully because it all depends on what transpires over the coming weeks in those negotiations. paul, i want to point you to something about when discussing christine lagarde's nomination he said in communicating with markets she would need to engage her plain speaking style in the constructive ambiguity with

flexibility during an unusually uncertain time for the regional and global economies. paul, what will be her number one challenge? what will lagarde need to be constructlely ambiguous on? >> it is very hard to take that style. i remember going to a dinner that she spoke at in washington a couple of years ago. she's very, very direct and i think in a way that might be her biggest challenge is to do the central bank speak and that's something that the europeans will be very comfortable with. they trust her. they know what she's doing. people are criticizing she's not a trained economist but think about the fact that she is inheriting draghi's old team and that's very positive. in addition to having a set of language that is very positive. so i think if people are looking for her to sort of take the high road, start thinking more about the politician e.m.f. style as opposed to a central banker. she's going to be different.

scarlet: go ahead, david. david: in, after you. scarlet: no, no, when you said she's going to have more of a politician style, where is the pushback going to come from then? because politician, they have friends. they have also antagonists. >> they do, but at the end of the day, i think she has enormous respect within europe. i think she gained that respect did you the financial crisis. so you see people taking her on. so the have get the thumbs up from president trump. he will probably be offering the job to draghi next in the u.s. i don't think she's going to get a lot of criticism. i think she will get a lot of leeway for six to nine months and she's going to inherent what draghi does in september, pick up the reins and run very smoothly. this transition is going to be much smooth around the the markets think, different to what -- would be like. scarlet: all right, paul

richards in new york, you're going to stick with us because coming up, charge your engines. shares of tesla are soaring this morning and premarket trade after the model 3 post a record quarter for deliveries. we will discuss all of that next. from new york, from london, this is bloomberg.

david: shares of tesla are trading higher after the electric car maker beat analyst estimates by quite a margin. joining us now is craig of bloomberg news heading coverage of u.s. autoas well. most of the market were surprised. were you? >> on the model 3 side, yes. that's where you saw the positive aspect of this report. there's a lot of concern about just how much demand there was for that car. this was the first full quarter that they had deliveries to china and europe.

so it's important to keep that in mind that this was sort of their first full run at being able to deliver there. and they were able to clearly get some lo jisks issued figured out and here in the u.s., strong demand for that car. david: demand for the car or demand for the tax break? >> that is the key question going into the third quarter. you're referring to the $3750 industrial tax credit towards tesla. that has as of july 1 well. saw the big dropdown in demand in the fourth quarter because the tax credit went from $7500 in half. so that is the key question going forward. scarlet: another key question is whether the model 3 is cannibalizing sale of the model x model x. what have we learned? >> that's the other half of this report and that's sort of fodder for the bearers if you will. the model s and model x in the first quarter was very, very weak.

you saw in the sort of $12,000 range. this quarter, they were up a little bit but it's somewhere in the 17,000 range. and we haven't seen them selling at that sort of level since 2016. so it's very weak on that side of the ledger. avid: two iconic cars, the mustang and the minivan. >> and don't forget the role that he played in bringing jeep to chrysler. so this is a guy who's probably as big as they come nowadays in terms of sort of titans of industry. david: changed the off industry. iacocca dead at the age of 94. >> if your credit card debt is out of roll and if you're in over your head, there's a credit that credit card companies don't want you to know. you have the right to let us settle that debt for a fraction of what you owe.

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scarlet: this is "bloomberg daybreak," i'm scarlet fu in for alix steel. equities higher building on gains over the last two days. a lot of data coming up in the

next hour that may change course. factory orders, durable goods, all that leading to the jobs report on friday and european stocks up higher as well. not so much the case in asia or the emerging market but we should mention that the emerging markets had a blistering run in the month of june. stocks up 6.2%. e.m.b. gaining 3.5% for the month of june. and demand for safe hurricanes continue whether we are talking about 10-year notes or japanese en the 10-year yield down to 1.96%. it fell earlier which was last seen after the president was elected in november of 2016. oil prices moving higher. so recovering from yesterday's drop. that's w.t.i. there and the push-pull between concerns of slowing global growth versus the decision from opec plus to extend cuts for another nine

months. we also have some breaking news. georgia bank posting a 2019 net loss on restructuring charges. and as well, this plan to shrink its investment banking division will cost as much as five billion euro. we are looking at the shares down on the day, off by half of 1%. deutsche bank according to bloomberg is exploring selling unwanted assets as it tries to overhaul the c.e.o. david? david: thank you, scarlet. we go to viviana with first word news. >> china may buy some u.s. foreign products as a gesture of good will. the volume is likely be smaller than before. purchases could include soybean, corn and pork. how much will be on the process of the newly restarted trade talk.

christine lagarde will be the first woman to run the policy. she was nominated to replace mario draghi as head of the european central bank. she will be taking over as the e.u. economy appears to need fresh stimulus. and president donald trump picking two nominees likely to back his call for lower interest rates. christopher warl is the more -- waller is the more conventional choice. dy felton has been criticize bed her unconventional use and advising the. global news 24 hours a day on air, powered by more than 27,000 journalists and analysts in more than 27 countries. this is bloomberg. david? david: thank you, viviana. earlier, bloomberg spoke with an exclusive interview against an mmediate rate cut.

