concerned. >> president trump says he can impose more tariffs. china says that would complicate negotiations. another bank victim. bank of america missed just by the peak of trade revenue. u.s. and europe sound off on big attack. amazon faces an antitrust investigation in europe, facebook faces more questions from the house and congress pulls no punches him a calling tech giants on trustworthy, delusional and like a toddler. david: welcome back. alix: i felt like i was gone forever. have one -- david: we have one today, bank of america. alix: we are trying to parse through what's what. they had a beat on the bottom line but it seems like a distinction between for the investment banking, trading world versus the yield cover how

that is hurting profits. david: they were downing trading but they were expecting to be down in trading. it's all about net interest income. it sort of like wells fargo yesterday. more nettually interest income than last year that it was below what is expected so they are getting punched a little bit. david: we will keep our ought -- alix: we will keep our eyes out especially in that conference call. we are in a tight trading range. the tightest we've been in since nine days over the last week and a half or so. euro-dollar pretty much flat. in the 10of movement year as well. crude up by 8/10 of 1%. i felt like a left and came back and everything was the same. pretty much steady as she goes. david: things will really happen now.

eddie: 30 we will get used -- u.s. housing starts -- at 8:30 we will get u.s. housing starts. facebook has it second day in congress on his liber proposal before the house financial services committee. at 12:30 we will hear from esther george on the economic outlook. after the bell, netflix and ibm will release earnings for the second quarter. time for the bloomberg first take joined by bloomberg intelligence chief equity strategist and by bloomberg macro strategist. let's take a look at the trading. it is down, we knew it would be down. bank of america down about 8% or so. what is causing this? >> i think it was a tough second quarter in general. rates and currencies is the big drag for most of the banks revenues in terms of trading. i think honestly for the bigger picture this is not just about trading revenue, it's about a

general revenue shortfall at large which is dragging the sector lower. --you look at things like and obviously investors are not happy about this. the trading revenues across other diversified financials were that have reported, the bigger story is not necessarily that rates are low, it's that there is not enough activity in general to elevate confidence these companies will produce earning growth in the future and that's getting reflected in estimates for growth in the third-quarter quarter, fourth quarter and first of next year. >> we have had low volatility, we have low vol, that's a difficult place to be. you need to take much larger positions and the banks are avoiding this. a smaller position in a low vol environment doesn't create a lot of revenue. alix: they said specifically

when it comes to investment banking they were looking to take on more risk but i guess it depends on what risk it is. vincent: the prop trading is no longer allowed in theory by the banks. that is taken away a lot of risk. environmentol without that it is difficult to see revenue go higher. david: it really did do better but mainly on advisory specifically. to what extent is the chairman of the fed hurting the banks? is it suppressing volatility? gina: i think it is to some degree. policy in general has captivated market trends of large. they contributed to this greater suppression and volatility. what you have going on with monetary policy is the suppression and volatility. there is a little bit of a give and take when you think of policy at large.

i don't think we can squarely blame this on jay powell and the fed. it's not their fault per se the economy at large is running at the slow pace. i think you have a number of levers keeping economic growth suppressed. first and foremost you have a tremendous amount of uncertainty on the part of the business investment community which is suppressing loan growth, keeping activities levels limited and that's getting reflected in financials. they are not going to escape the broader economic growth conditions. alix: trade is one of those conditions which leads us to the second story. this is president trump speaking at a news conference. long way to go as far as tariffs. million buther $325 we can put a tariff on if we want. so we are talking to china about a deal, but i wish they didn't break the deal we had. you look at what happened

in the cabinet meeting. how do you deal with that? there's even more uncertainty when they thought we would do a pause. vincent: what we have done is a pause on trade but i will tell you from my sources and people i talked to have really good contacts in china, president xi presided over a committee july 3 and said that committee in essence until lighthizer -- if they don't drop the tariffs in place, there will be no trade deal, suggesting there will be more tariffs basically to me says we won't have a trade deal with china at least until the 2020 election, this will be used as a bargaining chip and right now from what i understand, they aren't really talking. they are concentrating on the debt ceiling and other you -- on the usmca. the deal with china is on hold so out expect almost no news except for a little blustering until at least after congress comes back from recess. david: we've been talking to the

banks, do we have a similar sort of tension here between the consumer and corporate investment? corporate investment seems to be affected by trade but the consumer not so much? gina: what you are seeing in the banks is reflected own -- in the broader economy. no real change in the consumer landscape, but the investment landscape, the business investment arms are deteriorating, the growth rates are deteriorating precipitously. last year we had this boom in investment, capex spending did grow. part of that was with tax. there was an incentive, broad spending increase for businesses. all of the trade kerfuffle started and businesses started to say what do we do, where do we go from here? do we relocate operations, that's creating an investment shift but in general business

started to slow investment. capex has fallen in the first quarter for s&p 500 companies. the guidance has become fairly --ited, analytics are losing analysts are losing faith that businesses will invest going forward. david: let's go to one specific -- tech was on capitol hill. facebook has got themselves in a bad place in terms of the security risk which is a big thing congress is talking about. elizabeth warren, who is doing very well in the polls, talking about breaking up tech companies. the interesting thing this goes forward, you have china with huawei who has none of these distractions and they put investments in the tech and they the forefront of technology. the bigger trade pictures not just trade, but who will lead the economic world in the next three or four or five years.

the united states is looking to squash technology by seemingly breaking it up and making it more innovative and making a more competitive but of the same time you make it less competitive on a global stage. this will be interesting to watch going forward. alix: europe with the antitrust investigation against amazon, that was news this morning. do you feel tech is re-rated for this? gina: i doubted. we have seen a significant re-rating over the last year reflecting a combination of lower overall earnings growth expectations as well as the regulatory environment and pressures. i think some of the other companies, the consumer focused companies like the netflix is in amazon's is a little different. -- amazon has a retail focus and consumer focus, that's a different story than facebook or google.

then you've got apple out there as well which is the complete alternative story to what's happening. it is difficult to paint tech with one big broad brush. there are a lot of issues affecting tack in very different corners of technology and i think it has become a story of dispersion of results and returns. as opposed to two years ago with the rising tide will lift all boats, everything will rally. like insulted for the toddler to be put in the same category. they mean well and are honest. thanks a lot. as a reminder you can find all the charts we will use through the next two hours at g tv on the terminal browser. coming up, a tough second

quarter for banks. capital co-cio will be joining us next. this is bloomberg. ♪ is bloomberg. ♪

