cards for many immigrants who use public assistance including medicaid, food stance, and housing vouchers. the lawsuit filed today by california, maine, oregon, and pennsylvania follows others this week am including one involving 12 other states. the new rules are set to take effect in october. democrats on the house to dish year he will return to capitol hill early from their summer recess to consider gun violence legislation in the wake of this --th's math shootings in mass shootings in texas and ohio. jerry nadler says his panel will consider a series of bills including one that would ban high-capacity magazines of ammunition. the panel will also hold a hearing next month to examine military style assault weapons in which many democrats want to ban. rashida tlaib, the democratic congresswoman barred by israel because of her support for a boycott, says she does not plan to accept the country's new her visit her

grandmother in west bank on humanitarian grounds. on twitter, the michigan lawmakers said silencing me and treating me like a criminal is not what she wants for me. it would kill a piece of me. israel said today that it will let her visit her family one day after refusing entry along with fellow congresswoman ilhan omar. trump administration has informed congress it plans to sell f-16 fighters worth a billion dollars to taiwan, a move that issue to escalate already high tensions with china . two u.s. officials and a congressional aide says the administration have informally notified lawmakers of the proposed sale. the deal would behind the controversial because china loosely opposes all arms sales to taiwan, which it regards as a renegade province. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg.

>> live from bloomberg world headquarters in new york, i am vonnie quinn. amanda: live in toronto, i'm amanda lang. welcome to "bloomberg markets." here are the top stories that we are following from around the world. u.s. stocks are rallying to close the week, rebounding from the massive midweek selloff. we will talk to one market watcher who says equities will go much higher in the next four months. deere is in the doldrums. they lower their earnings guidance for a second straight quarter. it is reviewing their costs as u.s. farmers are battered. bearish on oil. opec is giving a downbeat oil market for the rest of the year as economic growth slows and trade tensions simmer.

let's get a quick check on the u.s. major averages. we are definitely seeing some enthusiasm, markets across the board are up. the broader s&p 500 has every subgroup higher. financials and tech as the leaders. 1.5% move. goldman sachs is one big influence to the upside. financials getting a relief rally here. to note, one stock that stands out in a positive way is deere, getting some support from analysts. we will talk about what that is telling the market. in terms of volatility, which has been one piece of the story, take a look at the s&p 500. these are the times in the past month it has moved more than 1% in a single session, up or down. for anybody that does not like big price swings, these are tough markets to stomach. vonnie: that is for sure. there was talk about recession

looming, what the fed should do, jackson hole, so i decided to look at a chart that shows previous recessions, and where households have stood in those times. if there is a recession coming, households are in a better position to whether it. the blue line is a look at personal income, and it's been higher than any of the past five recessions. at the same time, debt service ratio is lower than it's been in the past five recessions, so that bodes well for the u.s. household if recession is on the horizon. recession came up this morning when we spoke exclusively to brian moynihan. he is not concerned about imminent recession, but is concerned about the impact fear could have on the consumer. to fear abouthing recession right now except for the fear of recession. you are seeing a lot of people look ahead and say, if trade war

continues, if this does not get solved, you can see this getting to the consumer confidence, in the u.s., which is the critical thing to maintain. any fear a's see how recession is affecting our next guest moves in terms of strategy. joining us is charles lemonides us. . seems like we have been bubbling around the idea of recession for a while, but it has become a real possibility. has it changed for you, the idea that recession is coming soon? charles: no, it has not. we have focused on the idea over the past couple of weeks for two basic reasons. we saw a lot of volatility out of the stock market, and that creates fear, makes you wonder what is going on. ofondarily, there is a lot focus on the fact that the yield 10's between 2's and

inverted for a little while. the bigger picture for me is the difference between 20 tens has narrowed over the past six months ago, has been really narrow, but more important is the fact that overall interest rates in the u.s. have declined a lot in the past six months, so you have an economy that has had positive trajectory and momentum, and over the past six months, you have added the stimulus of much lower interest rates. the market is trying to find fear out of its own volatility and focusing on the question of whether recession is coming. let's get specific about the parts of the market you like right now. obviously you are saying stay in the market. where should they be? charles: it's an interesting place because overall, the market is not expensive but not radically cheap. the sectors and groups in the market that are likely to lead arehire into a bubbly top

the ones that have already had a lot of momentum. if you are just talking sectors and groups, it's tricky. the growth expensive sectors are unreasonably high prices, and they will lead you into a bubbly top. if you don't own those, you'll have the challenge of not participating. ,f you go into the value stocks and the name of our shop is valueworks, as a group, value stocks will have a miserable run into a bubbly top. three or nine months were that trend reverses, but for the next two to six years, what leads you to a bubbly high are really exciting, vibrant dynamic companies that are changing the world. those are no longer cheap. you have the choice to either get on board with those, get into the value stocks that are dead, or try to do some sort of stockpicking. we do stockpicking. the notion of stockpicking has by those whoslayed

believe the average guy is average, and therefore nobody should do stockpicking. vonnie: proved them wrong. give us a few names. charles: a couple names easy to buy, right in front of your face. if you are not buying apple with 12 times earnings with 5g coming, you are leaving money on the table. qualcomm is another wil well-known name. earnings will be growing dramatically beyond that. names to own.big in the mid-cap space, we love newell corp. lovee small-cap space, we bed bath & beyond, tidewater. amanda: they often say it is easier to decide what to buy than what to sell. what should you sell at these levels? apple would be an expensive name, but some are with owning. what don't you want to own right now? charles: a couple of themes that

are going on right now that are overextended. a couple companies that have grown through acquisition and cost-cutting, hollowing out the businesses. those are great stories while they are working and going up. while you could buy a new company and hollow it out, generate margin. in the biggest cap space, broadcom is definitely in that category. $150 billion- equity cap. another one that is very similar but in a different space is transdigm. $14 billion worth of debt. it has a single be plus rating on it. the credit rating agencies think there is a credit risk in it, yet, the equity cap is two times the debt outstanding. they have grown by acquisition. what about the idea that

value has not been in vogue, and the matter what, we are not getting there? charles: it is not going to get there. valley will not be in vogue. the trend to growth is the trend to growth. what you have to do in this environment is buy value and cell growth. find real diamonds in the rough that are being misperceived by the market today, and will be perceived different they in six months or the year. vonnie: but that is always value, right? charles: no. listen, the russell value index stock is dominated by low multiple stocks, be it financials, real estate investment trusts, cable, whatever. value stocks in that index will always treated lower multiples than true growth stocks. those boring company that don't have great growth prospects are going to underperform into a market top.

what we try to do is find the ones that are in the index entry that way but don't really belong there. that is hard work. amanda: always good to talk to you, charles. ides valueworks ceo. as we watched stock prices swing wildly, many investors are taking cover, so where are they minding up -- winding up? money market mutual funds. $18 billion of inflows, pushing assets to 3.30 5 trillion. here with the story is our money market reporter alex harris. it is fascinating to see. to me, the most interesting thing about that chart is that long printer in the middle where money markets were unlocked, taking us back 10 years to crisis levels. what does that say about sentiment? >> money markets and cash, even though people are blasting it as an investment, is good right now. money market funds rose with the

rate hikes. those yields are higher. positive rates with the banks did not go with. you are seeing 2.3% on a young for a money market fund. that is great. they hurt during the zero interest rate period, but assets are up. it is a good place to put your money, if you are afraid and a not sure what is coming next. fewie: you say there are places to park cash, this is one of them. remember when there was a problem with money market funds? would that ever be a possibility again? the security exchange commission enacted money market reforms, in place .16. -- since 2016. you also saw a big shift in that time to government money market funds. these are funds that invest in

treasuries, collateralized by treasuries, treasury bills, things that are perceived a little bit safer and sounder. actually, they look really attractive right now because t-bills, the rates are supposed to rise with treasury coming with all of this supply. yesterday, treasuries sold four- week treasury bills at 30%. you can actually see pockets were this is really attractive. if you are not just looking for yield and looking for a place to ine out, you can find value addition to that safety and soundness. amanda: let's make some forecasts. if we continue, if treasury yields fall, we have that goldman sachs 1% call, some saying zero negative is possible for the u.s. in that would happen, but we expect to see massive inflows into the money market? >> you can. money market yields tend to lag

fed interest rate cuts. you will see higher yields even as the fed continues to cut, and that is why you are seeing two plus percent on these money market funds. you can still see money flow in. look at 2008 during the financial crisis. we had a lot of inflows into the prime side, which tends to be riskier, and then the government side as well. people wanted to feel safe and secure. better to be there and earning 10, 15% ining equities. vonnie: as always, great stories on your bloomberg. harris on our fixed income team. nothing runs like a deere. john deere gaining despite a miss. what are the bright spots in the report boosting the stock? this is bloomberg. ♪

vonnie: this is "bloomberg markets." i'm vonnie quinn in new york. amanda: i'm amanda lang in toronto. john deere reported its third-quarter earnings this morning before the bell. despite missing estimates, shares of the world's top tractor maker gain the most in seven months in the session, climbing as much as 5.1% at the high water mark. to walk us through the numbers is our agricultural reporter from chicago. let's start with what deere is saying. there is obviously something up with, they saw customer orders delayed. the big question is whether they are temporarily delayed or not, whether there is so much uncertainty for farmers. >> there is a lot of uncertainty for farmers. they did say they had their

early orders were flat versus last year. that is actually a good sign, given all of the uncertainty. that is partly maybe why the shares are up. actually good demand in the circumstances. lydia, how curious, much were they able to talk about the outlook, how much visibility did deere give? >> in terms of the fourth-quarter outlook, things look pretty good. surprisingly. growth expected for both their agriculture and construction segments. part of that is assuming that farmers are going to spend a lot money on large equipment, which is debatable.

farmers, withy all of the uncertainty in the ag environment, they are going to pay down their debt, or save it. it remains to be seen. you say they kept their outlook for ag levels. they lowered the construction outlook from 11% to 10%, which i see as pretty robust. is there a danger they are overly optimistic on the construction side? side, on the construction the construction segment did really well this quarter. ofcourse, there are fears global growth slowing. theirid also pullback forecast for u.s. gdp growth, so i think there are some questions there. up 3.7% right now,

year on year, 8%. our thanks to lydia mulvany. bearish,, opec stays more from the latest oil market. this is bloomberg. ♪

amanda: this is "bloomberg markets." i'm amanda lang in toronto. vonnie: i'm vonnie quinn in new york. time for the latest bloomberg business flash. flywheel is shoving done more than a quarter of its cycling locations. the new york-based fitness location will close 42 locations, four studios in los angeles. it is the latest sign boutique exercise businesses are struggling to keep up with home exercise. companyal agreement applied for a nasdaq listing. the company aims for a $1 billion ipo in september.

a new owner for the brooklyn nets. the alibaba chairman is paying about $3.5 billion for the team and its arena. stakeviously bought a 49% and had until 2021 to exercise his option to take control of the club. latest business flash. amanda: opec says global oil markets face a somewhat bearish outlook, amid a slowing economy and a trade war that may drive prices higher, with saudi arabia shouldering most of the burden in production cuts. here with some insight is jessica summers. let's start with opec is saying, and obviously we have a lot of crosswinds, including the slowdown in china. is it surprising bit of pessimism from opec? jessica: absolutely. when i dived into the report, i saw they were signaling this bearish outlook for the rest of

the year. what it meant to me is now saudi arabia will face so much pressure in terms of whether or not it will choose to cut production, and even is already cutting more production that it promised. bottom line, saudi arabia and other opec producers don't want to see oil below 60, they want to see it at 80. we are far away from that number for them to balance their budgets and recover some of the government spending. they have a lot of thinking to do. meane: what does it all for u.s. shale producers with oil below 60? if opec decides to continue cutting production or cudmore, that will make u.s. producers even happier and drill faster. right now they are showing below $60 a barrel, they are just fine. crude production is at record high levels. crude production in north dakota is at record high levels. they are showing they can operate in this price environment. amanda: what about the so-called

opec plus? will russia stay in agreement with holding cuts? if they have not already, will they cheat? jessica: that is up in the air right now. what i want to point out, saudi arabia did allegedly have some calls with opec producers last week about oil policy in response to these falling prices. so we will need to pay attention to the september meeting in abu dhabi, where russia will be meeting with opec members, and we will need to see if they change their policies. vonnie: we have seen a lot of your your action on trade headlines. it appears the oil market is also trading in that kind of pattern. jessica: it is. the market is so uncertain right now. these trade headlines cause worry over oil demand. says heame time, trump may talk to xi jinping. we are seeing all of this back-and-forth and forth trading

up of headlines. when i talk to traders and analysts, they are concerned about this trade war. vonnie: i think we both want to say thanks. monday,mming note on days ahead of the jackson hole annual meeting of the kansas city fed, an exclusive interview with boston fed president eric rosengren. that is coming up wednesday. thanks to our oil reporter jessica summers. at 54.7t now is trading 0 a barrel. this is bloomberg. ♪

>> on ritika gupta. let's get the first word. president trump is meeting with

national security advisor to talk about the peace agreement with palestine. talks have been regularly taking place in qatar although afghan authorities have been sidelined in the process. have refused to hold talks until it reaches a finding with the trump administration on withdrawing forces. the congo ebola outbreak is showing no signs of slowing down. it has spread to a near province with one death. more than 1800 people have died since the latest outbreak began. workers have struggled to contain ebola despite the use of a vaccine. many people in eastern congo do not trust doctors and medics. the russian pilot who managed to land his disabled plane in a cornfield's has a quick landing was his only chance to keep his passenger safe. he spoke to reporters in russia today. he landed his plane so gently

that just one of the 233 people on board was hospitalized. people across russia hailed him as a hero and the kremlin said he and his crew will be given high awards. the government of greenland says it is happy president trump has taken an interest in the nation, talking to a thin allies about buying the island for the u.s. but it is not for sale following reports trump has spoken about the notion of buying greenland. the danish territory issued a statement to clarify it is not on the market. the white house commented it would not be the first time an american leader tried to buy the world's largest island. in 1946, the u.s. proposed to pay denmark $100 million to buy agreement. global news 24 hours a day on air and on twitter powered by more than 2700 journalists and analysts in more than 120 countries. bloomberg.

caroline: is 2:00 in new york, 7:00 p.m. in london. i am caroline hyde. scarlet: i am scarlet fu. this is "bloomberg markets: the close." caroline: the s&p 500 pares losses as it hopes germany will risk the pursestrings. binge.ly timed g.e. the fed in focus. minutesahead to fmoc for the meeting in wyoming. all that and much more coming up. scarlet: let's get a check of the markets. you called it cautious buying. we will end the week lower. we have stock indexes at session highs right now.

trade headlines do not seem to be a factor today. caroline: for once, they are on the back burner. orders on the front burner is, will germany loosen its pursestrings? will they allow any spending in the face of recession? we are seeing german etf's on the rise. scarlet: helping german big caps recover from a six-month level. the 30-year yield to a record low yesterday. oil also getting a lift along with risky assets, rising as as 2.2% before paring gains. plus managell opec to curtail supply? scarlet: we will check in for more on oil later. let's dive into the action with our markets reporters. >> it is a boomerang day for

general electric shares after yesterday's 11% plunge. at the highs today, g.e. was up almost 10% to $8.80. the number to watch is $9.03. that is where the stock closed wednesday before the whistleblower released his report accusing g.e. of hiding losses and not reserving enough money in its long-term care insurance. a bunch of wall street analysts came out to defend g.e. today. thealso very telling famous short seller came out defending g.e. today and criticizing the report saying fraud is not the same thing as aggressive accounting. a wide variety of other criticisms of this report also boosted confidence. larry cole buying about $2 billion of shares yesterday.

$9.03 will be when g.e. fully recovers from the report. >> let's check out the major averages around the world on the week. something interesting is shaping up. the dow, s&p, and nasdaq all lower on the week. this is a five-day look at the indexes down for the third week in a row. the e.m. equity index is down for a fourth week in a row, the longest losing streak since october of last year. check out the stocks. the first up week since july, up 1%. what makes this interesting is both p.m. and the stocks are considered to be leaving tells -- leading tells. in yellow, we have stocks. in blue, the e.m. index. in white, the s&p 500. stocks took off well ahead of the other indexes on hopes around the bottom in the chip sector and then back down in

may. higher now again. , the e.m.on to ask close to even. it will be interesting to see far sidea sign of the of the risk continuing is a better tell. caroline: fascinating. thank you. sticking with the markets at the end of a tumultuous week, we are joined by a state street global advisor. what to do with volatility. what is happening? >> not a lot this week. we did think heightened geopolitical tensions were likely to feed back into the real economy. we had a long-duration bonds until recently. right now, we are staying close to neutral. scarlet: you changed your positioning on long bonds. they got overextended. does the stock market reflect what is going on in the economy now? >> we think they got it a little

bit wrong. u.s. gdp is likely to come in in the low 2's this year. it does not justify equities hitting new highs. we are probably in a trading range on equities and see a selloff in bonds. flight to quality can drive bonds lower. caroline: as we look at to next week, jackson hole iphone o.c. -- jackson hole fmoc minutes, do you see any clarity to sustain a bond rally? >> i don't think there is a lot more the fed can say. they've said all along they think the fun a mental outlook is intact. we have been watching the data carefully. there are weaknesses. you could hardly argue they need to intervene with additional cuts. they have said repeatedly the equilibrium rate of interest rates may be lower than what everybody thinks.

the long-term trajectory probably does justify similar rates. they have been talking about what is going on on the geopolitical stage. we think we will get more confirmation it will move in september 25 basis points. that will be the same thing we have been talking about for months. scarlet: something already priced in. the fed might not have a lot to say that will move markets, but the e.c.b. could. we have seen indications it is willing to entertain certain ideas. how meaningful are the reports this week? >> across the board, central bankers are in an easing cycle globally. we saw 18 different cuts over the last couple of weeks. what will be more interesting is fiscal stimulus. in the u.s., one of the things that has buoyed the u.s. economy has been a tax-cut and fiscal stimulus. we are seeing more appetite for that in germany. what will be needed to take this to the next level will be fiscal and not just monetary. caroline: would that change your opinion on european stocks?

portfoliosof our where we are looking at a have seenm view, we some buying opportunities in europe. tensions andal things going on in italy in the fall through there are plenty of reasons to be cautious short-term. we think there could be good opportunities in the eurozone. scarlet: u.s. markets will likely stay range bound. we might see a pullback on treasuries. what does that mean for next week? we have a fed minutes. it will be the third week of august. where does that leave us in terms of being susceptible to headline risk? we are definitely susceptible. we thought this week as well. we have been putting on tell risk hedges for this environment. in terms of trying to reposition the entire portfolio, we think

on balance equities look ok. we favor u.s. we would be more cautious on emerging markets. in fixed income, be selective. do not put too much into duration or high-yield. caroline: does the haven trend remain intact? >> exactly. i was going to say gold. we have been adding to our position in gold. we have a 3% position because we think real interest rates have been coming down. scarlet: is that a crowded trade. we hear about more people getting into gold and you hear bullish forecasts on the price of gold. environmentn an where people are looking for safe haven assets, those are a couple of the few safe haven assets you have. crowded or not, we think there is still room to run. crowded tradeally

throughout 2019 is the u.s. dollar. where do you think that goes if we get the 25 basis points cut? >> it is hard to see where the dollar does not remain strong. in currencies are not a good place to be. there are other safe haven currencies. it is hard to see the u.s. dollar weakening much, especially against the backdrop of stronger economic results. scarlet: which might get the white house's attention and subject it to risk as well. thank you so much. coming up, president trump reportedly wants to buy greenland. live denmark is saying it is not selling. general electric rebounds, gaining as much as 9% as wall street pushes back against allegations of accounting irregularities. netflix seems to be canceling shows left and right. we will look into the numbers. this is bloomberg. ♪

caroline: time for our top calls, look at key movers. it was upgraded to a buy from hold with the $60 price target citing healthy traffic trends. next, tapestry downgraded to neutral with a $21 price target. shares recovering. yesterday sold off hard. we are up 8%. nvidia having its best day of the year after reporting second-quarter results that beat expectations. the price target is boosted to $180 at morgan stanley with the

analysts saying the quarter featured unexpected good news. $150. soaring to those are some of our top calls. scarlet: it is time for a bloomberg exclusive. uncertainty surrounding trade continuing to spark a rush into safety. that is led the yield curve to invert for the first time since 2007. we set down with brian moynihan to get his take. >> if you look at what our experts predict, they basically have the u.s. growing at 2.3% this year. 1.8% next year. if you broaden out to the blue-chip consensus, nobody has a negative number for 2019. the economy is growing. the debate is, is the bond market signaling something? people are raising estimates of recession to 40%.

but we see nothing in the underlying data that says it is happening today. >> you have a lot of clients across the country including individuals. are they starting to borrow less, invest less? is business activity giving up at all? >> they are not. the u.s. economy is the largest in the world by 30% or 40%. the u.s. consumer economy is the second largest in the world because it is bigger than china's economy. when we look into that economy, we see good things now. it has been increasing turned the course of 2019. we see it based on consumer spending. when i talk about consumer spending at bank of america, through august 12, $1.9 trillion was spent by our consumers on debit and credit cards, checks written, payments made, cash in the economy. $1.9 trillion. that is up 5.9% year-to-date

through august 12. 2018 was up about 8.5% over 2017. 8% growth and almost 6% growth. that means consumers are spending a lot of money across the board whether it is experiences, going out to dinner, traveling. the nice thing is they are getting a lift from gas prices coming down which provides a benefit to spend. they are up that which means it's going elsewhere in the economy. >> are you seeing going currencies in credit increase? are you seeing any backing off of using credit cards? are you seeing the need to reserve more against bad debt? >> not at all. charge-offs have been low and stayed that way despite my team saying it has got to go back up. it really has not. it has stayed constant. that is because we underwrite well as a company. with an unemployment rate of , a nominal number that has

theexisted for 50 years, average worker is working and getting paid more. they are making their way through. that will translate into good credit performance on the consumer side. with mortgage rates, you're seeing a tremendous kick up in production. probably double last year, month to date in july. august up even faster. people are taking advantage of lower rates. that will provide a benefit to consumers to save money on mortgage payments to invest in our homes or spend the money on something else. >> that sounds encouraging. what happened to the bond market this week? the 30-year set a new record low. you have any number of indicators that would suggest there is something wrong. what caused this? >> is largely outside the united states and inside the united states around concerns for trade

and manufacturing. around the world, there has not been a lot of great news lately whether it is the brexit situation that does not seem to settle down, europe slowing down, and the european central bank saying we need to slow down. china is slowing down. the impact of the trade war. the need for companies to restructure supply chains to avoid tariffs, which means they are spending money to move things and not to produce new products and capabilities. debate.te about the the old saying that we have nothing to fear but fear itself. we have nothing to fear about recession except the fear of recession. you are seeing a lot of people look ahead and say if the trade war continues, if this or that does not get solved, you could see this getting to the consumer confidence in the u.s. which is the critical thing to maintain. business confidence has come down but is still strong, especially small and

medium-sized businesses. they are fine. they are just more worried about what is going on around the world. caroline: that was the bank of america ceo brian moynihan. it has been a busy week for brian moynihan. he was in washington wednesday. one of the most read stories on the terminal saying he was among three executives that got on the phone with trump wednesday amidst the dire selloff, the worst we had seen all year. banks are being hit hard. trump called them after he met with steven mnuchin. scarlet: my question is whether the phone call took place before or after his series of tweets where he talked about the crazy inverted yield curve and how the fed is doing so much for other countries and how jay powell is clueless. timing is everything. caroline: it is. whether the banks want to hear more pummeling on fed policy. scarlet: his tweet tried to

deflect from trade headlines. trade was one of the reasons why the yield curve inverted. caroline: we have been on gains ever since. anrlet: anyone want to buy arctic island? president trump reportedly interested in acquiring greenland. denmark, which owns it, might have something to say about it. caroline: we have loads of charts for you summing up what a volatile week it has been. abigail was showing us how we have the difference in stocks with the chip performers versus emerging markets. so much key analysis you can look at. this is bloomberg. ♪

scarlet: a quick check of the latest business flash headlines. new home construction

unexpectedly falling in july for a third straight month. increasedily housing the highest since january. china's biggest energy company's backing away from venezuelan crude. the national petroleum court has 5 millionlans to load barrels onto ships. this is the first time in decades the chinese have foregone venezuelan oil as the trump administration tightens sanctions against the south american nation. the dental equipment company has applied for a nasdaq listing. the company aims for a $1 million ipo in september. that is your business flash update. caroline: their is another story we had -- here is another story we had to talk about because president trump reportedly wants to buy greenland, the world's biggest island. denmark is not selling. "the wall street journal" report

outlining his interest has left the danes bewildered with a former prime minister asking whether it is the delayed april. . this is an 80% -- it is a delayed april full joke -- april fools' day joke. about to visit denmark to meet with the prime minister and queen. scarlet: maybe he will make an offer they cannot refuse. thererthernmost base is about 750 miles north of the arctic circle and includes part of the ballistic missile warning system. it also has natural resources which everyone covets. china was interested in doing more in greenland. you know president trump is keeping an eye on that as well. caroline: it is a focal point

for many countries. they have all at some point tried to take the country independent. you flagged this tweet. scarlet: the greenland ministry of foreign affairs said we are open for business but not for sale. look at the emojis they added on. snowflakes, ice capped mountains, whales. caroline: there was a quote from a danish parliamentary member saying denmark does not own greenland. you cannot sell something you do not own. scarlet: you can try buying it nonetheless. this is bloomberg. ♪

>> let's get the first word. democrats on the house judiciary committee will return to capitol hill early from their summer recess to consider gun violence

legislation in the wake of mass shootings in texas and ohio. the chairman says his panel will consider a series of bills including one that would ban high-capacity magazines and ammunition. the panel will also hold a hearing next month to examine military style assault weapons which many democrats want banned. the new governor of puerto rico says she has a tough road ahead but she is preparing for it. she tells the associated press her priorities are to fight and help puerto rico out of its 30-year recession. she is expected to finish the term of the former governor who resigned earlier this month following massive protests. the new u.s. ambassador to mexico arrived in mexico city today to take on one of washington's most important diplomatic posts. the job has been vacant for over a year. speaking to reporters at the

airport, he says he arrived with his hand extended. windsed the united states when there is a prosperous and stable mexico and mexico wins when there is a prosperous and stable united states. india is promising the situation is being reviewed daily and some security restrictions will be removed soon. an official says landline phone service will be restored this weekend and stores reopen monday. restrictions have been in place for 12 days. the government imposed the lockdown to avoid a violent reaction to the decision to downgrade kashmir's economy. global news 24 hours a day on air and on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg.

caroline: from bloomberg's world headquarters in new york, this is "bloomberg markets: the close." i'm caroline hyde. scarlet: i am scarlet fu. this is "bloomberg markets: the close" as you just said. let's turn to opec. with the slowing economy and ongoing trade war, opec says the global oil markets face the bearish outlook for the rest of the year even though supply is tighter than previously thought. joining us is senior trader rebecca babbitt. saudi arabia can try to manage supply but it cannot do anything about demand. that is the real problem here. >> that is why you're seeing the market respond broadly with crude. any supply disruptions aren't opportunity to get a rally to sell it. the market is set up to sell. the only thing that will change that mentality in crude is when you see demand pickup.

sell into rallies until you see the demand profile change. caroline: selling in equities related to oil has been relentless. what has this week been like? >> this has been an extremely aggressive trade from many hedge emds sorting levered p's. they are looking at the oversupply of market in 2020 and questioning whether some companies will survive it. they are putting on aggressive bets in equities based on that. when you look at the short interest in those names, it has increased dramatically over the last month and a half. you have to wonder at what point the trade is getting played out or too crowded. it has certainly been a thesis that has driven the of the relatede

etf which is currently underperforming crude by over 30% year-to-date. that is a huge number. that is clearly market expressing its opinion about how they think these companies can survive 2020. scarlet: when was the last time positioning with this extreme? caucus through what happened -- talk us through what happened last time? >> in 2016, we saw extreme positioning. positioning is not as extreme as we saw in 2016 when crew got hit to $30 and equities continued lower. it is extreme but not as bad as it was in 2016. scarlet: it could get to the point of 2016? >> i would say that would take a significant recession type environment. right now, what is being priced and traded is the slow down. the imbalance in 2020 of one million barrels of extra supply on the market is only pricing and essentially a slowdown, not a deep recession. i think that is what it would take. caroline: is the selling

pressure largely on those externally focused? i thought that was where the u.s. made its money. are we at the level where it is too cheap to sustain what is happening in the permian? >> that is a really good question and where it gets company specific. for the u.s.-based shale producers, $60 is great. they start to feel some pain when we go below $50. as you see the larger integrated companies move into the permian, which they have been doing, they are less price sensitive so they will continue to pull crude out of the permian even as the price goes lower. that is the real problem for opec because they need permian supply to slow down as the crude price goes lower. as bigger players get in and are more efficient, they don't need

the commodity price to be as high to make money and they will continue to produce. permian production has not come off. that is where opec is feeling the pain. scarlet: u.s. companies need somewhere north of $50 to cover spending. what about opec nations? has the number changed for them? >> no. their numbers are pretty much the same. right now, they are sacrificing market share and hurting their budget because they are playing the long game. they are thinking if we can get 32020 and make these -- through 2020, we will see demand pick back up and rebalance. they are playing the long game. caroline: interesting. thank you, rebecca babin. now we are going to talk deere and g.e. g.e. rebounding. deere shares jump on the earnings miss.

it is interesting the reaction in the share price given the outlook does not look pretty. it is not as ugly as everyone feared. >> i think that is a big part of it. the outlook was cut but it is not as bad as people were worried about. even as farmers struggle with rising debt, export markets getting stifled because of trade tensions, the trump administration is giving them support payments. deere says that is one reason they may get a boost in the fourth quarter. that is something people have to look ahead to. what does deere say about the outlook over all in terms of what it can do independent of how the u.s. proceeds with the trade war? >> there is a lot of uncertainty. for a hard to predict how these trade tensions filter through -- very hard to predict how these trade tensions filter through.

deere is taking a closer look at costs as a way to try to soften some of the bloat of the uncertainty -- blow of the uncertainty. caroline: let's look at g.e. the bounce back has been phenomenal. we were up 9% almost undoing yesterday's relentless selling. the whistleblower report with the last molotov cocktail, do you think that is right? is this as bad as it gets for g.e.? >> there has been a lot of bad news for g.e. the last couple of years. it is hard to rule out the possibility of additional pieces of negative information coming out. that said, it has been such a seesaw. today's rebound is recovering a bunch of the ground lost yesterday. a lot of analysts on wall street are questioning the claims of the accountant who came out with

yesterday's report saying the ceo of g.e. is still well-positioned to forge ahead with his turnaround effort. scarlet: that is the big question. how much faith to investors have in his turnaround efforts? initially, it seemed like they welcomed his appointment. but then they got impatient when he was not able to articulate exactly how he was going to transform the company. >> he really went over a lot of people earlier this year. the second quarter earnings report at the end of july raised a lot of questions in terms of the company's ability to generate cash. he has his work cut out for him. this has always been a big challenge. the company has real problems in its finance unit. it has weak markets in its power equipment unit. the jet engine business has been a bright spot, but there are problems. g.e. makes the engines for the

boeing 737 max has been grounded for five months and problems with another engine are delaying the first flight of a different boeing plane. larry culp has generated a lot of confidence lacking in the two years before he took over. but it is still a big job. time will tell. scarlet: thank you so much, brendan case joining us from dallas. we have breaking news on argentina. the ratings company has downgraded the company to triple b.rom after macri was upset in primary elections. caroline: and looking at what this is comparable to -- i am looking at what this is comparable to. two notches because they

have gone straight past the minus. clearly, things are getting heated in general with argentina. scarlet: the index in argentina down, but it has been down all week. this is bloomberg. ♪

caroline: the stock of the hour, we are going to brazil. the country's leading payment processor is staying ahead of rivals by appealing to smaller merchants. growing revenue reflects its strength. a 12% intraday rally, dave wilson. >> this stock has set a record. it has only been public for little more than the year and a half. it is still controlled by an

internet company in brazil called universal online. this is a company able to grow by focusing on businesses, small businesses specifically. you look at how that has played out in terms of their latest quarter. fintech in general is an area where you have seen explosive growth. with paymented out volume up 59%. you do not see those numbers just anywhere. the company has been able to sustain expansion. the stock has taken off because of that. in the last three months, you have seen most of the gains for the year. the stock has more than doubled. catchingar people are the story and riding the wave when it comes to the payment processing business in brazil and with this company in

particular. scarlet: you mentioned it has a rival. clearly, this is a competitive business. how is it separating itself from the pack? >> they have multiple rivals. one of them is front and center because berkshire hathaway has a stake. how you do as well as they have done even the competition? sustaining revenue growth, a lot of it going with smaller merchants big they added 286,000 of them in the latest quarter. that is an area of the market according to analysts that its peers have not focused on much. you see what it has meant in terms of transactions. growth has slowed but still substantial. in may, they opened a digital bank. by the end of the quarter, they had 1.4 million users. has been downloaded

2.5 million times. that is what they are getting into to get away from the payment processing business. caroline: thank you so much, dave wilson. let's talk about netflix because it gained quite the reputation of the years but maybe not for what you think. it is known for creating a bloodbath of canceled shows. according to data compiled by not more likely to drop shows than any other network. we are joined by our reporter from los angeles. the grumblings we are hearing from hollywood are perhaps not entirely fair on netflix. >> well, my colleague compiled some data to look at the number of shows it has canceled compared to cbs or hbo. it does not look out of line. what is different is netflix has become almost a joke in terms of how many shows it green lights,

how many projects it takes on. "snl" did a skit about it not long ago. other shows have had a go at them for doing that. they are spending $14 billion a year on content. some shows get an avid fan base and then they cancel, and they don't know why because netflix does not share the data like a regular network might. scarlet: it sounds like hollywood is still coming to grips with how netflix does business. is netflix less transparent than traditional studios? is it just a case of the industry is not used to it? >> it is not as transparent. we don't have readings -- ratings the next after a show on cbs or fox. it is up to netflix to share the data. they are doing it for reasons not necessarily to appease reporters like me but to say this is a really popular show,

you should start watching it. they have done that for some of their shows like -- some of their films like recently they had a huge hit with adam sandler and jennifer aniston, one of their movies. that can get people talking about their program and getting them watching. aimthey have a different which is to get people to subscribe, not necessarily watching for ads like a network might. caroline: i made the mistake of watching that. that is two hours i will not get back in my life. it is fun but remarkably silly. [laughter] caroline: i am intrigued. as they lift the veil and show us when things are doing well, what about when they cancel things? is it all algorithm based? is anything we can point to as to why they decide to cancel certain things? a lot of them do in that being

charged on twitter by consumers who enjoyed it. >> i have had shows i have been a big fan of where they have said they will not return. it is disappointing. you don't get to see a storyline you might enjoy or you are left in suspense. this year, there was a popular animated series that was well reviewed by critics. we were all surprised when it was canceled. it is not just numbers. there are people around the company that can show there is more that goes into it. what that is they are never public about. scarlet: thank you so much. a fascinating story for anyone who watches netflix. the adam sandler/jennifer aniston movie is called "murder mystery." something else that keeps alsong up is from spain, known as "money heist" in english.

it is a popular spanish season. in season three, a couple of bandits go snorkeling through a flooded gold fault in a bank in spain looking to steal gold. this looks far-fetched but is based on real-life security defenses. the bank of spain has a series of different vaults and doors that seal perfectly into the space. there is an elevator shaft that leads to a second armored gate. very elaborate. caroline: much more than perhaps other central banks have. it is even more elaborate than in the film, right? in the film, they have to bust through one door. in real life, there are three. romaine: that would take three episodes --. scarlet: that would take like three episodes so they had to compress it. caroline: do the banks ever killed anyone robbing gold? maybe they have not thought of snorkeling. scarlet: they said there has

never been in treatment without authorization and they don't intend -- they said it has never been entry without authorization and they don't intend it. i recommend everyone to watch it. there is a link between what we talk about all day and what we see on netflix. caroline: you heard it here, folks. from new york, this is bloomberg. ♪

scarlet: the owner of the new york stock exchange just won approval that paves the way to let investors by derivatives that pay out with bitcoins. let's bring in ben bain. walk us through how long the process has taken and how much demand there is for it. >> it has taken a pretty long time. basically the company that owns the new york stock exchange has

for several months been saying they wanted to do something no one has done before, which is create a system where it will be easier for people to go to places like starbucks and pay with bitcoin. the issue is there is not really the infrastructure that exists. they have created a futures contract, a one-day and one-month contract, that will become the back office. eventually, the company says it will allow people to go ahead and use bitcoin to do things they do every day in real life. that has been a big not on cryptocurrency -- big knock on cryptocurrency. this is a bid to bring it mainstream. caroline: it makes the so-called price of bitcoin more regulated. at the moment, you get spot markets unregulated. it does not make bitcoin anymore less volatile.

how many people rush to starbucks and start buying coffee with bitcoin? >> that is the real question. that is the argument. the argument is these futures contracts will trade on ice futures u.s. they will clear on ice clear. they are highly regulated entities that already exist. right now, bitcoin trades in the spot market. a lot of these are located outside the united states. there are lots of price fragmentation's. some say manipulation. it remains to be seen. ice's argument is this will be the first time this is in a highly regulated environment. they think it will be a big growth business for them. it is significant in that this is the first time we see physically delivered bitcoin futures. there was a lot of hype around the cme and cboe doing this before.

those were in cash. these are physically settled so when the contract expires, people can collect bitcoin. that is why this was so complicated and took so long to get done. caroline: it starts in september? >> that was the news today. they just got the license to be a trust from new york state, which has been giving out virtual currency trust licenses. with that, they can launch this september 23. so that is their plan. caroline: ben bain making the complex understandable, thank you. let's have a quick look at the rest of the market. the nasdaq on a stellar run. it is all about the overall chip stocks doing well today. this is bloomberg. ♪

at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity.

♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. >> let's get the first word. rashida tlaib, the democratic congresswoman barred by israel, so she does not accept

to dust plan to accept the country's new offer. on twitter, the michigan lawmakers had "silencing me and treating me like a criminal is me."uld kill a piece of refusing entry to her and al hunt omar of minnesota. the latest court challenge to new trump administration rules on immigration. it would block green cards for many immigrants use public assistance, and putting medicaid, food stamps, and housing vouchers. followsuit filed today others this week, including one involving 12 other states. migrants were evacuated from a rescue ship near a southern italian island. as remain stuck on the boat

the political battle for migration rages on. the humanitarian ship open arms and rescued 147 migrants from the sea two weeks ago. the ship has been stuck in the mediterranean due to a ban imposed by the italian debiting minister. the native americans leading the fight against the dakota access pipeline's once the judge to resolve all challenges to federal permits issued to the project. it is argued the $3.8 billion project need to be shut down until the government has conducted an environmental analysis and studied alternative routes. the pipeline sparked massive protests in north dakota before it began moving oil from the state in 2017. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪

caroline: it is 3:00 p.m. in new york and 8:00 p.m. in london. live from bloomberg world headquarters, i'm caroline hyde. scarlet: i'm scarlet fu. this is "bloomberg markets: the close." caroline: cautious buying to end the week. the s&p 500 pared its third straight week loss. hopes that germany will loosen the purse strings to end a volatile five days. a trade war profit squeeze. escalating tariffs biting into forecast. but it is not as bad as investors fear. fed in focus. we look ahead to wednesdays fomc minutes. all that and so much more coming up. scarlet: first let's get a check of the markets. small caps leading the way among the u.s. equity indexes. the best-performing among the

three major benchmarks, even though it is set to close the week down 1.25%. energy and health care leading the way. more defensive sectors like tumor staples are the laggards -- consumer staples are the laggards. caroline: all on the news from a german magazine, business magazine, saying the german government could if forced to rein in debt if a recession hits. basically run a budget deficit for the first time in an age if europe's largest economy does collapse. we saw the dax outperform. scarlet: this comes after an ecb official yesterday reportedly set monetary stimulus would exceed expectations. now you start to get some momentum and the idea that perhaps europe will begin spending. a rare update as a result. treasuries falling as much as 1.7%. that was the most since october 2018. ge bouncing back after the 11% rally yesterday. let's dive deeper into the

action with our reporters. we will check in first with sarah. sarah: let's take a deeper dive into the better performing industry groups today, that being the semiconductor stocks. you look at the philadelphia semiconductor index, every single member except for one is in the green today. that after a couple of earnings. the stock is up near 3% today. the two earnings were nvidia on the what and and applied materials on the other -- on one end and applied materials on the other. nvidia, we have really seen a rebound it looks like for gaming chips. sales increased 24%. they beat on the top and bottom line. that sent the stock up almost 8%, the best day since october. applied materials on the other hand, they were pretty decent. they match expectations. however, they did not just match expectations. executives came out on the call in the aftermath and said they

are not yet ready to call the bottom in the semiconductor cycle. that is what set the stocks lower. mike: well, numbers can work magic in markets sometimes and there is no number more round than zero so when the spread between 10 year yield and to year yield dipped below zero on wednesday, it all beastly because all sorts of fireworks. we saw a massive selloff in stocks. what is interesting is the inversion did not last that long. only a couple hours on wednesday and a couple hours on thursday. most of that was outside of regular trading hours in the u.s. since then, we have seen the curve steepen by about two basis points yesterday. almost for basis points today. -- four basis points today. still a relatively flat curve and no committee and will invert in the near future, but this has allowed banks to find a floor. the kbw bank index yesterday was at its lowest since january. today, it is up 2.5%. the regional lenders like

regions financial are really leading the charge with gains about 3% or more. abigail: i'm thinking about risk assets and volatility as the connective thread. the s&p 500 since january of last year around the time president trump slapped tariffs on solar panels and washing machines. we see huge moves, volatile moves for stocks of that time. not really moving now. however, with this volatility, we had investors really going into haven assets. this chart is fascinating. the amount of assets in money market funds. back in 2007, $2.5 trillion. as 2007 and 2008 went on climbing. it coming.ensing almost $4 trillion in 2009 and slowly lower. since the volatility, take a look at the fact that we have money market funds climbing

higher at levels last seen back in 2009. the bull case, dry powder.the barricades, what are the investors seeing? scarlet: thank you so much. as we close out a pretty volatile week on wall street, we need to look ahead to another busy week as well. this time, it is coming up for the federal reserve. on wednesday, we get a read of the july policy meetings through its minutes. on friday, chairman jay powell delivers remarks at the annual monetary policies enclosing in wyoming. for more now, we are joined by the bloomberg economics senior u.s. economist. everyone will look ahead to what jay powell says. before we get there, the fed minutes are going to come out. seems like they tend to surprise people because they give us context for the decision we just got. >> well, look, it will be a little bit outdated even what happened in the beginning of august since the meeting

concluded on july 31, but so in that sense it will be less useful in terms of the timing of the next one but it will provide context as to which conditions will push the fed to act whether it is the next rate hike order looking further to when we had the downturn, what will make them invoke qe policies. that jay interesting powell really turned to the trade war, to for an impact as to why week -- to foreign impact as to why we are seeing the impact. givenarity in the minutes the global economy downturn and the trade war, we are going to assume 25 if not more rate cuts to come. >> i think it is still premature to expect an intermittent cut or 50 basis point cap in september. in september.

i think it is too much because the economy is doing fine. but you are right. there has been a lot of focus on the global developments from fed policymakers. a lot of them expressed concerns about that. that is why we see all this movement in the bond market. i think that is driven by what is happening in the global environment. i think they will continue to monitor that. we are not immune to global developments. but relatively speaking, this is not the biggest risk. the biggest risk is if the labor market here starts faltering. if that happens, that is a bigger concern. scarlet: are other central bank is going to be attending jackson hole? yelena: usually it is a bunch of different people from different central banks, and they will be discussing divergent see, divergence between monetary policy paths among different countries. scarlet: the reason i ask of

course is because we are now getting talks that perhaps the european central bank or germany may be doing more as well. is this an occasion for those kinds of central banks start telegraphing some of those moves? yelena: they are not going to coordinate the policy move. i don't think so. it is very useful to get the perspective just from those people who make policy. and especially given the topic, the themes of this symposium, which is about the divergence between monetary policy paths. so different countries in a different stage or in a different stage of normalizing policy when we started to get this issue we got recently. caroline: not normalizing at all. always good to get your knowledge. periodup, investing in a of chaos. more on bloomberg businessweek's exclusive conversation with don.

investors are keeping a close eye on north korea. pyongyang fired two more ballistic missiles into the eastern seat. we will have the latest in a live report. drowning in student debt. we will discuss student loans and what it means for the economy to help manage the growing burden. this is bloomberg. ♪

now for it is time social climbers, the stocks making waves in social media today. it is all available on the bloomberg. first up, amazon. product sold by big-name fashion companies as top brand. this is a test that is widely implement it and could ease tensions between amazon and consumer goods companies. amazon has already labeled certain products best sellers or amazon's choice so this would

add to that. deere is not selling as many tractors these days with trade war's raging. -- wars raging. it is taking a thorough look at its cost structure and looking to be more profitable. it reduced its full-year net income forecast. shares up by nearly 4%. while stocks sold off on thursday, president trump held a call with wall street's top baking executives, including jamie dimon and michael corbyn of citigroup. they were in washington for a previously scheduled meeting with the treasury secretary. don't miss more of our exclusive interview with brian moynihan later. those are your social climbers. caroline: thank you. let's switch gears a little bit ceo has been on the frontline of private equity for four decades now and sat down with jason kelly earlier to talk about how private equities role in today's volatile

markets. >> private equity can be a bit of a buffer during these periods. to be fair, private equity firms, virtually all of them, are foolhardy and do not say we will just by on a downturn. fact, one of the challenges that private equity has now to play that buffer role is it is harder now to deploy capital than it has been in a while. i say that because notwithstanding the chaos valuations in private equity transactions as you know have remained stubbornly high. they have been going over the last four or five years. you cannot reverse the laws of supply and demand. and with all of the money that has been raised, as you know, the phrase is this sort of dry powder available. and the animal instinct of good private acne firms to try to get it to work. the equity values or valuations have moved up and it is harder

to put money to work. the only way you justify it is if it is not unbroken but this long-term trend up. and given the chaos in a number of industries caused by factors that we don't need to enumerate now, all you need to do is watch bloomberg and find out all of those factors. it is harder to put money to work. some of the technical factors are still favorable. although high-yield flows have been diminished. i think there have been 38 straight weeks of money taking -- of people taking money out of the high-yield funds. capital will still be there. there is plenty of equity there. it is a matter of selectivity. but in these periods of time, there is a rusty businesses that seem to have a lower risk profile and the price gets bid up.

for us and i'm sure many others, you are navigating a way to find the right transaction with the right risk reward, capital structure, management team, prospects, path through regulatory maze if it is a businesslike health care where we invest often. it is complicated. i still view it as a flexible normalizet can economies and companies when needed. >> right. you have the ability and probably the need to be talking to ceos all the time. both ceos of companies that you control, ceos of companies that you might want to control. you have a whole network at your disposal. if you can generalize how the leaders of big companies and maybe small companies are feeling right now, what would you say? don: there is high anxiety. and appropriately so. economic and the

macroeconomic political conditions that you described. but i think public up and he ceos feel under more pressure ceosever -- public company feel under more pressure than ever to show improvement. it is a function both of stockmarket, which gives you a report card everyday, activists that come in and let you know exactly what you're doing wrong and what they think you should be doing right, boards that feel they have to respond to a lot of those pressures, and if you look at the statistics, i'm going to phrase it in a way that sounds shocking, but it is just math. if you recognize about one in five s&p 500 ceos change every year, that means that there is a ceo change in the s&p 500 about four or five days. >> wow. that is just math. don: just math. if you are the ceo looking at those numbers, looking to the

left and right, you would like to have eyes behind you. it is not that you don't trust you are not going to give you some time, but it is just a measure of the environment that it is tough. ceo tenure therefore is being reduced. ceos really i think have a tough job in public companies. it is tough everywhere. leadership is always hard. i just think now the scrutiny, social media, activists, shareholders, 24 by seven global makes it very hard to be a public company ceo. with jasonat was don kelly. looknessweek" is taking a at the american student debt crisis. it may take as long as 60 years to pay off the record $1.6 trillion students owe. in other words, students may be dead before they make taxpayers whole. take a listen. ♪ >> do the math on america's $1.6 trillion student loan balance and the bottom line is pretty

grim. a bloomberg businessweek analysis found that student loan borrowers are paying down about 1% of their federal debt every year. for the average barber, that is $300 on a typical $30,000 loan. at that rate, the debt will not be paid off for a century. no wonder it has become a political issue. progressives propose a bailout because tuition has far outpaced inflation and wages. conservatives blame the government for promoting out-of-control borrowing. about 8 million borrowers are now on income-based plans that let them reduced about the payment and can lead to debt forgiveness in u.s. 10 years. that has led to fewer delinquencies and defaults. on the other hand, they lead to slower repayment and rising balances. that is while unemployment is at a 50 year low. it is time to get tougher. the student crisis is likely to get worse. scarlet: you think about the damage this has done on the

economy. it is everything from people getting married to household formation to people being able to pay for rent because they live in their parents's house and to even saving for their kids's future. caroline: there is a really depressing piece on the uber today saying your -- the bloomberg today saying your kids's debt may outlive them. 130 thousand dollars annually, that is no small chunk of change. but they owe $260,000 in loans. for an awful lot of people, student debt gets bigger and bigger each year.

abigail: time now for "options insight." i'm abigail doolittle. joining me today is mark sebastian, founder of option pass. happy friday to you. what a week. on our third down week in the u.s. on the year. that follows the fomc meeting on july 31 out of the topical range right now. more so though the inversion of the yield curve is what people em to be be -- se focusing on. talk to us about what you are seeing and what could be next. to for myre starting bottom. if you look at the s&p relative to the vix, the s&p basically triple bottomed. on each of those, the vix at a lower level. it failed to break out. normally when you see a new low , that tends to be the market is starting to calm down. it is starting to unwind some of

its insurance protection. the 10 means we are finding some sort of bottom so we could see some chop but i think the idea that we will have some huge downturn in the next week is probably off the table. abigail: so beneath the surface on the vix, what are you seeing in terms of put or call buying? mark: you know, we have seen generally not a lot of upside call selling. people are still holding on to the longs. we have seen a lot of moving out of august and into september. a lot of repositioning but not a lot of major changes. abigail: more of a hedge against the downside? mark: right. abigail: as opposed to an outright bearish vet? mark: yes. most of the triggers are set up with the full vix but against the long s&p position. we are seeing some of that here. as that is happening, that is part of the reason why the vix has not reached new highs,

because there is not this panic buying of the calls because a lot is pre-positioned. abigail: so matching your seemingly bullish even if it comes after a choppy view, you have a bullish idea on disney. mark: disney got slammed on earnings. moving to disney plus, it was trading 147 a couple weeks ago. i can buy the 140 in september for $1.50. abigail: mark sebastian in chicago. like sticking your toe in the water around volatility. bullish on stocks overall. thank you for joining us, mark sebastian. appreciate you joining us for "options insight." from new york, this is bloomberg. ♪

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