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tv   Bloomberg Daybreak Americas  Bloomberg  July 18, 2018 7:00am-9:00am EDT

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the mysterious testimony puzzles economist. markets look towards the next round of q and a. morgan stanley crushing it with investment banking. stock pops in premarket. eu slapping google with a 4.3 billion euro fine. we are moments away from a press conference in brussels. i am alix steel. david is off today. the eu find will be 4.3 billion euros. we will get more details as we go. >> that is the big news. for morgan stanley, a alix: equity underwriting crushing it as ipos
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coming strong for them. are our guests. anything negative in the last six minutes? yet, a broad-based, solid quarter. revenue better. margin alsoealth coming in, 26.8%, within their target range. they've done a lot of work to improve that, so a solid quarter. jason: a big investment banking number as well. across the board. >> i would say morgan stanley is continuing this pattern of beating expectations. coming in, they had a higher bar . there is a pattern of beating the numbers of the last several quarters. they continue to do that. above $50 a stanley
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share, jumping 3%. is this morgan stanley stealing market share, or a pie that is growing? >> it is probably a share story, a little pie growing. better volatility, specially and equities, where morgan stanley is the leader. looks like they will retain that position, earning the most from that business worldwide. one of the stories and equities, , some expectation has been leaders will gain share. we heard from goldman and j.p. that may be happening. it looks like we could see some of that from morgan stanley as well. equity derivatives has been the strong story this quarter. alix: we will hear more as the morning goes on, but compare and
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contrast what you have heard so far from these headlines. jason: where does morgan stanley fit into this narrative this quarter? >> it seems like continuing the leadership there. i think delivering on the higher bar we expected taste on some of the other companies results. we did hear equity derivatives were strong, and a broad slowdown for fixed income, better in the commodities business. forink the expectation morgan stanley is flat, so we've have had some growth in fixed income trading. as percentage gain is not some peers, but there are comparison issues. thank you you very much. s&pre looking at a in relatively unchanged.
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will morgan stanley give it a boost? the cable rate down .6%, now at a 10 month low. part of it is the stronger dollar story. the other part is inflation held , so some rateu.k. expectations being pared back. the 2-10 spread, 30 basis points. alix: we will talk more about the curve as a goes on. jason: especially in the context of jerome powell yesterday. alix: coming up is the bloomberg first take. i want to kick it off with banks. butan stanley at almost 4%, you get a bead, a pop, then
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faded will morgan stanley be different? so hopefully they can come above that trend. it seems that banks have found their footing. that is something investors have been waiting for. they have been they value bet for a long time. the questionises of the yield curve and what it means for banks, but to us it is a regional versus large cap story. month tohe six five-year curve versus banks versus the regionals. the regionals are the blue line. will we see different engine as differentiation as we go forward? >> we have been leaning on financials to give us that pop,
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and we are seeing strong numbers on equity trading from the volatility and interest-rate hikes. were seeing the banks benefit from that, and a good consumer and business strength, a lot of loan revenues up at most of the banks. we may start to see the regionals become the place for arestors because maybe they behind the curve somewhat, but with the regulatory changes this year so far, that is benefiting the regional banks and should give them some run as we go ford. alix: there is no set quarter here. shot of the eu a fineioner levying against google, 4.3 billion euro s in an antitrust probe. they get 90 days and it ultimatum to end any illegal conduct. when you have an outperformance
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that continues, there is a regulatory overhang in the eu. >> there is overhang in the eu. we have those facebook fears for a while. we got no follow-through. that remove the overhang to a certain extent. it has been noted we are seeing google off its lows in the premarket, the same way with netflix yesterday. there is not a lot of fear out there. there is not a lot of downside protection being sought. this,as you look across netflix a tough week for them. woes: facebook has had its , defense seeming the come and yet they continue to hold on. what is the play here?
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>> are we moving into a too big to fails on for the tech stocks? one thing to be sure of is the regulators are catching up. we will see more fines and regulations, not only in the eu, but the u.s.. that will change somewhat. are pulling iny so much revenue every single day that the momentum is still there. alix: we have a question on the bloomberg. fine, the record comparing this to pass fines, is there a sign sent by the flows to the u.s.?- foes alix: they do have regulation and fines. you wonder if this is the backdrop for that. >> they are setting a precedent.
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i think the u.s. will come in behind these regulatory things related to facebook and google. is it ation is how much hit to the bottom line in a certain quarter, or is it a change of the business model but makes it sustainable in terms of less revenue going forward? her voice point about being strong. it will be interesting to see what she does next. jay powell speaking yesterday. he spoke about the yield curve getting so much bandwidth right now. >> the shape of the curve is something we talk about a lot. different people think about it different ways. some people inc. about it more than others.
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driveis trying to information about what it would be for neutral rates. away, along with the it isn't hitting .he economy yet they are beginning to question on whether the economy needs contractionary policy. the dot plot might be the most hawkish. marketith a strong job and inflation close to objective, the fomc believes for now the best way forward is to keep gradually raising the
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federal funds rate. reaction was that the january 2019 futures contract it a record high guild in the aftermath, so the short-term hiking environment got firmed up. that was the major market take away from yesterday. alix: thank you both. a busy morning. primea may is delivering minister's questions in parliament. she has survived by the skin of her teeth, yet again, to have control over brexit. drama behind the scenes leading up to this. jason: there will be a will of back-and-forth. there is never a dull moment with prime minister questions. we cannot go too far without nodding to a passive yield curver. a reminder, you can
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find the charts we used by running gtv on your terminal. toing up, more reaction howl's testimony. is he a passive yield curver? i don't think so. this is bloomberg. ♪ the fomc believes for now the best way forward is to keep gradually raising the federal funds rate. ♪
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alix: breaking news, a press , record fine for s.ogle, 4.3 billion euro
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google saying they will appeal that fine. the question is how much they have change their business model in europe. jason: and what opportunity does that open up for their competitors? this is really about real estate on the android phone for different apps. they have dominated that. does this opportunity open things up for rivals? the eu found they are preventing manufacturers. we will be following that news as we continue throughout the morning. facing the house financial services committee for a second day of testimony on capitol hill. he told lawmakers yesterday that the fed has a plan, but with a caveat. >> strong job market, inflation of theo objective come fomc police for now the best way forward is to keep gradually raising the federal funds rate. alix: joining us now is our
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guest. and, michael mckean. what does that mean? >> we won't be raising rates forever. we may be close to the end. there has been a lot of talk the fed may be dropping its forward guidance in its statement, suggesting rates lower for longer. this may be a signal that is coming. suggestingseem to be anything in terms of something new. it is just the fed is already on a path. there is a tunnel at the end of the light or something like that. >> from the chairman's body language, there is so much tea this sort ofand testimony. what was your take away? >> everyone is trying to figure out what is the substantive difference.