>> right now, my forecast as the most likely outcome is that inflation will move gradually back to 2%. the early this year data that was softer means it will take a bit longer to do that but right now, i still have that as my most likely outcome. however, you do have to think about the underlying trend in inflation. some of it is cyclical that factors affecting inflation but some of the structural factors, things like, you know, businesses, you know, with new models of how they're competing with one another, price setting behavior, consumer serge behavior and those structural factors are probably weighing on inflation as well. scarlet: can you still say that the fed fund rates is below nutrient until >> i think the fed funds rate is about neutral right now but as the economy dictates where the rate is, we need to move our rate with it. so if it is true, right, then

instead of us being a sustainable growth scenario, we are entering a new phase where it's a weaker scenario than the economy will move down and that will be one reason to move our policy rate down. but again, i don't think i have enough evidence to suggest that things are going there. i want to see more evidence before we get to that point. >> what have your business con contacts been telling you about business hiring and has it trade to -- lead to trade tensions or something else? >> we're more representative of manufacturing than other parts of the country. trade is definitely a concern on the trade policy uncertainty about it is definitely rising in terms of their concern. however, a majority of them say we haven't changed our investment plans. we're still on track with what we plan to do. there a few now that are saying i may be rethinking that or reassessed it but so far have

held in there. some firms have reorganized their supply chains but others are just taking in stride and just saying i wish the uncertainty were over so i would know things are going but i'm still on plan. scarlet: and that was cleveland fed president loretta mester speaking to tom keene and francine lacqua in an exclusive interview. joining us is carl, the commander in chief u.s. economist in new york and paul is still with us as well. paul, let me get your take because president mester was talking about how trade was a concern for the folks in her region. now that the president has nominated two picks for the federal reserve board, how big is trade going to weigh in on their thinking and how they approach monetary policy? what do we know about their views on trade? >> sure. well, judy shelton seems to be unrelentinged a hert to the

gold standard. on the other happened, chris warl from the st. louis fed, i wonder if this isn't laying the ground for the administration of can you continue pushing towards jim buller as the fed chair? certainly they have had some outreach to him and the president is not happy with powell's approach to policy. so maybe this is laying the ground work. we'll see how that pans out. but absolutely, they're concerned about the loss of business confidence. and the best way to measure business confidence is to look at what businesses are actually doing in terms of putting their money where their mouth is in terms of both hiring and nvestment. the hiring front is going to be on the fulcrum point whether they decide to move at the end of this month or wait till

september. the fed is proceeding towards a recalibration of policy. the question is timing and we can hear hawks even moderate hawks here like loretta mester trying to delay little bit so as to avoid the feeding frenzy when the fed gets roped into a lot more accommodation than they initially wanted to offer. david: we all heard the markets breathe a sigh of relief after osaka. we now have jobs numbers coming out on friday. how critical would those be given how disappointing they were last month? >> it's a big number. starting with a.d.p. which is quite accurate last month. but friday is going to be very big for the market. we see a continuation of the slowdown, that to miss just a complete green light for 25 basis points. in the market's mind, you are getting a cut in july. the question is how big? in my mind, it's 25 basis points because it's an insurance cup that you can follow with the 25 as required in the fold but i

think the number would need be extraordinarily strong to take july off the table. i just don't see that happening. scarlet: ok system we're already pretty much anticipating a rate cut in july, when i look at world interest rate probability on the bloomberg and all indications are the odds of a rate cut are at 100% for july and going forward, paul, what if we get the china trade deal perhaps say in the fall? the talks go well, things are moving quickly. what's the scope for rate cuts after that? >> that's a very good question. my base case going into osaka was it was going to go better than the market thought and that remains my view. very interesting listening to navarro yesterday. he's coming on in half han hour's time. his language has changed. i think a lot more with the chief in osaka than the market thinks which is why they're waking up to it now and we're starting to see bit of a tone

oming into risk again. it is higher than the market is predicting and expectations for another cut in the fall by the fed in my opinion is props a little bit too elevated. i do think that the e.c.b. will throw in a scenario in there. globally, i think central banks have put insurance into the game. that's what draghi was telling us three or four weeks ago. so gets the fed this month and you do get the e.c.b. in september. and then we see how this whole trade game plays out. but i think the bigger problem is i think there's going to be another trade war after october and i think that's going to be the u.s. and europe and that to me is going to be a problem. scarlet: u.s. and europe. ok, interesting. while i have you there, paul, we've got peter navarro, an adviser to the president joining us later on to discuss china trade. he's made comments that make him sound a little bit more

optimistic than he might have a couple of months ago. what would you want to hear from him that would make you more comfortable with the idea that we'll get a trade deal? >> i want to hear what he was saying yesterday. i think that his tone has changed. i mean, this is a hawk in a very, very serious way. it just strikes me that something happened in osaka. i think you want to see optimism. he was even talking yesterday in global press about the fact that the market should go up on this, which shows you where i think that the trump administration remains focused. then measuring their success on where the markets go and you had navarro specifically mentioning markets yesterday and optimism. so to me, i think you want to see a continuation of that message and i think if you see it, you're going see a 3,000 s&p today. david: i don't want to leave trade behind, but we have roll -- what are you projecting? it's like 164,000. >> we're at see,000.

