weaker to the point that it is a faint heart. alix: fed chair jay powell warns on global risk, week inflation, a tight labor market. u.s. cpi takes on new importance. deutsche bank drags in to a scandal on anti-money laundering laws. a tropical storm hurtled towards the gulf of mexico, while the british navy interferes in the strait of hormuz to protect an oil tanker. geopolitical and climate risks prop up prices. david: welcome to "bloomberg this thursday, july 11. we had some earnings just come out. alix: basically, general economic activity was positive, but part of their issue was there was less sales growth due

to their higher product pricing. they implement it higher product pricing to mitigate the tariff issue in the marketplace, and that had an impact on their sales. that's three through on tariffs, not being able to pass along prices, and having an impact on sales. david: and it hit their margins. there was also going to be margin pressure. the question is what it says more broadly about industrials. they say they think the economics are ok. alix: as long as their margins might not be, but overall economic activity ok. news comingve some out of delta, up in the premarket. it's raised its earning per share view. forecast now earnings-per-share, but i do not see their earnings. alix: it seems like you have

full year earnings at the top end. they are upan see almost 2.5% in the premarket. alix: people are traveling. they are moving. david: good for them. alix: which i will be doing tomorrow. in the markets, you are also looking at day two of fed chair jay powell. this is a classic easing cycle fed playbook. eve got a rally in the equity market, the weaker dollar, yields stemming any kind of selloff they saw, and crude getting a boost as well. if we take a look at s&p futures , over 3000. we held a little bit yesterday. also taking you look at oil, up by five tents of 1%. a big part of that is the storm hurtling through to louisiana. look at that. the storm hasn't even hit. it may turn into a hurricane overnight, but it hasn't even actually hit. david: it is huge.

. alix: it looks terrible. this basically shows different weather patterns. this is one you are looking at here that could become a hurricane. these are inch dots are oil refineries, just to give a reason of why we are seeing spreads for gasoline jump up. you're seeing local oil on the gulf coast shoot up as well because your closing platforms. refineries are now at risk as well. david: and who has refineries there? alix: chevron, bp. david: but this is probably a short-term issue. alix: hurricane season always happens, but when you add that into what is happening with iran, as well as storage withdrawals, that is all providing a boost for oil. david: it is time now for the morning brief. at 7:30, the ecb releases the accounts of its june meeting. morning, fed chair

jay powell continues his second day of testimony to congress, this time in front of the senate banking committee. banksderal reserve chairman of richmond will speak with mike mckee. the u.s.his afternoon, treasury is selling $16 billion worth of 30 year notes. it is time for the bloomberg first take. we are joined by vince signe cignarella.cent one part of jay powell's testimony yesterday, he sees a lot of strengthen our economy, but boy, he is worried about the global economy. chair powell: growth indicators from around the world have disappointed. trade tensions and concerns about global growth. slower growth in the global economy and we can manufacturing around the world. weakness in the global economy will continue to affect the u.s. economy. david: i think you might be

concerned about the global economy. [laughter] his you was absolutely unambiguous and very direct, which was we are here to support you. we are going to cut rates. we are very worried. even the jobs data doesn't change our view in any material way, so any sort of backing away of the expectation of three rate cuts by december, go back to three rate cuts because we are right there with you. if jay powell had wanted to give the federal reserve more flexibility, he could have, but he didn't. ,e backed them into a corner either going with three rate cuts by december or dislocating the market and disappointing the market. that i find really interesting. alix: does that mean this easy fed market playbook lasts or is it short-term? vincent: i don't know. i don't think he telegraphed three rate cuts at all. i think he telegraphed rate cuts for july.

i think the anticipation of rate cuts going further in the future is considerably data dependent, and will continue to be. while it may be a global growth issue, i think it is a big leap to say we are to funnel he going to get three rate cuts. back but he didn't dial the market expectations at all. and if he had wanted to change the narrative in markets, he could have, and he didn't. that was sort of my point. vincent: i agree, but i think he's going to save that for the fomc meeting on july 31. we've got cpi today, ppi tomorrow, retail sales next week, real average earnings, which. is a key number if all of those come in hot -- which is a key number. if all of those come in hotter than expected, that puts him in the fomc in a little bit of a corner. david: enough of jay powell. it's been too long since we've talked about deutsche bank.

we thought we knew everything wrong with deutsche bank, and then this story came out overnight. they are being investigate by the deferment of justice in connection with the 1mdb scandal. i thought that was a goldman scandal, but there may be corrupt practices and money laundering at eight bank? -- at deutsche bank? you've got to beginning me. lisa: this is just -- you've got to be kidding me. lisa: this is just a pylon of regulatory pressure on deutsche bank. they also closed several accounts of jeffrey epstein's earlier last year as the investigations heated up. it raised the question of how long they'd been doing business with him, again raising questions about compliance, about what their standards are in terms of who they do business with and how they do business. not what deutsche bank needs at a time when there trying to restructure -- when they are

trying to restructure and move forward. vincent: you would think it is a crisis of confidence come about at the end of the day come of the streets has no matter what happens, germany will support -- of confidence, but at the end of the day, the say no matter what happens, germany will support the bank. scandal, when you are a ceo and the department of justice says we have an investigation, just get out your checkbook. no bank fights them down the line. they just end up paying a fine whether they are guilty or not. david: we don't know that they are guilty of anything. they may be totally innocent. but at a time when they are trying to restructure, they have so many things on their agenda, ime toot to take t respond to all of the document and interview requests. it soaks up management time.

lisa: the new york fed was looking into deutsche bank. with the stress test, they were cleared on a level. this just puts them right back, at least from public perception, right in regulatory crosshairs. alix: the third story is what is happening with oil. the longest high we've seen since february. part of that is what happened in the strait of hormuz, where the british navy had to block iran from to control of an oil tanker. that helps support oil. do we want brent at $67, or do we not? .incent: we do not we do not like iran these days. the president just said yesterday that we are going to increase sanctions on iran. one of us here at least is old enough, and i will just put it on me, doesn't it remind you of another time in life with high oil prices and a slowing economy? david: that was not pretty.

