is thursday, may 14. you are watching "bloomberg surveillance -- you are watching "market makers" in our new time slot. erik: coming up the trade deal known as tpp. senate leaders reach an agreement to hold votes. stephanie: facebook's push for your business. is mobile advertising the secret to success? and we want to hear from you -- do you like facebook ads? tweet us @marketmakers or tweet erik and me. do you click on them? i know erik doesn't because it doesn't use facebook. erik:. his -- here is the news in focus. >> the dollar dropped to its

lowest level in four months after retail sales were little changed in april. stephanie: alibaba announced they would be working with walmart allowing customers to use it mobile payment service. no cars, check out with a beep of your smartphone. >> increasing prices in japan, australia come over the course of the next year. >> the new york-bound amtrak train that derailed into philadelphia was traveling at 106 mile per hour just before the accident. that is more than double the speed limit. >> go pro billionaire founder and ceo has fulfilled a promise he made to his college roommate 10 years ago. he was given $4.7 million -- 4.7 million of the company's shares costing $229 million. erik: more headlines this morning.

iran will top the agenda when president obama meets today with leaders from six persian gulf nations. some of it is taking place at camp david, the presidential retreat in maryland. they will try to work out an agreement caused by the u.s. negotiations with iran over the nuclear program. saudi arabia and king salman won't be there. he said others in his place. both countries, the saudis and the americans, insist it is not a snub. the second time could be the charm for the president when it comes to the asian trade bill. senate leaders agreed on a plan to move it forward. today the senate will vote on two related bills the democrats want and then will vote on a proposal to speed up the approval of trade agreements. senator ron wyden called it a smart move. senator wyden: taken together the bills form a package of trade policies that are going to help our country create more

high skilled, high wage jobs in my state and across the land. erik: many democrats said the asian trade deal would be a one for american workers, saying it will cost american jobs and depress wages. we have a report from washington on this matter just ahead. stephanie: once again, honda has been hit hard by the fall airbags. honda is recalling almost 5 million more cars because of problems with safety devices made by japan's takata corporation. so far it has recalled 20 million cars. yesterday. and nissan recalled 6.5 million cars. and called them the biggest losers. within the space of 27 minutes last night -- i hope my husband is getting coffee right now -- washington, d.c. sports fans suffered for not one, but two playoff losses.

sorry, d.c. first al horford of the land hawks scored with two seconds left to go to give the hawks an 82-81 victory over the washington wizards. hawks lead 3-2. and then this whole room was cheering, including scarlet fu rangers in a victory over the washington caps over the nhl playoffs. at one point the caps lead the series 3-1. there you go, it always the change. good morning for scarlet fu that morning for my husband. it was a least a good game, erik? erik: i didn't get to watch it. is he that big a caps fan? stephanie: he is not a hockey guy come he is a d.c. guy. the caps the wizards, marion

barry. all d.c., all the time, my husband. erik: currency u.s. dollar trading at its lowest level in months compared to major peers. the dollar climbed nine straight months through much for the first type in a decade -- first hike in a decade. stephanie: coming up at 8:30, we will be getting initial jobless claims data as well as producer prices, and according to a bloomberg survey, the jobless claims number is expected to be around 283,000. this is so important because we have gotten so much negative data that the big overarching goals out there --they were beating their chests about the u.s. economy. erik: the initial jobless claims data has been good so if we don't get a good number -- " good" number -- this morning that will be a break in a trend. stephanie: julie, u.s. number three? -- you have number three? julie: kohl's out with its

earnings. investors alike what they see. the sales up 1.4%. the estimate from analysts was for an increase of 2.6%. we had macy's yesterday missing, overall retail sales missing. we had nordstrom after the close today. amidst all of this options traders are cutting bearish bets on consumer companies. interesting, given some of the numbers we have gotten. erik: julie, thank you. we have another thing you need to watch good ecb president mario draghi is scheduled to speak at 11:00 a.m. eastern. he will be in washington. since the central bank president began buying debt, the moves in the euro stoxx 50 next has come to the highest level since september 2013. stephanie: if your average investor would grade janet yellen and give her be plus, a minus, what would drive to get? -- what would mario draghi get? erik: why would she only get b+

a-? stephanie: chewing gum in class. just tighten it up, erik. what would he get? erik: i'm not giving him a grade! stephanie: i will give him five kit you can't win with erik oil is gaining a bit and. trading close to $60. refineries weekend and inventories drop. i'm going to be focused on that all day long. i will be at the commodities conference and talking to some of the biggest investors in that space -- erik: hang on, i gave draghi a moment of thought that hang on, i want to know who you will be talking to. stephanie: not going to say. erik: i know you will be talking

to ryan anderson. stephanie: mario draghi. erik: i will give him high marks for his attire. i love the blues brothers white shirt skinny black tie thing that he rocks that every single press conference. stephanie: there you go. erik: mario, what are you doing to me here? stephanie: every once in a while it is good with glitter, but no yes got a tight look. excellent answer erik. let's take you back to d.c. were as i mentioned, my husband is weeping. the senate will hold the vote today on whether to approve'obam -- approve president obama's measure on trade agreements. peter cook come out chief washington correspondent, joins us now for more on the outcome. first, i'm just going to apologize to you. double loss, basketball and hockey. tough night for you. peter: very painful.