♪ >> this is bloomberg daybreak. amazon is the latest american tech giant to be targeted by the european union. opening anhief investigation into claims amazon misuses data from smaller traders. the eu will look at the dual .ole -- the company's dual role amazon says it will cooperate. in europe, car sales concert -- resumed their downward spiral.

year's halfway mark, europe is facing is -- it second annual sales drop. quarter loss in its auto division. a rare setback for erickson turnaround efforts. thatposted a earnings missed estimates for the first time in six quarters. erickson said its rollout of 5g networks in asia will weigh on profits. david: bank of america reported second-quarter earnings a half hour ago and it beat on earnings-per-share but missed a bit on trading. most important net interest income. is down a tad in the premarket. we welcome allison williams and troy gayeski, sky ridge capital co-cio.

what it -- allison, what is your initial take? allison: 444 on net interest margin misses. not as bad as some others. we saw credit come in better than expected. those of the of the other two levers we are looking at and it made the difference across some other banks. wells fargo missing. citi down on net interest income, but basically talking about that guiding lower. alix: troy, do you like banks if they will be making lasts because of the yield curve but apparently the consumer banking division is doing well? troy: the biggest focus we've had on earnings is was the state of consumer credit. a lot of our risks are tied to that. bank ofsee whether it's america or jp morgan and improvement in consumer credit quality. own themanks, if you

you're owning for the dividends and share buybacks, you recognize it's on its way down in the question is at what point do you see a higher multiple because the earnings streams are resilient to economic weakness. you recall this out of the crisis were banks shifted their model from being high risk-taking to more utility like models, yet you haven't been seeing that with multiple expansions. equity,re long bank that's what you're waiting for is a final revision of long-term multiples to get some more material upside. david: that depends on what the fed does. we talked about citi and what they expected the fed to do. what is bank of america expect the fed to do? alison: that was my point about citi. they factored in and one more rate cut later in the year and that's not what the market got.

i think the other thing we are talking about trading, it is down, the fixed income came in better, but equities are worse. some of the sharpest declines across. the one bright spot we are seeing is equity capital market fees. we had great ipo activity in the u.s., i'm not sure it will be shared, but equity capital market fees almost doubling across some of these companies on a sequential basis. that's a high point. , briannvestment banking moynihan saying this on improvement in the area. they'd market share gains because they re-position their business. what does that end up meaning? alison: that's alluding to the equities business. we are hearing across banks about consolidating market share

on the equity side. we had a competitor saying they were exiting that. we have seen over the past -- >> we can gas. alison: we look to 20 -- we can gas. alison: even though the total trading revenue shrunk, you absolute gains at some of the and youu.s. competitors had an exit by credit suisse and deutsche bank and others. ,hat is the opportunity there even though the revenue climb continues to shrink, you can make it was sure gains. that helps overall profitability especially when you have companies that are not profitable pulling out to ensure the profitability of the business. david: bank of america said they are seeing a loan increase. the consumers driving the force. troy: that was the point we were

making before. we saw 15 and 16 the consumer stop deleveraging and would stop showing. we got much better growth and income. what's empowering -- they are continuing to improve metrics on the gdp level which in turn is leading to more demand for credit which has been the main focus of earnings and revenue growth from all the large institutions in the u.s.. the thing we should mention is if you look at the banks where they are consumer lending hadsed, they have actually much more meaningful loan growth , so we expect that trend to continue for the next several quarters and then back to with the downsides are. take a really going to deterioration labor market and when you look at how low initial claim still are in the fact we are pulling people out of the woodwork and labor market, it

doesn't look like those markets will deteriorate anytime soon in capex.e decline fed flipsing up, the playbook. why federal reserve rate cuts have some investors bullish. this is bloomberg. ♪

♪ uncertainty around this outlook of increased particularly regarding growth. we are monitoring these and assessing them from the outlook and inflation. jay powell continuing to signal willingness to cut rates yet it did spark a rally in treasuries and a move in gold. troy, if you're going to lay out

your perfect playbook, what is it? >> markets are partially gotten that already. whenxtreme of that was markets were priced in 75 basis points cut despite very healthy banks, very strong consumer. we know trade is affecting capex. markets got carried away and that one is more technically driven. in terms of going forward, which would hold for is getting cuts where you inject more liquidity even though this is growing strong. this year or late early next, they can cut a trade deal and if that happens, business confidence comes back and then you see the capex numbers go back up and they were off to the races for a whole other length of sustained economic growth. if you're looking for the --

isld you don't want to see 75 to 100. that means the economy is curated. >> isn't the only reason they are cutting as they are worried. are they already signaling that? >> clearly if you look overseas, europe is a train wreck. partiallyheld, because their demographic issues of cause more capex than expected. the u.s. has slowed. you look at manufacturing, is barely expanding. so i think what the fed recognized as you know is the phillips curve is very flat, they were little too aggressive in the ensuing inflation. it was anot admitting mistake but they're trying to retrace that and make sure the last thing that causes an economic slowdown that is sustained is overly tight

monetary policy which leads to overly tight financial conditions. >> do you want to buy gold or treasuries? troy: gold, no question. if you're looking at growth and future fact that -- future path the fed and talking to a total return the next several years, particularly -- no doubt it is gold. david: a weaker dollar, more inflation? >> you look at the future path of monetary policy not only in the u.s., but overseas, it will be lower rates in the next recession, the fed is going to zero. 2.1, 2.15%.is that .5 to 100t going to basis points. upside and you have the wind at your back from global central banks. says value is a

trade decade. people have been saying that for five years. it's tricky to call these big rotations from value to growth, that being said, in theory, we could be set up for a similar one we had in between -- 2002. in the late 90's, tremendous outperformance for growth of all stripes and then what finally triggered that reevaluation was a dramatic economic slowdown. so there is the potential for that. it's a leap of faith. alix: troy will be sticking with us. big tech under fire. more on the showdown between the valley ndc. this is bloomberg. ♪ s bloomberg. ♪ hey! i'm bill slowsky jr.,