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the economic data in the united states has been strong. air out reald to narratives. we are trying to see how dovish he will be. put?trong is that powell i think the tea leaf reading will continue for some time. don't have a good opportunity. ben bernanke and janet yellen had more severe situations. you can identify where they were when things got rough. alix: let's talk about ben bernanke. there was an interesting chat yesterday, ben bernanke, tim geithner, and hank paulson. has some ben bernanke concern on the next financial crisis. geithner are had more constraints in a heavy crisis.
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i'm struck by that. we are talking about the today hikes. the issue is where you are around neutral when the next crisis hits. fed coal is to get rates as high as they can while they can. historically we have seen the fed cup 500 basis points when a recession comes. we are at 200 now. you can't cut more than that. they would like to get as much wiggle room as possible. the argument was made yesterday that we don't need to cut as far because this is a lower interest rate environment. in the financial crisis, they had to be creative near see you -- near zero. they are not thinking this will solve all of our problems. alix: i'm glad you mentioned that. jason: a lot of the talk among these veterans was around the toolbox.
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what does the government now have at its disposal? what do you make of that? >> you were talking about the yield curve and how the fed is interpreting the potential inversion as early as next winter. ,ll this yield curve inversion i look at it in the context of relative policy normalization. the toolbox started with low 2008-2009,tes in then segued into the bond buying. for all the discussion of yield curve inversion coming do have to look at that 2-10 curve in the context of the relative pace of normalization of policies. and other fed officials would get into that more. it is turning into an issue. this hiking cycle is first and normalization, and secondarily a good old-fashioned hiking cycle.
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understanding where we are on that is what is so important to this discussion. alix: thank you very much. michael, you will be sticking with us. to update you on google. you are looking at the eu commissioner still at her press conference where they announced a record fine for google, just over euro euro 4 billions. .oogle has 90 days to comply google saying they will appeal. google'swant to read response. "android has created more choice , andveryone, not less ecosystem, rapid innovation, classic hallmarks of robust competition. we will appeal the commission's decision." not surprising, but this gets to the heart of the matter. , people want more
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real estate on the android phone. tox: you can go to live keep up-to-date on that press conference. she continues to describe the case against google. has 90 days tot stop illegal practices that push google services in front of others. much more on that to the next few hours. jason: you are seeing a live shot of theresa may's weekly prime minister's questions. she narrowly avoided a catastrophic defeat on her brexit legislation, but the drum is far from over. on whatoined for more is going on behind the scenes. david, nice to be with you. hello. sorry for the delay. may on herng mrs.
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feet. it was a dramatic moment yesterday when she got this vote through. the real problem is how she got it through. there is a lot of bitterness across the spectrum with some of the tactics employed to get the people to vote for her. it has created a lot of bad blood. were talking about not seeing this amount of bad feelings across the chamber's the last 35 years. maybe she will find every vote hence harder? opposition labor decided to vote with her. so she squeaked through on this. as you can see from the pictures, she is robustly defending the government's position. johnson, hes, boris resigned as foreign secretary of days ago over her brexit strategy, he will be making his
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resignation speech. he could be backing up the prime minister and saying he will tell the line, or that could be more dramatic and he could at the extreme end be staking his claim to the leadership of the party. we will be watching that closely. later this evening, she addresses the whole group of mp 's. from there, you get an idea of how unhappy the party is. we are just the few days away from winding up. theresa may survives yet again, fewwe still have a potential landmines before they break for the long summer vacation. jason: thank you so much for summing that up. lots more to read on the bloomberg about the behind-the-scenes drama. alix: the cable rate hitting a 10 month low. michael fergus is still with us.
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do you feel like part of the weakness in cable is a dollar strength story, or that inflation came in and did not have the jump we were expecting, so a reevaluation of rate hikes from the boe? structuraleen a dollar bear for some time. i did catch the relief rally. since then, the dollar has been resilient. there is a steady backdrop. there is almost a rotation, first euro weakness, then yen weakness. the u.k. has a lot of specific things going on, but there is a backdrop of dollar strength that is part of every story right now. alix: what do you do with equities? the outperformance of u.k. equities.
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the blue line is the outperformance. the bottom line is europe ex u.k. if you see a dollar bull rally with more room to run, can you not invest in u.k. equities? >> 80% of earnings are from non-u.k. sources. it is one of the most extreme in any developed market. ,ou run your correlations relative tor ftse , if you are investing in those equities, you are making a currency trade as much as an equity trade. you have to look at it very carefully. jason: we are not that far removed from president trump being over in europe questioning the nato alliance. some big questions around trade and terrorists. how does that play through the
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european story? when you discuss trade and tariffs, my analog is look at brexit, big, scary headlines. the process by which it is actually implemented is a slow, tedious process. meanwhile, the markets have to do something. if you're going to hold your thesis based on one headline, it's going to be difficult. alix: well said. you will be sticking with us. coming up, google's record eu billion. shares off the low of the session. this is bloomberg. ♪
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alix: this is bloomberg daybreak. a lot of headlines, not a lot of movement. that is the theme over the last couple of days. s&p futures unchanged.
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over in europe, there is a little bit of a change. it is a stronger dollar story prevailing anywhere you go. rate down that is a 10 month low. part of that is a u.k. inflation story. the point to spread is unbelievable. the two-year yields hitting a post financial crisis type. continuing to grind lower. down we are looking at a one year low because cash is finally worth something. that is basically the hammer in the coffin for gold. jason: it is amazing. i know you love this comparison. it is a really interesting window into where we are in this market, especially if you say m.uities are h alix: headlines are fast and
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furious. cracks -- >> president trump is trying to back up his assertion that the meeting with butter and was excess us. he tweeted today that russia has agreed to help with north korea. --said there will be an exciting future for north korea at the end of the process. the trump administration is opening investigation speculate to importing uranium. the american uranium industry was to be shielded from competition. in the u.k., british prime minister theresa may is breached -- bracing for a speech today in parliament. johnson's remarks are being billed as a resignation speech. johnson said her brexit strategy
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killed what he called the dream of breaking free from the european union. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. alix: thank you so much. google is facing a record antitrust fund following a probe into concerns over android apps. the fine would end and eu probe into the search giant's probe. joining us now with more from brussels is bloomberg's caroline. the press conference is still going on. what have we learned so far? fascinating, the billion.the fine, $5 that is about 5% of their overall annual turnover. this is a record fine. they can easily digest, but still this is a key statement.