vincent: it was not pretty, and if this continues, it is going to get very ugly. you can't have oil prices at $100 a barrel and a slowing economy. lisa: to be fair, oil prices are hugeg up a bit, with a storm hitting refineries in the gulf, and iran potentially saber rattling with the u.k. over the strait of hormuz. the fact that we have not seen a bigger gain at a time when you are also seeing drawdown of inventories in the united states indicates a strong degree of skepticism about the global economy and how high oil prices can actually go. vincent: that's true. slower growth is going to limit the upside. alix: let me jump in on that. to support that view, opec sees new oil surplus in 2020 as u.s. shale keeps surging. overall, non-opec is forecast to grow by billions of barrels a day in 2020 from the u.s. --

millions of barrels a day in 2020 from the u.s. david: this remind me of the fed backing up the president in fighting with china. shale is backing up the president fighting with ron. -- with iran. vincent: the united states is clearly a major force in oil supply these days, undercutting what opec is put into the market. i think it becomes more of a global geopolitical issue, where you start to see iran and russia form greater alliances among china and russia forming greater alliances to get oil around the united states sanctions and such. rather than perhaps being an oil price issue, it becomes more of a geopolitical tension issue. lisa: i love that you are saying that the shale industry is just saying we are going to back you up instead of saying we are going to cash in and make as much money as we possibly can. [laughter] david: you can see more on

"commodities edge" today. alix: thank you. we will break all of this down and get your trades as well. coming up, you've got bank of america merrill lynch changing its call after fed chair powell's testimony yesterday. as we had to break, faster knell -- delta --'s snl raising its forecast. apparently this is a benefit from boeing and the max being off air. less planes in the sky, more pricing power, good for delta. this is bloomberg. ♪

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viviana: this is "bloomberg daybreak." airlineshares of delta rising. delta has been able to command higher fares because of travel demands and lower fuel costs. the grounding of the boeing 737 max 8 means there are fewer seats. upkitt benckiser will pay to $1.4 billion in a u.s. investigation into opioid addiction treatment. it's unit has since been spun off. prosecutors argued british companies deceived doctors about the treatment. the ceo of norwegian air shuttle is calling it quits this is a turnaround plan starts to take hold. he indicates he wanted to step down after leaving norwegian -- after leading norwegian's rapid expansion.

that is your bloomberg business flash. david: thank you. fed chair jay powell yesterday had a difficult time squaring a strong employment picture with weak wage growth. >> do you think it's possible that the fed's estimates of the lowest sustainable unemployment rate may have been too high? chair powell: absolutely. i think it's learned -- i think we've learned that it is substantially lower than we thought. meyer we welcome michelle of bank of america merrill lynch. jay powell being frank, saying it is absolutely different that we thought. what has gone wrong? michelle: there's lots of theories as to why the phillips curve has flattened, but i think the main reason people have accepted this flattening is because you haven't seen fast enough wage growth. an unemployment

rate below 4% for some time, you would think that wages would be increasing at a faster clip, and they are just not. they are edging higher slightly. the conclusion is either you , ort have full employment you just have a really flat phillips curve. alix: so it is just a full easy elsey reaction in markets. do you buy into it? does it continue? guest: we think there's a counterfactual around the phillips curve. you've got the inflation element, but you've also got corporate uncertainty that we think is driving market expectations to expect three and four cuts this year. we don't believe that that will come to fruition. we think economic growth will pick up towards the end of the year because we see inventories run down, a very strong consumer at this point, but that being

said, right now we think the fed is moving towards the market in a way that is wiping away some of the uncertainty around trade. that being said, we think a 25 basis point cut in the fed funds rate isn't necessarily going to be the thing that is going to spur the animal spirit back into the market place right now and encourage companies to spend. david: before we talk about what effect it would have, you are actually changing your projections. michelle: heading into powell's testimony, we thought that the first cut would come in september and they would cut a humala to of of 75 basis points. that was based off of stronger economic data and the view that these uncertainties are there, crosscurrents are there, but the fed wants to see some evidence spilling over to the u.s.. what we learned yesterday as they are data independent right now when it comes to u.s. data right now. they are following global data, following risks, but they want to be early and aggressive as possible.

i thought powell was really dovish. it certainly sets up right when he five basis point cut at the end of the month -- sets up a 25 basis point cut at the end of the month. alix: this is where we see rate cuts for the rest of the year. the blue line would imply july, the white line at the end of the year in playing three. maddie, you are at the consensus at this table. how are you playing it? going: our view is we are to see stronger economic growth through the end of the year, but despite that, we do have some event risks. perhaps the fed disappoints, but we are seeing stronger economic growth. we think companies are still looking for resolution on trade, and we are going to wait and see whether or not corporate spending picks up in the consumer continues to be resilient. ,rom a portfolio perspective we've actually taken risk down in portfolios, taken some of the

equity beta risk off of our portfolios, and instead we are leveraging the resilient consumer and credit markets, adding to more high-quality credit in our portfolios right now while we are waiting to see whether or not some of these event risks dissipate. david: are we in danger of the fed using its moorings? it is ironic that chair powell yesterday started out with the dual mandate, which is employment and price stability. if you look at the dual mandate, they are doing just fine, and yet he is signaling very dovish. he's worried about global growth, corporate uncertainty, things like that. michelle: i think what they've changed on the margins is this idea of more proactive policy versus reactive policy. oft is with the goal ensuring they continue to meet their dual mandate. i think the risk is that the data will begin at these events, particularly the global trade war, will spill over to the u.s. and present them from meeting

their mandate down the line. so run these models not with current gdp, but with expectations of future gdp, and as a result, it suggests let's get ahead of it. let's cut so we sustain the higher growth trajectory. alix: you will be sticking with us. coming up later today, an exclusive interview with richmond fed president tom barkan. coming up, oil around a seven-week high. let's of different things going on here. off the highs on the session on opec's monthly report. this is bloomberg. ♪

♪ alix: taking a look at oil prices, on one hand you have the bullish factors. you have climate risk with a storm hurtling towards louisiana, and risk with iran.

opec's monthly report signals a surplus in 2020 because demand is not there and u.s. shale is overproducing. joining me still is michelle meyer of bank of america merrill of j.p. morgan asset management. do you feel like brent is accurately reflecting the global growth you see? michelle: $67 is pretty much around the average. that is what most people would consider normal oil prices. back at the end of the year in the fall, when economic forecasts were stronger and we were talking about a fed that was hiking, oil prices were hovering around $80, $90 a barrel. i think that largely reflects the fact that global growth has weakened. is it the right level given what we are seeing for bubble growth -- for global growth? hard to say because there are all these other concerns that

altar prices put a lot. alix: how does this feed into earnings? earnings expectations have been rated lower for all sectors except health care and utilities and consumer staples. is this good for energy, bad for the rest of the sector? how do you look at it going into earnings season? maddi: one of the things we are seeing in the oil markets is much more capital discipline over the last couple of years. if you look at the shale producers, what you see is the flexibility with which they can bring supply onto the market, and then bring supply off of the market. $67, $68, $69 a barrel, what you will see is more supply from shale producers, but as there's oil prices type out and stop -- top out and start to fall, that flexibility has been key to keeping oil prices range bound. alix: do you play energy? maddi: in our view, it is about

how does that factor in the consumer spending story? bound isg range good because we think there's only so high that oil prices can go at this point. alix: you guys are sticking with us. stay tuned for all things oil. we will break it down on edge."erg commodities joined me at want to talk p.m. eastern time today -- join me at 1:00 p.m. eastern time today. coming up cut them -- coming up, we will break down the european central bank challenges and when and how they should cut. this is bloomberg. ♪ . ♪ we're the slowskys.