so again, that weakness here earlier in the cycle. we've seen many episodes where we've seen a near stall in the payroll numbers and they always come roaring back with over 200,000 gains in the subsequent month. i don't think that happens this time around because it's really not just a fluke. it's a business confidence issue. what we saw in osaka, we saw a version of this movie before in buenos aires before. david: almost verbatim. >> exactly and this sense of optimism is going to falter as the year wears on the fed will have to go two or maybe three more times. i think september, not july, but that depends on the payroll number for sub 100 on the feds moving at the end of this month. but the important thing is look at 10-year yields. we're below 2% now. the fed has to choice that lower. so one federate cut is not going to be enough. if we're at 2% on 10 year, the fed cut is twice this year. if we're down to 175 which is a

resistance level, then the fed has to go three more times. david: paul richards of medley global advisors and carl, thank you both very much for being with us. coming up, another piece of deutsche bank's overhaul. the bank looks for buyers for its unwanted assets. more on that on wall street beat and this is bloomberg. ♪

>> the hewlett-packard greenroom, peter navarro, stoinlt the president for trade nd manufacturing policy. here's your bloomberg business flash. amazon will hire more than 2,000 workers the u.k. to develop its latest technology ventures the employees will include engineers, data scientists and engineers. by the end of the year, that will raise the british workforce to almost 30,000 people. b.m.w. is running up the score against mercedes-benz. they doubled its sales lead in the u.s. thanks to a fresher line of s.u.v.'s. mercedes has been the top selling luxury grand the u.s. the past three years.

that's your bloomberg in a flash. david: returning to wall street beat, this is where we cover three things that wall street is buzzing about this morning. deutsche bank assets for sale is said to be seeking buyers as part of its overhaul plan. and the investment bank, former c.e.o. is considering starting a boutique that may force him to give up ten's of millions of dollars. and sales to broadcom. broadcom is in advanced talk to purchase semantics within weeks. so i guess it's not a big surprise. >> these assets are pretty ugly there. are a lot of non-performing loans. but the thing about these assets is if they sell them, the worry is if there's any writedown associated with them and selling

them might be in bits and pieces and it's not clear whether they can make this happen. and this is part of their plan to make a bad bank so-called and so instead, they might to start to exit some of it. scarlet: they're also reports that all this restructuring is going to cost a lot according the&lead to a 2019 net loss as well wham kind of expectations will investors have for deutsche bank financially? >> it will be costly but so far, that there's have been some excitement so far about a more drastic restructuring plan. they've been bleeding for a while here. remember, you're getting rid of with a could be 20,000 people, it could be very much money in severance cost and the worry is they may need a capital raise. david: there's a challenge here for anyone is not selling at a stress price. because everybody else, all the other banks note they got to sell. >> that's exactly right. and if you're a competitor, like we were talking about the prime

brokerage assets were more exciting. you're a competitor, what's been the strategy is to steal your clients and steal talent rather than paying for asset anyway. >> i want to switch gears here to orchel. longtime banker, tried to move over and now looks like he's interested in perhaps striking out on his own. what can you tell us? >> this is a very exciting story for a lot of reasons he is the head of the u.b.s. investment bank and when that didn't happen , they did an about-face, now there's threat of legal action euros much as 100 million on the line here and for him to striket on his own, that would amount to about 15,000 euros in pay.

it's been up in the air for a couple of months now and if he does strike on his own, a boutique would still be a rival firm to u.b.s. doing this would be very expensive but the important part of the story is it's very early and he's talking to a wide range of people. that means rival banks and even technology firms in silicon valley and we've that out of the bankers before at that level. david: bloomberg says broadcom is in talks with symantec. it would be a big deal. $14 billion or something like that. >> it would be a big deal and hawk 10 is very exciting to the banking industry and he does a lot of big deals. last year, there was c.a. technologies and $18 billion cash deal in which he raised financing so much symantec shares are already up on the news. hawk 10 is very ambitious deal maker but the industry has

already been consolidating quite a bit but their high premiums required to be paid to get assets. scarlet: i like the way you put it, ambitious deal-breaker. his plans to acquire qualcomm did not come to pass. how badly does he need to make deal right now? >> the acquisition strategy has been criticized quite a bit because he has been a leader as he stretched too far. with that said, symantec has problems of its own. stocks has declined for quite a while now. they've lost their c.e.o. they have to reinstate their earnings. maybe it's a good time to get in. david: ok, thanks so much. coming up, 6,000 american flags, 5 orchestra members and 13 towers. that's next. this is bloomberg. ♪

david: tomorrow, the country celebrates fourth of july and our bloomberg team will be celebrating up in boston with the boston pops along with about 400,000 people on the bang of the cardinals river. to give you taste of what's to come, here's the boston pops spectacular by the numbers. ♪ [applause] ♪