stephanie: sounds like things are improving for the president. peter: the outlook for his trade agenda looking better than it was 48 hours ago. amazing what happens when you get a group of democrats who have blocked you on a big trade bill in your own house and you get the chance to talk to them. that is what happened after that vote. the president spoke to about 13 democrats and now, lo and behold, they are singing a somewhat different tune and are now on board. we will see the vote today at 2:00 in the afternoon. it is not the final hurdle by any means but it is a significant step forward if he gets the 60 votes today. our group believe the most important economic piece of legislation that he is trying to get finished before he leaves office. stephanie: any doubt congress gives him the fast-track? peter: there is still some doubt. the biggest on has always been the house of representatives but what has happened in the last 48 hours is significant. a lot of democrats taking on their own president on this issue and it was bad politics. they will move forward in the

senate. if there is a final vote next week in the senate, it will help his chances in the house. but there are still some curve balls out there. republicans in the way as well. erik: i want to talk for a moment about elizabeth warren could i will remind everybody that she is one of the president on trade. however -- opposing the president on trade. however, she seems to be joining forces with a republican to take on the federal reserve and wall street. this is not unprecedented. elizabeth warren has worked with david vitor belfort. peter: she has good she announced a new bill -- he has. she announced a new bill with him yesterday that really takes on the federal reserve and its ability to land in times of crisis. she has this new bill with vitter that would limit the lending programs to at least five institutions having to qualify, having to have one of these lending programs. there would be a penalty rate on those programs and they would have to be solvent.

is a big step in tightening the rules for the fed. the fact that it is bipartisan is going to get a lot of attention. erik: chief washington correspondent peter cook. coming up, fire at a nuclear plant and hours drive from new york. we will talk to the ceo of the company that owns the plants. stephanie: a lot more to cover. you are watching "market makers" right here at 8:00 a.m. our new time, on bloomberg television. ♪

the world's largest retailer will on the offer and direct challenge to amazon's prime service. more than one million erik: before he was arrested and a key is to manipulating, the alleged flash crash trader claimed other traders were doing the same thing could "the wall street journal" claimed he complained to the chicago mercantile exchange about traders more than 100 times over several years. his last complaint came weeks before he was arrested in britain. the stronger economy appears to be having an impact on higher education. more young adults are skipping college and heading to the workforce. that comes in a report by the national student clearinghouse research center, which says college in rome in the spring semester is down 2%. hardest hit, community colleges and for-profit institutions.

a fire last week at a nuclear plant 30 miles north of new york city is fueling calls for the facility to be shut down. among those demanding closure is new york governor andrew cuomo. it is owned by entergy and its ceo is with us now. you can understand the concern among new yorkers, including the governor, about the safety of the nuclear plant. is there a future in which you could envision the planting shut down. >> at some point it will -- erik: inevitably. >> it is one of the best run plants in the united states. the incident we had last weekend -- the plant shutdown safely, as it was designed to do. the safety systems worked the way they were designed. employees did a great job. the incident was at the

transformer yard, where power is delivered. the fire was in the transformer the same type of equipment at every power plant in america -- erik: no risk of a meltdown. leo: nothing like that. the fire is put out, oil in the transformer, a like kind of oil and the water that was used to put it out gave a leak from the area. where it went, if there is reach into anything other than the site, we are in the process -- erik: what would it take -- were cuomo to get his way, what would entergy want in return? leo: right now what we are trying to do is ascertained what happened at the plant and that is for the governor has been talking about all week, the issue of what happens, how we reacted, and are there improvements that could be made? his interests in that incident and hours are exactly the same. stephanie: then where do you stand? if he is requesting that it gets shut down, where do you stand on

it? leo: we think it is vital to the city and the state, supplies to the 5% of the power in westchester county and new york city -- 25% of the power in westchester county and new york city. it would be difficult to remove that from a reliability standpoint. the iso operates the grid here. the plant is needed. at some point could there be a transition out of indian point? absolutely. erik: what point in time with that be? leo: the license application we are in the middle of now would be through 20 33, 2035. we believe we can operate the plant safely through that time and later. that is the process we're going through right now. erik: your stock in your earnings have been under pressure. explain to us the impact of cheap natural gas. leo: cheap natural gas is actually a very big benefit to the majority of our business. the business where indian point is part of -- in 2015 it will be

less than 50% of our earnings as a company. the utility business in the gulf south louisiana, texas, arkansas, and mississippi, is growing point rapidly because of the cheap price of natural gas and our electricity rates are 20% below the national average. major manufacturing boom and industrial renaissance going on in that part of the country. tens of billions of dollars of investment going into heavy metals wooden paper, chemical businesses down there. those businesses use a significant amount of electricity. we have a pretty aggressive construction program to build new power plants and transmission facilities and reliably serve that road. cheap natural gas has been a boom to the company and is creating tremendous growth opportunity. erik: you have a lot of customers in the south. a lot of you generating facilities are in the south. what about the future that elon musk envisions that everybody

in a sundrenched north america has a solar panel on the roof and a bunch of batteries downstairs in the basement and disconnects from the grid? leo: actually utility-scale solar is the best economic decision for the great right now . we are in the process of several utility-scale solar project could be announced when yesterday in new orleans that would do exactly what you are talking about. 1.5-megawatt solar system, 4000 solar panels that would be backed up with battery storage one of the first in the united states to be in a city with battery storage -- erik: would you buy batteries from elon musk's factory? leo: we will have to look at what is most economic. the once he is selling right now are more of residential use. we would be using bigger batteries than that with a much lower cost on a per-megawatt basis. erik: thank you. leo: thank you very much. stephanie: nuclear energy, who doesn't want to talk about that at 8:00 a.m.?

facebook's top hat exec joins us. ♪

stephanie: mobile advertising was a bright spot in facebook's latest earnings report. it made up 73% of the social network's total ad revenue for the first quarter. companies are driving more dollars into digital and mobile but the question we are asking is what is their return on investment? do clicks equal sales? there is no one better to ask then the vp of global marketing at facebook. welcome, finally, to market "market makers." >> thank you for having us. stephanie: when i go to my

facebook page, i see them, they are telling me about belly fat and the botox that i need. >> those are clearly not targeted properly, stephanie. stephanie: exactly. help me understand who is clicking, what the actual action is. >> mobile is now the predominant way people are consuming the facebook news feed. on facebook we occupy about 20% of all mobile time in the united states, between facebook and instagram. what consumers do depends on the message that the advertiser is delivering. some click, some go to high right away and some are just consuming the video message that may tell the brand's story or may showcase a new film coming apart new automobile that is launching. there are different objectives that the advertisers think about and that dictates the kind of thing they put in the newsfeed. erik: when you pitch a prospective client on the power of the facebook mobile platform, what do you say? what is the value proposition?

