what ray dalio is saying is that may be coming to an end. he is saying at some point, that is going to turn around. his right at some point unless we all die of nuclear obliteration, but when? does anybody else -- is anybody and end?casting the theme of inflation. into but not i buy one in consensus. it is not that we will necessarily get policy rates hiking. a steeper curve because we are going to see central banks cutting at the front end. steeper curves. that could be true. my kind of thinking is it is not going to be higher rates anytime soon. people are getting ahead of themselves. we are not going to see rates rocket away to the topside. there has been a structural change due to technology, the amazon effect. the cheaper extraction of energy. demographics. all of those things, structure and inflation is a completely different world. it is not a concern that we are going to get steeper curves. i don't think that is a theme you're going to be playing for the next six months. >> it does seem interesting some investors are going -- interpr

eddie, the top headline this morning from ray dalio.tionalr it's fact, -- he would suggest we are heading to a paradigm shift. some of the lines. awful,eal rates are so you want to buy gold. but a couple cautionary notes, his whole dynamic theory, risk -- his proposition is real rates will be dreadful, and buy gold? eddie: i think he's absolutely right. real rates are the main driver for gold. i've had a look at the numbers, and what drives gold changes over time. but in the last few months, there's a correlation between gold and real rates, at the highest that it has ever been. that tells us people are really worried. nejra: more about that in a moment. eddie, thank you for joining us, on ray dalio's call on gold. theng up, we speak after swedish telecom group meets estimates with second quarter results. this is bloomberg. ♪ manus: warm welcome to "bloomberg daybreak: europe." i am manus cranny in dubai. inra: i am nejra cehic, london. some breaking news, tsmc second-quarter net income coming andt 66.77 billion there, the estimate was

china trade war, slowing economy rough 2019 so far for ray dalio's bridgewater.rts the fund paired its losses meantime, bridgewater managed all weather fund was up 13% during the first six months of 2019 big week ahead on wall street with earnings set to dominate the agenda more than 130 companies in the s&p. to look at what investors need to watch this week is stephen whiting global chief strategist at citi private bank is it earnings or is it the fed? which is more important right now? >> it's got be both. i think earnings will be first we have to digest the impact of very key earnings results. i think the really interesting thing right now is that the federal reserve, the ecb this week in terms of setting out what they will likely do in coming months can have a very large impact on valuation. we have seen massive easing and financial markets. 100 basis point drop in italian bond yeelgds 200 drop in brazilian bond yields central banks can have a large effect on valuation and have a marginal positive impact on economic activity. the question is what happens afte

ray dalio was out overnight. thinks the current era of low interest rates and quantitative easing may be coming to an end. can you understand that view? must be a fairly long-term view. steven: the first thing we have to accept is that we are at this new normal. interest rates are going up from extraordinary levels. interest rates in large chunks of the world -- europe, switzerland, japan, art negative. the idea the interest rates could ever go negative was something i never thought i could see. the idea that they could be sustained negative is even more extraordinary. so we have to accept. that interest rates are in this permanently low environment. that doesn't mean they can't go levels. these my personal opinion is that the u.s. will deliver the 50 basis points of cuts that they promised us. but if the economy continues to be ok in europe -- in the united states, and if inflation picks up a bit i think we will be on hold for some time. because inflation is a little below target, it has been below target for a

then ray dalio gives gold the thumbs up again. of quantitative easing might be coming to an end. another battle in salt reduction war. ponczek,s now is sarah bloomberg cross-ice at reporter. still with us, jens nordvig of exante. there's this notion going on that if the fed does begin aggressively cutting interest rates, we could see a rally that includes high-yield bonds. scott is coming out and saying that is probably ill advised. if you look at history on average since 1986, through cycle, while people believe maybe now is the time to get into the riskiest of credit, he's saying probably not the best idea. alix: i'm thinking you disagree with that. jens: i think what's dangerous about doing these historical comparisons is this cycle really feels very different. a lot of people argue that what the fed is doing it's kind of crazy. like we had just a flip aced on essentially no u.s. data. is the u.s. recession really here, or is the fed being way more preemptive than previous cycles? i think a relationship in high-yield bonds is a