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david: so that's the boston pops by the numbers. you're going to be over in great britain and they don't view this stakes quite the way we do. great britain lost, didn't they? scarlet: yeah. no, that's a good point, david, although there were fireworks over the weekend, interestingly enough. i don't think it was quite for independence day nonetheless. but just watching that makes me feel really home sick since i won't be at home for fourth of july. but i did spend the weekend in london and i saw a statue of george washington in the city of london and i also of course can't help but recall there's nothing as american as baseball and the yankees and the boston red sox were in town. the yankees swept the red sox. 59,000 people went to london stadium to watch the yankees win some there are a lot of americans. david: as i understand it on a

soccer pitch, actually. because they don't even have baseball stadium and the score was like american football scores than they were baseball scores. scarlet: pretty lopsided but it was a fun time for all and it was amazing just how many yankees hats i saw. i didn't see any red sox hats interestingly enough. david: good luck getting a good hot dog over there. head of capital markets and institutional strat gist is there. >> we're looking at stocks getting ready to open higher on this holiday shortened day. we have dow futures up by .2 of 1%. and european stocks up by .8 of 1% as investors continue buying bond as well. ♪ ♪

-- i am honored

honored, that is what was said by the first woman to be nominated to the ecb. newgold standard, two dovish trump nominees to the fed. defensepremier globalization and the opening of financial markets. can the u.s. and china bridge the gap? peter navarro, senior white house trade advisor will be with us. welcome to bloomberg daybreak on this wednesday, july 3. i am david westin in new york. scarlet fu in london. taking a look at bonds, particularly the 10 year. scarlet: the 10 year yield falling to as much as 1.987%. gives you a sense of how much demand there is for treasuries. that demand is not limited to u.s. bonds. we are seeing gold prices among -- above $10.

making record highs, futures indicated for a higher open as well. what happened here? how can you have investors demanding risky assets in the safest havens? personality.split david: if gold and u.s. bonds were not enough, take a look at european bonds. ,ou have the italian 10 year 1.698%. the u.s., 1.9. people are just flocking to bonds. scarlet: they are also looking for some kind of yield, so it is going to be interesting to see what gives first and how this all plays out and how long things move in this direction. as i indicated, we have futures showing us a higher open. -- european stocks are higher than the euro, gaining a touch against the dollar.

a lot of excitement over the nomination for head of the ecb. 1422 announce. an ounce.e -- scarlet: we will get -- david: we will get the u.s. trade balance from may. latest sales figures for north , june market45 services and pmi's for the u.s. and at 10:00, it is factory and durable goods orders for may. lagarde, it looks like she will be taking over the helm at the ecb in the fall. what challenges are she likely to face? we turn to taylor riggs to give us the story. taylor: she is not facing a good economy for one and as we take a look at what that means, one gauge we can use to measure is

the euro area and manufacturing pmi data. as you can see, the lowest of the 45. belowand the u.k. well the u.s. which is managing to stay in the expansion versus the contraction territory. another issue she is dealing with is the german ten-year which is at -38 basis points and approaching the ecb's benchmark rate. goldman sachs saying this could go further. they are looking at a year-end target on that german 10 year bond yield -- 10 year bund yield. 15 basis points more than the ecb benchmark rate. more negative for longer when it comes to the euro zone. another thing that lagarde may inherit is a stock market in europe that has not responded well to the ecb's monetary easing policy as much as the u.s. respond -- u.s. markets have responded to the fed policy

in the last five years. stock markets are up 15%. the index in the euro zone only up about half that. riggs, thank you for that wonderful set up. joining us for more on the markets and how europe responds to the nomination of christine lagarde as the new head of the ecb is the head of capital markets and institutional strategy. i want to pick up where taylor left off which is that european stocks have lagged behind u.s. equities and the ecb has now promised to be in position to respond to stimulate the economy. we know that the ecb is different from the federal reserve but if lagarde has any kind of unofficial mandate, would it be to stimulate the markets? is that a priority? that when she comes

into office, she has to keep up with the promises of draghi because he created what we have here in america, the ecb put. the markets ebb and flow, pmi is down, the economy is slowing and the economy has really been lagging and mario draghi has promised to put in stimulus, to come in and essentially support the markets and put more money to buy more bonds. i think it would be in her best interest to follow suit with that and help buoy the economy up. has mariomark -- draghi made promises she cannot keep? is that going to fix inflation and growth in europe because thus far it hasn't. sylvia: she is in a tough spot because she does not have any

tools available to fix inflation or slowing growth. what you can do is keep the economy stable and hope there is recovery in the broader sectors for the market to continue or start to grow and potentially rally. i don't think she can stray too much from the policy he has put in. in terms of her acceptance of the job, if she did stray from that, people would question, she is not an economist, she is a politician. she has done policy in france but keeping up with the trend and keeping on a logical path would make the markets very happy. david: i wonder if the markets in europe might be indicating happier days are on the horizon. of white line is the ratio cyclicals, it is actually coming up a bit in europe. even as the blue line are coming down, does that indicate the market thanks something is going to happen? -- thisthis is superior

is super interesting because the same thing happened in america. we had a cyclical defense responding. like the charts you are pulling up for europe. part of that is around the g20 rhetoric. i think part of it is around an agreement or at least the trade truce which flows down to the rest of the world in terms of potential possibilities in global trade. scarlet: one of the things directors do is offer different etf's for those who are short-term traders looking for concentrated exposure. what do you see in the flows when it comes to those leveraged etf's? your intro was saying flows and equities are up and performance ingold is up.