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notably, we are also hearing that they feel that google has been up to illegal practices. they don't like the way in which google uses the android devices. they don't like the way they were giving payments to certain mobile phone makers. you couldn't have microsoft things. notably, they did not exactly like the way in which they stopped android faults or different operating systems based on android, but slightly different. they did not allow those into the mobile phones of those makers. clearly, there is going to be a .oncern they need to change their behavior. she says this is not a moral crusade we are on, this is
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behavior change we want to see from google. will it impact the overall difference of the search engine? in russia, and 2017, they took a stand. the regulators forced the change. now, you can get other search engines and it has reduced google's search engine share. could that affect the overall amount they earn in terms of additional revenue they earn every day on the advertising scale? i will be speaking to margaret a settlement -- in just a moment. alix: really looking forward to that. say, caroline is speaking with margaret. fine ise on how the eu going to affect google and the rest of the market,itor joins us
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now. spin this forward for us. what is the implication of this for other tech companies beyond google? itor: the implications for the industry are not so straightforward because this is only applied to google. this is completely assigned to the rest of the companies that we are talking about new markets . the european commission is willing to apply traditional violations to the market. this is pretty par for the course for margaret. she has been fairly aggressive in going after a lot of companies, especially big u.s. tech companies. put this in context for us in
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terms of her overall strategy. again, in her agenda, she has been tackling antitrust violations in the tech industry because that is her most of the violations lately have happened. we shouldn't be worried about targeting u.s. companies. she always mentioned the flag of the company -- despite the huge amount of the fine, it might not be as damaging as it could be for google, because the penalties could easily be absorbed. it could be far-reaching and still google has some kind of discretion to comply with the decision without enforcing the way to apply these remedies. margaretommission of a
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has always been after the online giant, we are talking about the tech industry. jason: great. thank you so much. alix: it was really interesting, a bloomberg opinion article saying the fine is big, but it could be worse as there are smartphone technologies that are already adapting their platforms for the android. there is going to the business for the company no matter what. jason: contextually, they did knock a hit as hard as microsoft it back in the day. alix: interesting there. still with us is michael. do you need to factor in a regulatory over risk when it comes to the big tech stock? michael: you do, the question is to what degree? you saw this back in march after the cambridge analytic a scandal
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with facebook. a lot of big excitement, a lot of drama in the media. it sort of steadily faded from the markets there because the risk getting from concept to reality to a really means in the u.s. context. overseas, they are being more specific and proactive there. as you look at the saying index -- fang index right now, it is -- isant to know that the higher than the volatility erupted. is not asitself overextended as it was in late january. it is getting there. as we get into earnings cycles, you have to be very careful. there is one important facet of the discussion which is in the options market.
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it has been pretty aggressively on the flipside. alix: we actually have a chart for that. the s&p skew versus the nasdaq 100 skew. that is basically what you're talking about. michael: also if you look at the volatility versus the vix that is going back 10 years. since march, people have been aggressively hedging this outperformance rally in ndx and thank and so forth -- fang and so forth. jason: you studied architecture at columbia university back in day. you and i were talking earlier about all of the variables we have to take into consideration when you're in architect. what is the variable that most concerns you in this market? professor many years ago made a theory.
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michael: i think the overall question right now is are we midcycle? are we in the fifth inning of the game in the u.s. economics cycle, the seventh inning, or the top of the ninth. i think understanding that, because there are unknowns about how the fiscal stimulus that we tell us winner, how that is actually applied, how do they would interact with that? i am a much more of a midcycle very late cycle guy right now. that is the answer. if we are late cycle, then for all the exciting earnings growth equity going to see, gains will be difficult to come by. a lot of people seemingly betting we are not late cycle right now. jason: i'm definitely in the midcycle camp. thank you so much.
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coming up, more on morgan stanley's killer earnings in my favorite segment, the wall street from new york , this is bloomberg. ♪
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alix: this is bloomberg daybreak. hour, up in the next randy, former fed governor. ♪ now to your bloomberg business flash. the turnaround is starting to take hold at ericsson. north american sales rose 11% for the swedish wireless networks.
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a key measure approved at a pace thaned been -- analysts expected. 2024.eing 747's december thousand and president last year in office if he wins a second term. a tectonic shift for warren buffett's berkshire hathaway. in the past, brookshire has used its cash pile for more acquisitions. that is your bloomberg business flash. alix: we turn now to wall street beat. morgan's magic. morgan stanley wraps earnings for the big bang with a killer quarter. musk's mirror has two faces.
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ballmer dials it down. the former microsoft the ceo has come along way from his onstage pump up days. the bar is skewed. jason: it is. wait until we show this video. joining us now is lisa. great to be with you. morgan stanley is captured a lot of headlines today. it is coming towards the end or at least towards the back half of earnings. what jumped out? lisa: the contrast between morgan stanley and goldman sachs. goldman sachs used to be the trading behemoth of wall street. morgan stanley made a very deliberate move to say we are to radically cutting our units across the board, saying we are going to shrink it. they are crushing it. they actually beat their fixed income trading revenues by much more than goldman sachs be there trading revenues in a fixed income space, which goes to show, perhaps morgan stanley taking the approach that at
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least for now is working or consistently and better than goldman sachs. it is really a tale of two banks. you have seen them market caps of these two banks really converge. it will be interesting to see how that develops. jason: a lot to watch given david solomon taking over now as the ceo of goldman sachs. not quite the trader harvey schwartz was. lisa: notable that morgan stanley also crushed it with regard to investment banking revenues. underwriting. alix: our second story has to do with elon musk. he comes out and says you have to dial it down. unhelpful your perception of your leadership leaves you short tempered. then you had mr. musk coming out an apology saying ok, i will dial it back. that is basically what he said
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in an open letter. then, you had elon musk coming out and apologizing in a tweet. he also wound up having elon -- monster yesterday on bloomberg television and he double down and said dude, you have to get it together. >> what needs to stop is just ignore the shorts. you're going to lose that battle. focus on the production side. i think anything out of bounds like we saw more recently clearly, that is the stuff that needs to stop. he can tweak all he wants to about the things they are doing to improve the production, albeit if it is focused on the right piece of really advancing the mission. think elon musk is changing his tune or is this just a temporary almost trumpian walked back? lisa: it is funny that you say trumpian. there were so many parallels between the two yesterday.
