bell ringing] the day isame of rally -- the nasdaq closing at a record high while the dow and s&p seeing it just day in two weeks. the nasdaq is really the story, with tech leading the way, seeing its biggest gain in four months and a record high, finally playing catch-up to the s&p and dow. i'm joined by joe weisenthal -- it was kind of a green day across the board. almost 2%. joe: we talked about the selloff and the fed -- alix: you did, i was on vacation. joe: we saw the transportation rally.

there had been talk of the transportation sector being a red flag, but today it was strongly up. alix: it was weird and the discretionary world because we had a split in the retail world -- michael cores and tiffany -- michael kors just tanking on earnings. joe: of course, we had this amusing thing in greece where we have these signs out of greece that a are patching a deal together and other sources saying no, we are not. that seems to be the story for so long where you get all of this optimism and then the creditors are like what? what stood out to me was the emergency liquidity assistance not being raised. which egged the question is that or is thess capital ecb trying to apply some pressure? joe: you don't know but as the

clock ticks there, they are doing whatever they can to build pressure. alix: there is no more money in the greek banks to take out. just kidding. joe: the huge story today is the fifa corruption stuff, which is going to be an amazing story for a long time. corruption allegations relating to the awarding of the coming r.rld cup's in russia and qata it's something people have been talking about forever and people seem to be taking action. alix: what's fascinating to me is where we went with the company angle because we had statements out from adidas saying they support a culture that promotes ethics. and then the nike thing happened and the deal there is connecting the dots, it shows nike could have bribed a brazilian soccer

official for a sponsorship. joe: if that turned out to be true, that could raise all kinds of troubles for the company. the other thing that's utterly fascinating about the world cup and the macro economics of it all -- inc. of the last several world cup series. awarded toe were these countries at a time when people were super bearish on the u.s.'s place in the world. it was all about these energy nations on the rise and now that these games are actually happening and the global narrative has totally changed so that the u.s. is clearly the world's strongest economy, all of these economies are in trouble, the energy economies are not so great -- i feel like global international games are a lagging indicator of where the mood is. alix: i was looking at that and i was looking at qatar -- their

fiscal breakeven is around $60 a barrel. your point of the rise and fall of these guys. qataroday, the market in had its worst drop in three months. the official word from fifa is nothing's going to change about where the games are played, but any hints there could be a problem with the games is a huge issue because they spend an to buildount of money their facilities. even the slightest hint that those games could be imperiled is a huge problem. russia, 20billion -- billion.nd brazil, $11 we were dragged on for a long time and look at how much they spent. i want to bring in two more guests. , theg a global tour here

thing that struck my eye was an article about china. it says china is not showing the requisite tolerance for pain and the recent steps are likely to ensure a belated financial reckoning in the years ahead with a potential shakeup for the global economy. so the government is not actually doing its job to weed out the bad guys. join the club, right? lisa: there are these local government facilities they give you a funny feeling that say we've got some land and we can borrow against it and use that to fund our pet projects. you want to cut down an increase transparency while at the same time, how do they cut back on stimulus programs when everybody else around the world is gunning down on there's? to the credit of the

chinese, they did try to cut back on stimulus for years while the rest of us are reinflate income of the chinese up until the last year were cutting back significantly. it's not until this year that they finally caved. now some support for banking. could one nation that has been engaging in one kind of stimulus program blowout without other countries following suit? up,hey were to blow couldn't that be catastrophic? guest: all the financial markets are intertwined, so there's probably no escape. if china doesn't get its act together, it could go the way of japan and have huge implications. that is what we heard

about the u.s. programs just a few years ago and the european programs last year. it the same story across the globe. i'm fascinated by this story in china -- the stock market has been on an incredible tear this year. bloomberg news had a great story about how even the most bullish analysts on china have been relatively pessimistic based on where the market ultimately went . i'm fascinated by this idea that the chinese government sees it as useful to have the stock market bubble blown so these companies can recapitalize. they do others so much private sector debt but if they could make it up in the equity market and heal their balance sheets that way. alix: we are not done with earnings season yet. cory johnson has earnings for us. cory: reporting $232 million in revenue -- adjusted earnings per

share is what we are looking for. options take out stock and expenses -- $.23 -- the analysts were wrong again. adjusted earnings per share are a little better and the guidance for next quarter, a little better than analysts were predicting. as a result, you see this stock trading where it closed -- around $160 a share. a very expensive stock, trading at 26 times its book value. this company is enjoying very strong revenue growth securing against cyber attacks. market share away from more experienced companies like symantec. alix: thank you very much. ,ou were talking about a chart looking at the nasdaq versus the tech focus. joe: if we could bring that

chart back -- everyone with a talk about chinese stocks, they talk about the shanghai composite. alix: it makes the nasdaq look puny. joe: it is completely absurd. good pointou raise a -- to what end is the chinese government fostering these bubbles, if we can call them that? is it to maintain the 7% economic growth as their target or is it because of something that is more of a need? at what point is it not an appropriate time? 2% should be enough given what is going on globally. -- what at that chart do you see? guest: i feel good about u.s. stocks. our tech stocks in a bubble because of the private market activity and private companies going public and a lot of ipo

activity. when you see the nasdaq trading like that, you see tech stocks up but muddling along. it improves the attractiveness of the u.s. market stop joe: one other story a want to bring up is this fascinating story in europe with negative interest rates. people have talked about this for a while that there is this weird thing going on but it creates a technical problem for because markets theoretically, you get a situation in which the owner of the bond, someone who expects to receive payments could be on the hook to make a month. so they are trying to rework these rules and come up with rules to prevent that. last night, my six-year-old son said to me if i put money in the bank, like don't i make money on my money? it defies financial logic for an