if you look at the top flows, they have been in all of the tech type names. also internet, but then we saw a bunch of flows into our health care etf. flows into some of our more defensive names. i think what consumers are doing as they are looking at this and saying g20 gave us an opportunity to jump on the balance for some of these that are meant to do well in the short-term. ei.ponents to huaw for the next 10 years, think gold, cash alternatives are some women are coming back into the portfolio picture. ,t is portfolio reconstruction short-term trades and long-term defensive investments. david: sylvia jablonski of direxion investments is sticking with us.

coming up, peter navarro. this is bloomberg. ♪

david: president trump says that trade talks with china are ongoing but that it is more important to get the right deal then get it done quickly -- than get it done quickly. peter navarro is the assistant to the president on trade and manufacturing policy. thank you for joining us. peter: good morning. how are you? david: find.

peter: tomorrow's going to be a great day in washington. maybe go along the defense sector because we are going to see some interesting stuff fly over the lincoln memorial -- the lincoln monument. let's come back if we could to trade because we saw what happened with president trump and president xi in osaka. the immediate response from the china daily, they said this is nice but the parties are still widely -- widely apart on a conceptual level. how do you bridge that disparity because they have a very different approach to their economy and businesses? peter: you did not see what happened between president trump and president xi, because that happened in a bilateral meeting and there was no press in the room after the initial opening. what i saw was great personal

chemistry between the two presidents. we had an exchange of views and a strong commitment to going back to the negotiating table. is leadinglighthizer these negotiations and as we speak, plans are being made to reengage with the chinese both in china and here in the united states. what we prefer to do is negotiate behind closed doors in good faith and not in the newspapers. david: but is it realistic to get china to make any accommodations at all on the basis of the way it structures its economy? with a top-down economy subsidies and various special arrangements between the government and companies. is it realistic to have any movement on that at all? peter: course it is. we had a 150 page plus agreement that dealt with seven structural

issues that we are trying to resolve, these include intellectual throughout -- intellectual property theft, cyber intrusions and so on. withins a recognition china, particularly with performers leading the negotiations on their side that in order for china and the chinese economy to get to the next leg of growth and prosperity, they need to make these fundamental structural reforms. there is a will in china to move to that. we are going to the negotiating table and from an investor's point of view, this is very bullish. this will take some time. the president said he wants to get this right. in the meantime, over the next month or two, the two things i think from the investor's point of view that are salient are whether we passed the u.s. -mexico-canada agreement and whether the fed cuts interest rates, which it should.

if you look at what that will do, it is worth over a point of gdp growth, 75,000 jobs in the auto sector. it modernizes the agreement into the digital economy and also services which we are very strong in. those of the kinds of things investors should look at as the chinese negotiations go on. give us a sense of how important and critical the stock market is to the president, the white house takei thinking on the need and urgency to make a deal and i bring this up because the s&p 500 is at a record high for a second straight day. does that record high give the administration more room in pushing china to get what you believe it needs to do? peter: you may know this. in my previous life as a macro

analyst, i would come on bloomberg many times and talk about how the stock market is a leading indicator of the economy. what the president thinks about every day and what i think about going in is how to create good jobs and good wages for the american people, particularly those who work with their hands. through policies like tax cuts, deregulation, cheap energy and a level playing field on trade, we ataged to grow the economy levels that are unprecedented given the forecast we were faced with when we came into washington. that is what the president thinks. my point is he thinks about building a stronger economy and the stock market follows that. it sees what we are doing and it goes up. it is a tremendous testimony to this president that this market has been going up. in the day after the election, i was on another network when futures were down significantly

and predicted down 25,000. i am here to tell you we will get to 30,000 if we pass the usmca. it is a beautiful thing the president is doing but he needs help from congress on the usmca. he needs a little help from the federal reserve which got ahead of its knees a few months ago and caused must -- cost us a little but of growth. david: you would be one of the first people along with the president to say it is not everything, it is just -- it is also national security. what came out of osaka. to be a concession on hua -- what came out of osaka appeared to be a concession on huawei. shirley national security is not for sale. how do you reconcile that? peter: there is a little misunderstanding here. here is the big picture.

there are two components to the equation. there is no question that huawei is a national security threat and we do not want them into our 5g network. the president wants to leave the 5gld on the innovation of and that policy remains in place and we will do everything to further that policy. on the other hand, we sell a relatively small amount of chips, many of them are lower grade chips without any national security interest and as a goodwill gesture to president xi , to move things along, the president said we would continue to sell some of those chips to china. having said that, we are keeping huawei on the list which is important and most importantly here, the president of china significantmake

purchases of our agricultural products as a goodwill gesture on the chinese side. will see if they keep that bargain. the important bigger picture is that negotiations are back on track. we are going to have solid high-level negotiations. the markets should take comfort from that. runhe meantime in the short , there are other things in play that are going to move these markets. the usmca is one of them. the interest rate policy of the federal reserve is another. david: it appears there is going to be an opening at the top of the imf with christine lagarde moving over to the ecb. would you recommend an american in that position and if so, who do you think would be good? peter: this is outside my lane, so i am not going to comment. david: fair enough. scarlet: outside your lane perhaps but let's get a sense on what your thoughts are when it comes to the overall health of

the global economy because when u.s.-china trade war, we were talking earlier with paul richards and he was quite confident that something will get resolved with this latest round of trade talks, but he is more concerned that the u.s. and europe are going to have a problem. he thinks that is where the next trade war is likely to be. what are the white house's specific grievances when it comes to trade with europe? peter: i think using the word trade war is hyperbole. what we are having with china is a legitimate trade dispute. davidyou and i or disagree with the fact that china steals intellectual properties and forces technology transfer? do you disagree? david: i do not. peter: the point is, that is a dispute, not a war.