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elon musk coming out. it definitely had the feeling of handlers saying whoa, guys. take a step back. relax. this is what you will read, this is what you will tweet. this will be your external persona. the question is, is that going to be something elon musk can continue or is it just going to be a one-off for damage control? jason: one external persona we miss a little bit from a corporate perspective is steve ballmer. alix: and a hygiene perspective. >> i yell and scream. i become a little more moderate. i preserve my vocal cords because it certainly can be a problem. an jason: it can be an issue. this is steve ballmer back in
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the day when he was running microsoft developers. alix: with the sweat and the shirt. there you go. my faith. -- my fav. jason: now he is a much more subdued owner of a basketball team. he talks with david rubenstein on the peer-to-peer conversations. alix: you can see the intensity percolating up on the surface in the interview. he wants to do it and he has the intensity for other things. honestly, called personality. we have to keep playing this over and over. nothing i can say can possibly compete with or even explain how wonderful it is. at the same time, this cause a personality really helped to drive microsoft through the decades. he is a really impressive person. it really was that impressive the -- intensity the health
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drive that. jason: he is worth about $40 billion.he is microsoft's largest shareholder still. still very important, but a different calm her steve ballmer -- calmer steve ballmer. alix: thank you so much. you can catch the rest of the interview tonight on the david rubenstein show airing at nine clock p.m. eastern. official, david solomon will be the next ceo of goldman sachs. we will break down what the bank can learn from other secession stories. stories.sion this is bloomberg. ♪
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alix: goldman sachs officially
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has a succession plan. the bank announcing yesterday that david solomon will be taking over as ceo. bloomberg opinion columnist steven gunn dealt rights, this puts the storyline back on track. it is one that is necessary. investors have shown less appetite for wall street rescue businesses.solomon still has a lot of work to do .it is not clear just how much he can or will he wants to shrink the trading business without significantly reducing the process. how easy is it, if you are ceo, to come in with a different kind of background than the current one and write an enormous shift? it sounds like a lot more like what industrial ceos have to do. >> and almost think it is harder when the business is not doing poorly. you look at ge, there's a need
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for change, and need to come in with a totally different mandate and wrote everything apart and start over. when you have a company that is actually doing pretty well, i think honeywell is a good example of that. beloved by investors for getting honeywell and a great place where it is reporting consistent margin improvements. that is a big shift for investors who have become too really wanted focus on profit improvement. he sort of had to play that dialogue. he is than a really great job of it. solomonistening to yesterday and reading some commentary and even backstory happening, he is having to strike this tough balance. to your point of we are going to do some new things, things are going pretty well. this bank is in a very different position that i it had.inhat
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the post-financial crisis how do you manage a company at this point in the cycle? brooke: is like he has to create a new all the same time a new wind competitors eating your lunch. that is basically what he has to do. you have to be respectful of your predecessor. if they did a good job and ran the business well for the time they were running it, you can't completely trample on that legacy. you have to be careful about the way that you run this company. and honeywell's case too. dave stayed on and oversaw the transition. think that is the right way to do it. there may ben that taking this company to where it needs to be for the future, but they're not completely ripping up the blueprint. alix: it's also about the warring factions. solomon has been very
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clear that he wants to invest in some of these new businesses, whether it is markets are lending platforms and maybe get away from a lot of the trading revenue as lisa was saying and wall street beat. alix: it is all about wall street beat and commodities. thank you very much. as we had to break, margaret is still speaking about google's record $5 billion fine. google responding to the fine. we will hear more from her in the next hour when two speaks to caroline. the question, how is google going to make of the business? how will they change their model in europe and will it be the same scenario as the 2009 microsoft? this is bloomberg. ♪ retail.
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under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store
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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ alix: for now, fed chair
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powell's statement puzzled economist. magic. morgan stanley crushing it with big investment banking revenue all beating estimates to stop costs. pay up big time. the eu slaps google with a four print $3 billion antitrust fine. welcome to bloomberg daybreak. david is off tonight. joining me is bloomberg's jason kelly. a record fine. thatuestion is how does actually affect google's business in europe or is it just when they have a huge business in asia or the u.s.? jason: how does it affect business and therir competitors. a lot more to come there. alix: we will be speaking with
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margaret the sire -- margaret today. no action equities. s&p futures down by one point. closing above the 2800 level yesterday got traders excited. inflation did not pick up last month in the u.k. the other part is a crazy stronger dollar story that started during jay powell's testimony at the senate banking committee. to your yields are the highest since the greek financial crisis in crude .8%. jason: time now for your morning brief. we look at housing data for june. 10:00, said chairman powell speaks before the house services committee. at 2:00 p.m., the fed releases the beige book.
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also happening today, the blue origin launch at 10:00 a.m. eastern. we will be covering the launch live. the company had a successful flight in january. ofwill be sending up a host items related to antigravity research. they later plan to use the rocket for human spaceflight down the line. alix: can't wait to see that. picking up in -- taking off in west texas. oil, saidng to import rocket into space, life is good there. jason: i love the new modern space race. all of these billionaires going after it and competing to get people there. alix: it also shows that you business,d a private private money to get behind something like this.
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if they can really pick up the slack. would you go into space? would you do it? jason: i would. alix: i wouldn't. i would be so scared. sharks and the ocean and space are my two can't handle things. , deep anything in between blue and blue origin it's not for you go -- you? alix: not for me. anyway you slice it, it was a really solid quarter. all major banks except for wells fargo climbing this morning after earnings. joining us now for more on earnings is carmel. on the phone, marty. what did you make of morgan stanley's quarter? marty: the bank earnings have been kind of what investors thought of bank earnings would
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be in the middle of the ocean, floating out there with a fear of those sharks. what we are seeing is that actually the earnings are coming in. all of a sudden, it is turning into a little bit of an oasis paradise here. morgan stanley was ahead of what the expectation was by a full 15%. $1.30 when the markets out they were around $1.15. you can see loan growth and super regional banks.investment banking is a litmus test for most morgan stanley and goldman sachs. there are a lot of things going on right now. alix: going forward, did you interpret morgan stanley's feed as taking market shares and is -- or did you take it as banks being able to take on more risk? growing. is a pie
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that is why it is a litmus test for the economy. all of these banks have actually been exceeding expectations. america, bank of goldman sachs, morgan stanley. alonenot that they are taking market share, it is that activity out there is going up. they have more reliance on investment banking. that benefit for the bottom line is a little bit bigger. jason: i want to get your thoughts on what jumped out at you in the morgan stanley report. overl: what impresses me and over is there managing of the cost line. we are in it. -- period when all the banks are investing heavily in new technologies, continue to grow their businesses. that was a big feature in the goldman sachs commentary and jpmorgan commentary. they managed to keep costs under control both on the fixed side as well as the cop side. that jumped out at me.
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obviously, volatility begets good trading income. that is a big part of this. the other thing that jumped out at me was you continue to hear that the pipelines are good for m&a as well as investment banking. this is not a one quarter wonder. this is going to continue. continue talking about that, i'm glad you brought that up about investment banking and m&a. that has been a machine for a long time for goldman as well as morgan stanley. compare and contrast those two for me given what we heard yesterday and what we have heard so far from morgan stanley. carmel: different business lines, clearly. , i would expect morgan stanley to potentially be stronger and some of the equity areas, stronger in the smaller placements, goldman sachs to be more global. while they didn't give a lot of commentary where their pipelines are forming, i would assume it
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seems to fall out among those two lines. same feature. strong economy leading to more m&a. probably coming from different parts of the economy. alix: something we saw before earnings is that banks are pretty much trading in line with each other. there are clear winners and losers when you come out of the financial earnings. do you expect them to trade finally on their idiosyncratic factors or will it be a macro trade? martyk: i think for the back half of this year, it is more of a macro trade. these banks still have this kind of baggage from the last financial crisis that whenever there is a hint of that type of pressure, the stock prices really start to undervalue themselves. they really overreact. you can see the fundamentals come in mike we have seen here, continued improvement in returns.
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we think we have another full percentage point in improvement in returns for the second quarter into the end of this year. that fundamental improvement pushes everybody up and they're all benefiting from what is happening in the economy right now. jason: i'm looking at the top live blog in terms of what we are getting. one of the things that jumped out was in an interview with the cfo of morgan stanley, he talked about a healthy appetite and healthy market for ipo's. what are you seeing as the year goes on in that regard? carmel: absolutely. there is space for ipo's. there were a lot of companies waiting to find out what is going to happen with trade, was going to happen with various elections globally. the ipo backlog is still pretty healthy. within the united states, possibly concentrated more in the health and tech space. probably new companies that didn't exist five or 10 years ago. much.thank you both very
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coming up, it is reaction to jay powell's congressional testimony. schoolgo business professor of economics is coming up. this is bloomberg. ♪
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>> this is bloomberg daybreak. it is a record that google set.s it had it the european union has fined the company $5 billion over android apps. that is the biggest fine ever in an antitrust case. google was also ordered to change the way it put search and
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web browser apps on android devices. the company says it will appeal. yuan musk has apologized to a british diver for a marked that rattled investors. he said he was sorry for referring to the diver as a pedophile. he was one of the divers who rescued the boy's from a flooded cave in thailand. bloomberg has learned that the a billion-dollar contract to develop two new planes to serve as air force one. the boeing 747s would be delivered in december 2024. thousand the president last year in office if he wins a second term. that is your bloomberg business flash. . alix: interesting when it comes boeing.
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earlier in the weeks, the conversation was are they going to end up losing business because of trade issues between the u.s. and china. they were saying china already bought a lot of planes for us. now, it is a vote of confidence . plane onvery special order of the president gets what he wants with this air force one, what she has been talking about. we will see how that goes. boeing is one of these companies, and i know we keep coming back to this, in the context of global trade and tariffs, these big massive worldwide companies, people are going to be listening very closely to what they say about their orders, about their overseas orders, about the u.s. orders especially if they source of from all over the place. to thelso when it comes fact that we spoke to the boeing ceo this week and he basically did say yes, we are noticing some on the margin. there is caution. there is a material risk for our business.
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p&g for example, threats about having to cut jobs and raising prices. jason: not for nothing, jay powell yesterday it came up, i do whether or not whether the house is going to press him as to whether trade ultimately starts to affect monetary policy. alix: since the house is up for regularly -- reelection in november, i expect them to be a lot of grandstanding. like ties, i have nothing to do with tariffs. figure it out. jason: a texas ceo is resigning from his post after violating the company's code of conduct. what a big headline yesterday after the close of trading. by most accounts, this is the third chip ceo after intel and rambus who has lost his job for these sorts of violations.
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>> particularly for texas instruments, which is a low-key disciplined operator. this is an unnecessary distraction. remember, this is a new ceo. rich templeton was looking for his retirement after serving for more than a decade plus as ceo, and for a long time with the company. unnecessary distraction, but it doesn't takeaway from investment. jason: i'm glad you talked about this company is a study. ick in my younger days, covered chip companies for bloomberg news. i remember going out to texas instruments for the first time. there in this very huge campus. it was built as i understand it, with these massive hallways because they used to roll missiles down the hall. beenis a company that has in all aspects of electronics business for a century. anand: absolutely.
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they have slowly moved away as chip companies have slowly moved away from the volatile and consumer electronics business. made themselves into stalwarts in autos and industrials. revenues are growing, single digits. earnings are going substantially faster. of factory a lot equipment back of 15 plus years ago. there slowly filling up the factories. incredible forward thinkers, incredible execution. returns.ed capital unnecessary distraction, but this is a far cry from the ceo change at intel. jason: i'm glad you brought that up, because that was very traumatic. they basically looked around and they don't know where to go at this point. at least in templeton, as you have noted, relatively young guy. he was headed for retirement, he
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is only 59 years old. i thought it was interesting that he said he is going to be in that role indefinitely. what you make of that? anand: this is yet another testimony to ti's longer-term, the weight of their view of the world. this is a substantial change. for them, it is probably a bigger change them perhaps the perception outside in. there will be process changes i am sure as a company, but they wanted to provide a solid message to the street. templeton coming back permanently is a good start to that. alix: talk about the fundamentals for a second because you have all of the drama surrounding why he was ousted, with the bad news was behind that, but talk about a headline that crosses when the company is actually in good shape. versus the semiconductor that is already in trouble and then gets a headline. how do you deal with that? anand: compare and contrast.
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we preview the quarter, it is not a surprise that the beat the eps beat is a white margin. i am sure that as we get the full numbers, gross margin will have improved pretty substantially. all of those are positive aspects of pi. compare and contrast that with intel. this is a substantial change, accelerated, help the effort is substantially. he has changed management. those kinds of changes ruffled a lot of feathers to the point where senior intel management and now they are in the ranks if you made the top spot. there a different. i think the ceo change at intel is a far bigger change than the ceo change at ti.
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jason: the impact of the broader chip industry is so fascinating right now. you still have dealmaking going on with radcom specifically getting into the software business, not doing the chip deal. what is the overall sense of where chips are in the cycle because it is such a cyclical business? anand: there are two schools of one is that we have peaked and margins are as good as they are going to get and we are ready for a potential weakness, perhaps led by the more volatile areas, such as memory. the other is that this time it is different. semiconductors are the new industrials. we are going to be steady at even. if there is a takedown, we have improved the operational execution of the business so substantially the you're not going to see high highs and logos like we have done before. much.thank you so i still want to get your take on overall city index -- semi
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index. what areas of the semis are going to be most vulnerable going forward? be a: if you wanted to bear and poke holes in the semi memory whererea is supply concerns are pretty high relative to demand. we don't agree with that completely. we think that this is a long-term expansion story. that is one part of the area. the other is handsets are roughly about 30% of overall demand versus chips. if you wanted to poke some holes, high and smartphone demand could be weakening. that sort of is wobbly. that is another area. back. let's take a step semis are going faster than the s&p. if you wanted to play the relative game there, we are potentially in a better position
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than the overall market. that said, semi-'s are usually a , the stockscator turn will be for the fundamentals. ison: as you point out, ti an interesting story here because of the ship they made away from the communications. they were enough ears battle for so long with intel and broadcom. they really made that chip under templeton who really comes back into the ceo role toward a much more analog world. anand: that strategy has worked wonderfully for them. they have a book of products in the tens of thousands. note one particular customer is a substantial wait for them in their business. or subgroupr sector is their dominant driver of their business. in a lot of ways, it is a very different story than it was 10 or 15 years ago. alix: really great stuff. super nerdy, jason.
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nice job. google was fined $5 billion by the eu and forced to change within 90 days. caroline is sitting down with eu commissioner margaret. i'm joined by it margaret right now. right now, the european commissioner stood outside. talk to us about whether this will actually work. it is a big fine. you want serious behavioral changes, but when it is 90% of the market in terms of search, will it really make a difference? >> the difference is that now we have twice. those who produce mobile phones for us can choose. whether i can put other operating systems on my phones. for those who search rivals, they make it a fair chance to actually get to us as consumers to show their products.
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industries and companies say they will do something else, they may get a fair chance of getting to the consumer. >> what sort of changes would make you feel that they have reached compliance? they have 90 days to do it, what could ensure that we do see the innovation? the obvious minimum is that the contractual would disappear. you find a lot of these things in the contracts. is theirgle and it sole responsibility to make sure that this infringement comes to an effective and. that remains to be seen in what choices they make. >> what up the phone many factors themselves? when googles a search engine is about 90% of the market, do you think they will stop? >> it remains to be seen. we know that when amazon they werefios, looking for manufacturers and saying could you make a phone
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with this operating system? they wanted to do that, but they couldn't because of the restrictions that google put on them. quacks some say this is too little too late. some to that particularly with the shopping ruling you made last year ensuring that other shopping search engines might get more prominence other than google, that hasn't worked either. a breakup of see the monopoly to see competition become effective in your mind's eye? >> i think it is very important noticethat we have taken of this. we cannot say that google is complying with the decision. we will do the same thing, we will monitor if google lives up to the suspicion. this is the important thing. if google lives up to the decision, it could work here and now for manufacturers to have a choice, for consumers to have a choice.
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if you start with essential facility discussions are breaking up companies, it will take forever. what we need is competition here and now. cracks what about other regulators? tould the u.s. be doing more insist on competition as you see it? >> we spent all of our resources to make sure european consumers can have fair competition and the benefits of that. we don't spend much time considering what other people should do with their resources. >> what about how other people will react? we are in a political environment where relations between the eu and u.s. are not the strongest. do you think we might have some kind of reaction from president trump? do you hope for one and somewhat? >> the thing we have always shared with u.s. friends is that consumers should have choice. the important thing in the market phase is that the market serves consumers.
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ifinesses respect, but consumers don't like your product or services are prices, they will go to someone else. . these are values we have shared with u.s. friends always i don't see any reason why they should change. >> certainly, we have not had any monopolistic investigations in the u.s. in years. colleagues, we have been more than busy with our own priorities. said if yous always force us to change, we might not be able to to remain free. to that take away any element of competitiveness there? >> is one of the things about android is that it is open source. open source is up for anyone to have the skills. to see should i do something, should i put my skills my ideas
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into making a new version of android? that is doable because this opens doors. then, you have another operating system. that, i think is a very good demonstration of the benefits of competition. if you open up both innovative ideas and business ideas, they can thrive. this is just to say let's open up for competition. >> what would you say in general the dominance of certain u.s. tech companies such as amazon, facebook, google? do you feel they have become too much of a power in the markets? that also it's great european consumers have access to great products. reason why main google and amazon and facebook, why they are big in europe, is
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that people like the product. this is also why it is such a surprise to me to see these illegal practices. ferment aed to's petition when people like your product? this is the main reason why you are big in europe. this will not change as long as you are innovative and producing, if people like their products, you're more than welcome to be successful here in europe. merit, ursete on the parable -- you are as powerful as consumers like you. as long as you compete on the merit, you're more than welcome to be successful and also to drove -- grow into dominance in the european market. the point is here that you should not misuse your position and is something that is illegal. >> thank you very much. really walking us through her decision-making process.
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this is the biggest find we have seen coming towards google. t seems as though they must end their illegal behavior. back to you. alix: thank you so much. not only is she coming for them, she is going to stay with them. she is going to monitor and make sure they change it in 90 days. this is going to be an ongoing oversight here. jason: this is no joke here it she is running this very seriously. she has been very vocal for the past few years. she has put fears into a lot of the hearts of the people of silicon valley. as we go to the market check here, equities will they go nowhere. futures in the s&p up about four points. it is really a story of a stronger dollar. . .werling down .7%
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are seeing a lot of buying in the gilt market. the dollar also continuing to write higher after jay powell's testimony yesterday. that spread continues to flatten 23 basis points. gold, cash is actually worth something. maybe you want to be selling gold. the breaking news is now out. housing down by 12.3%. may revised a little bit lower as well. permits month by month down. a huge mess. we were looking for permits to increase, their actually down 2.2%. as housing numbers do not look good anywhere you slice it. jason: let's break it down. joining us now, is randy, former fed governor. here in new york on set with us, we have michael. want to start with you. what you make of this?
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michael: you don't want to read too much into one print, but maybe there is a story there that higher mortgage rates are slowing activity to a certain degree. jason: it yourself in your old job here. you look at these sorts of numbers. you look at what you have been hearing yesterday and what you will hear today from jay powell. what does this make you think about the broader economy? el: you don't want to react to anyone number. andthe put in the context sort of understand what is driving the number. if you look more broadly, i think the economy seems to be doing recently well. most forecasts have economic growth in the corner that just ended between 3% and 4%. that is pretty good unemployment rates are around 4%.
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inflation rates, the core around, 2%ates is which is the goal. i think as gradual rate rises and makes sense, it is likely to continue on the. jay powell made it clear that they are on the path for now and will continue on that. housing starts fell the most since 2016. multifamily starts really saw a big drop. i understand you don't want to make too much out of one data point. specificto pull out things that are affecting the everyday consumer. that top panel is the mortgage rate. 30 year mortgage rate is now over 4.3%. when i got my mortgage, it was 3.75%. the bottom panel, you have gasoline prices rising nearly four dollars. you have gasoline cpi also rising.
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now, canmy looks good the consumer with weight growth stagnant withstand this? michael: i think they can given the cause of the tax cuts. i would add in the risk of tariffs as well. we put tariffs on steel and aluminum as you know. if you look at the cpi component on home appliances, those were up about 8% in february. there are headwinds that the consumer has to absorb in terms of higher cost. at the moment, labor markets are quite solid. the tax cut does give households additional income. we are talking a little over 3% consumption growth in the quarter. butink that can continue, these are something to the limits and brakes on how fast the economy can grow and were underlying momentum is. alix: that is what i was interested in seeing yesterday from jay powell. book forin the last
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-- what is the breaking point as you see it? that: i think they now see they are very close, right around their goal. jay powell emphasized it is a symmetrical. they're not going to freak out if it goes to 2.1%. they will allow it to happen. 2.2%, but to 2.1%, they percent, there going to feel more confident that they need to raise rates faster. placeee the conditions in for a to potentially be moving up because we are seeing market conditions and probably stronger economic growth at least four q through and probably q3. alix: jason: i want to follow up on something michael mentioned. cuts.e and tax how is that playing through and how do you figure out what is a
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temporary and what is a longer-term issue for consumers? michael: that is exactly what the fed struggles with. is always easy to see when something doesn't persist true. that was obviously just a short run issue. they are struggling with that. you can see from the testimony yesterday and discussions on trade wars and tariffs. jay powell talked about how we are not seeing a big macro impact, but it could have a larger macro impact if it turns into a sustained round of protectionism. that is a political judgment that is really hard to predict. their struggling with that now. the same thing with respect to the tax policy. the tax reform is said to be about trying to improve investment conditions, which will then hope to improve productivity. that takes a while to see. it could be it was more of a short run stimulus or a more long run fundamental increase in
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growth. it is going to take a while for the data to be able to pull those two apart. . it may be a little bit of both alix: goes ahead scratcher yesterday. that was jay powell talking about for now. >> with a strong market, and the risks to the outlook roughly balanced, we believe that for now, the best way forward is to keep gradually raising the federal funds rate. alix: talk about your confirmation bias. what did it mean for you? michael: i wouldn't look at it as a dovish signal. takingat it as since position, he wanted to rein in some of the forward guidance. we want to speak is constantly aboust the longer horizon. given the way the world looks now, we think this is the right policy that may change later. i look at it as the overall
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peeling back of forward guidance and not having too much comfort about telling markets what we might do next year. you will hear him say we took a decision today. this is what we think. next year is highly uncertain and we will decide then. they don't look at it as dovish. i still thing for me, it means probably through the end of the year. that stimulus is going to keep the economy in and above trend growth path. alix: you now it. jason: randy, what does for now mean knowing how carefully a fed chairman chooses his words? think that michael was saying is exactly right. the economy is evolving along the path they have been forecasting. given that, they are going to
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continue on the path they have been doing, which are gradual rate increases. i think with continued strength in the economy and labor market, and inflation going slightly above 2%, they're going to be very comfortable with september and likely a rate rise in december. it depends how the economy evolves. i think that is a little bit more of a technical academic phrase. i think jay, who likes to speak in a little more click wheel terms set for now, and i think he is conveying the same thing. there is enough uncertainty that we want to leave our options open. right now, the path is pretty much along what we have been predicting. not usedically, we're to hearing one syllable words from a fed chairman. the other the other big topic of conversation had to do with of the yield curve. shape of the curve is something we are talked about quite a lot. different people think about a different ways. some people think about it different than others.
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i think about it as what is the message from a longer rate about neutral rates? george also speaking out about that saying it is more about the quantitative easing holding down the back end of the curve. how do you look at it? would say the longest the bond market thinks we are going to be stuck on this low growth inflation world. the balance sheet may be holding down term premium, but i think it speaks more to the potential for recession risk. the further you get into 2020, but also that the structural constraints on the economy remain in place, and the tax plan is unlikely to change that. jason: yield curve, how are you feeling? randy: the key thing driving it is the markets think there's almost no chance for inflation to move up. think it is only a low
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probability for it to move up, but i think the markets are underestimating the potential for an inflation spike. i think they are just too sanguine. we look to countries like it venezuela, the technology to generate high inflation is still there. wrong.i don'td go think that is likely, but i think the markets are too sanguine about the possibility. jason: randy joining us from chicago. he is at the bloom school of business. joining us is michael here in new york. let's get an update with what is happening outside the business world. >> president is tied to back up his assertion that the meeting with vladimir putin was a success. the president we did today that russia has agreed to help with north korea. he says there will be an exciting future for north korea at the end of the process. earlier, he tweeted that people at the higher end of
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intelligence -- bloomberg has learned that european commission president will discuss the issue with the president next week in washington. the eu wants to head off a u.s. investigation into whether car imports hurt national security. that could lead to a 20% tariff. billionaire jeff bezos lands to launch another rocket today. his company blue origins says the new shepherd rocket will be carrying a number of science in education experiments for microgravity research. this is their ninth mission. he hopes to eventually sent tourists into suborbital space. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. jason: thank you so much. blue origin, not shooting you into space. alix: i wonder if there will be
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an amazon prime angle? house?to your jason: let's also remember that elon musk shut a car into space. maybe jeff bezos is going to send amazon and go? alix: at least the echoes actually works. that was a little hard. coming up, how the wealthier get wealthier, and how they invest. last year saw the biggest increase of billionaires in the increase. where are they investing their money? i do want to recap that housing for you because it was so terrible. housing starts and permits had a big miss here, down by about 2.2%. down a whopping 12% in housing starts. multifamily starts really ended up dragging it down. the dollar off the height of the session. you are seeing a little bit of buying now all across the curve.
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this is bloomberg. ♪
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>> this is bloomberg daybreak. coming up in the next hour on bloomberg markets the open, christian milani. alix: another day, another billionaire. the number of billionaires increased the most ever last year with one more minted every two days. billionaires also sell their wealth increase by $772 billion over the two months. how are they investing? joining us now is the global
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market manager for new york. you have this nice window into the ultra high net worth individuals. what is the biggest question right now? >> we have been advising our clients to build globally diverse portfolios. what we are seeing with u.s. investors is a huge home bias. post the financial crisis, they had roughly 25% of their assets in cash. fast forward to today, it is still 22%. as a point of contact, if i was an investor and i sold at the peak of the market before the market crash, every single asset class what outperformed by a large margin. more reason to put money to work and diversify further geographically as well. alix: do you have a feeling as to why? 25% in cash was very surprising to me that it was that much. do you feel like they are waiting?
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they think they are correctly investing? what is your read on that? ida: those who waited on the sideline have not done nearly as well. if you look at clients who went with our proposed asset allocations, they did 300 basis points better per and i'm than those who did not follow our guidelines.when we talk to them about diversifying areas he speak to them about is investing in china. china is driving and leading the way in innovation and technology, virtual reality, robotics ai, we think there is a huge opportunity for a long upturn in china. we took 100 of our clients to shanghai last fall and they heard first-hand about all of the exciting innovation developments happening in asia and in china. those clients represented $50 billion of net worth. storyllion, in the asia
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and china story in particular. jason: given that what we are seeing in the world right now, especially as it relates to china and tariffs and trade and whatnot, what are those clients saying now that may be different in terms of worrying about that overseas exposure? are obviously monitoring very closely what is happening with the tariffs. hinabillion on c today could go up by more than $200 billion by the end of the summer. despite all of the noise around tariffs and everything else, there is a strong fundamental reason to invest in china. above and beyond everything else i just mentioned, innovation, technology, china also has a very large middle class, and emerging middle class. 400 million people. those individuals will be driving a consumption in asia
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and in the region in the near-term and long-term. not to mention, that the chinese have a six time savings rate compared to the u.s. a lot larger. i was having a client conversation last week. the client said to me, i have exposure to china. but they realize is wait a second, china and hong kong only msci,mise 3.5% of the where it to be closer to 17%. a lot more room for increased growth there. jason: alternative. i saw on your chart there, still fairly heavily weighted toward at a time of relative existential crisis in the hedge fund world. what our clients saying about that and what are you telling them about hedge funds specifically?
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ida: we are telling them they need to build diverse. the whole goal is to make sure you have a very solid portfolio, withstanding political -- geopolitical risk that could happen in the future. alternatives are very important part of that. private equity, real estate, alternative, we bet 100 different ideas in the coinvestment space. we end up with a 6-8 the our clients invest in every year depending on themes we are seeing in technology, geography, etc. alix: is there one worry that everyone seems to have right now? ida: how do i invest my money? i reiterate to everyone that we have to go global and put the cash to work and stay invested. alix: clearly, high net worth individuals are looking out for the next 20 years. such a pleasure. up, a look at earnings
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after the bell and how rising treasury rates are casting a shadow on gold shine. more on what we're watching next. this is bloomberg. ♪
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alix: here is what we are watching today. earnings and commodities, what a surprise. and theooking at ebay two americans, american express and american airlines. tomorrow morning, flagstone, we get our look at private equity. always interested to hear what steve schwarzman and john gray markets. the them numbers are one thing, but really understanding what they are seeing in terms of
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geoeconomic and geopolitical trends will be interesting to watch. we will also get a lot of that today after the bell. american express a window into consumer sentiment. american airlines window into spending. either a, always something interesting. alix: i love dealing with airlines. maybe should cut a low of the margin. we are also watching morgan stanley and ai on the way. a really solid quarter. is cash versusng gold. there is a lot of talk right now in the commodity world about what is happening with gold. this is one of my favorite charts.
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at the blue line is the three-month t-bill. basically, your cash is worth more there is literally no other reason to buy gold. jason: at of what we just heard out of ida, her clients like cash. it is pretty amazing considering where we have been in the equity markets. alix: a lot of conversation now, what do you do when you have a dividend yield of 6%? you are not in cash for safety, because you can actually make money now. a totally different dynamic. hear more from jay powell today as he goes back up to capitol hill. so much going on. alix: maybe not so much in actual market movement. coming up, we open with john.
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that does it for bloomberg daybreak: americas. as we had to break, take a look at where we are at in the markets. a lot of news, not a lot of movement. you want to be watching google and what it does to the nasdaq is the antitrust fund comes down at 3.3 billion euros. you're still seeing equities hold onto the gains. the dax, the outperform are up .7%. it is a stronger dollar story anyway you slice it. the curve in the u.s. continues to flatten. 23 basis points. continuing to grind lower as did two-year yield stays at 6.2%. this is bloomberg. ♪ phones have made our lives effortless.
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jonathan: committing to gradual rate hikes, day 2 of the testimony. eu,cord fine from the google facing. big banks on wall street, morgan stanley delivering. 30 minutes away from the opening bell. futures dead flat into the cash open, fx market, $. euro-dollar down. bid, 285 on the u.s. 10 year. semiannual testimony before congress, planning to stay the course on the rate hike plan for now. >> for now, the best way forward is to keep gra


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