check out gold getting a bid today after billionaire hedge fund manager ray dalio picked the asset as a top investment, calling it a diversification play and what he calls a paradigm shift katie stockton and nancy tangler our trading nation team today. katie, gold has had a good run surged above i guess about a six-year high recently, settled out a little bit where does it look to you right now in terms of where it's headed in ex >> we saw major base break out in gold in june and gaps in the likes of gld and the gold prices have managed to hold that gap, which i see as a positive development the consolidation phase now appears to be resolved to the up side and that really frees up gold to see some up side follow thrthro. the next resistance is around 1590, based on the fibonacci replacement levels and i think that up side is very realistic for gold, based on that base breakout we have seen. >> all right pretty significant move from here if it gets there nancy, as a fundamental investor, somebody who deals in asset allocation, what goal -- what purpose does gold serve potentially in a

days, and williams who started the whole thing. 1430.70ures back up to an ounce, partly thanks to ray dalioy thanks to the fed. microsoft had a great quarter. it beat analyst estimates in most part of its business despite concern there is a full forward on pc sales we will have to pay for in the next couple of quarters thanks to trade. at the moment, all decisions are suspended as to what will happen trait wise. -- tradewise. jcpenney down 16.5%. a report from cnbc on jcpenney looking at restructuring. allianz data systems one of the 2.5%performers, down despite the cards with logos and all that good stuff. let's get to the latest on brexit and the race for u.k. prime minister which should see clarity next week. boris johnson remaining the frontrunner but supporters of jeremy hunt are counting on a late surge of support from conservative party members. joining us from london is just check woman. it will be a big -- jess shingle men. until polls do not close monday. after that we are expecting the results on tuesday. theresa will remain prime minister until wednesday. the handover will happe

ray dalio alluded to this. a paradigm shift. he said it would happen sometime in the future. it looks like it is coming quicker than we thought. just as an asset diversification, as central , you see morea qe negative yield in debt. it takes the risk off of metals, which yield zero and you have to find that. negative debt is also a funding. it bounces the playing field and makes the metals more attractive. scarlet: gold at 1447. silver doing even better. .5% at $16.37. just to recap some of the big earnings we got. microsoft reporting fourth-quarter results. as fiscal fourth-quarter revenue beating the highest analyst at -- estimate. almost a billion dollars less. eps, $1.37 was the print. $1.22.s were looking for it's a beat. romaine: there are also earnings out unclouded strike, the cybersecurity software company that went public last month. they came and nine on their first quarter numbers. on their forecast, they seem to be about the line. fiscal year revenue coming in. the average of analysts estimates. coming in better than expected. of $.72.or a loss >> that is it for

the ray dalio comments -- that did not hurt things.l of the uncertainties giving a little bit to gold. atrling is moving, it is 1.2487. a far cry from below 1.24. this is parliament says no deal brexit cannot be negotiated, or not negotiated. that is not happening. the s&p 500 is well below 3000. ,t did find a few fix buyers the 10 year yield following europe lower. netflix the worst performer in the s&p 500. ,ubscriber growth slowing albeit a good quarter and other metrics and maybe this is a chance to buy on the dip. we just heard from lance fritz, you is reversing the effect of the bloodbath yesterday and helping rails to gains yesterday. that is a look at global markets. main items on the agenda in france. the french finance minister spoke about the topic with bloomberg earlier. >> we are moving on and i think digital taxation is the key issue. you have a new business model. this new business model of the 21st century is not taxed at the right level. i think it is in the interest of all countries, including the u.s., to have a fair

julius bar delivers the latest earning report under outgoing ceo >>> the market rebound catches ray dalioflagship funds logs one of its worst first half performances in decades. >>> rising oil prices boost energy stocks after the uk calls iran's seizure of a british tanker in the strait of hormuz an illegal act >>> well, european markets trading in the green now, stock 600 initially showing some signs of stabilization around the flat line, but things have picked up in the last half an hour or so we're seeing some fairly decent moves in the dax and ftse mib as well as the ftse 100 leading the charge up .4% coming alongside some weakness in the pound, very strongly correlated for the exporters in the european market last week, we saw the stock 600 outperform the broader global markets. wall street struggled for gains last week, ending lower for the week overall europe continuing this moderate positive momentum. a big week for corporate earnings, nearly 150 companies reporting out of the u.s we also have that ecb meeting on thursday and global flash pmis coming out on wednesday. plenty on th

