>> halfway through the trading day. i am kriti gupta. "bloomberg markets" starts right now. ♪ let's jump into the price action. oh wait and see mode ahead of jackson hole later in the week. even though we started in the green, we don't see a ton of conviction. trading flat. that will continue into the 1:00 p.m. hour. it is not that different from the bond market. the 10-year yield up by two basis points. intraday volatility is crucial. we have seen moves of about 10 basis points in the last couple of hours. with the bond move you are seeing the dollar trade.

that is where all the price action is. the dollar weaker by about .4%. brent crude trading with a $99 handle. up about 3.6% in the intraday session. one big story breaking about an hour and a half ago. julian robertson, who became one of this generation's most successful hedge fund managers and mentor to a wave of investors has died. he was 90. let's bring in sonali basak to talk about his legacy. walk us through what he was known for. sonali: a few things. he was known for building one of the world's earliest and at the time largest hedge funds. starting with a little over $8 million, expanding beyond $20 billion into 1998 when it started to peak. he became a family office and he

seeded dozens of fund managers, some of the world's most prominent hedge fund managers. that includes chase coleman, lee ames lee of maverick, steve mandel of lone pines. even jim chanos mentioned he was one of the best stock pickers of his generation. he had gotten into macro for some time. you saw him build what we know now as the modern hedge fund. a whole generation learned how to navigate volatile markets and macro trading and technology investing. kriti: "bloomberg markets this is." i want to talk about -- this is "bloomberg markets." 200 firms linked to him. tiger is known for calling the tech bubble at the end of the

1990's. talk about one of the traits that went wrong. sonali: 1998. he bet against the yen and that contributed to a lot of losses in 1999. they returned the money into thousand when they said it would close down. this was a historic run and historic investor that managed his money into recent times. speaking with bloomberg he talked about some of the more macro traits he made and turning the page on technology a little bit. getting into big tech later on in his career. that late tech bubble boom a lot of investors rushed into was when he stepped out of, which was a historic call, although painful at the time. what else was he known for? risk management. not making any bet too much of his portfolio. he was known for his philanthropy. his life outside the hedge fund world.

raising all these tiger cubs who went through a rigorous process over at tiger management to become what they are today. kriti: that's the crucial point you make. he is known for stockpicking. it is ventures into the macro space and did not necessarily pan out. sonali basak, thank you was always for the report. time for first word news. mark: the united states is urging citizens to leave ukraine. officials believe russia is preparing to target civilian and government structures as the war reaches the six month mark. the warning follows a ban by the ukrainian government on celebrations in the capital on the verge of independence from soviet rule. that was due to fears of attack. western leaders warned russia

against annexing other parts of crimean territory after crimea amid rumors russia is planning to do so. in videos to the platform conference, the prime minister justin trudeau. >> vladimir putin would launch a full-scale unprovoked invasion of the rest of ukraine. today on the eve of ukraine's independence day, i'm here to reaffirm our steadfast support for the full restoration of your independence, territory and sovereignty. mark: the crimean peninsula was seized in illegally annexed by russia in 2014 after a referendum widely deemed illegitimate. the billionaire founder of tiger management has died. julian robertson was a mentor to a wave of investors known as tiger cubs. by the late 1990's his fund had

$22 billion in assets, and annual returns averaging 32%. a wrong way bet on the yen cost investors to flee. he closed the fund in 2000. he was 90 years old. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪

kriti: this is "bloomberg markets." let's talk about the price action we have seen. a real tumble. all roads lead to the dollar. that brings me to my chart of the day. vxy index. the weakness in the euro, dropping below parity. we drank -- we bring it back to the global financial crisis. it is not just about a strengthening dollar. it is about the margin of the move. you can see this progression line. that was mirrored in 2014. even back in 2008.