we like drip coffee, layovers- -and waiting on hold. what we don't like is relying on fancy technology for help. snail mail! we were invited to a y2k party... uh, didn't that happen, like, 20 years ago? oh, look, karolyn, we've got a mathematician on our hands! check it out! now you can schedule a callback or reschedule an appointment, even on nights and weekends. today's xfinity service. simple. easy. awesome. i'd rather not. alix: this is "bloomberg daybreak." just a couple minutes away from the latest ecb accounts, but the markets dominated i a dovish fed. you've got equities rallying.

italian equities seeing a big pop. yields continue to grind lower today. in other asset classes, it is the playbook. a selloff in the bond -- excuse me, buying and the bond market, yield moving lower. citi says you could see 1% onto your yields. the weaker dollar story continues to permeate. you've got the ecb account of its june meeting. they expressed some nuance on tltro terms and guidance. david: a more accommodative tltro terms. alix: interesting. need toeed on the prepare for policy easing, so jumping on board the dovish central bank policy train. david: i think they are preparing the ground, is what i would say. getting us ready. alix: interesting if we read more deeply into any sort of tiering. it feels like if they cut rates, if they doo tier, or

qe, they can maybe hike. david: the european banks are really struggling. alix: exactly. goldman just came out with an estimate and said if you see a 20 basis point rate cut, that is going to result in 5.6 billion euros of lost profits for european banks. david: as we know, the european economy is so dependent on the banks because of the capital markets. if you get the banks in trouble, it is hard to get the economy going. alix: still with us is michelle meyer and maddi dessner. what is bank of america's call on the ecb? michelle: we think they will make a cut in december and guide towards that in july. our european economists feel pretty strongly that they won't embrace qe at this point. that that is not the right policy to deal with low inflation and low inflation expectations in particular. they are on board with the ecb turning more dovish and delivering some support. david: maddi, same question for

you for j.p. morgan, but follow-up question, will it make a difference? maddi: that is the key question. if we see a dovish ecb, which we expect, what happens from there? i think you could see a sentiment pop that would lead the markets higher. you could see a weakening euro, also good for the export driven economy. on the other, it is very painful for the banks to have negative real rates and actual nominal rates. tiering has too come into play. david: they've got other issues. they've got political issues in europe, trade issues with china. is that going to help sentiment a lot? maddi: it is sort of a short-term sugar high, just like we are seeing in the u.s.. we still have the concerns around trade and slowing manufacturing, but certainly

easing policy and dovishness from central banks will help sentiment from a short-term's perspective. alix: what does that wind up meaning for the dollar? michelle: it is kind of a race for the bottom. clearly the fed signaling cuts, the ecb signaling cuts. broadly, central banks have become more accommodative. it is a question of relative accommodation and relative strength in the economies. i think you can argue the u.s. relative to a lot of trading partners is on sounder footing. the economy does look a lot stronger. the downside risks are more minimal. but a fed wants to be aggressive , which would suggest a weaker strongerut the fundamentals would strengthen the dollar. david: i was struck this morning by two very different schools of thought on the dollar. pimco is saying everything is going to roll over now. other people saying we think it

is going to strengthen, mainly because other people are even worse than we are. maddi: we would be more in the letter. -- in the latter. at this point, economic growth is slowing around the world. you had a story about u.s. leadership a few years back. you are starting to see that again. if we see relative growth fundamentals pickup in the u.s. as we expect, we could see some upside to the dollar, but not meaningful. we believe that the equity markets are more driven by earnings expectations than they are the dollar at this point. alix: are we in a world structurally where inflation expectations are now embedded lower, and it is going to take a miracle to get them higher? michelle: i think that is a big challenge across the globe. inflation structurally has been low and expectations have been falling. that is a critical concern for the central bank community. alix: and europe is plummeting. michelle: yeah.

that is a big concern because many start to change the mentality of how consumers are willing to spend, how businesses think they can price. you get into a disinflationary spiral, which risks falling into a deflationary spiral. i think that is a big part of what of -- eight big part of what is driving central banks to be easy right now. they hope that it can actually lead to higher inflation. you cut now, generate higher inflation, and later you can actually hike again later in the cycle. david: isn't there a real dilemma for the central banks to try to inflate expectations by cutting rates? typically you cut rates when you think what is coming down the pike is not that happy. maddi: i think there is a different volatility picture of inflation then we have a few years back. today's inflation is not yesterday's inflation. today's oil and energy market is not yesterday's.

the volatility of inflation itself has come down. there's only so much we can expect in terms of inflation at this point. david: we have to talk about the negative yielding debt. alix: quite a lot of it. david: i will put up a chart here, $13 trillion. the effect is even larger than that. in fact, it is disproportionate in europe compared to the united states. this cannot be a good thing. michelle: i think it speaks to the fact that we still have a lot of distortions in the financial system. that arecentral banks talking about returning to extraordinary monetary policy very quickly, even when the economy is still in theory recovering. you have dovish's effort -- you have dovish central banks, and we are potentially talking about adding to's distortions. this idea of negative debt is not going away. if anything, it is going to get bigger. alix: this chart looks at it

from a different angle. it shows negative real yield bonds. basically, the bonds that are below the cpi rate for the country. you have negative real yielding debt. maddi, i know you are taking some risk off, but where do you need to maintain risk because you are looking at a world with $13 trillion of negative yielding bonds? maddi: we are taking risks down in portfolios, not completely off. we don't think we are headed into a recessionary environment. we expect to see a pickup in global growth towards the end of the year, not to the 3% or 4% level, but perhaps north of 2%. in that environment, credit is actually a really nice asset class to give you some yield cushion. yields are relatively narrow right now, so you're not getting huge pickup, but relative to markets, we are looking the credit markets, even in this picture where you are seeing $13 trillion of negative

yielding debt because you are getting spreads over treasuries in high yields. david: do you see economic activity picking up towards the end of the year? if so, who is going to lead that? the united states, china? michelle: we are a little bit more cautious in terms of roast in the second have of the year. we think it will fall below trend -- terms of growth in the second half of the year. we think it will fall below trend in august. we think was extraordinary policy in the central bank community, we could see some grow down. as we approach the third quarter, the data is likely to look softer. alix: when we see the turn in the back half, how quickly do you see that coming? will central banks have to whiplash themselves, or a slower growth environment? michelle: i think it is going to