keptes i spoke too pointing to its specific leverage strategy made famous by ray dalio. that it holds basically every asset class and gives higher waiting to less risky things like bonds. that style is headed for its best performance since 2010. with a long bond exposure has done well in anticipation of rate cuts. investors have been flocking to duration risks at this bond fund has seen the positive profits for the past consecutive eight months, trading at the highest level on record. but when it comes to equity markets, the winter has been low volatility funds. to a representative from research affiliates who told me they have done well since a weak economy. many of these are also bond proxies which plays into the long bond trade. i will show you the performances of these strategies, and you can see how the dovishness from the fed help them -- propelled them. but after the jobs report, the returns started to stall. but where do they go from here? that is the big question ahead of today. we have several fed events that could set expectations. we have powell who begins hi

the idea of ray dalio, six to 10% weighting in gold, recalibrating, is very important.successfully. [closing bell rings] >> liz: frank holmes, great to see you. that is his company. just below a new record for the dow jones industrials. that is it for the "claman countdown". connell: trade optimism working in with fox confirming u.s. trade negotiators head to china for face-to-face talks on monday earnings reports fueling the rally in stock along with coca-cola, united technologies helping to lift wall street higher. at the close the dow is fighting for a record high. it is a little short. we need it up 187 to be a record. that is pretty good up 178. the s&p 500 and nasdaq ending the day in positive territory. the second day in a row they have been higher. there you go, good to be with you, i'm con

sources i spoke with pointed to a leverage quandary made famous by ray dalio called risk parity. on less higher waiting risky things like bonds. really anything with a heavy bond exposure has done well with rate cuts. example, theyfor have seen positive profits for the consecutive eight past months, gaining 16% this year. those are the bond market winners. when it comes to equities, it is about low volatility funds. the strategy here, talk -- track stocks with muted pricing. safety plays do really well during rate cuts. that tends to signal a weak economy. these are also bond proxies, so that is playing into that bond market play. let me show you the performance of the three strategies. you can see really well how the dovish ship has fueled them. i do not have that chart for you yet, but we have fed speakers coming up, so that ben's -- begs the question. where did these strategies go from here? great work, and a big question as to how powell, if he wants to walk back market expectations, how could he do that? let's get the first word news in hong kong now. >> u.k. members of parl

routine -- resume its easy money policy of the fromand it is being cited thei sergio ermotti to ray dalioing ourselves up for a period of inflating asset prices which ultimately will not be sustainable." sharon bell, managing director european equity stategy at goldman sachs is with us. where do you stand on the debate? sharon: i stand in between. i have sympathy with the view the economy doesn't need a massive further easing injection. employment is close to full employment, inflation is relatively close to target. growth has certainly slowed the last year. ago, the economy was growing 4% and now it is 1.5% or 2%. that youand the view don't need additional stimulus at the moment but then we have been talking about the risks earlier. concerns about trade, growth in china, growth in europe. i think the fed will be cutting rates as an insurance policy against a weaker environment. i do understand the reason for cutting rates. i think they will do a rate cut at the meeting this week, probably another one later in the year as an insurance plan rather than the hugely stimulate growth. anna: th

belying that thesis today. >> i love the fact that hasbro was switching so quickly if you go back to ray daliomments he made at the beginning of the year, there was a sense that china could hold us hostage, stanley works is doing everything he can to make sure it is not. stock is up 8. that's a good call hasbro, 60 to maybe 50 stock's up 7 if you say the magic words you're moving away from china, people go nuts with your stock love it. >> can we put up a long-term mattel and long-term hasbro? sometimes it is good to step back and remember that management does matter and that execution does matter mattel was once twice the size of hasbro. 20 years ago, they were trying to buy, mattel had a series of ceos, hasbro had a much more directed sort of understood strategy and i don't know if we have it, but it is very telling when you look at the comparison of these two companies over the last ten years. >> they own all the factories, they had tremendous costs and hasbro meantime switched costs, became much more -- became toy light and game oriented. pretty amazing i like that. management matters. >> i

ray dalio says diversify. ashley: take a look at oil.espite everything that's going on in the straits of hormuz, iran, 33 cents up to $55.63 on oil. we say this a lot, in the old days this would have been through the roof with tensions in the middle east. joining us today, jonathan hoenig, david dietze and susan li. thank you for being here. shares of dow component microsoft, did i just hear, all-time high. after posting record revenue boosted by its cloud business. david dietze, i asked someone else this earlier this morning, just under $140, is that a little too expensive for microsoft or is this a buy? >> you never like to buy the largest company on the planet at all-time highs but the more i dive into their earnings which were just released, they are hitting the cover off the ball. i tip my hat to them. they are in all the sweet spots of technology. their cloud business is growing like gangbusters, breathing down the necks of amazon. of course, subscription service, they are moving it from that perpetual license model to subscription