bachus through from start to finish when you go back to the client and say "see? it works." carolyn: the first thing i do is start with the consumer. marketers care about one thing, growth. they need to sell products and move them off shelves. i talk about the consumer adoption of mobile, which is happening faster than we predicted. we have 1.20 5 billion people on mobile everything one. when we talk about what the consumer is doing, that is the most important thing to a marketer. then we ask what are their objectives. if they want to increase brand awareness, do they want to send people to their off-line stores, do they want to send people to their e-commerce. we explain all the solutions we have. erik: this chart illustrates the point you are making perfectly doesn't it? carolyn: it has dramatically changed in the last few years. digital eclipsed tv two years ago, in a 2013. people are spending more time on digital and it is largely being

driven on mobile because we have these devices with us 24 hours a day -- erik: that is where the p itch starts. carolyn: it is the most important thing for the marketer and also the most important thing for us at facebook and instagram. stephanie: are you seeing marketing budgets grow or are basically moving from tv or print onto digital? carolyn: marketing budgets in general are not growing as much as they have done in the past. there is a small digit growth. what is happening is there is shifting going on between a medium. if consumers are spending to any 5% of the time on mobile and the sand is 10-11%, there is disconnect. where does the money come from? sometimes it is print come sometimes it is tv, sometimes it is share shifting within digital. there are so many more opportunities to reach consumers in a discovery mode on the mobile device than before. erik: carolyn, how do you prove

to the client that it does work? stephanie: erik, they just need to sit down on a train and look at everyone staring at their facebook page. erik: yeah, but you need to know that the ads are driving behavior. stephanie: why, because you prove that billboards were selling products? erik: that's the point. carolyn: we can prove it and we don't want anyone to spend a single dollar with us. i tell every client straight to their face, do not spend a single dollar with us unless you believe we are driving your business objectives. we believe everything should be measurable, it should be targeted. we absolutely can measure and we have had a tremendous amount of case studies to prove it. let me tell you one that i love because i think this is an example of a client sportchat, the highest retailer -- stephanie: did you choose a canadian come before erik?

carolyn: consumers were watching shorter-form video. as a matter of fact, you get 47% of the value for the first three seconds and 74% in 10 seconds. he charged his agency to come up with 50 videos. you had andrew robertson here recently. stephanie: here on monday. erik: i will interrupt you erik: we have some breaking news on initial jobless claims. julie: we are seeing a bit lower number than had been estimated 200 64,000 initial jobless claims being filed last week. the estimate was 273,000. a bit better than had been estimated. 2.2 million -- we've been seeing the number trend below 300,000 for some time. it looks like a four-week average.

as for producer prices, the headline number we are seeing a decline of .4%. no inflation insight. if you take out food, energy and trade month over month, you get a gain of .1%. that is in line with estimates. year-over-year, you get a gain of 7/10 of 1%. inflation is still very, very tame. erik: i wasn't saying to stephanie before -- between the jobless number and the pti -- we've had a series of better-than-expected numbers. that's what we got yet again. but, it might be more noteworthy -- i was looking to see if there was any response in the 10 year yield.

not really. the utter lack of inflation is pretty striking. we've had prices dropping on a producer level. stephanie: we will see how the market reacts and talk to some people -- we've been talking mobile ads. we have to take a commercial p when we return, we will continue this conversation on digital ads . is the money well spent for most companies? would have carolyn -- we have carolyn with us. ♪

erik: you are watching "market makers." we are back with carolyn e pverson and jonathan nelson. before we get to you, i want

carolyn to finish explaining the proof points on facebook ads. you were using the example of sport check, a company i know. carolyn: they had 100 products they wanted to sell for black friday and boxing day. we made videos for 50 of the 100 products. we had a control group measured the 50 that had facebook support against the 50 that did not . the 50 that were on facebook there are sales grew 57% over the 50 that did not. on boxing day come a 67 percent -- we will not take a single dollar unless we can prove results. stephanie: give us an understanding of how well targeted ads work. we are so worried about giving out personal information wavered

when i'm on facebook or on a site and they know what i like come i find myself clicking. jonathan: you saw the results from sportcheck up 69%. targeted ads work. we are from to present the right message to the right person at the right time on the right device. erik: being able to do so requires knowing a few things about those people. jonathan: we are looking at age, gender behavioral attributes. we are trying to find out what people want. erik: it is more than that. stephanie: i can look on a dress -- at a dress on my home computer and come to work and it will have the identical dress from the website i was on and it even has my size. it is scary how much information you have. carolyn: here is how to think about it.

consumers see 750 messages a day. it would be so much better if -- that was a useful service for you. maybe you were thinking about buying it and you didn't buy -- based on their preferences, they may be -- that's a great thing to happen. the more relevant we can get the advertising, the more useful it is for the consumer and the better the results. stephanie: when you talk about behavioral characteristics, what kinds of behavioral character sticks? jonathan: if you are looking for dresses, we want to show you dresses. if we can figure out your size we will show you things in stock in your size to you. erik: mobile is clearly the killer out there. be on to mobile in general, what are the most powerful trends in digital advertising? jonathan: we are seeing a lot

and mobile, a blend of mobile and video. television on all devices. mobile, tablets, pcs and regular -- erik: what is the optimal length? jonathan: about 7-10 seconds. stephanie: is there a risk that what i say i like is not representative of what i do? i can say on my facebook profile that i love hermes bags and vacationing at four seasons. if you look on amazon, what i buy is to be socks. -- two socks. -- tube socks. carolyn: you can absolutely set your ad preferences. we are trying to put the controls into the consumer's hands. if there are certain things you want to see and you are not buying those things, some consumers want that, some can

actually set their settings to things that are super practical. you can go in and set your ad preferences. stephanie: people actually do that? carolyn: they do. the better signals about what you want and what you are interested in -- the ads you see on facebook are every bit as good and relevant as the stories you see from your family and friends. stephanie: i would rather an ad for a luxury hotel then tube socks. erik: ads seem to work so well on certain social media platforms like facebook and come in my personal experience not so well on other social media platforms, particularly twitter. jonathan: you tell facebook quite a bit about yourself. what you like you are showing your behavior, we can look at your network and understand who you are and what you are

interested in. facebook ishas been a great partner of ours. we are focusing on what people want. twitter is more like tv. it's just broadcasting to whoever is out there. we find facebook to be an extra in our partner. in terms of the actual partnership and our data and engineers working together to make all of this work. stephanie: the images are beautiful. is that why they work so well? when twitter is cluttering me with tiny messages come i block them immediately. carolyn: instagram is a beautiful creative canvas. they were the first agency to partner with us to launch instagram and the reason marketers love it, it's a beautiful canvas to tell stories. the bigger trend is this visual communication in general.