be lower, and i don't think it will lead central banks to turn hawkish very quickly. central banks want to see evidence of above trend growth for a period of time. if they can pull this off properly, you ease now, yourance type policies, allow the economy to build again, and then start talking about hiking in the future, but you don't want to scare markets. it is a difficult game to play. david: and you don't want to scare green markets. dohelle: and they've learned not respond to a tantrum. [laughter] alix: one more cookie, mommy. i promise. david: right, ok. michelle meyer and maddi dessner, thank you for being

with us today. viviana hurtado is here with first word news. viviana: there's a report the u.s. may suspend some sanctions on north korea for 12 to 18 months. according to south korean news agency, it would be in exchange for a freeze on north korea's nuclear weapons program. the u.s. and north korea are soon expected to hold their first working level talks in five months. the royal navy coming to the rescue of a british tanker being blocked by iranian ships in the persian gulf. the u.k. says the hms was exporting a tanker when the ships tried to block it. iran denying the report after british forces seized an iranian tanker suspected of carrying iranian oil to syria. president donald trump is holding a social media summit at the white house, but you won't see anyone from facebook and twitter. instead, the president invited a

number of conservative voices considered fringe will backup his claims of being silenced online. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. david: not only that, but president trump has just tweeted "out this summit, saying, determined this dishonesty and bias by certain companies. the fake news will be there, but only for a limited period." alix: but won't they not be? david: as far as we know, they were not invited. but i think he said we will let the abc and cnn's in there at the beginning to report, and then we will excuse you.

there will be quite a few people that i think most people would say are less than credible, and senators who are very credible. alix: all of this ahead of a tech testimony next week. david: on antitrust issues. on the heels of what we saw yesterday about facebook's cryptocurrency, everybody saying we don't like this idea. alix: exactly. david: coming up, the hits keep coming for eight bank. bank, now being investigated by the department of justice. more next in today's wall street beat. alix: if you have a bloomberg terminal, check out tv . check out the charts and graphics and interact with us directly. ask us a question or check us out on twitter. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up in the next hour, an exclusive interview with marise group chairman, live from sudden valley. this is "bloomberg daybreak." president donald trump says lockheed martin agreed to keep a helicopter factory in pennsylvania open. asked month lockheed said it would shut down a plant. -- aprompted a conber conversation between the president and lockheed's ceo. weakness in fast retailing offset a strong showing overseas, especially in china. the company hasn't been hurt by the trade war between china and

the u.s. world's second-largest --nsurer citing which demand citing weak demand. i'm viviana hurtado. that's your bloomberg business flash. alix: thanks so much. we turn now to wall street beat. first up, deutsche buck -- deutsche bank gets tangled in 1mdb probe. then, changing how musk talks tesla. a top tesla investor says musk should change how he talks about the company in public. good luck with that. joining us now is sonali basak, bloomberg's investment banking reporter. i can't believe we are talking

about deutsche bank again, but in a different way. sonali: who would have thought? what happened is the banker at goldman who pleaded guilty in regards to 1mdb guided authorities to one of his employees who moved over to deutsche bank. they are looking at whether deutsche bank violated any money laundering or foreign corruption laws in regards to fundraising for the malaysian fund. david: they haven't accused anybody, neither deutsche bank nor the former goldman employee. at the same time, this is not good news for any bank, but deutsche bank is going through so much turmoil. sonali: remember, deutsche bank has been in the spotlight of regulators including the federal reserve, looking at their bank in the -- looking at their role in the danske bank scandal as well. alix: they say this is immaterial for deutsche bank, more of goldman's to

carry, but they could still have fines for all of the violations they are embroiled in. david: it is also management risk. management has to spend time and effort dealing with this thing. sonali: and the employee is not working there anymore, so it is solely a management risk. alix: speaking of, president trump. he basically said that deutsche bank wanted his business, and so did others. know, president trump and his organization have had a long-standing relationship with deutsche bank. in fact, congress is investigating, so we don't know exactly what is going on between deutsche bank and president trump. sonali: i don't know if ever winsock, they had to end their relationship with jeffrey epstein as well -- if everyone saw, they had to end their relationship with jeffrey as well. alix: our second story is tesla. bloomberg spoke to james anderson, investor in tesla. here's what he had to say about

the stock and elon musk. >> i don't think there needs to be a blackout, but i think it does mean that one should on the whole not try to give too many targets that may not be attainable with specific dates. i don't think one once sudden reversals of policy. i hope that's not too much for a major shareholder to ask. alix: that is like the nicest way of saying please stop tweeting. sonali: he is saying you don't need a blackout, though. how much money does he have at stake, more than $3 billion in tesla? to ask that kindly is really interesting. david: and he said to set targets that are not attainable. you don't do that at a public company. that's a bad idea no matter how you do it. sonali: he's talking about something very specific come of the self driving cars and robo milliond the one

vehicles by the end of next year. i mean, the whole industry doesn't believe that many cars will be put on the road next year. it's ambitious. bloomberg forth live coverage out of sudden valley, idaho. we will bring you -- sudden .alley our next story is about ken griffin. sonali: we seen a lot of revolving talent around citadel. just yesterday they hired two from goldman. the second one on the list has had a tough run. since 2009, this is their best year yet.

they are able to raise money again after they had guards from the u.s. after their bribery scandal. alix: what is making everyone win? sonali: the volatility this here isn't as bad as last year. everyone says these trail the stock market, but it is not just about the stoxx. they have asked the stocks they have -- about the stocks. they have fixed income currency that is well ahead. david: good for them. that's wonderful, but the market has been pretty forgiving. sonali: for a hedge fund it is pretty good to be doing so well this far into the year because if we are going into a tougher cycle, the idea is that they are hedge funds. but we have to look at these over a longer period of time then just six months. david: exactly right. thanks so much to sonali basak from bloomberg.

is planning toce tax the likes of facebook and google. more on what i'm watching next. alix: tech tax. tech tax. that's going to be a tough one for me. if you're getting in the car, bloomberg radio is on sirius xm jenna 119 and on the -- sirius xm channel 119 and on the bloomberg business have. this is bloomberg. ♪

david: here's what i'm watching. there's plans for the u.s. to investigate french proposal to put taxes on big technology companies like facebook and google. the french have said we are going to but a 3% tax on the french.you get from the the u.s. is now employing section 301, which traditionally has been used only in the most extreme cases, sort of like nuclear war. alix: so what is the thesis for 301? david: essentially, you are

doing something threatening our industries. in fairness, we talked before, do europeans really beat up on tech companies because they tend to be u.s.? europe doesn't have the tech apparatus. people have speculated about that, but president trump says we are going to protect them. alix: it also raises the point of, again, is he right in that? what is to prevent other countries from doing it? then you have these companies paying so much taxes that they can't invest as much. you have to wonder. david: it is not the only problem facebook has. yesterday they got mentioned quite a few times for libra, there cryptocurrency. let's see what they had to say. chair powell: i think it cannot go forward without there being broad satisfaction with the way the company has addressed on the laundering, all of those things. the number of concerns i listed at the beginning, all of those will need to be addressed. david: he laid out a lot of

concerns, but the interesting thing was for and democrats wait boy, youy, saying better watch facebook. alix: it is sort of bad timing. it feels like tech companies are always ahead of regulators. were already in the spotlight from election meddling . david: when you say you are going to create a whole new money, that gets their attention. alix: coming up, lisa erickson and burns mckinney. can the fed field rally continue? this is bloomberg. ♪