investor to end up paying for the privilege of lending to someone. these investors are sake we are sake we're not going to do that because we have a dust -- we have adjustable rates. it just shows that this cannot last. gina, you are staying with me. and thank you, joe weisenthal, our markets managing editor. coming up, we will look at how the dollar, oil and the federer driving u.s. stocks. ♪

alix: welcome back to the bloomberg market day. we want to get right to the top stories at this hour -- corruption charges are walk --

are rocking the world of soccer. swiss police arrested seven fifa officials and switzerland is probing whether anyone broke laws. two former executives were charged in new york along with marketing officials. the justice department vowed -- andrests in mark racketeering. bailout talks in greece are said to be going nowhere. a greek government statement was denied, saying they were close to deal with international creditors. the official asked not to be identified because the talks are private. spokean ceo jamie dimon at the sanford bernstein strategic conference in new york . he commented on jpmorgan's business after the currency play. jamie: it's scary for a bank to go through that. makingk to the good job

sure nothing was crippling to us. it doesn't mean we're not going to lose business. i suspect we will lose some. alix: he said shareholders are lazy for casting votes based on proxy advisors questioning his power and pay. in new york city, a problem with the subway system -- someone has been stealing power cables. at least 500 feet of power cable has been swiped, causing delays for commuters in queens. they say that thieves will probably sell them for scrap. more than 11% up over the last year. what will the fed rate hike due to end the bull market? us is a senior equities strategist at wells fargo securities. is a good bible market? the first hike is

in the midst of a bull market. view, it is highly unlikely the fed wants to kill the economic path to progress they have started. i think they will move slowly and that's consistent with history. stocks kind of model along in the first six months before the rate hike and after, the average return is 3.5%. it's not unusual to be in the environment we are in. alix: you had a recent note that pointed out first quarter earnings on energy -- what makes the distinction between something boosted by buybacks? gina: as much as we talk about buybacks, it was resistant in the first quarter but if you

strip out the share count, the sector was up greater than 6%. growth year on year. as much as we think i backs are driving everything, there is some core earnings growth, especially in the energy sector. earnings growth is pretty persistent. total earnings-per-share group 7.5% excluding the energy sector. if you go back a year ago, it was close to 7%. just happenedt, that the energy sector saw such a massive swing in prices. you saw a lot of movement regarding the dollar but nonetheless, corporate america is pretty strong. what's a bigger factor going forward? is it going to be the dollar appreciating more? gina: most likely oil. i think the weakness we saw in the first quarter is related to

oil with a little dollar kicker. do we needoil price to see to get more optimism in the stock market? gina: as long as we hold the bottom and move higher off the autumn -- oil is up about 30% from its trough back in march. as long as we hold somewhere between $45 and $60, we will see stabilization in the earnings stream going forward. alix: you are overweight health care, tech, materials and industrials. where are we in the recovery? gina: a lot of it depends on where the fed goes from here, but we are in the mid-to later cycle. early cyclical stuff which does best when the fed is decreasing rates, that time has passed. it's now time to move on to mid to later cycle industries. that will depend on the bounceback we get in the commodities complex and how

quickly the fed increases interest rates. wrapping up with the dollar. the consensus is a gain in the dollar throughout the year, as long as we get something 7% or less, there's omitted risk. if we get more than 7%, it depends on how much more. , 14%, thatuge deal could be damaging. it depends on the extent. think of the long-term move in the dollar from 2011, the dollar has been rising. alix: thank you very much. we will be right back.

alix: welcome back. in a new june investment outlook, he talks about his big

bet against the bund, calling it well timed. bill gross spoke with erik schatzker earlier today. i announced it at the same moment i thought of it. i had not had the time to put on the appropriate amount of positions. from that standpoint, the execution was poor. so there will be less spontaneous expression from bill gross in the future? bill: i hope not. if anything, i want to continue , toell you what i think open my books and write the books and at the same time, leave the room, so that's the better procedure. it's more to do with how you put on the trade unless to

do with how you structured it? bill: the structuring, also. i thought the yields would go up toe slowly and less quickly the extent the structure i produced in technical terms was an options strangle than selling calls and selling puts. it was 50 basis points higher in yield. it was surprising to me. executed as well as the timing of the trades themselves. erik: you write that it still makes sense to arbitrage the difference between german bunds and treasuries, for those who haven't read it, please explain.

bill: what needs to be observed as the global monetary policy has proceeded at different paces and different countries with different total amounts. ofyou have a different set policy rates and a different set of policies with quantitative easing here and in the eurozone. inhas produced a disparity terms of returns going forward and prospective yield. the policy rate five years in the future as indicated by the yield curve is 2.5%. is policy rate in germany .5%. normalize, they will have to be the same. between 2.5% is

significant from the standpoint of a historical spread. it should not exist. erik: what other relative value type trades appeal to you right now? bill: as one observes and one expect in developed countries and emerging countries for nominal growth rates to come closer together, several observations come out of this. you can observe overvalued stock markets and undervalued stock markets, for instance, germany and the u.k. are very attractive stock markets relative to future policy rates. bonds are very attractive relative to that rate and in mexico, their foreign-policy rate is 6% or so. it's going to be difficult to

achieve. framework can lead you subjectively to an assessment of value not only in bond markets that stock markets as well. gross.hat was bill thank you everyone for watching bloomberg market day. i'm alix steel. we will see you back here tomorrow. ♪

emily: local video. --ording to scylla von silicon valley. ♪ i am emily chang, and this is "bloomberg west." up, a silicon leader, sounding the alarm about how vulnerable companies are two cyber threats. also, the demand for wireless internet. a life raft. i will be speaking to a ceo, and apple adds the chatter it is looking to hold a car. all of that ahead on "bloomberg west