the younger generation that's growing up communicate through motor cons, photography, you can tell beautiful stories. the ads on instagram feel part of the fabric. we have had great welcome in the market for instagram. it's a beautiful canvas. jonathan: absolutely. instagram has been a great partner of ours. we are developing ads that pull at people's heartstrings, that connect with people on a much more deeper -- stephanie: go easy on the modee mojification. carolyn: the interesting thing is seeing the services and breaking that platform -- stephanie: you can create a beautiful image. carolyn: state farm is rocking it on instagram. banana pro republic.

they are thinking about how you communicate a brand message in this new environment because they have to be were consumers are. stephanie: thank you both so much. we've been waiting to have carolyn on for a year. it was worth it. carolyn and jonathan nelson. erik: what drives billionaires like elon musk? how he squared off with the russians on his plans to build rockets. stephanie: stay with us. "market makers" has a lot more to come. ♪

erik: here's a number you can take with you this morning. $299 billion. that's how much -- $299 million.

this is a complicated tale. he was woodman's friend back at uc san diego and became employee number one of go pro. back then come he told him this -- if go pro ever makes it, you will get 10% of whatever i get selling my stock. go pro evolved into the iconic action camera company and woodman is a billionaire. go pro issued stock options -- woodman paid the company back. that's what most recently happen. that's what completes this conversation. stephanie: did he give it to him in writing? when he was employee number one was this a handshake, was this at a bar or was this put in writing? we know the twisted tales that went on with facebook. erik: they were in their 20's. this is a garage operation, kind

of like a dorm room experiment they are doing these action cameras. nobody knows that go pro will end up a $7 billion company. erik:stephanie: they were 18 years old at harvard and that tale was quite different. i want to know what went into this. erik: nick woodman lived up to his promise and had to give go pro the money that was given -- stephanie: let's talk about another totally rich guy. we are talking elon musk going into -- ashlee vance will tell you what makes this billionaire takeick. ♪

erik: coming up, we will hear from h&m's north american

president on how his company plans to recruit and retain more workers. such a high turnover industry. stephanie: we are moving on to elon musk, one of the richest people in the world and he helped build paypal, space x and solar city. what drives elon musk? ashlee vance wrote the biography on mr. musk, which is out next week. the front cover picture, i absolutely love it, a picture of mr. musk as a boy. there he was as a child. give us a quick snapshot. we know the man, the myth, the legend. what was he like as a kid come as a teen? ashlee: he was into science fiction.

there was this other side of him that i uncovered for the first time. he was a real loner and had a hard time in school. people bullied him. he didn't have any super close friends. it's interesting that he has become this celebrity ceo. his friends and said this would be the last person you would expect to do well this. he was definitely smart. he just kept to himself, so nobody knew what was going on inside his head. erik: everyone wants to know what is going on inside his head. what makes them so successful? what drives him to take the risks that he takes? what was most surprising? ashlee: elon is a unique case because he talks about wanting to take man to mars and becoming a -- some people think it is a stick. this is his life's quest.

he is so driven to make this happen. that's where he comes up with these ideas. stephanie: what kind of loyalty does he have? you think about steve jobs, it seems like he was just so brutal. ashlee: elon is just as intense. people think there is a lot of turnover at tesla. the one thing i found that is surprising top executives at tesla, a lot of them have been there 10-12 years and they learn how to function in this environment. stephanie: meaning work around him? ashlee: there are highs and lows. you work on this amazing technology and they sure this quest. -- shared this quest. erik: the comparisons are fair? ashlee: elon would tell you the same thing. it does give intake -- and take

at meetings. erik: lake jobs come he is able to create this reality distortion field around him. to persuade people or push beyond them in order to waste ideas upon the world -- hoist ideas upon the world that initially have tons of doubters. ashlee: people working there were willing to do 100 hours a week. erik: if you wrote it down on paper, you would say there is no way -- stephanie: what is his work ethic like? clearly come he seems obsessed. he is a man about town. that is not steve jobs like at all. ashlee: elon e-mails me at 3:30 in the morning. stephanie: and still has the

power to party. ashlee: we would stay up and have these conversations until 12:00 at night. he says i will get on the jet and fly back to l.a. erik: helps that he is not flying commercial. ashlee: he has the constitution unlike anything i've ever seen. stephanie: describe him in one world. ashlee: intense. erik: is he the next steve jobs? ashlee: some make the case that he is bigger. stephanie: we will say what about him. ashlee: people will start pulling out the quotes. the stuff from 2008 when both companies were collapsing -- his psychological turmoil at the time. erik: amazing stuff. cannot wait to read the book. ashlee vance. his new biography is out next week.

cisco's john chambers in the next hour. ♪

ers." erik: good morning, everybody. welcome to the second hour of "market makers." i'm erik schatzker. stephanie: i love this timeslot or i'm stephanie ruhle here you can see our friend betty liu during lunchtime at noon. now we will talk to you about what we've got this hour. this company wants to recruit you. h&m's new play to attain young talent and where it's making heroes in the fast fashion business.