♪ chair powell: it's gotten weaker

and weaker to the point that it is targeting. alix: chair powell warns of weaker risk. a dovish fed playbook as u.s. cpi is moments away. thesche bank draggi into -- deutsche bank dragged into the 1mdb scandal. insight fromome jason chandler. and a tropical storm hurtling towards the gulf of mexico, closing oil and natural gas platforms, while the british navy interferes in the strait of hormuz to protect an oil tanker. david: welcome to "bloomberg daybreak" on this thursday, july 11. fastenal came in with a mess, getting punished in the premarket about 5%. in the meantime, delta came in

and beat earnings-per-share, and more importantly, took up forecasts. delta is up about 2% now and the premarket. alix: they had to raise prices at the end of last year, and sedse products the rai prices for didn't have the sales growth they did normally see. david: there's a lot of squeezing at the margins. alix: keep your eye on boeing and southwest. a headlight just crossed saying that they are being sued over 737ged collusion for max aid. just keep your eye out. david: the stock was actually up in the premarket, so we will see. alix: in the markets, a completely dovish fed picture. equities rally in, dollar we care, bonds go nowhere, but you're still seeing some geopolitical risk.

the question for me, how long can the fed fuel rally last in the markets? david: when does bad news become bad news instead of bad news is good news? so far, so good, but you wonder when. it is time now for the morning brief. at 8:30 this morning we get cpi numbers for last month as well as initial jobless claims numbers for last week. at 10:00, fed chair jay powell continues his two-day testimony in front of congress, this time before the senate banking committee. 10:00, federal reserve chairman of richmond barkin will sit down with michael mckee. $6.3.s. treasury will sell billion in three-year notes, and fed chair jay powell made it clear he is going to cut rates. of that you to a slowing economy globally and no

signs of overheating in the job market. chair powell: grows around the world have disappointed. trade tensions and concerns about global growth. concerns over global growth. slower growth in the global economy. weakness in the global economy will continue to affect the u.s. economy. alix: tuning is now are burns mckinney, allianz global andstors portfolio manager, lisa erickson, u.s. bank wealth management head of traditional investments. i thought the mandate for the fed was stable employment and inflation, not global risk. what was your biggest take away yesterday? lisa: i think the biggest take away in terms of, as you point out, there mandate, is they are really trying to do what they can to support the economy. certainly while we are seeing some decent signs still from the u.s. in terms of growth, there are still on a bigger picture

scale risks that could derail that. when we look at our global health indicators, we do see that while there have been some signs of stabilization in individual countries, really there is a trend of downward momentum globally. that can impact the u.s. economy. what you see is the fed reacting to that, and we think that is good for markets. alix: the fed fuel rally, how long does it last? are you buying into it? burns: we talk about windows good news become good news and bad news become bad news. i think probably, the time that reversal ist when investors start to expect inflation. jay powell noted it has certainly been tamped down. when we get the cpi numbers later, we expect that to be pretty much flat month over month. we do have a deflationary presence, but back to the points you were making a few minutes ago about the phillips curve, i'm not sure if it's dead.

it's just been flattened a bit by a lot of long-term secular factors like globalization, demographics, automation. it has been flattened, but if you look out a little bit longer term, we are starting to see signs. average hourly earnings are not at that worrisome for percent level, but if you look at the trendline, it has been going up each of the last three years. there are signs that may be going forward, given that we have unemployment at the lowest it's been in nearly 50 years, we might have that going forward. when investors start to appreciate that, that might be when the fed has to start actually worrying about maybe bit.ng down the plays a alix: burns and lisa will be sticking with us. coming up, and exclusive fed richmondh

chairman. inid: chair powell is back front of congress today, this time in front of the senate banking committee. we welcome now senator david purdue of georgia, coming to us from capitol hill. thank you for being back with us. good to have you. i always ask you as a senator and a former ceo, is it good or bad news that the fed has to keep cutting? normally we think about that as a indication of weakness in the economy. sen. perdue: it is hard to generalize. the unit cuss -- the u.s. economy is doing just fine. what chairman powell talked about yesterday, and we hope to probe this today, is what are those global crosscurrents. he talked about the trade concerns, but the long-term impatience of these trade negotiations around the world has to be tremendously encouraging. to our economy in the united

states, and he way. but i think the fed is concerned about is will these crosscurrents have a negative investments in the u.s. economy. david: you concerned about the underlining economic data -- the underlying economic data? sen. perdue: what i look at is there's plenty of capital in this market. innovation, capital formation, and the room of law -- and the rule of law is what has built this economic miracle, on top of a great workforce. good., so i think this economy is moving, reacting to freeing up capital on several fronts. the tax bill, the dodd frank -- andnd recent

releasing some regulations makes us more competitive than the rest of the world. david: fed policy will affect the dollar and how strong it is against other currencies. there are reports the presidents would really like to weaken the dollar. does that make sense to you? in these companies that iran, they were multinationals, so we had to watch fx, foreign exchange and interest rates around the world. any sitting president would love to have low interest rates to spurn lowgrowth -- to growth. we have 7.5 million job openings because of the heat of this economy. sooner or later you're going to get some labor inflation pressures. so far it hasn't been out of the norm, i don't think, but we are watching that here as well. david: sooner or later was the interesting phrase you used. why later? jay powell was asked about this repeatedly and said i don't know what happened to the phillips curve. we are not getting wage

inflation despite the employment level. sen. perdue: i think part of that is you are rebounding from a decade of low performance in the economy. we had the lowest performance out of the prior administration in american history. we are rebounding from that a little bit. at some point, the dynamics probably have to come back in. the other thing sitting out there is are we really going to succeed in this trade negotiation long-term? i believe we will. if we create a level playing field, we have a renaissance going on in our manufacturing environment right here in the u.s., so those are the things that i'm encouraged by. now the fed is looking into say let's see what the international pressures are going to do. david: as the chair appears before you today, president trump has been rather critical of jay powell. he repeatedly has said he has the power to dismiss him as

chair. do you believe he does have the power? would you are would you not exercise the power? sen. perdue: i certainly would not like to see that today. i don't think it is my role to weigh in on what the fed is doing. they are an independent central bank. officialske elective in congress weighing in on interest rate increases or decreases. what i was worried about is the size of the balance sheet, and i still worry about that. bankry about the of japan's as well. revise ory might revisit the issue of the balance sheet. you would be opposed to that. sen. perdue:. i liked what they were doing when they were rationalizing on some normal level that everybody could be comfortable with. a business guy.