i live on my own now! i've got xfinity, because i like to live life in the fast lane. unlike my parents. you rambling about xfinity again? you're so cute when you get excited... anyways... i've got their app right here, i can troubleshoot. i can schedule a time for them to call me back, it's great! you have our number programmed in? ya i don't even know your phone anymore... excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass. ♪ bloomberg is daybreak, i'm alix steel. not a lot of movement in any kind of asset class. u.s. futures holding onto gains. bank of america, investors trying to figure out the outlook

will be. we want to highlight european auto down 8/10 of 1% after --rible sales, car sailing selling all across the board. the cable rate hanging out around the two-year low. a have the secretary saying no deal is not priced in. the spread continues to get flatter. rebounding after getting hammered yesterday. we want to turn back to washington with what's going on with tact. it showed how concerns lot -- concern lawmakers are and how much the tech players think they shouldn't be concerned. an exchange between the subcommittee chair and the representative from amazon. >> do use consumer data to favor amazon products? >> our algorithm aims to predict

what customers want to buy. we welcome now from washington, david, he served as the policy director of the bureau of competition of the fcc. welcome, good to have you with us. you heard one of the exchanges where you heard lawmakers say you have too much power and you are abusing it in your the tech people say no. is there too much power, too much concentration in big tech today? >> from a competition perspective, power has to be defined in terms of a specific market. you look at the example of amazon, they are in intensive -- intensely competitive retail market. they the relatively small market share. it is important not to look just at size. what amazon and some of these other competitors do is they help make the market more efficient by eliminating

middlemen, by having greater at -- access for consumers and ultimately leading to lower prices. necessarily something you need to be concerned about. david: the definition of the market is critical here. if you define it as anybody buying anything any place, amazon is not dominant. if you define it as online purchases particularly in north america it's a much stronger position. the same thing is true in europe. definitione relative ? question ofjust a whether market share is. as the amazon witnessed pointed out, there is emerging competition from traditional retailers. even though somebody like best buy and target might have a smaller market share, they are a very intense competitor, because they offer amazon things cannot.

so market share is the beginning of the analysis and the question is are consumers benefiting or harmed. 30 years ago, justice breyer in an important decision said courts should be very reluctant to challenge practices that lead to lower prices. the people who wrote the sherman act were concerned with prices that were too high, not too low and when practices lead to lower courts enforcers and should keep the guns in their holsters and not draw them too quickly. david: antitrust has been focused on prices paid by consumers. at the same time we have the head of the antitrust division saying it's not just about price. if you look back at what happened with microsoft and google today if the government didn't go after that. is the dominant players are so large it doesn't allow the new guys to come

along. what about that? >> that is absolutely a concern. concerns include innovation, consumer choice. they include product quality. all those are relevant and to the extent that firms engage in exclusionary practices, unfair practices that aren't really profit maximizing the keep rivals from being able to enter or expand in the market, those are in antitrust concerned. david: which takes us to the exchange we listened to and whether amazon might be using its enormous data to benefit product -- it's products and dis-benefit other products. the composition enforcement authority saying they will go after this on the subject. always remember that eu antitrust laws are different than the united states antitrust laws. the eu is trying to manage the market and it is much more concerned about what is the

impact on rivals than we are in the added states. in the united states the key concern is what is the effect on consumers and so far a strong story hasn't been told about how amazon misuses data in that fashion. david: let's go back to your old outfit. there are investigations we are told that were started on the , are thetech players proceedings on capitol hill likely have any affect on those in debt potential enforcement actions in the executive branch. he was brought before congress before getting sued. >> people in the enforcement agencies listen to what's going on on the hill as they appropriately should and that is important, but the kinds of things the hill comes up with, the testimony from the hearing yesterday usually doesn't matter

much when it comes to going to court. that is the entity that ultimately will determine whether or not there is an antitrust violation. what you need to win in a casing court is what president adams called hard facts. facts that are difficult to dispute and we are a long way from political rhetoric, the hard facts you would need to prove an antitrust violation. david: thanks for joining us today. former ftc policy director. alix: staying with tact. troy of sky ridge capital, what do you do? you looks it -- troy: at your tech holdings and say we know the biggest strategic threat is a washington invention. you so what happened to facebook. compliance costs went up dramatically. point, amazon is much more resilient. the other thing, they create real jobs. bricks and mortars in terms of

logistics and warehouses, they have a much broader footprint. when we think of the various tech companies now, we think google is probably the most vulnerable because if you look at some rhetoric going on with them around trying to get their search engine in china and excluding the pentagon from ai, that seems in the short term two of the bigger risk, but what you do, do you rate them higher, you break them up? there seemed to be mixed views in the tech community. that could have the most price vulnerability similar to what facebook had several years ago. david: we saw them up -- alix: we saw the most selling in tech stocks in months. long treasuries is the most crowded trade. alix: for the second month in a row. how do you not own tact? -- tech? troy: one of the reasons we

laugh people comparing european to u.s. stocks. european stocks don't have these massive growth engines. all the growth in tech and health care and biotech in particular. it is impossible to not participate if you are long equities, that's where you will get the best growth. other than economic weakness, you also have this threat hanging out here that can periodically elevate and potentially create opportunities. david: it's a real threat if someone doesn't try to break them up would take action. even the fines are big. they just went right past that. so a fine won't slow them down. troy: 100%. you're talking something more dramatic in terms of breakup. what does that mean, how is it done. , thate point is uncertainty that may not be priced into the market, it doesn't mean you don't own tech stocks, it's just something you should be aware of and it may infringe upon the debt you're paying. >> will earnings save and change

this conversation? troy: markets have rebounded dramatically. unless you have blockbuster --, i don't think it will change the narrative in the short term. once again, tech should lead earnings out of this recession. in a non-recessionary environment that is guaranteed to occur. alix: do we still have some weakness in the back half that has been accounted for? troy: if you look at earnings you are at 17 half times. closer to 18 that markets are under appreciating the trade frictions and the impact it will have overseas. you look at what's happening in europe, there is the potential markets are underestimating continued trade friction, lower thatue, lower growth and

means you're actually buying stocks at a much higher price or least a marginally higher price. alix: great to see you, thank you so much for joining us. david: let's get a look at what's going on. she is here with bloomberg first word news. >> some republicans call the measure harassment. some democrats say the party isn't going far enough. that was the reaction after the u.s. house voted to condemn president donald trump for comments that have been criticized as racist. several publicans voting for the resolution. the next leader of the european commission wants to convince president trump he still needs old allies. u.s.ants to persuade the is better to find compromise and work together. the two sides are fighting over trade. the u.s. is threatened to impose a tariff on imported cars. retired u.s. supreme court justice john paul stevens has died. he was 99.

in 1975, gerald ford nominated stevens to the court, but he became the anchor of the his liberal wing. stevens retired as a supreme court second oldest judge ever. local news 24 hours a day on air and at tictoc on twitter powered by more than 20 700 journalists and analysts in more than -- in0 journalists and analysts more than 120 countries. david: he was talked about as a liberal, he was appointed by conservative and he always said he didn't move, the court move. he stayed where he was. he also wrote over 1000 opinions and he was the dissenter in the bush v gore decision that put president bush in power. alix: you didn't clerk for him. david: i did work with him. he was very close with my boss. he was a real gentleman, very smart. chicago, he from

knew business law better than anyone other than maybe my boss did. he really understood corporations. the business justice is that how one might have thought about him at the beginning. david: exactly. he knew the inside workings. today forn doctrine toing court about referring -- for the statutes. he will be badly missed. alix: this is bloomberg. ♪

♪ alix: this is bloom -- >> this

is bloomberg daybreak. coming up in the next hour, patrick mchenry of north carolina. >> here is your bloomberg business flash. the pairing of united airlines joining delta in raising its profit forecast, strong travel demand means more pricing power for the world-class second largest airline. will help the rising cost pressures from the grounding of the boeing 737 max. a watchmaker cracking down on so-called gray market distributors who make unauthorized sales. also so revenues in hong kong fall more than 10%. little protests there have cap tourists away. -- jumping over bill gates to become the number two ranked person on the billionaires list.

on tuesday it climbs to a record. ed aestimated is a -- little under $108 billion, $200 million ahead of gates. that's your bloomberg business flash. alix: luxury retail. they made some really smart investments are we will learn of what they are selling in the world. david: the chinese really like those. alix: we talk about how banks want to manage all your wealth money. there you go. we turn now to wall street, three things wall street is buzzing about. said to be hiring about a dozen bankers to bolster its wealth management unit in the deutsche bank broker-deal could pop up the mp. it could get a top 10 spot in asia.

step, brain surgery. elon musk says it's ready to begin brain surgery to allow people to work computers with their minds. sarah here -- is here to explain. you are an expert on brain surgery. [laughter] >> that's exactly what i yam. david: deutsche bank got 12 private bankers. >> where they are looking to expand his wealth management. that, it isnk about a steadier revenue stream. yes they are absolutely doing a huge overhaul of the banks, they are said to spend $8 billion by 2022, cutting thousands of jobs across trading death -- trading debts. actually want to expend is the wealth unit.

alix: for bank of america earlier, the wealth management unit was up. the pretax margin was 29%. if you are in it and doing well, you do well. david: particularly if you're in the business and one of the bankers. and theys two people want more people from credit suisse because they stepped up the bar. for this baseis of the banking industry. we have seen across earnings reports only goldman sachs really posted an increase in equity trading revenue. alix: what i was interested in is there a talk -- they are cutting tech spending. the one area where everyone will be spending a lot of money on, they are not doing it. >> we heard yesterday from jamie dimon saying in order to win you need to spend and he was talking about tech spending. down $11 locked

billion for its tech expenses. deutsche bank has other focuses. this is where they are stepping back from saying by 2020 we could actually see tech expenses cut by a quarter. that's a significant amount and it's interesting to see at a time when you're seeing the tech revolution. alix: how many people does kathy manage? david: a huge amount. alix: that's amazing. david: it cyber and compliance. they are basically trying to transfer about $160 billion from deutsche bank for the hedge fund brokerage unit. what are the problems? >> they are hitting some roadblocks because many of the clients of deutsche bank holding $1are billion a day to go elsewhere. that's putting pressure on deutsche bank to transfer not

just the balance, but also the technology and supposedly potentially staff as well. according to people familiar with the matter will be sitting down with u.s. hedge fund to convince them to stay. they did this last week in europe. clearly an issue if you're trying to transfer balances. slowly -- day you are david: there is always difficulties you don't anticipate. let's turn to brain surgery. no, we are moving, let's go. >> easy enough. troy: what about brain surgery -- david: what about brain surgery and elon musk? >> this is unbelievable. they have been pretty secretive up until now. ony have mostly been working rats. they are not working on humans. they did issue a research paper

saying they have now done surgeries on at least 19 animals and have successfully implemented these threads. they are very small wires with thousands of electrodes on them. 87% of the time. drillal sounds easy, they four eight millimeter holes into your brain and then they put these little threads into your brain and the idea is if you want to text someone or email someone, all you need to do is think the words and they will show up on your computer screen. they have said in the future you can download languages into your brain. but what if you don't want to? if i'm thinking something that i don't want to the no, how does that work? >> i'm not sure how that works, i'm sure you have control over it. they are thinking the best form of using it for now would be people with paralysis, people who would need a form of

communication. they will be taking approval from the fda to start clinical trials of humans as soon as next year. muskn you imagine for elon when you can just think something britain -- something. david: many thanks to sarah. coming up, how president trump's racist remarks that affect getting budget deals done. alix: if you're heading out to jump in your car, don't forget to tune into bloomberg radio. this is bloomberg. ♪

david: here's what we're watching. it's about president trump's tweets during the four -- congresswomenour

to go back where they came from. we have the house formally condemning. the house strongly condemns president trump's racist, that of legitimizing increased fear and hatred to new americans and people of color. this is a formal censure against the president. alix: what does that mean? what kind of wages that hold? -- weight does that hold? david: it's more symbolic than political. in a bloomberg news piece, we got some issues that need to be addressed and perhaps in the next two weeks, particularly the debt ceiling and the budget and the negotiations between the treasury secretary and secretary pelosi. this might actually get in the way of that. also didn't-- alix: speaker pelosi get in trouble for this? avid: it turns out there's

rule that goes back to thomas jefferson saying you're not supposed to say nasty things about the president from the floor. the house in the past couple of years has said calling him a racist is one thing you can do. she was banned for speaking on the floor for the rest of the day. wonder whichto side comes out with the best spin. david: it's political on both sides but the interesting thing is president trump essentially pushing the democratic contenders to the left because they have to rally around the new members. alix: i see. this is what i learned in the morning. coming up, more bank of america earnings. this is bloomberg. ♪ hey! i'm bill slowsky jr.,

i live on my own now! i've got xfinity, because i like to live life in the fast lane. unlike my parents. you rambling about xfinity again? you're so cute when you get excited... anyways... i've got their app right here, i can troubleshoot. i can schedule a time for them to call me back, it's great! you have our number programmed in? ya i don't even know your phone anymore...

excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass.

david: they talked up -- alix: they talk about the global. there is an upside on that. david: they also pointed to the fact they're doing somewhat better. they redid their investment bank in situ back on track. seeingmarkets you're not movement. pretty much going nowhere. for the last nine trading days. crude now up by 1%, the biggest selloff arid not a lot of action. i wonder what the next one will forecause we were waiting

fed chair powell and now what? david: i'm not sure what they are waiting for now. time now for the morning brief. at: 30 eastern time. 10:00 this one in front of the house financial services committee. at 12:30 will hear from kansas city fair president -- fed president esther george. at 2:00 -- after the belt, ibm releases its quarter earnings. earnings, they reported their second-quarter earnings and joining us is a bank of america shareholder walter, the greenwood capital cio and allison williams, bloomberg intelligent senior analyst. let's come back to that interest

thing. the chief financial officer said it is up year-over-year in the recent downturn was in the long end of the curve. that's what's been hurting but they think that stabilized. >> that is similar to some pressure at wells fargo in terms of looking at reinvestment yields, some of the bigger portfolios these banks have. i think like everyone we are waiting to hear what the guidance will be on the analyst call. that management deferred to answer on the media call that may signal it's going to be negative. it may signal there will be complexity there. what we've seen with the other just thet, not guidance, but what you baking and. how much will they cut in terms of determining.

what do you think so -- alix: what you think so far? the report was solid. thehe report was -- >> report was solid. you are seeing pressure there with the interest rate -- interest rate structure. i want to focus on the 46% of revenue that is non-interest income where you saw some strength in the bank. that is the benefit of this business model think of america has that they do have a lot of other businesses to lean on as they seeing pressure. i agree it will be instant to see the guidance. citigroup guidance from one rate cut. i would prefer them to be more conservative and bring more rate cuts. it may be a surprise if we don't get those cuts. david: they've been known -- >> we will want to hear more on guidance and credit coming in better -- better.

i think that is important because when there is revenue pressure, you want to know there will be some offsets. , bank ofof expenses america results today talking about some of the benefits of digital and technology. i think investors want to see or i would want to see if i was a long-term investor, continuing with technology but continuing with other areas and making some cuts. bex: deutsche bank will cutting on tack. -- tech. that would kind of makes sense theit is important that u.s. banks have been spending more on technology than they have been winning and that does highlight the importance. perhaps not deutsche bank's plan but maybe they have not spent the money to spend. just onee more did

more beat on deutsche bank. wasn't there a general understanding deutsche bank had been behind? invested even in a way like barclays had invested. >> i think that's one of the important things about learned isis we have being at the four front and expectedhese network being an early adopter and weeder, you kind of lock that in. alix: berkeley is headed out about european bank. combined with oppressive violations could lead to more shortcut rating and banking shares trying to call the bottom actually in that sector. had to put your european hat on, would you be willing to bet on that or would you rather buy u.s. banks that

may not have a ton more upset but a flattening yield curve? the european banking sector is where investors go. i would not be inclined to do that. certainly, a devalue sector now -- i agree from a tactical standpoint could see short covering. we would rather stay with the higher-quality business models in the u.s. if i could make one point over the technology discussion, jp morgan spends a lot of time talking about that. 25% of their account openings are digital. they stopcenario did spending on technology even in a recession so it is important for this sector. david: it was not just jp morgan. we saw this morning that bank of america is crawling. they are at sitting -- adding digital customers. time spent a lot of talking about bank of america gaining share. share andnies gaining

trading other banking businesses but the largest u.s. banks are in the u.s. and a lot of that is aided by technology in terms of mobile banking and payment services, etc.. bank of america highlighting some of the dow results this morning so that is helping some of the bigger banks. alix: trying to explain to your mother how this works -- do not recommend that. morgan stanley -- who is doing them best? allison: one thing with morgan stanley, golden has equity trading results. that raises the stakes for morgan stanley. we expect they remain the global leader but are they keeping pace , and in the longer term is there opportunity for them to gain more share? the second key metric for morgan stanley is their pre-taxed

margin in the wealth business, bank of america called the record. 29% on the surface. enough to make that a new record and we are expecting to see good things from morgan stanley. david: based on what you have seen so far, particularly bank of america, if you had to make a move, either go heavy or lighter. which would -- we would you go? upside or downside? a good question. we are comfortable where we are but if you had to push one way or another, i would say tactically you could see upside. the expectation levels were pretty low coming into this earnings season. as we progress through earnings season and this contrasts with other areas of the market, they are starting to look good. we have tracked evaluations and dividend yields.

is where i would be. if i had to choose, i would say tactically a little bit longer. you are sticking with us. alison williams, thank you so much. we are going to look at investors playbooks. there continues to be space with a dovish fed. this is bloomberg. ♪ >> we are carefully monitoring developments and assessing implications for the u.s. /economic outlook and inflation.

viviana: this is bloomberg daybreak. amazon is the latest tech giant to be targeted by the eu -- you.

anti-from tweets claims amazon this is desmond uses data from smaller traders. the eu will look into the companies dual role as a retailer and host to other sellers. amazon says it will cooperate. in europe, car sales assuming a downward spiral. they fell 7.9%. the years halfway mark, europe is basing its second annual sales drop, issuing profit warnings. bmw recorded a loss. a new frontier for elon musk. his start up says it is ready to begin brain surgery. the company unveiled its plan to implant patients with electrodes with computers. so far, it has only been tested on rats. it needs u.s. government

approval. alix: thank you so much. that does not sound scary at all. the powerpoint is alive and well. investors getting their playbook says the fed continues to stay dovish. our guest talked about why he is buying gold. >> it is a binary choice now. you're looking at economic growth, the future path of the fed and talking about total return the next several years. no doubt. walter is still with us. what is your topic? -- top pick for that? walter: i would agree gold would benefit from this massive central bank easing cycle we have -- we seem to be about enter with the fed. every central bank around the world easing which is going to put currencies in general under attack.

like gold. i would agree. we have got exposure to gold miners in our etf portfolios now. david: when you do things like invest in gold, it is not saying much about future growth. the global for the country as a practical matter. it is what the central bank is telling us we are not going to have much growth. well, honestly if powell were to tell the truth, the reason he is cutting rates is because what is going on in the rest of the world and what the interest rate section is overseas, the spread between -- the fact is the fed between the funds rate and other central bank rates is to white and so powerless trying to get closer to those levels. that is why he is cutting interest rates now. if you look at the economic data , it has slowed. it does notuted -- warrant in and of itself cutting interest rates.

some of these factors coming into play so powell has taken that into account. that is why he is going to cut interest rates in july and again in september. alix: jp morgan had a callout that was interesting. decadealled trade of the . so much money has gone into low volatility stocks. that is a bubble and value is going to come back because of that. the chart you are looking at his growth versus value and how growth is continuing to outperform. when would you be betting on that kind of trade? bottom this is like the in european financials. because this has been going on for me while. something we discussed internally for some time. it is tough to make the call. in our portfolios we like to have exposure to both so it like to have exposure to growth stocks that benefit of the past years as your chart demonstrates. we also think there are

opportunities within the value side of the equation. it comes down to factors. it is technology and health care , discretionary versus energy and financials at the end of the day. that is the kind of -- you have to make a call on the sectors to make a call on that chart turning one way or another. david: what are one of the things we hear about? the imbalances involving the system and you look at value versus growth and you wonder. basically, etf flows in the low stocks -- people are crowding in, betting against volatility maybe because of the central banks. at what point similar to value versus growth is this overbought? when you look at the performance of some areas, like utilities and real estate of the past year, that would be reflective of what your -- you are talking about. there is a risk in the short term with names and technology, like microsoft is a tremendous

company. we have exposure. coming into earnings, there is a lot of risk because of the kind of 45 degree angle you see the start trading at. there is an balance. the market -- in balance. the market is not really turning but underneath the surface use the tremendous individual stocks volatility. witness dsx versus another name so individual earnings are going to drive that stock volatility with the vix, 12.5 there is more risk of that's going up versus going down. alix: walk that infamy walter and -- what stock are you trying to buy on earnings if they do poorly or have more volatility? what you have to look at, the market tends to overreact in the short term to a headline. , in theseave to do is

cases take in and make sure you're comfortable with the story, that there is not a fundamental change. maybe the company missed one-time factors. take advantage of the volatility. you have to dig in on a case-by-case basis to understand why the stock is reacting the way it is. there is a long-term story unchanged, you can go in and take advantage of the plot -- volatility and make a purchase. todd will be staying with us. coming up, a cautionary message for the global economy. shares are down after the railroad company -- outlook. this is bloomberg. ♪

bottom-line.or the we will look at three companies. qualcomm, its shares have been up since the department of justice intervened in the case on the west coast.

coming into the district court and of the court of appeals, you should stop your order. do not have it apply to all, in its licensing patents. the ftc suit qualcomm we're the government suit them under a different administration. the court said qualcomm is doing it the wrong way. they have to license. we are going to limit how much they charge. the government has come in against its own ftc and said please, stop that order. do not make them change their procedures. the stock is going up. alix: that hurts my head. david: the government is against itself. therefore you go, stock rally. what companies are under as they roll out there five g network? are basically said they going to spend a lot on rolling out the network in asia and that is going to a on profits. this is the first time they missed analyst estimates in six quarters.

they will see how smoothly they can roll it out and if the profits hit long pay off. -- longer turnout payoff. it could be a while before you can actually use it. time this is the first they have gotten a clear outlook. david: csx, for more we bring in a bloomberg opinion columnist who has written a column on this subject. alix: they now see their revenue for the full year is going to be down 1% to 2%. they had been looking at a low single digit gain so this is a shift here and they say this is based on our current read of the conditions. it's conditions improve the back -- of the year. to make him a you do not come out and make this significant of a cut unless you see warning signs. we need to be cautious on the

environment we are in right now. positiveey are pretty where you are. if you remember in january, these recession worries were at a fever pitch. csx was among those who said we are not at the point yet. growth is holding up. volumes are holding up. now we see volumes come down significantly across the board, particularly at in her models. csx has been coming from less profitable intermodal lines. the rest of it is tariffs. the stamping demand. you are not seeing industrial companies by as much, especially after they had an uptick in inventory last year to get ahead of some of those tariffs. the jb huntned story and how the dow said a good -- had a good rally yesterday versus the esf. brooke: we have seen week

trucking rates just taking market share away from the csx. that could be playing into their forecast as far as volume. there is also a question as to whether a are being too optimistic. it will be interesting to see see where they fall in the spectrum. are you conservative, like csx? or are you jb hunt and you think this is a momentary blip? i tend to fall on the cautious side. david: walter todd, come in here. i we talking to the shipping people, whether trucking to get a sense of where the economy is? do you look at the shipping situation is warnings on the horizon? walter: yes. if you look at the cash trade index, that has been down for quite a few months in a row and that has been a leading indicator for shipping. brooke mentioned the delays we have had for the past year. the reaction in csx versus jb

expectations.n to jb hunt was flat on the year so rallied off of that better than expected. csx was up 28% so it is down. i would encourage reviewers to go listen to the csx earnings call. it is a microcosm of what is going on in the economy now. that is a great point. how conservative are you going to be on the cuts? walter todd will be sticking with us. cryptocurrency enters day two. we will stick with a republican congressman from north carolina. ♪

alix: this is "bloomberg daybreak." i am alix steel. nothing happening at all. your standard playbook. equities go nowhere during

european car sales fell off a cliff. you have bonds going nowhere. the yield curve going nowhere. the cable rate holding at two-year lows. -- we are getting eco-and housing starts as well and looking at what is happening with big banks. housing starts down .9%, worse than expected but building permanent style whopping 6%, well below expectations. david: it is fascinating. mortgage rates are going down. homebuilding rates at its second-longest winning streak. a little bit light on the starts and the permits. alix: indeed. you have to wonder how much will be seasonal and how much is not and how much does it matter? we just have a headline that blackstone raised $11 billion for its largest secondary fund

meeting there is so much money out there. rotated as it classed asset class. does the ego data actually matter? david: it matters to the economy. alix: it matters if you're a homebuilder. like to haveuld millennials forming households and buying houses and building houses. alix: the numbers tell us that did not happen. david: let's find a what is going on outside the business world viviana hurtado. viviana: some republicans: the measure harassment, democrats say the party is not going far enough. that was the reaction after the house voted to condemn donald with comments that have been criticized as racist. several republicans voting for the resolution. today the mexican truck door -- drug lord known as el chapo will be sentenced. was convicted on multiple conspiracy counts and a drug

trafficking case. the guilty verdict triggers of mandatory sentence of life without parole. the biggest question is whether el chapo will speak at today's hearing. nancy pelosi says she seeks talksd motion after more with steven mnuchin about raising the debt limit. pelosi is trying to deficit higher -- is trying to negotiate higher spending limits. a break could depend on funds for veterans health. global news 24 hour -- 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. david: thanks very much. in chargeok executive of its move to create a cryptocurrency spent yesterday answering sometimes hostile questions from senators. today he faces the house. we welcome the ranking member of the financial services committee , republican patrick mchenry from north carolina. thank you so much for joining us. appreciate it. rep. mchenry: thank you.

david: watching that hearing, i asked myself how much of this is because it is facebook and how much is because it is cryptocurrency? a lot of it seemed to do with facebook. do we trust the company? , 10%mchenry: 90% facebook the nature of digital currency and blockchain. the fact is the technology is here. now we have large corporate trying to engage in the development of a new digital asset and an additional currency and an additional payment platform. i think what we have seen now is a knee-jerk reaction based off ,f the fact that it is facebook without deeply understanding the technology that underlies this new project libra or the broad understanding of digital assets and digital currencies. we heard mr. marcus from facebook say we understand we have a trust problem and we will

do whatever we need to do to remedy that. what can they do for you to say i now trust facebook? rep. mchenry: my view is they have a consortium and a new group to develop this technology. coin,s were just facebook they knew they would face enormous scrutiny by governments around the globe based on their previous privacy issues. or lack of privacy for users. nature of this is somea association outsourcing of this to a separate party for the implementation of this idea. allays their way to privacy concerns that are emblematic of what facebook faces. david: does that make you feel better or worse? whose jurisdiction with this

fall under was mark the united states, switzerland, who has regulatory authority? rep. mchenry: that is a key question. why switzerland? why not the united states. these are american corporate's developing this technology. we have 28 of them that have joined in. why do they have a domicile in switzerland? that ita branding issue is international, or is it based off the regulatory structure in the united states? that is a fundamental question. that does not make me more game for this idea. however, i think what we have just seen is the idea of killing an idea before it grows because we do not like facebook. i do not think that is responsible nor appropriate for government officials to engage in that. david: will be watching with

great interest. we now have a debt ceiling that has to get addressed, we have a budget that has to be addressed. at the same time the house of representatives seems to be at war with the president with this resolution yesterday. how did you vote on that? rep. mchenry: i voted against it. taking shot at everyone in the president's statement, much less every statement by the speaker of the house is not what we should be about. we should be talking about fixing the problems of the american people and trying to build consensus on the problems people care about. reaction we see in politics around every statement, we had a group within the house that called nancy pelosi a racist a week before calling donald trump racist. this is much more about political warfare than about substance. i want us to get back to substance. david: is it about public relations, whether on the right or the left, or does it get in the way of substance?

the debt limit, the budget, is it possible for congress to be sniping back and forth and still come to terms and get the nation's business done? rep. mchenry: yes. that is my hope. the treasury secretary needs to state clearly the date by which the debt ceiling has to be raised and leave it to congress for us to figure it out. it is not his job, nor is it any treasury secretary's job to get into the weeds of how we legislate and fix this problem. he needs to state the date. the markets understand that, and then congress will respond. we will respond responsibly after trying every other option, we will respond appropriately. david: a version of winston churchill there. walter: from york -- david: from your point of view, is it open to do with the debt ceiling in the spending caps at the same time. that seems to be what is being

proposed -- a packaged deal. rep. mchenry: that is the desire by speaker pelosi. i do not think that is a requirement. given the early date that has been talked about, the range of dates in early september, i think we need to fix this problem and then come to terms on a budget deal in the fall. david: thank you so much. appreciate you spending time today. that is representative patrick mchenry of north carolina coming to us from the capital. alix: staying with tech, the mood in congress very scathing. >> the internet has become concentrated and less open and grown hostile to innovation and entrepreneurship. >> facebook is dangerous. >> i do not trust you guys and i'm not alone. alix: still it does is walter todd of greenwood capital. that was a taste of some of the words thrown at big tech companies. you like technology? walter: technology is a sector

we like. tactically in the near term it is extended relative to the market. it has had an incredible run. there are different areas of tech. these earrings are focusing on the social media, facebook, google, and so forth. we do have exposure to google. we cut that exposure in the last month or so, given some of the headwinds. it is still good business model, but we recognize there will be -- our other business model is not subject to these headwinds you are hearing about in congress. we like software, we like selective exposure, we had some cap equipment which had a better-than-expected report. we think tech is extended but longer-term you have to have exposure. alix: you also hold apple some

interested to see how the backlash from congress on the tech companies, how you view that in relation to apple? walter: i know apple has taken some shots in terms of their app store and how they run that. they have a suit going with spotify. risknk apple is less at than the focus we are seeing right now. we are comfortable with that exposure. they should benefit from the rollout of 5g, which you referenced earlier in the coming year or two. a new phone cycle there. apple not as much of a concern as google. alix: thank you for your time. walter todd of greenwood capital. coming up, netflix versus its rivals. we will look at the streaming giants future with jon klein, former cnn u.s. president. that is next. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." secretary general live from the g7. here's your bloomberg business flash. today shares of swatch are higher. the swiss watchmaker is cracking down on gray market distributors cutting into swatches pricing power. the company also saw revenue from hong kong fall 10%. political protests have said tourists -- have sent tourists away.

makerch luxury goods climbed to a record. estimated at a little under $108 billion. about $200 million ahead of don't gates. a group -- ahead of bill gates. the unit buys interest from investors in private equity funds who want to cash out their long-term holdings. the market -- investors want steady cash flows with less risk than traditional buyout funds. that is your bloomberg business flash. david: a lot of money out there. alix: basically you just raised a lot of money to buy out other investors. it is a pretty passive investment. it is not like you're going to buy a specific company and fix it up like a traditional buying equity. david: i guess it is not quite good enough to do an ipo. alix: that is how much money is sloshing around in the world.

some say that means you will not have a huge market selloff because you have $11 billion in secondary funds at blackstone. fine. they are doing just it is time for all of the lead, a deep. it is making headlines and moving markets with insights from industry veterans and insiders. today we are looking at streaming media as we get netflix earnings after the bell today. netflix facing competition the likes of which it has never seen before. we welcome jon klein, president of the company -- he also used to run cnn. let's talk about netflix. there has been a story of how may subscribers you may add and how fast. it will not be quite as fast right now. where's netflix as we see these other competitors? jon: it is slowing down domestically, but accelerating globally. this year, 60% of their

subscribers are global. next year it will be 65%. they have 55 million u.s. subscribers and the rest of their 150 million subscribers, which is the number i think they will announce later today, our international. david: in the united states it was a first mover. it is about to use some of that advantage. maybe it still holds that advantage a little bit better outside of the united states. jon: that's right. they were the only game in town and now is getting very crowded. the streaming wars are so on. we are in this pre-d-day where the big players, warner media and apple and disney are laying their battle plans, they are making big moves. disney just acquired total control of hulu. hulu will have a single owner and be able to pursue a clear strategy.

they have 30 million subscribers. you have warner media and nbc universal taking back from netflix the most popular shows on netflix, friends and the office. friends will be one of the pillars of the new hbo x product from warner media and the office will be one of the pillars of the new nbc streaming officer. alix: that is because friends is the best show. aside from that, i want to raise the emmys, game of thrones with 32 emmy nominations, hbo vaulting past netflix. we thought it was going to reverse. hbo is nothing after game of thrones, netflix will pass it. what is the content like on these guys? .on: content is hit or miss the greatest minds in the history of tv programming bad about .100. 90% of the shows these networks launch fail. network -- netflix applies

artificial intelligence to what they're doing so they understand their content better than everyone. their batting average is .250. that is a big improvement, but it is still not 1000. david: can artificial intelligence be the library? friends, you know it is in the can, you have it. if you're netflix, you are still taking the risk of buying a new show. jon: without ai, you're dealing with a blunt instrument. you know france's popular, but you do not know who it is popular with, you do not know what else the people who love friends also love. warner media pullback friends by paying $100 million per season. networks -- netflix was only willing to pay $90 million. when netflix said $90 million was the price, they are basing that on vast data about friends

and how it could be used. they could probably tell you wanted joke per penny basis what it is worth. how much is ross worth versus rachel and nobody else can come close to that. we work with companies to help them get back in that game. i think for a couple of years, netflix is any good position. during that time, it will be a battle of second and third place. disney is in a very strong position because marketing a new streaming service is about explaining to customers what they will get and why it is worth the money. that he votesand not only the family-friendly programs of the disney cost service, the disney -- the avengers franchise, star wars and star trek and all of that, and they also have hulu and espn plus. david: to give you a sense of the relative importance, we will

put a chart up that shows the market cap. the white line at the bottom is netflix, which is not showing up a up flex. the yellow line is at&t when they bought time warner. blue is disney, showing a steady increase. as a practical matter, can netflix survive without a big library? jon: they are building one at a cost. their cost -- every time they spend is spent intelligently but it is still a cost. when is the genie going to go back in the bottle for netflix? when are they going to start be valued not as a tech startup but as a traditional media company. i said on this program, winter is coming for netflix in the form of more challengers. let's keep in mind also that when winter came, the humans did win. there is a battle, but it is not foreordained that netflix loses. they have a big advantage because of the ai.

david: come back to where we started with subscriber growth. there has been a lot of pressure to increase their rates. then you have disney come in and undercut them on the price. we will open the false for those classic disney -- open the vaults for those classic disney movies. will there be a constraint on netflix? they have to get more money to pay for their library or get more subscribers. disney is doing everything they can to be the clear number two. they want to be the clear leader among all the insurgents. the content is beloved by millions of people and an instant brand recognition, that is powerful. if you are warner media or your apple, what is apple's promise when it comes to content? they used to be about think different, but they rolled out a service that thinks the same. alix: we know that david is ross

on friends. jon: the character was based on him, yes. alix: i might appear monica but deep inside there's a lot of phoebe. great to have you on set. coming up, bank of america analyst call underway. some of the highlights after the consumer arm outpaced the training arm. on bloomberg radio, sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪

alix: here is what i am watching. bank of america reporting a record second-quarter profit. the analyst call is underway right now. taylor riggs is monitoring the conversation. anything about the net income interest forecast? taylor: we just heard from the cfo saying the net interest income for 2019 will grow at 2%.

in the first quarter the number was 3%, which is half of 2018. we just did get that number about 30 seconds ago, looking at and i i to grow 2% -- looking at nii to grow 2%. things they are talking about, strong asset quality which they are continuing to hear from jpmorgan and wells fargo. the mortgages they are lending out moving up in credit quality and continuing to see some of the premium right off which is lowering the nii. consumeree a healthy and a strong economy and strong asset quality. within the slowing economy we know bank of america is all about responsible growth. did they have any more expense levers to pull if something were to turn in the economy? they are saying managing expenses for them is key. they do not see as an area where they would increase further expensed reduction, the key here

for me is loan and deposit growth trying to offset the expectedn nii, but nii to come down pretty much like we have seen from every other bank. alix: we were talking earlier, what you want to be as a bank? you want to be more conservative like jpmorgan, or less like citigroup? david: it shows me how much the fed drives this. net interest income goes down, but the credit is stronger. alix: and when you have a good consumer, there is that. stocks off the lows of the session. that does it for us. , morgan stanley wealth management head of equities models portfolios. this is bloomberg. ♪ i don't know why i didn't get screened a long time ago.

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jonathan: coming up, the president applying pressure on china as officials prepare for further trade talks, keeping chair powell on the path toward easing even while the data in the u.s. comes up hotter. waiting on the outlook from america's biggest lenders. bank cheese prepared to lower rates. good morning. here is your work -- your wednesday morning price action. futures unchanged. muted price action in foreign-exchange. yesterday, plenty of price action. this morning yields down one basis point. your yield on the 10 year maturity, 2.09%. let's begin with the big issue. a tug-of-war between solid economic data and risk for the outlook. >> things are better than people think. >> as investors try to dig through, they have to look at the underlying