at also with us is elsa lignos from rbc capital.e is political infighting, the boss is away, philip hammond is saying may be brexit is so soft he will not even realize but saying it will happen. who do you believe? mess.brexit is a it looks like an ugly outcome. i am struck around westminster, at the misperceptions about what will be achievable. there is almost this sense that we are some sort of super powers still, that europe needs us more than we need europe. i am concerned by the attitude i'd attacked -- i detect. when i look at this, it looks like a complete mess. this idea that we can have our cake and eat it in the u.k. seems like a load of nonsense. francine: are you still short the pound? mark: i am still short. we are also short against the euro and the dollar. over the next couple of years, we will see weak growth, lack of investment, lack of jobs, and bad politics. we need to build in political risk into the pound as well. the parity could be achievable against the euro and ultimately against the dollar. tom: elsa, good

ofning us now is cohead global high-yield and greg bishop, at rbc wealth management. coming to us from st. louis, head of global fixed income strategy. i want to start everybody with a achrt showing what jeff gundl is talking about. option spreadss and duration, when duration is really high, spreads impressing. is the terror we heard of all of those people's versus -- voices, is that justified? is he right to start pulling >> we don't disagree. we have been taking risk down steadily over the past couple of months. we are targeting an underweight to risk assets including high-yield investment grade and emerging markets, but it is nuanced. we don't worry about the current fundamentals. portraits are healthy, leverages high, but not increasing. they spent the last few years extending maturity profile at a low cost to debt. we see low spending and don't expect it to pick up your the question is are you being adequately compensated for the al attila the and -- for the volatility and illiquidity. high-yield tends to underperform and we see triggers for volatility to go up.

are actually on the ground at the location, helping them redistribute the inventory, something that rbc a blessing in disguise. that stock is up. then we have weakness could dollar general, this is a big day for committees because dollar general is down. issues with that company. this has been popular among investors, especially hedge funds. and this situation is not too hot. disney is down about 150 basis points today. some weakness there. a few things going on. first, reports that they are going to india continue to figure out how to create higher margins at the company, something that has been very important to them. today our story on bloomberg is that they are looking at cutting some of the staff at the abc unit. this is never a great time if you are having to cut employees. overall it has been a positive story for the stock. julia: you know the network business has been under pressure, and that is part of the profit of the overall company. and are going over the top are going to be streaming the product as well. one has the stock done since then? oliver: we are 13% off the high. t

goldman sachs, rbc capital, taking the stock from a sell -- what were you doing with a sell on boeingys? to neutral just about everybody raised their price targets as well as estimates. boeing boosted its own earnings outlooks by 6.5% why the heck did so many firms have sell ratings on the stock it was the best performer in the dow for 2017 it's not like this was some kind of stealth jet rally let's look at a couple of firms. goldman added bowing to their sell list in february of 2015. where did they go wrong? they assumed lower sales would transha translate to lower stock prices. when things started getting better, they dug in their heels on the bear thesis rather than capitulating i bet they're kicking themselves in february, buckingham took boeing from neutral to under perform. they predicted it would go lower thanks to a series of revisions. whoops, couldn't have been more wrong. morgan stanley takes boeing from overweight to equal weight the analysts explained with the stock up 40%, the risk-reward wasn't as favorable as it used to be. fair enough, but turns out he was available.

joining us, an analyst with rbc capital markets. you don't cover apple, but you cover all the rest.hat is the big highlight from earnings season? obviously we saw a strong quarter from all these companies. >> demand trends remain consistent. i think this was our 30th quarter in a row for year-over-year revenue growth for google, our 17th for facebook, and about 20% year-over-year growth for almost 10 years now for amazon. we have seen consistent demand trends. the investments were happy and they were heavy last year and a year before that, and probably next year too. these companies make they have a lot of new opportunities to go after, whether it is amazon talking about advertising revenue, or netflix sending money to build out its international library. these companies all remain in growth. there is no scenario under which these margins will materially expand. -- will not materially expand. emily: is there room for other players at this point? >> like snap or twitter? it's unknown. whether they can get to a couple billion in revenue, probably. we call that the experimental budget

joining us now is cohead of global high-yield and greg bishop, at rbc wealth management.ed income strategy. i want to start everybody with a chart showing what jeff gundlach is talking about. the yellow shows option spreads and duration, when duration is really high, spreads impressing. is the terror we heard of all of those people's versus -- voices, is that justified? is he right to start pulling back? >> we don't disagree. we have been taking risk down steadily over the past couple of months. we are targeting an underweight to risk assets including high-yield investment grade and emerging markets, but it is nuanced. we don't worry about the current fundamentals. portraits are healthy, leverages high, but not increasing. they spent the last few years extending maturity profile at a low cost to debt. we see low spending and don't expect it to pick up your the question is are you being adequately compensated for the al attila the and -- for the volatility and illiquidity. high-yield tends to underperform and we see triggers for volatility to go up. scarlet: maybe it is fo