we are having rational negotiations over that. with europe, we have a situation where under the rules of the world trade organization, foreign nations can charge significantly higher tariffs. in the case of europe, we have a 10% tariff on our autos and we only charge 2.5% on there's. and that is simply not fair. as a result we have a trade deficit with europe approaching $180 billion this year. 6000 jobs that we lose per billion, that adds up to quite a lot. we have legitimate trade disputes with europe. important tot is talk about the g20 because what certainlyhe g20 was the best foreign policy president since reagan.

what was interesting to me was how president trump could go into any bilateral -- turkey, saudi arabia, germany -- and have close, warm relations, candid discussions with people like angela merkel about these issues. that is what we need to do. we need to have frank issues. europe needs to pay more for the nato alliance. that is a discussion we need to have. from an investor's point of view, the fact that the president has these relationships, a post of the cold shoulder diplomacy of barack obama, this is good for the markets. it allows america to promote peace and prosperity at the same time that it advances its economic and national security interests. david: peter navarro, thank you for being with us. broadcom, chipmaker

pushes further into the software business. more on that next in today's bottom line. this is bloomberg. ♪

scarlet: time now for the bottom line where we look at three companies we are watching. semantic, broadcom reportedly is well into discussions about possibly buying cement -- semantic. semantic is up and broadcom is down. they are trying to expand the chipmaker into cybersecurity. scarlet: broadcom also looking to make a deal after its effort to buy qualcomm did not go over so well. i am also keeping a close eye on tesla. shares are higher in premarket trade but this is a stock that lost a third of its value so far this year. they announced a record quarter of deliveries. 95,000 200 vehicles delivered to customers. the question is whether the level of demand is sustainable and profitable and whether that federal tax cut credit that was

cut in half in july pulled forward all of the demand. what happens in the second half of the year? elon musk is looking for recovery, ever the optimist. david: at the same time it does involve china. we now have a report that dell, hp and microsoft are going to be restructuring their supply chains to pull more things out of china so they are not producing there. scarlet: they are looking to move to perhaps vietnam, the philippines or taiwan. economyp, a risk to the in the second quarter. we will discuss what the fed needs to do next. this is bloomberg. ♪

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will open higher u.s. equities. dow futures up .2% following gains in europe. asia had a down day. weakness across the asia-pacific index, off .3%. e.m. off. e.m. has had a strong run in the month of june. we are also getting data. looking at the trade balance. for the month of may, we have a billion,f $55.5 slightly larger than what was anticipated by economists which was $54 billion. jobless claims coming in. claims for jobless benefits for the week ending june 29. slightly lower than what was anticipated which was 223,000. the previous week's number was revised larger. it was a bit of a wash for the jobless claims.

229,000 claims from the previous week when 227,000 had been anticipated. the 10 year yield still lower. plenty of buying. treasuries is now 1.96%. it had gotten as low as 1.93%. the move higher in equities remains the case and the move higher in bonds and lower yields is intact. david: for more on the numbers, we welcome state street local advisor senior economist coming to us from boston. silvio jablonski is still with us. we look for the numbers coming out on friday. does this data tell you anything? simona: they suggest a slight downside risk to consensus estimation. still a number that is consistent with keeping the labor market where it needs to be, meaning accommodating new entrance and the labor market.

that is the lens through which we need to interpret the numbers. we may have a number not as high as anticipated but as long as it as high as 100,000 we should be comfortable with that level. scarlet: i wonder how you interpret the trade balance numbers. i am looking among the different headlines. among the headlines was that canada posted a trade surplus among record exports to the united states. how you read the different trade numbers balance we have with each country and whether that spurs the administration into more hawkish rhetoric against certain countries? simona: it is hard to make too much of any data point in and of itself. ultimately what this tells you is domestic demand in the united states is holding up. that is what is driving imports.

whether you are already starting to see some degree of relocation in terms of the sourcing of the import is questionable. it is still early. chances are you will see some adjustment. there is a difference in terms of whether some of the trade flows reflect the genuine changes in supply chains or just shipping. to the extent they ultimately will reflect a genuine relocation of supply chains themselves i think they would be welcome. david: one of the questions is what does this mean for the fed. will they cut in july or not cut? we talked earlier with the president of the cleveland fed. she said she needs more evidence. this is part of what she said. growthe is possibility could be slowing more than we expected. we did expect slowing this year to trend. i need to see more evidence.

