dani burger is here to tell us more. what is going on? underperformance. i have on the board one of the largest equity quant funds. haveost of this year, they had down months but recently, in june, that was a four per and 8% loss. -- 4.8% loss. that is the worst for this mutual fund since its inception. we are seeing these kind of losses across the board for these kinds of funds. even if you are invested in quants, you are not impervious to losses. matt: what is driving the downside? what is the reason behind it? it doesn't look like they were doing too well before this year, either. dani: they invest into two strategies that are popular among quants. is investing in companies that are cheaply priced. that is in the blue. run since its worst 2011. meanwhile, momentum is really popular investment stocks that are highfliers. did really well this year, then the past few months happened. its worst return in two years. these together show that quants have nowhere to hide and behind that, the underbelly of the stock market was not as healthy as the surface seems

dani burger for today. applause all around. this is bloomberg. ♪ ♪ live from new york city, i am vonnie quinn. caroline: i am caroline hyde in london. this is "the european close." earnings season and trade tensions battle for the spotlight, but as far as alternative assets, auctions are looking up as wealthy investors put more money in the art market. thestie's jumped, helped by auction of the estate of david and peggy rockefeller. here.ful to have you you have 27% of all buyers that are brand new where are they coming from? guillaume: 40% are coming through asia and 40% through online sales. it says so much about the market today. caroline: in terms of tech and asia being a driving force. the number two market overall, picked u.k. to the post. how is it changing in terms of what you are currently selling in terms of the kind of art? guillaume: the art market 10 years ago was very much western things. it was between europe and america. it is true that asia has become a major player and today accounts for one third of our a

for more, here's our reporter dani burger. dani: the delirium can continue on because i love injecting skepticism into the idea into any conversation, but especially right now. we are looking at massive m&a value. the blue bar is the quarterly value. because it's so high, last quarter the most since 2007, also saying this is too much it can't continue. when we take into account the value of the overall market, it's not that impressive. the white line, i have the ratio of deals to the overall equity markets. look at what is happened this past year. this year looks no different than 2015. me it's notts tell delirium right now. this is more of a return to normal. this is a pickup in the paths from last year. matt: dani burger joining us. now ruth david from our deals team. what could either risk to the m&a boom continuing globally? what could stop this train? dani interesting because was talking about it not being that impressive. qualcomm, wasal, stopped by u.s. antitrust. that's the huge problem. our regulators going to clear s

here to tell us more is dani burger. dani: i think this is the story of the 2018. jpmorgan calls this a two-tiered market. --t's a develop market that's the developed markets doing well. what are traders still worried about? trade war. creating this market where we have developed stocks doing exceedingly well, but the china complex, using a term from j.p. morgan, is taking a hit. base metals like copper in the yellow dipping. meanwhile, china equities have also given up their position of the lead so far. that's the red dot there. we've seen developed markets doing well. if you're asking where trade is split, it's happening. under the surface, we're seeing these divisions. matt: what if we focus on just the develop markets? a lot of fun to think about this in the u.s. do you see similar divisions? dani: i do want to focus on the u.s. for this because it's interesting. to the divisions i want to point out, one i want to point out is trade. ones with local sales are beating their counterparts in that mostly have international, on the top, domestic, in the white, blue

dani burger kicking things off. dani: there is a pressure cooker building in the u.s. treasury market because speculators have pushed their short positions on the u.s. 10 year to an all-time record. look at this. this is about half a million contracts. we don't have any precedent in history for this massive position here. yields hovering around 2.8, around the level we saw this massive best be put on. this toon i am bringing your attention, if we continue to see trade tensions building, if we get any flight to quality, this could result in a massive short squeeze. guy: maria? maria: that is good, but i have the biggest story today. -- had a terrible day yesterday. volatility, 90 day volatility in commodities. the spike we saw yesterday was the biggest since 2015. investigators -- investors have concerns. what could happen to commodities and demand if we continue to see it carriesp and significant implications for china and other emerging markets. jump inhe big volatility, some of those concerns piling up. guy: thank you very much, both of you. fantastic charts. i have

nejra: thank you so much dani burger. coming up, europe's bid to reduce car tariffs. can they convince president trump to step on the brakes? this is bloomberg. ♪ nejra: economics, finance, and politics. this is "bloomberg surveillance." let's check in on what is trending across the bloomberg universe. trump backtracks on comments in helsinki, saying he accepts the conclusion of u.s. intelligence agencies. i'm bloomberg, theresa may has fended off a bit rebels to create a customs union if the trade deal fails. the government won by only six months. ,nd our most read stories are in third place, analysts in blackrock say now is the time to buy emerging markets. voicednd, fed officials concern about the next financial crisis. and goldman sachs surprises by setting aside a unusually small portion of revenue to reward traders and bankers. i just want to get a quick comment for my guests. larry, on goldman, what we see under david solomon? larry: it comes out of the investment banking after. -- backdrop. i suspect consumers will still be a big part. issuesy have to addres

joining us now is a dani burger and sharon bell. bloomberg news describes morgan stanley as almost flawless. [laughter] dani: what a note to end things on, right? it was indicative of the share prices we saw. investors really happy about what they are seeing and a bright spot was there investment banking unit. i love this, both morgan stanley and goldman sachs had in their press releases that they were the top firm when it came to an m&a advisory.-- for what it's worth, they both get a peace of the ground. nejra: is this as good as it gets? dani: good question. it is difficult to keep it up, of course. theirey have taxes in favor, a regulatory environment moving in their favor. executives say they have deals in the pipeline, as well as being committed to reducing share count. all of those ingredients make for success going forward. the big question is do we get the yield curve inverted, traders taking risk off the table because they are scared of trade wars? if that happens, we might not see it continue, but for now that seems conta

here to tell us more is dani burger. morgan stanley says we are in the middle of the coming correction that will be worse than february for u.s. stocks. the me take you and show you what is going on. the market leaders have gone missing even though more than 85% of u.s. stocks have eaten their earnings estimates. i want you to concentrate on this blue line. this is momentum. show me --owing saying show me the best winning stocks. though stocks you can see on the blue line have fallen the most since 2006. these are what have been leading the markets, they are gone. what could take over? when we think of good earnings, stocks, of cheap lifting the markets because you need earnings for cheap things to do well. yesterday they went up. so unless this action, the white line continues upward, we are not going to have any market leaders and morgan stanley says this is the reason where about to enter a correction. -- we are about to enter a correction. matt: thanks for joining us. bloomberg's markets and -- reporter. asian stocks

dani burger., this is bloomberg. ♪ ♪ guy: 9:00 a.m. in new yorkguy:, 2:00 p.m. in london. i am guy johnson. this is bloomberg markets. coming up, china temporarily fanning sales from icon, -- macron as trade tensions and testify that intensify. asian stocks overnight looking a little sad. the ecb will introduce an operation twist setting the yield on france's twenty-year bonds to twenty-year lows. let's talk about european equities and how they are trading right now. actually, let's not, because not a lot is happening. the u.s. is on holiday. i do not think the board has changed a great deal. volume is down sharply. everyone is thinking about the world cup. let's talk about what we are looking at cross asset. this is the picture we are focusing on across the world. they are managing to stabilize the chinese currency. pboc behind all this and stabilizing at. the chinese equity market is starting to fall. the 30 year bond in germany is trading .29. i do not think you will see much movement until the states rejoins tomorrow. joining us now to discuss all of this and the footb