the royal bank of canada rbc has a mining heritage, which goes back i will say well over 100 years.aking that up. -- i don't think i am making that up. can you correlate gold over to other metals? is that a safe thing to do in analysis? >> well, gold clearly has some other features that some of the other metals don't have. when you run correlations, there is an underlying correlation there. but particularly in those times that were discussed, gold has an element the others don't. tom: send your love notes to francine lacqua in london and i will take the heat this morning as we look at gold. peter schaffrik will continue with us. an important interview this afternoon. it is a perfect time to get your september started. the new year for banking. the conversation with moynihan . this is bloomberg. ♪ francine: this is "bloomberg surveillance" with tom and francine from london and new york. texas is still being lashed by rain. thought thatmp the response hurricane harvey would serve as a model. the flooding has crippled the heart of u.s. energy production and has put as much as 30% of am

rbc capital was out with a note earlier today saying it gives a chance of a deal 50/50 whether or not through, but it would have to be closer to $145 a share and, again, dow jones reported earlier today that an offer was made from united technologies to rockwell collins, below $140 a share. so, guys, we're in that phase here where some figures have been bantied about but at this point, neither company is confirming that there are talks. neither of them are commenting on what discussions might be taking place >> all right phil, thank you. phil lebeau in chicago so this has been the group everyone was buying into the election, the notion being there would be much more defense spending is there still money left in this trade at this point, guy? >> i think so, the short answer is yes i'm not certain that collins is the way to go. we've been steadfast on this stock now for years. one of the great american companies nobody talks about a few weeks ago there was an article that came out, boeing might be doing avionics internally which is not great for collins, by the way. so although i think

[indiscernible] rbc expects a slowing chinese property market to weigh on fundamentals. >> it is justtoojust too plentiful. the currency changes in those two countries, makes the production of iron ore cheaper. over time, chinese production of iron ore will taper off as they use more scrap. >> global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. it seems of the column has returned to the market. we see volatility fading after geopolitical tensions over president trump and north korea's war of words. take a look at the u.s. financial indications on 5038.erg, g #btv5038 -- you can see the financial index tightening the most since may. if you look closely at this chart what is happening this week, you can see financial conditions are easing once again. with volatility sustained we could see a quieting down of the fed hawks. they have been a little worried about volatility not being there, and that unending market rally. let's get more and what is happening across markets and what is happening across

names like eog, those, to me -- >> if we have wti to test 42, let's say, that's the level that lima of rbc gave me continue power lunch. do we see an xle that moves higher can we see the integrated move higher with $42 a barrel oil the >> there are a lot of factors at work the authority answer is no i'm not pretending to have any insight into what's going to happen in crude, the commodity exxonmobil now for the last 18 months has not been trading particularly well. on an overall tape that's been outstanding and crude oil market until recently fwo gone higher to basically side y sideways in my world, exxonmobil bottoms out, i don't think you touch it. in terms of valero, there's upside left in the stock if you go back to 2015, vlo topped out around $72. given the fact that oil could move lower, i mean, the stars do line up for these guys, probably in terms of the stock prices. >> and the 3.9% dividend yield valero is paying out, people are absolutely gravitating for this is a name, the margins are going to improve for them. this is a stock, again, people want to own because it's a defensive

apple, of course, is tight-lipped about what features that phone is going to boast rbc expects the followingharging, upgraded processors with greater ar and br capabilities, and facial recognition among other features the cost, a rumored $1,000 if that's true, would probably just be the starting price with higher memory models demanding more investors are betting that the new phones are going to excite a lot of consumers, encourage them to upgrade to these new devices. that's why apple stock is surging more than 40% this year. not just phones, apple also anticipates to introduce a new watch, as well as upgraded apple tv be there on september 12th bringing you all the headlines as they come. >> thank you very much, josh lipton so apple trading at all-time highs. time to buy or sell on the in us at some point, i think most believe that the stock runs up into a big launch. at some point you have to decide what that moment will be when do you think that moment will be? >> some people would say, why do you have to decide >> all right. >> i think if pete were here, he would say, why would you have

cloud revenue may be small now, but rbc expects that to double year on year.he opening. ramy inocencio, bloomberg news, new york. anchor: we will watch out for alibaba. ahead, cathay pacific. our next guest has an outperform rating on that.. hear why from a ceo next. this is bloomberg. ♪ 0 in singapore. 28 degrees out here and a very hot. quite warm here. you are watching "daybreak asia." export numbers from singapore. economists expected. electronics asked boards, robust. of 16.3%. expectations were for a 15% increase. that is a slight slowdown from what we saw in prior months in singapore. shery: what is interesting about these numbers is not all nondomestic numbers fell. economists have said we are seeing this uneven growth and that is problematic, given this is not a mental inflation coming in. it could be seasonal. get other headlines from the first word news with paul allen. paul: president trump has abolished his business advisory council as more high-level figures walked away. his strategy forum held a conference call asking who would stay on board. of