david: if they need more evidence, what would it be? simona: i think it is -- sylvia: i think it is a tough call. if you look at the reason job numbers, they are softer than we would have liked but it shows the economy is still stable, jobs are still stable, the consumer is still stable. what we need to see is the impact on companies and earnings. this earnings season is what they need to see. have earnings slow down significantly or are they flat or are they on a stable path. we have a trade truce. we do not have a trade deal. the market is looking for that rate cut, but the things that matter in terms of does the fed act will be a series of negative termso come that out in -- miss earnings. is that a black-and-white explanation as to whether or not we are slowing down. scarlet: that would provide

clarity on what is going on with companies and how they manage the process. we are in this environment where bad news is seen as good news. we have a trump put as well. does that matter whether earnings are slowing or accelerating if we have this trump put and the fed put intact? sylvia: i think it matters because we eventually need companies to grow and we need earnings to continue to be stable and move upward in order for the economy to expand. we can exploit -- we can employ the trump put or the fed put and that keeps us away from a recession and keeps the economy afloat. long-term, if we would like to move forward, we need to produce and grow. companies need to bring in earnings. some of the things like the china trade for and margins and capex spending improving will depend on the next couple of weeks with the global trade story.

simona, connect the earnings with what sophia -- with what sylvia is talking about. i will put up the earnings index that shows the trend is quite negative, people are taking down their earnings revisions. what in the economy will drive that one way or the other? simona: in order to get earnings you need to sell. ultimately you're talking about the state of demand and corporate pricing power. you are in a situation where some input costs are rising. the tariffs we already have in place do impact the cost of intermediate goods, etc. the question is can you pass those costs on to consumers? there may be a margin already reflected, the result of the trade dispute and the tariffs so

far. there is a degree of deceleration in demand as well as we have to recognize. how you reconcile these forces -- the best case is you recognize that may and june were almost the highest uncertainty months so far in 2019 because the trade negotiations broke down and we were concerned about the possibility of mexico tariffs, etc. , a you have a truce potential reenergizing or some trade flows whether it is just agricultural goods, and you still seem to be on track to some ultimate agreement that should take the uncertainty out of the picture. you may well be in the process of bottoming out if this external influence is resolved favorably. it is possible the next corner of earnings does not look rate,

but nonetheless you may put into place the bottoming out process and going forward to or three quarters you're looking at the brighter picture. we talked about how there is a lot of demand for safe havens and risky assets. how long before this gets reconciled? sylvia: i think everyone is right. there are a lot of short-term opportunities right now because of the trade truce and some of what we view as stability in the market. investors will look to the tech names and the semiconductor names and the china related emerging markets that have positive prospects and put some money there, at least in the short-term and seek they can generate alpha. until we get certainty, simona mentioned may and june were the

most uncertainty months. people -- in order for them to come back into the market, it is difficult to find yield. i think there is still quality in the market and are all defensive plays that may play out and benefit the bottom line in a portfolio. david: sylvia jablonski of direction investments and simona mocuta, thank you for being with us. now let's get a look at what is making headlines outside the business world with viviana hurtado. viviana: president donald trump picks two nominees for the federal reserve board likely to that calls for lower interest rates. christopher waller is the more conventional choice. julie shelton has spent decades outside of mainstream economics. she has already been criticized for her unconventional views and has been advising the president. christine lagarde will become

the first woman to run euro area policy. the imap managing director was nominated to replace mario draghi as the head of the european central bank. she will be taking over just as the eu appears to need fresh stimulus. china may buy u.s. farm products as a gesture of goodwill. the volume is likely to be smaller than before. how much will depend on the progress of the newly restarted trade talks. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. hurtado.ana this is bloomberg. david? david: coming up, the race for the white house. we will speak to tina boredom, citigroup chief global financial analyst. her take on what will influence voters in 2020. that is next on today's follow the lead. live from new york and london, this is bloomberg. ♪

viviana: i am viviana hurtado in the hewlett-packard enterprise greenroom. coming up, bank of america merrill lynch head of equity and strategy. here is your bloomberg business flash. the world's most valuable marijuana company will step down. he was also a cofounder. the other ceo will become soul chief executive. he will meet with the board to begin a search to identify a new leader. amazon will hire more than 2000 workers in the u k to develop

its latest technology venture. the employers will include engineers. amazon's british workforce to almost 30,000 people. in kentucky, firefighters are battling a blaze you see a warehouse filled with 45,000 barrels of jim beam bourbon. two warehouses catching fire last night. one was extinguished but the other has burned for hours. an official says lightning may have started the fire. i'm viviana hurtado and that is your bloomberg business flash. david: time for all the lead. a deep dive into stories making headlines and moving markets with insights from industry veterans and insiders. today we are taking a look at the upcoming elections in 2020. with 15 months to go before we let the president, a third of the senate, and the house of representatives, citi is out with a report.

we welcome tina fordham, citigroup chief global political analyst. it is quite a note. put out the latest polls of where the candidates are and indicate where things are. joe biden has faded. .lizabeth warren has come up are these worth anything 15 months out? tina: only as entertainment and cocktail party chat. despite the fact that we have written this extensive report and the polls do not mean very much or practically nothing at this stage, all investors want to cut to the chase. there is always the same question. who will win? we are trying to make a few key points. one is that with 20 plus democratic challengers, many months of entertaining debates to go, the primaries not starting until january, we have

a long time to see this kind of shuffling. the person who is the favorite is rarely the ultimate candidate. bidens fall is no surprise. scarlet: it might be no surprise for now, but the president delights in this presidential horse race. he is always looking for someone to be a foil to him. tina: he definitely has his own favorites. scarlet: tell us about his thinking and how that might influence the democratic race. tina: i wish i could see inside president trump's mind, but i will apply a game theory lends to what he might be looking for. i think president trump would love to go up against a hard left candidate. he has an incredible mac for zeroing in on the achilles heel of any opponent. his characterization of elizabeth warren is pocahontas,

his ability to come up with these harmful nicknames. i think a candidate like joe biden would be tougher for him to stand up against. sanders, warren, might be easier thinkor him, what let's about who democrats have nominated in the past. it was not people at the front of mind. jimmy carter, after president nixon resigned, very little known. bill clinton, not very well known. barack obama, not the strongest cv. let's consider the fact we could have a surprise as the ultimate nominee. david: we may not know who will win, but we may have a sense of what they will win on. we'll put up a different poll from mid-june. usa today in suffolk university put out. the top three are consistent. health care, immigration, and the economy. what you think the election will

turn on? was the election will turn on in the next 16 months is hard to say. i would take us back to 2008, when candidate a obama and john mccain were the nominated -- were the nominees. the economy was not a factor in that campaign until the final weeks. are much more aware and sensitive to economic criteria than political campaigns. we can see that the performance of the economy is date in two voters priorities while anxieties about health care and immigration are much higher on the agenda. there is a lot of space between the candidates as well as the incumbents, but this is what voters are most concerned about. it is not just the economy,

stupid. at the same time, pocketbook issues tend to loom large. the economy is doing reasonably well. is president trump getting credit? there is some polling that suggests even americans satisfied with the economy did not say it is because of president trump. tina: that is quite right. this is one of the more obvious manifestations of what polarization means. to take this example, it means saycrats are more likely to the economy is doing well, but it was president obama who got that process going, and not to credit the incumbent. the other factor, and concern for republicans will be status quo voters are happy with the current performance of the economy in other issues and less likely to turn up and vote. hence, efforts to fire up the base and continue to do that, a

strategy that has worked well for the president. scarlet: firing up the base, you cannot do that through the economy from trump's perspective because people being happy does not get them out to vote. can we bank on more saber rattling when it comes to geopolitics? i do not see geopolitics among the top issues. tina: geopolitics tends to fall quite low, and it rarely, if ever, is a key factor in voting decisions. to my international investor base, i emphasize that. i want to raise the importance of social issues within the health care of the. -- within the health care theme. efforts to overturn the 14th amendment, on roe v. wade, are actually more significant than many domestic and international investors will think about.

if that happens, that will galvanize democrats and many moderate republicans. that is something to keep an eye on. scarlet: is that something that shows up in the polls are takes people by surprise as we get closer? it is not looming at the moment as a concern at the top of the agenda. i think that falls and the wider health care debate as well. i am flagging that as something to think about. a softening in economic performance does not hurt the president that much. i think that gives them space to continue to be tough on china. we might get a partial trade deal or more handshakes but this tension continues right up until november 2020. see in awonder if you larger trends across the ocean. president trump won his presidency because he appealed to people who felt left behind.

it is strange that with brexit and the populism in europe -- are the democrats making an effort to appeal to those people from ohio, from michigan, from wisconsin tina:? they of -- from wisconsin? tina: they have not started to make that appeal yet because they are still jockeying for position. when we talk about left behind voters we are not talking about the poorest people. the poorest people in america voted for hillary clinton, not donald trump. to apply the political science to be one middle class and lower middle class people lose status, whether economic or social, that produces the most anxiety and the most political turbulence. that is the cohort of voters to watch and those are the same people who voted for brexit. what you also had in both cases was that lower middle class and

working class voters merging with the top-tier, and that is the coalition that got trump elected. scarlet: politics makes for strange bedfellows. 500 days before the 2020 presidential election. tina fordham, chief level analyst at citigroup in london. coming up, u.s. bond yields thing their lowest since 2016 in the shortened trading day ahead of the fourth of july holiday. muted trading will be the theme all day. that is what i'm watching. this is bloomberg. ♪

scarlet: here is what i am watching. global bonds are extending their gains ahead of the holiday shortened fourth of july trading day.

the u.s. stock market will close at 1:00. you're looking at yields on the tenure falling. they have come up off their lows , their lows of the session today. a lot of demand for safe haven whether it is treasuries for german bonds, whether it is cold. plenty of demand for risky assets, including equities. it will make for an interesting day but i'm not sure how much we can read into all of this given that trading will be over quickly. david: we will see what -- payable does to that if they come in strong. scarlet: do not miss the boston pops fireworks spectacular on the fourth of july all across bloomberg many platforms. do not miss it. 4. boston pops, july ♪

jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪

jonathan: coming up, it is the appetizer ahead of payrolls friday. the adp report missing economist estimates. treasury yields hitting the lowest level since 2016. christine lagarde swapping the imf for the ecb. 30 minutes until the opening bell. here is your wednesday morning price action. futures up six points. drop.cord closers on the we are positive .2%. the fx market stable. there is your bid at the treasury market. yields lower by a single basis point. we begin with the big issue, looking ahead to payrolls friday. >> the u.s. data has reverted to trend. >> economic data has been more mixed. >> some members