europe,d parts of that's another dynamic of the fact that you can't generalize about the global economy right now. our economy is hot, doing very well. we produced 6 million new jobs over the last few years. the thing i look at is we have ,he highest u.s. median income but i think we will be successful in these trade negotiations any short-term and long-term. david: you have a recess coming up in august, and we have a debt ceiling issue pending. there's a proposal to have a continuing resolution for a year. you are against that. explain why. sen. perdue: number one, it is irresponsible. it is outrageous that the unit since government and united

states congress historically have not funded this government on time. only four times. we have eight working days between now and this august break, which is a traditional break were senators and congressmen go back to the state , and it is a work month. right now we have got to get the hhs funded before we can come back. cr it's terrible to the military. it continues spending at the same level we spent last year. it doesn't sound so bad, but ties the hands of the military. it causes cost to go up dramatically, much more than what we are talking about negotiating right now between domestic issues and military issues. david: thank you so much,

senator. really great to have you. that is senator david purdue of georgia. alix: coming up, oil at a seven-week high. geopolitical and climate risks driving that rally. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." agilent technologies is making a bet on avena technologies. agile and once to capitalize on a push by big pharma to develop new drugs to fight cancer. shares of delta airlines rising. the carrier boosted its profits forecast for the full year. delta has been able to command higher fares because of travel

costs,and lower fuel plus the grounding of the boeing 737 max 8 means there are fewer seats. benckiser willtt pay to settle a u.s. investigation into the sales of marketing and opioid addiction treatment. that unit has since been spun off. prosecutors arguing british company deceived doctors about the dangers of the treatment. that is your bloomberg business flash. alix: thanks so much. opec sees the new oil surplus for 2020, but also geopolitical risk with iran, the u.k., france trying to get into the middle, and a storm hurtling towards the gulf of mexico. lisa erickson and birds mckinney are still with us -- and burns mckinney are still with us. i think you can take advantage of both growing u.s.

and canadian exports alongside the fact that you have investors trying to plan what interest rates are doing. the investment community has pushed into defensive, and a pipeline company like transcanada kind of gives you the best of worlds. whether you think oil prices are up or down, they are a toll taker. utilities have gotten kind of expensive. in many ways, transcanada is a little bit like a utility. the difference is you have a better dividend yield, a lower valuation, and other dividend growth. agree?isa, do you if you ever wanted to play value, energies has been the place to go, but it hasn't been able to get a bid. lisa: we are generally more cautious on the oil complex. while we continue to have some growth, demand is slowing overall, so that picture is not as positive. in addition, you have a pretty

ample supply situation. while there are geopolitical risks on the horizon, you continue to have opec any shale opportunity. i think the story is even though overall there's more of an oversupply picture in the oil complex, there certainly is a need within the u.s. to continue to transport the oil that's their out to the coast, and there's limited supply within that pipeline capacity. alix: burns mckinney, thank you. lisa erickson sticking with us. later on "commodities edge," i will talk about all things oil. coming up, we are going live to sun valley, idaho for an exclusive interview. this is bloomberg. ♪

david: breaking news right now. president trump is to announce an executive order addressing the issue of citizenship on the census. the supreme court has said you cannot included. he will address this in the rose garden at 3:00 this afternoon. alix: looking forward to that. a lot of implications. david: the top names in technology and media gather in sun valley for a conference. bloomberg's paul sweeney is with publicis founder and chairman maurice leavy. reporter: we are in sun valley, idaho with maurice leavy, chairman of publicis. thank you for joining us. i wonder if we can start by you giving us your sense of the advertising industry. what is the status from your

perspective of the advertising business? in one word, disrupted. as many other industries. clearly, everything is changing. the only thing which is not changing is where we can make a difference is creative ideas. still lead the advertising world, but clearly .he media has changed the consumer, which is the most important part, because the consumer is always connected and has access to so many options and services and ways of need if wehat we want to best serve our clients to be connected with the consumer, defined the consumer

at the right time, and delivery right message at the right time, where and when it is relevant. areobviously, the way we operating has changed dramatically. technology is at the heart of everything we do. we have new competitors, and we have a combination which is extremely difficult to put at work. people,the mathematics the guys doing analytics, the technologists. all of these combined is creating something which is brand-new. publicis we at started the transformation years ago. we are more ready than many of our competitors simply because we went already through so many

challenges, and he could cultural -- and the cultural operation at an developing incredible platforms , and now theyen are working extremely well together and delivering something which is quite unique to our clients. so yes, our world is disrupted. yes, everything is changing. paul: facebook, google, they are out here at sudden valley. they've become such a big advertising platform. are they a friend or foe for the traditional advertising industry? maurice: both. they are friends because we are to connect our consumers with our brands. they are great partners.

, they are shutting most of the advertising revenues on theopposite side other side. they are great partners and great competitors also. like you, there are great partners delivering information, not the same time they are your competitors. paul: the advertising agency industry globally has seen a lot of mergers and consolidation. do you think we will see more of that in your business? maurice: i believe so. i believe we see more consolidation. clearly, we are in a scale game. scale is very important. there's two aspects.

one, we will see more acquisition on the technology side. .e did our part we just acquired a remarkable operation, and i am pleased with what we have. we believe that this is a game changer. regarding the other side, yes, we will see acquisitions. paul: maurice leavy, thank you so much. alix: thank you. that's bloomberg's paul sweeney. coming, u.s. cpi. we will break it down and get the trade. this is bloomberg. ♪ ♪