stephanie: neil ferguson is the with us this hour. spending versus austerity. he takes a couple more shots. stephanie: i think of him as a global influencer. erik: i wonder what he thinks of himself. stephanie: he was a globetrotter and influencer, without a doubt. how about a bit of news? investigators probing that fatal amtrak crash. they want to know if speed kills. the crash killed seven people and injured more than 200. the ntsb has determined the train was traveling more than twice as fast as it should have. >> maximum authorized speed through this curve was 50 miles per hour. when the engineer induced

brake application was applied, the train was traveling at 106 miles per hour. stephanie: the accident could have been prevented if the track had been equipped with automatic braking technology. that system is already in place on most of the line between washington and boston. flying on corporate jets may be quicker than going commercial, but it's a whole lot more dangerous. bloomberg news looked at you with aviation records and found repeated examples of pilots on those smaller jets skipping basic safety checks, working extremely long hours or overlooking hazards like ice on the wings. in the last 15 years, there have been five times as many fatal accidents on high and turbo jets than on commercial passenger planes. erik: the alleged flash crash trader claimed his peers were

doing the same thing. he complained to the exchange about other traders more than 100 times over the years. watch out, amazon. here comes wal-mart. the world's largest retailer will offer a $50 a $50 your unlimited free shipping service for online customers. -- $50 a year. more than one million items will be available for delivery in three days or less. shares of coals down 9% in premarket trading. quarterly sales missed analyst estimates. sales picked up in march and april after a week february -- weak february. stephanie: tepid economic growth in united states has one of the world's most recognized

economists worried about an unexpected downturn. he was concerned about the slow pace of growth. recent reports are showing weaker than expected retail sales and the first quarter gdp growth at just 2%. that has given him concern. >> i don't believe you can run the economy for another five years at this low speed. something will break. we will tip into a much better world or we will find that we get even lower growth. and then financial instability. stephanie: he believes the u.s. needs a 1960's style moon project to spark a new run of economic growth. erik: that makes me think about the dollar. investors are not in love with dollar anymore. dollar is down again today to its lowest in four months. michael mckee says the big move is a big deal indeed.

michael: a strong dollar can be a good thing sometimes. when it goes up as fast as our dollar did, that causes all sorts of problems. from july to the middle of march it went up 16%. we have not seen a move like that in decades and it has major impacts. it pushed down on inflation because we buy a lot of cheaper imported stuff. our stuff was more expensive to sell overseas. you can see that in hiring. corporate earnings at 45% of the s&p 500 get a lot of their profits overseas. the dollar for their earnings. ge cut earnings by $1 billion. here is one effect on stocks. earnings yields on s&p tended to track changes in the cpi. the price-earnings ratio explains why earnings were lousy. pes are so high at this point.

stephanie: why don't companies hedge against this? michael: it's hard to do when you have some occurrences were dealing with. when it goes up so fast, it took a lot of people by surprise. it is coming down now. will it stay down? oil prices going back up again. oil prices are going back up, that helps bring down the dollar. yields going up overseas particularly in germany. you can thank the economy mohammed el-erian was talking about. you don't have to worry about the fed raising rates a lot or sooner. they don't need to make that trade. erik: thank you. stephanie: nobody gives you the real deal better than michael mckee. we have to turn to everybody's favorite mna space, the pharma industry.

the cancer drug showed activity ty in two tumor types -- cynthia joins us now. what were the key findings in this report that has caused this action? cynthia: the first set of data came out last night. what we saw was that a variety of therapies being tested are working in a number of different tumor types. ovarian cancer, lung cancer. they've been shown to work in one form of lung cancer and skin cancer. increasingly, the list is getting longer of different types of cancer that these drugs are working in. erik: where are these copies having the most success? cynthia: they have had success in late stage melanoma. they're looking at lung cancer because that is such a big universe of patients and their

looking at different subtypes and varieties of ways the drugs could work in combination or on their own and looking at a number of different tumor types outside. there is early data that is encouraging that shows these drugs are safe and can move forward with looking at different disease states, but it's early in this process. stephanie: there is a meeting next week. cynthia: the big theme will be price. the two drugs already on the market are $150,000 a year for patients. the data has to show not that these drugs work, but they work in such a meaningful way that insurance companies will actually be able to put the bill for a large number of patients getting onto them should they get approved. erik: are we talking about the next-generation cancer therapies? the ones that trigger immuno response inside the body? cynthia: that's exactly what this is. the new generation we looking at is do these drugs work alone and then in combination with one another.

is that safe? can patients tolerate it? are the results so compelling that we can afford to pay for this? erik: thank you. a good rundown. stephanie: her first visit to "market makers." erik: next up, h&m's plans to retain more workers in the high turnover industry called retail. ♪

stephanie: welcome back to "market makers." h&m is a global fashion retailer launching a national campaign today aimed at attracting young talent entering the fashion industry. i'm talking about hiring, not shopping.

the place of possible campaign will spread awareness of h&m's competition does compensation and benefits. what is behind this strategy? let's ask daniel kulle. he started at the company as a store manager. he knows the place inside and out. welcome back. daniel: thank you for having me. stephanie: normally when we think about h&m strategy, it's about selling clothes, not potential employees. daniel: we are growing a lock we need to attract talent that have a passion for retail, a passion for coming to a company that makes it possible for you to grow into a career. we want to have people that take ownership and osborne or ship -- and have entrepreneurship. we have to make sure we have the best location in the market and the best store managers to run that store.

we want to attract people that have that ownership and have the passion for retail and take the keys and run the store. erik: are you talking about store managers or the people in the aisles? daniel: throughout the board. we want to a check part-timers that want to earn extra money. we are seeing people want to come to us and grow into store managers. when the people going into controlling functions, we need people in the supply chain and so on. erik: how can you afford to do this? stephanie: retail is a race to the bottom. people want cheaper product review already sell inexpensive products. how can you afford to do this? john: we believe in the people believe in the company and we see one way of keeping your organization structure lean is by having people take more ownership so we don't have to have a big top level.