economist at rbc capital markets and david kelly with us as always. welcome. pretty good-looking healthy report would you complain about anything in there? >> it's hard to. this report check off all the right boxes. >> sizable for the previous month. average early earnings, lovely me trick called wage buy i mean, look, it's interesting the original print was 130 thousandish. she said look we're averaging 160,000 year to date that's more than enough to observe new entrance into the labor force. we're now averaging 185,000. that's a splitting hairs conversation and that's the idea that the market has to embrace by tend of next year a federal fund rate for just 1% higher by the end of next year and we'll be reducing the balance sheet at a pace of $600 million per year and in that scenario i would expect long-term interest rates to be higher than they are today. >> it's a good report in the economy. monetary policy is still too easy here. >> yeah. i mean, look, we'll see if the fed for once actually follows what it's mapped out next year but if you look at the 2 a

we think and they can look at our track record of achieving it and then come to their own conclusion rbc implies 12% on the top of the line this guidance implies it won't be material to q-4 a big reason you see that stock surging this morning a set of tools allow developers to build ar enabled apps really i was interesting in how he was thinking about pricing the iphone 8 we look at the value that we're delivering innovation and we're delivering and priced accordingly. so if you're doing a great job there then you know people will pay a bit more guys back to you >> thank you very much with technology the lead performer right now on the s&p the dow hitting 22,000 for the first time ever. joining us is bill snead >> good morning to both of you i wanted to ask you. you bill yourself a value investor >> how do you find value >> there's quite a bit of value out there. people are willing to pay 150 times earnings to buy glamorous very large capitalization earnings and they're beating the pulp out of media and health care related issues at the same time so we're selectively picking through the

the 117-year-old law has rbc in one cabinet minister step aside and two senators resign.s coalition holds just a one seat majority. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm shery ahn. this is bloomberg. yvonne? yvonne: sherry, thank you. of course, those threats from president trump during his speech in arizona seeing reverberations across the market. on wall street, a little bit, but a mixed picture in asia pacific. let's get the latest from sophie kamaruddin. sophie: it is early in the day as we digest the handoff from wall street. the nikkei 225 looking to resume losses for a third day in four. in sydney, there are earnings aplenty to digest. ,e have materials leading gains but financials dragging the most on the index. ,e have the picture in bonds tracking treasury, 10 year yield fell to a june low now sitting around 2.17%. in the commodities space, iron ore on the up, gold trading just above the 1290 level. oil prices just marginally lower after jumping 1% overnight. that we gotven overnight in the

collins if the bid is only 140 or less than 140, some have said that may not be enough to make it happen rbcital says it is a 50/50 chance of a deal they think it is closer to $145 being the price point at which rockwell collins would make a deal, shares of rockwell collins getting a nice surge we are aways away from this being announced as a formal merger or a buyout at this point, just reports of talks. >> let's switch to tesla what's going on with tesla and its model x suv, the pricing >> cutting the base price by $3,000 that's going to bring it down to 7905 a lot of people are saying, this is proof you have to cut the price because people will order the model 3 instead of the model x there is less interest in that story line what they are focuses on, if you go above $75,000, it is a very saturated market for luxury suvs no shortage. model x is running into a bit of a saturation if you will in terms of that market and how many suvs might be bought. >> it has less to do with the 3 than it does the saturation. the audis and the mer scedes ar up there >> some will speculate this elon musk ha

going to blast two different stocks for you right now first up, regency centers, reg is the ticker rbcital market upgrades to their top hit list out perform shares are down 17% this year. analysts calling it the best position shopping center, it like the fact you got so many grocery stores because they have higher sales regency is nearly 96%. the company's access on get market on good terms and boosting the target of 75 to 72. citi group raised its targets on regency three days ago y your final stock is kennametal the analysts there believe that sales may finally be inflected and cost cuts. kennameta coming up 25% upside, they' industrial steel >> their sales have inflected? >> they make landing gear for airplanes and they do a lot. >> ahead, a lot more on today's sale off plus, it seems even if you report good earnings, the markets have no love for retail stocks we are talking former ceos of jc penney and neiman marcus, straight ahead stay with us oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new a