the question here is, is the dollar living the market? how much of the commodi market is moving the euro. we will talk about that with mark mccormick. bloomberg spoke with stephen england are, global head of g10 fx research who outlined the vergence as you are seeing in terms of the supply chain disruptions take a listen. stephen: like a greek tragedy there is not much they can do. the economy is weak. when we talk about supply chain disruption, they are not able to keep their homes. that is really weighing on sentiment. the ecb does not have the tools to address that. u.k. inflation numbers let people in the market say, why zero different and what can the

ecb do about it? when you see the trading, the market is punishing currencies that belong to central banks that have an inflation problem and are ambivalent of a how to approach it. kriti: kriti: joining us now is mark mccormick from td securities. thank you for joining us. it's a foregone conclusion that as we see natural gas prices and power get higher it will have a reverse effect on the euro. how much of the current weakness is more of a function of the ecb's ambivalence as opposed to the energy story? mark: it's a tricky story. the ecb would like to hike rates than what the market is pricing higher now. -- both countries in general and financial conditions. the part of the story is they

don't the euro to drop further than it was. a big part that is interesting is despite the focus on defending the ecb have mistaken impact the currency, the euro is not trading on two-year rate differentials. it is all about relative growth. as long as you have natural gas prices and energy prices rising at the levels they are, you will see divergence between oil prices and terms of trade and how that impacts the euro. even versus a currency like the yen which can strengthen of oil prices start to reverse in the next few weeks. kriti: how much further does the euro have to fall? jordan rochester says .95 seems to be the right we could hit this winter. do you agree? dana: i don't agree. we do have to be putting a huge bet on if winter is warm or cold. colder winters can make things very challenging, especially considering how hot summer was in the inventories.

we track indicators looking at energy prices, rates rags, equity and volatility. the euro should be trading around 1.03. i say we are anticipating into next year a stronger euro. the other side will come from things happening in europe. what happens to the global inflationcy and the fed. they will go on hold and could be cutting rates next year. at the same time the ecb is either on hold and the european recovery story is starting to come to a remittance he. that's remittancy. they could get worse but it will depend on the weather. kriti: we bring it back to the dollar. that weakness against the euro empowering the dollar higher. how much stronger could the dollar get? at what point do we need to have a conversation about currency

intervention? dana: -- mark: what is interesting are the themes that are resonating and fx. mexico and brazil are holding ok. we were short euro up until parity. we are still around 103.45. we have shifted into short euro versus norway. you can see this interplay in terms of trade, relative growth, relative interest rate cycles. those things matter a lot. as we are not through the peak commodities outlook. our team expects a little bit of firmer energy prices. agriculture, base metals. base metals are underperforming. if you look at how the dollar will be shaped by these other sources, you will see diversions across a lot of different asset classes. that is one of the key drivers. kriti: let's talk about the

pivot point here. it seems like the dollar store is not going away anytime soon. i'm curious what brings it into the next era of sustained dollar weakness. mark: it is inflation and how that works with the fed. if the market is confident we can landed that 3.75 terminal rate and we can see the massive drop in production prices, a humongous driver, you mentioned supply chain stress. you look at the fed's global supply indicator and you can predict forward-looking global inflation by about nine months. the other side is global growth. the european growth story, the chinese equity story, the non-us growth story needs to recover. the way we have tracked global data and trends in global data. they are turning positive. that is why the market is engaging to find ways to save

the dollar for local idiosyncratic stories. the ultimate pivot point, when the data turns, inflation has peaked and we figured out the fed, which will probably beat later this year or early next year. kriti: a dollar story that's a continue macro hedge. a crucial part of it. mark mccormick, thank you as always. still ahead, macy's cuts its forecast. the shares are moving higher. we here with the chairman and ceo told caroline hyde. this is bloomberg. ♪

kriti: this is "bloomberg markets." macy's has cut its forecast with

a glut of inventory leading to bigger markdowns. shares are higher today after the retailer's second-quarter earnings beat estimates. joining us is coanchor caroline hyde. she spoke with macy's chairman and ceo jeff kennett. what was striking was the retail story when it comes to the consumer disparity. you have this massive income disparity. higher inflation. is macy's worried about that? caroline: he said that consumers are stronger than you might think. he did think about the headwinds affecting macy's purchases. let's talk but how you can see the consumer. they are wearing about the pressures. gas prices, food prices, wages. it is not keeping up with the pace of inflation. nevertheless, we are seeing disparity between the consumer that is purchasing at macy's

still wanting to come and spend. that is why they are lowering their full year guidance, whether it is for sales, inventory back up. he spoke about the industrywide inventory. they will have to shift those. those home goods everyone got to and the pandemic era. the luxury buyer is still strong. this took me by surprise. you think about the earnings of $250,000. not yet affected by the pullback in stock prices. that is where he has spoken to the previous stock prices falling. he says that bloomingdale's it is quite strong. kriti: we talked about the spending ability. if or maybe when that debate has

the holiday season. caroline hyde, thank you. let's look at the inside of the retail giant. let's bring in dana telsey of telsey advisor group. a price target of $28 a share. dana, thank you for joining us. let's start with macy's. they had a warning that was similar to walmart and target. macy's caters to a little bit of a higher end consumer relative to walmart or target. i'm curious about your thoughts on the earnings dori today. -- story today. dana: it is already baked in very well. it is the third week of earnings season. overall, the downdraft and consumer stock prices year to date for 2022 is based in the expectation moderation. what jeff spoke about today is the bifurcation, the lower end of the higher end of the consumer. we have been seeing that from everyone.

what is poignant is a have an increase of 12% of the first half of the quarter and it slowed down in the second half, down 4%. those inventory levels are up 7%. it is a lower number than expected. but the headwind of walmart, target, old navy and many others, it will lead to the back half of the year keeping inventory levels clean and how you manage the margins. kriti: that confuses me on the inventory story. the higher the inventory has not historically been a good thing. cue 2020 and 2021 and 2022, isn't it a benefit to have a buildup into the holiday season at a time when a lot of people cannot get their hands on a lot of these goods? dana: one thing that happened is supply chain disruption. goods are coming in at

inopportune times. whatever season they are meant for, they are not coming in for that season. the longer they stay on the shelves, it does not increase -- therefore we are having more kids good -- goods going to off prices. that is what the consumer wants the day in their shopping for what is left of it. kriti: what do you do in that scenario? does that mean things had the clearance racks more? because i have to be perhaps a little bit more of an orientation towards things like fast fashion? what is it mean for the operations of these retail companies? dana: they are looking to manage the markdown, promote, show clean inventory levels. they will be more markdowns,

more available for off-site. as we get to the holiday season, let's see what the inflation numbers look like. let's see what gas looks like. could we see it stable? right now the wage gains are not keeping up with inflation and we need to see a stabilization of retail sales. the national retail federation is looking at six. -- 6% 8% growth but the holiday season is not showing as big and 2022 as it did in 2021. kriti: dana telsey, always a wealth of information. we think he was always. breaking is here. directors at two regional banks saw a 100 basis point rate hike in july. this is coming of the minutes of july discount rate meetings. nine regional feds saw 75

discount rate hike. this is significant as we talk about whether 100 basis points hit some sort of psychological level in terms of rising interest rates or if it is as high as the federal reserve will go. there is a discourse in the market that if you see the federal reserve go to 100 basis points, that could create panic from the united states, specifically known to lead some of the high gains from around the world. this will be crucial. we will have the details and all the analysis in the next hour of bloomberg programming. for now, markets continued to drop marginally. s&p 500 down by about .2%. nasdaq flat on the session. we will have more market pricing and market action in the hours ahead. this is bloomberg. ♪

>> the most crucial moments in the trading day. this is "bloomberg markets: the close," with caroline hyde, romaine bostick and taylor riggs. ♪ caroline: 2:00 p.m. in new york. this is "bloomberg markets: the close." we are always happy to welcome gina martin adams. more breaking news ahead of the all-important jackson hole friday. the speech coming from jay powell directed at two regional feds. a full percentage point rate hike intellect. gina: the fed is pretty co