from the beginning when you keep the costs low, when you do have a lower cost -- stephanie: you have some of the most expensive real estate. daniel: we also have a lot of traffic there. we can justify that real estate prices. erik: we know who you are competing with when it comes to fashion. who are you completing with four employees? daniel: across the board. people out there in america specifically there are intervenors. people who want to take ownership. erik: they are not working at j.crew. who are they? daniel: people working at restaurants. people coming from the military. every kind of -- throughout society. erik: you have a recording

program for them? daniel: we go out and say we are the place of possible. h&m is not about jobs, we are about careers. we want people who have fashion and ownership. they come to us and see it's not -- it's my chance to grow into a real tell career. this retail career. stephanie: when i think about people who work in retail, they're doing it for the christmas season or their students. -- they are students. daniel: one third of the people are coming from the stores. they are working and coming directly to the managerial positions. erik: how many stores do you have in america right now? daniel: 363 on thursday. we are opening up in sarasota. erik: how big are you going to

be? daniel: we don't know. it depends on the market. erik: opening up stores is something you can decide to do next week. you know where you want to be by the and of next year. daniel: we know we will open up 61 stores this year. that is not. we have more growth potential in north america, for sure. the whole retailing is evolving into something new depending on what's happening with the different channels. we are in a good position of growing up. we are growing at the same time as half the other retailers. stephanie: five years ago, i would say h&m's customer is the same as forever 21. daniel: we are widely spread. forever 21, catering for women men, kids. we are much more for the whole family.

the people out there who like fashion, one great quality and want to have astonishing value. they come to us. we can be one-stop shopping. this week, we are launching a new beauty product. stephanie: that coachella collection, my mother loves it. thank you so much for joining us. daniel kulle is the north american president of h&m. an american dream story. store manager to h&m north america president. erik: a quick look at the stories making news. a change in the drivers seat for pr at uber. the current head of communications is leaving. he will work with the ceo. the executive shuffle happens as uber raises a new round of

funding unless seeking $1.5 billion. a crazy valuation of $50 billion. stephanie: one of the reasons david seems to be so valuable was his experience in washington. that's what uber's big problem is. erik: a new report showing inflation is under control for the time being. inflation at the wholesale level of expected leaf fell last month. the cpi dropped -- another report on the labor market fewer americans than expected filed for an up limit benefits. -- unemployment benefits hitting a 15 year low. more recalls because of faulty airbags. today, it was honda. recalling an extra 4.8 million vehicles, pushing its total to more than 19 million.

toyota and nissan recalled 6.5 million cars. those are your top stories. stephanie: paul krugman is wrong. that's what harvard history professor and globetrotter niall ferguson says. ferguson said the u.k. labour party's feet is thanks to anti-austerity economists like mr. krugman. he joins us now. good haircut. you don't like paul krugman. niall: this is not argument about economic history. economists make predictions. paul krugman was not the only economist who said the u.k. would be in a death spiral as a result of the austerity policies. last year, the u.k. economy was

the fastest-growing in the g7. it's a job creation machine. he was wrong. so were all the economists that predicted disaster. they thought it would be worse than the great depression. erik: i'm not about to argue with you. i'm not taking paul krugman's side. in your writing you have a special hatred for mr. krugman. his argument was lame publishing this shoddy diatribe and my favorite like his journalism his writings about bernard characterized by extreme partisanship, couple minted by -- erik: if that isn't personal god help the person -- niall: those who dish it out

should be ready to receive it. he has dished out far more abusive language -- he referred to the chancellor as an upper-class twit. i won't go into the things he has called me. i think my language is rather restrained. it's not about personality or insult, it's about who was right and who was wrong. it's about time he admitted that he got the u.k. economy ethically wrong, so wrong that we have to -- if you predict depression and say it will be worse than the 1930's and 2 million jobs are created, the economy is the fastest-growing in the g7 last year, you have to step up and say i got it wrong just like i got the euro zone crisis wrong. erik: how did his policy work? niall: there are a couple of points that are crucial here. it wasn't the case that reducing

the deficit would cause growth to crater. quite the opposite. nor was the case -- a key argument paul krugman made was this thing called the confidence the area. you would create this worry about confidence, you should run a deficit of 10% of gdp for the rest of time. that was wrong. the more krugman talks about confidence theory the more confidence recovered. it recovers because businesses see a government that was taking control of a disastrous -- stephanie: stick around. i will see you later today. ♪

erik: we are just a few minutes away from the opening bell of the new york stock exchange. first, let's recap the biggest global market movers. tracy is here with a triple whammy.

three things we need to watch. and niall ferguson is still here. we will start by talking about the dollar. tracy: the dollar is basically in a four-month low against its major currency peers. this is hugely surprising for the vast majority of the market which is thinking this will be the year of dollar strength. erik: this has been a massively moneymaking trade. are you surprised by the turn of affairs? niall: it correlates to expectations. if the data look poor for the u.s. and a lot of the data has not been great, you have to lower your probability that they will raise rates. that's all this is. it has been the case since december. you look at the dot plot they're getting cold feet. there is despair that larry

summers might be right. it might be stagnation. we might have to postpone the rate rise -- because the fed is data dependent and doesn't have any kind of rule anymore is a real possibility that they will link -- blink if they decide things are softening. erik: and other surprises. tracy: lots going on in currency markets today. the other thing we are watching today is the bond market. we said bonds were rallying a bit. in the afternoon, they all slowed again. this morning, they are flat. the major thing to talk about his bond market volatility. niall: you get this kind of thing -- nobody is quite sure if we have reached the bottom. erik: did you think negative yields in germany were a crises? niall: think of all the

structural headwind. the demographics, the technology, all the things that made the world a deflationary place. these rates which are historically unprecedented are not so completely crazy. the difficult thing is to say when this is over. the biggest inflection point -- take time to become clear. we are at one of these lows in history where there is a lot of noise come if you try to make this a high-frequency call, you will be wrong. escorts help the big question. is this the end of a rally in the bond market. -- ask your self the big question. i'm not convinced we are there. niall: one thing that surprised everyone is the amount of positions still being liquidated. we thought those had been flushed out of the system.