still with us, julian chillingworth from rathbone's and peter schaffrik from rbc. going to get easier? people have things to say. do we know where the government wants to go? julian: i don't think any of this is going to be easy. i think one of the things i believe is going to be published very soon is the proposed relationship between northern ireland and the republic of ireland, which i think is going to be quite a long process. that is the first of many hurdles to climb over. i think we're going to see investors worry in waves about brexit. francine: more volatility? julian: and again, we've been talking about currencies quite a lot. the pound will be the barometer of that volatility. francine: peter, same? where does the pound go from here? peter: on what julian was saying, even though they might publish papers, it doesn't mean the two sides might be getting anywhere closer together. of whatsort of a sense to the u.k. government wants. francine: do we? peter: i think we do. roughly speaking, we know where we want to end up. we know what the europeans want. what

for that setup joining to us talk about opec and oil prices is the managing director and editor of rbcal market strategies. nice to see you. >> thanks for having me on. >> so what do we expect from this key meeting of opec producers and non-opec producers, and how will it impact price trading just below the key level now? >> yeah. i think the problem is, as jacksed mentioned, just met in st. petersburg and couldn't solve theish iu of oversupply from opec members, so i don't expect them to come out and announce plans and discuss rising libya prices. they were exempted from the original deal and they have surged back and they can find a way, this is going to be a persistent problem for them, and how do you consider some of the nations that are struggling a bit. >> what actual little could save opec is probably venz will and we are news out today, they are pulling -- that's what you want to watch for to see what clearly saves opec this year. >> owe spec not a cartel any myo. >> it will only cut back it suits their interests. opec's bus is really driven by saudi arabia so as long as the sa

. >> gerard, thank you that's gerard cassidy, rbc wells, one of the other story is the jobs report this morning, much better than expected. the dow is up 43 point, dollar stronger, too. joining us for more is former commerce secretary carlos gutierrez along with former acting sect of labor, seth hey gentlemen, thanks so much for joining us and rolling with us as we move through all news. mr. gutierrez, let me ask you about the overall state of things, a macro backdrop that we're talking about. are you encouraged by what you see? >> i am. it was a solid report. as you know, 209,000 jobs was ahead of expectations, but it wasn't ahead by too much, so, therefore, things aren't heating up it sort hit the sweet spot the key thing is that wages are up 2.5% on an annualized basis that's good news all waiting for that and the labor participation rate ticked up slightly. so the key challenge is we continue to be a 2% economy. 2% growth. the president wants 3 to about-3-.5%. that's going to be a big challenge which is why toys so puzzling that they are going to cut immigration by half. that works

america said it fired rivas in april and cooperated fully with the investigation rivas went on to work at rbc been suspended from that institution. >>> results just coming in from china's e-commerce giant, alibaba. earnings per share came in below forecast, but the revenue did beat estimates revenue was up by 56% in terms of an increase of a year earlier. you can see that stock is reacting it's up by -- up by a declining amount up by 4% when we first saw it. nowup by 2.8%. the adjusted earnings per share were 1.17. revenues, 4$4.7 billion they're talking about their digital media and entertainment increasing 30% year over year. by the way, the cloud computing business has grown 96% year over year, has reached a smimilestonf 1 million paying customers they are the amazon of china. >>> when we return, we'll talk more about that and the effect of trade on employment in america. we'll take a closer look at what happens when trade kills yr ou job. we have that story when "squawk" returns. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business wor

m&a at rbc capitalmarkets good morning >> good morning. >> what do we think is going to happen here?he impression was that when president trump became president president trump that we were going to see a wave of mega deals, that regulations were going to -- the wall was going to get lower and we were going to see lots of stuff the biggest deal, the head line deal that i can even think about right now is amazon, whole foods, and on a dollar basis, not even that large. >> i think the large deal in the u.s. this year is dickinson and that's $24 billion and then last week or the last couple of weeks we've had there's been rumors in the market about upc making a bid for rockwell collins that would be the largest deal in the u.s. year to date at about 30 billion or so, depending on what you put it at. but if you think about the administration, coming in to the year, it certainly was looked at as a positive for dealmakers >> right >> i think some of the, if you look at some of the factors that happened now, the uncertainty in terms of a forward look has started to creep in to some of the c

but on the oil and gas side, rbc notes something pretty interesting that this is the first storm in thecoast to materially impact the energy infrastructure in more than a decade, or about a decade. the last one was ike in 2008 so we've gone nearly ten years without sort of a material impact here. the good news is that energy stockpiles were higher than they were back in 2005, and 2008. that's the good news the bad news, i guess, for oil is that the world relies more on american crude than ever before. now, the flip side of that is the export market for crude oil from here is all but stopped according to some statistics, you can sort of, statistics here, statistics there, about 56% of all crude oil in america is somehow touched by this area. whether that's shipped in, shipped out, refined, produced around here and brought back in, that's just one angle. there's rails, trucks aren't running, the port is still closed you can see it's still raining so, if it just keeps raining like this, everything that's bad is just going to get worse from an infrastructure and a roads perspective. a lot m