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when you're not, you pay for data by the gig. use a little, pay a little. use a lot, just switch to unlimited. get $400 back when you buy the new lg g8. call, visit or click today. alix: this is "bloomberg daybreak." i am alix steel. 25 seconds away from the latest reading of an nation in the u.s. in the market, a dovish fed

playbook. italy outperforming as bond yields they are continue to come down. you are seeing buying, especially the front end of the market. yields lower another two basis points. the dollar weaker. citigroup says you can see 1% on the two-year. cpi. year on year, if you backup energy, coming in 2.1%, and month on month, also a little bit firmer at .3%. beating estimates and sequentially higher. jobless claims also ticking lower. 209,000 individuals got claims for the first time and you have the real average hourly earnings coming in at 1.5%. all this implies firming or at least a floor for inflation. you can see yields moving higher

and dollar moving higher as well. david: and taking a step toward addressing exactly what jay powell mentioned yesterday. expressing concern about why wages are not going faster. going up faster than it was before. it also continues strong employment situation which he talked about a fair amount. the mystery is why the wages are not coming. dana, your reaction. you have core cpi as largest increase on the month on month basis. what is your take? dana: i do not think it changes the story. citigroup did expect a strong core reading, especially 1.1%. is concerned that wages are not rising quickly. they are not having a powerful effect on inflation and i would

suggest that for jay powell, he said the labor market is not as hot as we would expect and that has people at the lower end of the spectrum who depend on tight labor markets. is is a structure issue or a timing issue? we just talked with david purdue who says because we are so fall down it takes us a while to get back up. lisa: we see issues impacting the level of inflation. if you look at productivity over the decades, we have decline in productivity and that can dampen return and demand long-term. we also see that new were term there could be -- that nearer term there could be cyclical issues in play. wage inflation is a later cycle phenomenon. the fact that we have had more moderate inflation is not a complete surprise and i think that firming we see on the cpi

number is within reasonable expectation and make sense given where we are in the cycle. alix: did we learn from jay powell that he is not even going to look at this number and it is more global risks? is jumpinginflation he will not care and he wants labor markets to get hot? dana: certainly the fed will take this measure into account by the concern is about the external environment, financial conditions, and the generalized degree of uncertainty. uncertainty is quite high. we are seeing that borne out. trade has collapsed, which has raised the degree of uncertainty. when we look at our change indexes, they have more or less stabilized but nonetheless there is still that scope for further trade disputes that could weigh on the global economy in the later half of this year as well as next year. david: chair powell talked about uncertainty. affectcertainty

employment situations as well as capital investment? we typically think about it in terms of capital investment. do you think that might be suppressing wage increases? dana: there are a number of factors suppressing wage increases. if you're a business or multinational you're not sure what the trading environment will look like and you may not be willing to hire or raise wages significantly if you have to curb employment later on. alix: lisa, how do you position yourself as an investor when that isooking at a fed data independent. what you do? we are advising our investors to stay neutral to their long-term allocations. meeting whatever those are, it is 50% in equities, to stay in that position. the reason why is as you point out, we have a situation where we have moderate growth, we have moderate inflation.

theluation across the -- valuations across the board are a little bit rich but not at extremes. that gives you more of a balance position across asset classes as opposed to emphasizing one or the other. david: one of the exchanges was interesting with aoc with chair powell. basically you got it wrong when you estimated the rate applicable to trigger inflation. this is what she had to say. >> do you think it is possible the best estimate of the lowest sustainable unemployment rate may have been too high? >> absolutely. we have learned is substantially lower than we thought. thatsuggests -- david: suggest they should be running the economy hotter. does that suggest an increase in wages? dana: certainly if you have exhausted the available pool of labor, which powell says we've

not quite done yet. i think we have to wait for that to happen before wages will rise. david: dana peterson of let's take a -- look at what is happening outside the business world with viviana hurtado. is ary -- viviana: there report the u.s. may suspend some sanctions on north korea. according to a news agency, the positive be in exchange for a freeze on north korea's nuclear weapons program. the u.s. and north korea are expected to hold her first working level talks in five months. the white house abandoning plans to end drug rebates. the money is collected by middlemen. say the practices resulting consumers pay more out of pockets for prescription drugs. spokesman says the administration is encouraged by congressional efforts to control drug cost. the royal navy coming to the rescue of a british tanker is

believed lost. it was escorting the tanker when three iranian vessels try to block it. the iranians were warned off. iran denied the report that comes after british forces seized and iranian tanker suspected of carrying iranian oil to syria. 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. i am viviana hurtado. this is bloomberg. alix: thanks so much. recapping the cpi data, on a year on year basis, core level 2.1%. month by month basis also saw the biggest increase since january of 2018. the move is immediate. you see selling in the bond market, yields backing up, dollar rising from its low and equities off the high. david: our colleague emailing in real earnings resume uptrend.

it is the real earnings jay powell talked about yesterday. coming up, banker to the billionaires. we will talk about what banks are doing to get the business of the ultra rich. jason chandler is next for this week's banking on change series. alix: users can interact with all of our charts at gtv . check out the features and save the charts. gtv . ♪

viviana: i am viviana hurtado in the hewlett-packard enterprise greenroom. coming up later, an exclusive interview with tom harkin, richmond fed president. daybreak.oomberg here's your bloomberg business flash. donald trump says lockheed

martin agreed to keep a helicopter factory in pennsylvania open. last month lockheed said it would shut down the plant. that prompted conversation between the president and the lockheed ceo. lockheed is one of the pentagon's biggest contractors. the parent of unicode posting earnings that fell should -- offset a strong showing overseas, especially in china. the company has not been hurt by the trade war between china and the u.s.. the u.s. justice department is investigating deutsche bank's role in the seb scandal. investigators have spent years looking at involvement with the malaysian fun. -- the malaysian fund. that is your bloomberg business flash. alix: here with us is sonali basak of bloomberg. the deutsche bank allegation or

potential investigation, how serious is this? sonali: we do not know how serious but it is not a great thing to see for deutsche bank. they have issues with restructuring and other issues with the u.s. involving money laundering. the federal reserve has been looking at them with regard to their role in danske. alix: if your management, it is something else you have to deal with. david: it does not matter if it is roadless. -- it is frivolous. you have to spend time and energy. not speaking of legal fees. alix: there is that. david: let's talk about banks in an entirely different way. belief,me for all the -- it is time for all of the lead. all week -- it is time for follow the lead. bank earnings kickoff on monday. today we look at the world of wealth management with many banks refocusing on part of

banking with relatively lower risk but strong returns. here is taylor riggs. taylor: you are right. banking sector, morgan stanley has done the best job of refocusing on the wealth management business. take a look at how it has boosted their profitability. one measure is r.o.e. up to 20% in 2018, the highest in four years and before that the highest since 2010. analysts say this could help them in the next down cycle given the high profitability and the strong recurring revenue that wealth management provides. if you take a look at the composition mix of morgan stanley, you can see wealth management much more profitable than the investment banking division, the investment management division, and the security division. the refocus has been good. wealth makes up about 42% of the revenue, up 18% from 2006. as we look at some of the european banks, ubs has done a

good job within the european banking sector of switching over to wealth management. they now get 30% of their revenue from that business. that is according to our analyst in the latest sector and have been pivoting the focus over to asia. you see the next new asia money flows at a record last quarter, accelerating to a record 18% on an annualized basis. that is a good thing because asia asset flows have been the largest growing by region, up about 29% in the last five years. david? alix? alix: thanks so much to taylor riggs. joining us is jason chandler. jason: thanks for having me here. alix: my question is is the five big enough for everyone to play in wealth management? jason: absolutely.

it is a great time to be in wealth management, especially in america. we see opportunities for clients that need advice during there is lots of room for everyone. sonali: we see everyone doubling down at the same time. the biggest deals since the financial crisis. is getting competitive. why's everyone betting on this? jason: it is a great market to be in. everyone is getting into the market. that is why we feel like we have a great advantage. we are the largest wealth manager and a global player with 2.4 trillion dollars in assets, half of that in the united states. david: you are recognized as a leader. where are you underperforming? where you see opportunity? is it china, is the europe? yes, in terms of where we see opportunity. it is in america, it is in the asia, and it is a focus on high

net worth clientele. we are proud of our globe -- proud of our growth in all of those segments. in asia we passed $400 billion in client assets which makes is the largest wealth manager. it is a great place to be with growing wealth. wealth around the world growing at two times gdp and in asia, a new billionaire being minted every third day. sonali: we see growth in the u.s. behind that of asia. in the u.s., as the european bank, how are you supposed to gain share here? what are you offering that other people are not offering? jason: what we offer his advice. we are proud of our financial advisors. we have the most productive financial advisors in the united states. average production hovers around 1.3 million, and it is through that relationship that we acquire more clients and grow our market share. sonali: what about savings?

you just them out the promotional rate of 2.5%. at the same time goldman is bringing theirs down. how is that going so far? jason: it is going well. when you think about clients and what they need, they want advice on both sides of the balance sheet. we see financial advisors giving advice to both sides of the balance sheet. anything around lending insecurities, mortgage we see market withe in the a promotional savings rate and it is attracting more new assets and more clients. alix: this -- david: this is a labor-intensive business. does that indicate to you it is more efficient to get richer people? you need the billionaires rather than 10 million or 20 million or 100 million? jason: is a relationship business. what we offer is a relationship with a trusted advisor.

where we are focused is in households, high net worth, ultrahigh net worth. roughly over one million. 80% of our households in america are over one million. sonali: speaking in how you service them, is that justified, and what kind of lending products are people looking to right now and is america over levered? they areth our clients conservative when it comes to leverage but they want to optimize their balance sheets. we look to extend credit against their house, maybe hard assets or are lending or their liquid assets in terms of a security baseline. what we try to do is give advice and provide access to credit that gives them flexibility. we find that are wealthy clients are looking to be flexible. they want to be able to buy something. having access to credit provides flexibility for our clients. alix: what kind of differing

trends have you noticed in the last does give years versus five years ago? as we are getting later into this market, clients are being more conservative. there is leffler -- there is less leverage we see and their holding more cash. u.s. clients are holding 25% of their holdings in cash. it is about being comfortable to go to sleep at night. when we talk to our clients we give advice and look at their wealth through three perspective. how much money do i have now? we call that liquidity. have i saved and allocated my money's in an appropriate way for the future? we call that longevity. how do i want to allocate money do have an impact on the organization's eye care about, the people i love, and the community i live with. we call that legacy. as our clients think about those three buckets, they are being

careful with their liquidity bucket, that is 25%. we are also seeing more assets being allocated to alternative investments. less hedge funds and more private equity and direct investment. sonali: are they worried about private equity this late in the cycle? risk returniquidity profile for private equity is still attractive for our clients and we still see increase their. sonali: your business is susceptible to a downturn. how are you preparing for a potential downturn? are in the advice business. volatility in the market and downturn in the market uses a bigger window to provide advice. that is why my feeling of having educated, experienced, intelligent advisors puts us in a position to differentiate ourselves in that market. having a global business, having people on the ground in asia, in europe, in the americas allows us all of that insight to our clients. david: we hear about a shift in

the nature of the ultrahigh net worth individuals, from old men to women and younger people. did they have different priorities? jason: they do. every family we erect with, and i know i'm client meetings essentially every day. that is why the wealth management business is great. amazoned ornk it be ubered. it is a relationship business specific to the family and the client. we see client trends growing, specifically with women. more than 40% of women at the age of 65 will live by themselves by choice or by chance. we see millennials being and influencing growth market, acquiring more wealth. different than what most people may think about in terms of their affection toward technology. when it comes to their wealth they want to receive the advice from a person. the other part we see is a global -- is a growing wealth

segment, people are living longer. the last survey we did with our clients, more than 30% of her clients believe they will live past 100 years old. if you believe you will start work at 25 and retire at 60 and live to 100, you will be retired longer than living and that has an impact on your asset allocation. david: 30% believe they will live to 100? alix: i don't want to. anyway. jason chandler of usb -- of ubs. coming up, bracing for barry. thunderstorms expecting to gain force in the gulf of mexico. more on what i'm watching in the oil market. if you're jumping in your car, tune in to bloomberg radio on sirius xm channel 119 and on the bloomberg is this app. this is bloomberg. ♪

a tropical storm

looming in the gulf of mexico and it could turn into a hurricane overnight. oil producers are evacuating personnel, shutting down refineries and platforms. we want to take a look at gasoline. this is nymex gasoline, the difference of what you buy oil and sell your product for. that is shooting higher. $24 a barrel. this has double implication because you have a refinery in philadelphia that close down. that area is short product as well and that you have this taking gasoline and products off-line so that creates issue for the regional david:. it looks like -- for the regional. david: it looks like this is seasonal as well. alix: 100%. demand, and this is hurricane season, so you want a prepping for that. it is coming earlier.

you also have to take into account the geopolitical risk feeding into the environment, what it means for supplies and inventory drawdown. supportive factors for oil. david: is there typical time to get it back up and running? alix: it can be fairly quick but it depends on the flooding. flooding is more dangerous than anything else. that is what i'm watching. you should watch bloomberg "commodities edge" where we will talk about all of that. stanley globalan head of economics calling for a 50 basis point cut. he is still on that track. this is bloomberg as the market participates in a fed fueled rally. ♪ i don't know why i didn't get screened a long time ago.

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market is nearing all-time highs as investors look for rate cuts. jerome powell leading the door wide open for action. date to on capitol hill with the fed chair with the ecb expected to follow suit. 30 minutes until the opening bell, good morning. here is thursday morning price action. .utures big positive five points on the s&p 500. in the bond market, yields flattening a little bit higher. market.08% and the fx serving a little bit more dollar weakness. euro-dollar 1.1268. let's begin with a big issue. chairman pile -- chairman powell. >> it will probably happen that we will cut rates. >> 25. >> 25. >> very little