they keep coming. the big question now is how many of those are left. erik: one thing worth mentioning in the context of the bond selloff and makes things a whole lot easier for mario draghi. he doesn't have to turn himself into a pretzel trying to explain why the ecb should be buying bonds at negative yields. niall: they have to be given high marks for stabilizing the eurozone crisis which people thought would lead to the breakup of the euro area. we are not there yet. we're left with a problem child which is greece and the peripheral economies are in trouble. there's not much sign of contagion of greece gets worse. that's the kind of problem mario draghi was wishing for. the greek tragedy is by no means over. tracy: mariota drug is speaking at the imf so we think greece will be back him a table and things still have to be worked out. the market is to watching the situation closely.

niall: they were advised by certain american economists. the greek government is losing the game of chicken. greece is back into recession and the political position of the greek government is crumbling. i don't think we are far away from their folding and ultimately, another victory for the european central bank. erik: thank you very much. we are talking about markets and that means any to bring you up to speed on what's happening in the u.s. equity markets. stocks on the stock exchange just opened for trading. we are going back towards a record but not there yet but stocks are rallying. stephanie: we would need another leg up from here to get to that record level. julie: we will see if we can hang onto these gains pre-in the s&p 500 is up about 12.5 points in the dow was gaining about 107

and the nasdaq is up about 36 points. all the major averages are up at least a half of 1%. let's talk about that big three stock stories -- cisco, the company came out with earnings and a forecast that was in line with estimates. you will be talking to john tamers who announced he is handing over the reins in midsummer. at the same time, the stock was downgraded to neutral. they shares are little changed right now. kohl's like macy's yesterday disappointed with its comp sales numbers. the sales were up 1.4% versus the estimate for a gain of 2.6% and the shares art taking a big hit, down 10%. shake shack shares are doing well. people are spending their money at restaurants. it is up 12.6% after reporting an unexpected gain in profit.

analysts estimated a loss. sales at restaurants opened a whopping 12%. erik: thank you very much. neil ferguson, professor of economic history is still with us. i am eager to talk more about your perspective on the u.s. economy but i need to go back for a moment to our conversation about the british election the george osborne economic policies and your criticism of paul krugman. the reason i am belaboring this point is because in your piece for the huffington post, you addressed the criticism of osborne or at least the criticisms -- how should i put it? you make the point that had britain bought troubled assets instead of injecting capital directly into the banks things would have been better. you draw a comparison to the

united states. niall: that's not quite what i said. i said it was wrong to say tarp, when it became a master of equity injection which it did it was comparable with the nationalization of banks like rbs. paul krugman argued that nationalization was the way to go and the government should take over these banks. that actually happened in the u.k. 80% of rbs is owned by the british government to this day. it ended up buying equity in preferred stock and it has been sold off. if you ask larry summers, did we do what paul krugman recommended, his answer would be no. erik: i'm going to suggest that you might be wrong. niall: go ahead. erik: the troubled asset relief

program, you are right, it began in concept as an asset purchase program. instead it changed in concept. when it was passed, it was passed as a program to inject capital directly into the banks and that's when hank paulson was still treasury secretary october, 2000 eight. it did not evolve into an asset purchase program until tim geithner became the treasury secretary in march of 2009. niall: the original idea was to buy distressed assets. later, they ended up buying preferred stocks so it was the wrong way around. there is a big difference between doing that and then selling off the small stakes which the treasury did and taking over 80% which is what happened in the u.k. if the u.s. government today owned 50% of citibank, they could say they did what paul krugman and hank paulson said.

erik: let's talk about how long it takes before the federal reserve raised interest rates and perhaps that is the reason we have seen the dollar take a leg down in recent weeks. niall: paul krugman was right about the direction of rates. back when we first debated in 2009. it's important to ignore knowledge that when your antagonist is right, it's something you never does and i hope he will do it over the u.k. but he was right we were in a much more depressed condition and rates were not likely to jump up anytime soon. when you ask yourself -- i updated my view of the light of that and subsequently wrote about the real dangers about deflation that can only be warded off by specialized monetary policy at first i was a skeptic about quantitative easing. i admit i was wrong about that. you have to be prepared to own the things you call ron if you're going to be credible.

-- things that you call wrong if you're going to be credible. he will reluctantly concede he got the internet wrong but that's about it. erik: i will stay out of the debate between you and paul krugman. it is an slowly critical to admit one's mistakes and at such a pleasure having you here is always. that is niall ferguson from harvard university. next up, follow yesterday's third-quarter earnings report -- we will check in with john chambers of cisco who plans to hand his reins over, stick around. ♪

erik: john chambers from cisco is stepping down after 20 years as ceo. he is moving to the chairman suite and his replacement is chuck robbins who will take the reins in july. john is still in charge and is

with us from his office in san jose following yesterday's third-quarter earnings report. good morning to you and great to see you. let's begin with the earnings. john: it's a pleasure. good morning. erik: thank you. i would like to start with the earnings because what cisco season the world economy is so important. on the one hand, you've got continuous success and growth in your enterprise business and on the commercial side but still pretty stagnant numbers on service providers. i want you to explain what you see happening among companies and economies globally from your position at cisco. john: thank you very much. thank you for the comment. yesterday was extremely strong quarter for us and terms of positioning. we over achieved on revenue and gross margins were good at 62.5 and earnings per share were one penny above the street

expectations. that show that our momentum in the market is above what the market is anticipating and 11 out of 12 sell side analysts raised their price targets because of our opportunities. what we see is a good growth and over 70% of our business. global public scepter was up 7%, global commercial was up 6%, global enterprise was up 7%. u.s. enterprise was up 21% where we have changed our selling motion but instead of selling boxes, we are selling the pipeline and that looks good. 1200 opportunities, $3.7 billion in pipeline is up dramatically versus one and two quarters ago. it shows the transition we are making is going well and the u.s. was strong. your point about service providers they were down 7%. yesterday i went out on a limb

i said the odds are very good you will see service of th service providers get back to growth. that has a huge impact in our growth numbers. it will probably affect us3 points negative. we saw three emerging markets soft russia which should surprise no one, it china and brazil. india and mexico are doing well and the rest of emerging markets are growing at 6%. erik: something you said on the conference call caught my attention. you said the situation that cisco and other companies confront and economies like russia and china will change when it eventually it will turn around assuming our governments get along. that is a big assumption. what is it that inspires confidence in you that the united states is going to come

to some sort of reconciliation with vladimir putin and china. ? ] john:. i have been doing business in china for 30 years. we followed the key leaders there and identified them way ahead of time and watched the current leaders coming out of western and central china. i think it is in both of our country's best interest to get along. i believe both of our presidents believe that as well. the last meeting between our two presidents a couple of months ago went very well. the meeting in the fall is a thinly critical but i think that will go well. chuck robbins and i have been going to china for two years every quarter. we watch the position as our countries work through that. i think that will happen. what you are seeing now is a number of temporary economic impacts around the globe in terms of currency and in terms of friction between countries. if you look over one year from

now, we will work throws -- we will work through those. erik: one year from now, our relations between america and russia and america and china you believe will be that her and better for business than today? john: absolutely. with all the concerns people might have, i think our governments can work through this and find a middle ground. i think that's a give and take and it's healthy and business can be one of the backdoor ways of keeping the relationships working. for -- both the leaders -- both leaders believe that. erik: you are the most intensely competitive person i have ever met, quite seriously. i know how serious you take your competitors like juniper. cisco is a bigger company, 12 times as large but nevertheless while juniper was struggling now it seems to be resurgent. how come you guys did not bury

juniper while you had the chance? john: you never want to treat your competitors in a way you would want to be treated yourself. our goal was to beat them very effectively. if i remember right, they are not actually researching. their growth is negative by a large percentage point and we are grown by 5%. they bet they can make a transition from hardware to purely software. that's a huge bet for their shareholders and if you watch the market, even the great players like microsoft and intel or oracle and ibm are growing negatively in large numbers but we are growing at 5%. i feel good about our growth projections for the future. it's a nice way to say we pulled away from jupiter -- juniper and aristotle and hp. just as we have done to hundreds of competitors over the past two decades. erik: that's the competitive spirit i like to see, thank you

very much. he is the ceo of cisco. always good to have you. next up, we are talking the business of coffee beans. levatsa brews more than 17 billion cups of coffee each year and that's just on this planet. we will talk about that brands future in space and on earth as well. ♪

erik: venture investor roger mcnamee will join us next hour for a discussion about unicorns. he is the target of the biggest copyright cases in history and one of technologies biggest outlaws -- kim.com is a character almost larger-than-life. emily chang speaks with kin doc com and opens up on his legal strobel's -- his legal struggles

and failed political ambition and here's a sneak the. kim: i believe in copyrights but not extremism. extremism is if you are a hollywood studio and you lease your content in one country first like the united states and then rule it out over a couple of months in other countries around the world and expect the internet community in these different countries to wait for their release. erik: on tonight's episode of "studio

895, italy's lavazza has been one of the most successful family-owned business. it is present in more than 19 countries and 17 billion cups of its coffee are consumed every year. success on the planet hurt is not a not. the company worked with the italian space agency and nasa to deliver the first espresso machine to the international space station. with us this morning is the vice chairman of the company and a fourth generation executive of lavazza. welcome. just happy: -- giuseppe: thank you. erik: how does this help lavazza on planet earth?

giuseppe: it's a challenge to send our machine to outer space and make a cup of coffee in a different environment. we can say maybe we have coffee with the best view in the universe. we are very proud that the coffee they are serving is lavazza so it's a sign of our passion for continuous innovation that fuels the growth of the company along our history that is now 120 years old. erik: people don't think of innovation when they think of coffee. how do you innovate in the world of coffee? you roast the beans and grind them and make coffee. giuseppe: coffee is a contemporary product or it we started from a traditional product. you mentioned the beans but now you can enjoy your coffee in many different ways. it approaches a different style.

in culture. it is the convenience that you can prepare your coffee in a very correct way, the way you want. erik: starbucks has shown us that is possible to make an extraordinary amount of money and high margins by being in the coffee business but also the coffee retailing business. is that something we might see? when will we see a lavazza downstairs? giuseppe: you can be successful with coffee shops but we can also be successful with distribution. we are very strong with retail distribution but we also like to work with professionals like chains and restaurants and cruise liners. there are huge opportunities for a company that wants to be the

coffee for many copies around the world. erik: where is your biggest growth market? giuseppe: we saw incredible growth in the last couple of years in this market. last year, we had terrific growth, about 130% in volume. it's a very promising market. it's the first priority in our international expansion. erik: to the degree that americans are buying lavazza and more of it as they are, it's lavazza instead of what? giuseppe: instead of other kinds of specialty coffees. we are focusing on premium coffee, super specialty coffee and what we are seeing is people like the italian way of brewing coffee which is different than the u.s. style. erik: describe it.

giuseppe: the u.s. market is focused on heavy roasting coffee but in italy we adopt a different level of roasting to bring out the real identity of the coffee beans we buy and deliver them to the consumer the real dna of our coffee. it's very connected to our idea of food. italy is very strong in food culture but we have a great respect for the natural taste of our products and the simplicity for us is the best way to enjoy the maximum flavor of our products. erik: how do you make people aware of this? they are becoming more aware now but is it like a coca-cola/pepsi taste challenge? giuseppe: we are using a lot of marketing tools. we are investing heavily in making people aware of our story. erik: thank you very much.

we will be back tomorrow. ♪ olivia:erik: cruise back around the $60 level and investors predicted oil would fall back to $30.

we will talk to a hedge fund manager betting on crude oil taking a leg down. olivia: shake shack shares are surging in the northeast and southwest. first-quarter sales has more than tripled since january and their ipo. erik: there is a new book about what drives elon musk and the sophie's choice he once had to make between tesla and spacex. olivia: good morning and welcome to "the bloomberg market day." erik: we are 30 minutes into trading on the new york stock exchange. let's take you straight to a look at financial markets. olivia: