francine: you are seeing the dow off by about 35 points. the dow and the s&p never traded in the green. but it was a pretty mushy day. here to talk about this is joe weisenthal. at what was weighing on markets overall was a transportation stock. you have the dow jones average sinking. like it is af feel summer day.

we have been having more down days than updates recently but we are still there record highs. there is it too much going on in equity markets. in hard.tals came not a lot of demand, not a lot of transportation joe: you imagine that they would be economically sensitive, movie stuff across the country. that is something to pay attention to. the thing to pay attention to is the chinese stocks. it fell six and a half percent. because the market has been rallying so much lately, that only brings it down to where it was on may 22. it is hilarious when you see a market fall that much and it goes back a couple of days. whilst the u.s. market is so quiet, we have china to look at for endless excitement. did have the tightening

of margin roles. joe: there is excepted that there was tons of retail. so, it makes sense, the huge run-up, tighten the rules. you're going to tumble. alix: we started in china and then you had to go to europe. greece was still the story. you had eu officials that no deal would come by sunday. greece feels optimistic. the ecb worried about contagion. banks are starting to reports and the numbers are awful. quarter losses 75 million blocks, deposits drinking. -75 million bucks, deposits shrinking. joe: there was pretty clear signs of a recovery, economically, certainly in the financial market. since the beginning of when the election season started late last year, through the turmoil

and the certainty of the government, they just lost so much. got the mna -- m and a. joe: the biggest tech deal ever. of course, this not a name that you wish to know. this is not a name that people now outside of the markets. yet, here is the biggest tech deal in history. obviously, if you consider a a well, time warner, that would be immediate. continuinge seeing premiums continuing to rise. globally.on dollars 24%.um is not as high as other years. still, pretty strong. joe: this is a big year. every time we are talking after

the bell, we are talking about some deal in either that happened or that might happen and so, there is a lot going on. the other sector that got hit was energy and industrials. in terms of energy, these stocks really sold off. we got the department of energy report, it was really next. your production really high even though we have seen a rate count cut. inventories climb it. i pointed that out because if you do have a rise in products stocks, refineries might not need to make as much because margins might shrink. that has been the overall worry. joe: are has been a decline in oilntory but american production is absolutely roaring. despite the crash we got, there was no hiccup in production on a four decade high. the story of the world being awash in oil continues. another piece of evidence was

something that bloomberg news reported on today, was takers. the amount of oil being transferred on tankers around the world is booming. that is assigned, another indicator that the world is absolutely awash in oil and any hope that the crash was going to cause some sort of tightness in the oil market is hard to believe. of --20 million barrels 20 billion barrels stored. market share has increased for opec by about 1%. they are now at 33% this year. the part of this is that you are seeing the oversupply reflected in stocks in a way that you hadn't before. you have seen investors pull money out of energy producers for the first time in eight months. joe: it is interesting the way that people react to price movement. everyone was saying, it is time to get bullish. now, we are seeing some weakness

, still, there's plenty of oil is getting negative on oil. julie: we have been talking about retail. we cannot talk about -- forget about videogame retail. couple sales up 8.6%. that is five percentage points better than have been estimated. earnings coming in better than estimated, it looks $.10 better. and increase their, sales coming 2.06 billion. they are forecasting second-quarter earnings per share of 21-20 five cents. analysts had been looking for $.21. we have seen a shift in the city of game industry in terms of how you are selling games, are you selling them through software, through subscription. it looks like gamestop has rolled with it. also looking at ulta earnings.

larger than i realized it was. this is $10 billion company in terms of market value. it is a chain of 797 beauty stores, kind of like sephora, although the physical stores are in some cases bigger. the first quarter comparable sales, they are up 11.4%. an enviable number. worst quarter earnings are share and a dollar and four cents. pretty much the numbers look like they are beating estimates across the board. the second-quarter forecast does leave a little bit of room for it to miss estimates but it seeing ae we are positive reaction in the shares. while we are talking retail, let's rounded out and talk decker's. that companies earnings-per-share a four cents. analysts had been estimating breakeven. the first quarter forecast was below estimates. and $.52. of a dollar

analysts had been looking for a dollar 17. that looks like more of a mixed picture although the shares are still trading higher. for now i want to bring in bloomberg chief economist and -- we want to hit on that top story of the day which was about them and a and what that winds up the and about. do you think that we will see more semiconductor deals as we look for scale in this market and what is the goal? guests: you get more buyer power if you have more leverage over your suppliers. with debt as cheap as it is now, typically, with both debt and valuations higher, it is kind of an odd thing. history shows that m and a usually beats close the top of

the market than to the bottom. reporter: what are some areas and companies you are looking at where you could see some activity? guest: you have seen a lot of movement in the space. taking itr finally on. that is very heavily debt fueled because you can leverage against those hard assets. you don't tend to see as much debt in areas where your assets tend to be more intellectual and intangible such as semiconductors. anywhere where you can do a deal , lever ike is hard assets with cheap debt, while it is there, you will probably see more. it is hard to find organic growth. companies need to put their money somewhere. reporter: companies are

cash-rich, generally. it is a slow-moving economy. there's not a need for a lot of investment, so they look at strategic acquisitions. that is what we are seeing continuously now. alix: a different way of allocating your capital. the economy is growing at a faster pace, then you will see that sort of organic investment, but we are not there now and if we look at the capacity utilization rate, that has been falling for the last several months. guest: we have gdp revision. and so expected to go negative on expected to have negative growth for the first quarter. >> last year it was .1. it got down to -2.1. this year was .2, a slightly

smaller downward revision. stops there.n there was some weird factors that caused the economic weakness. there were different factors last year relative to this year. the energy price story, the west coast port strike. because there are different factors behind the contraction, there are different factors behind the recovery. at that strong rebound, it would be a temporary rebound. look for strong rebound, it would be a temporary rebound. for: thinks to our guests joining me. we will be right back. ♪

♪ alix: welcome back to the bloomberg market day. we want to take a look at some of the top stories crossing the bloomberg terminal.

the president of fee for is resisting calls to resign. he made his first public remarks about the bribery scandal. he said he cannot "monitor everyone all the time." he also insist that he can restore trust in his organization. 17s expected to extend his year reign at fee five. j.p. morgan chase is laying off thousands of employees. bloomberg has learned the bank will make the cuts over the next year. the wall street journal is reporting jpmorgan may cut more than 5000 workers by next year. the bank said that they would compare $4.8 billion in expenses from its consumer and banking division. in has never been a bigger deal in the tech industry. buying technologies brought calm for $37 billion in cash and stocks. go buying broadcom $437

billion. this deal is said to break up the investment. climate change is making storms more intense and damaging. the president receive the latest briefing at the national hurricane center in miami. predicted 6-11 storms the season with three developing and hurricanes. the season starts next week. those are your latest top stories. the st. louis president james bullard is urging central bankers to raise rates. he sat down with bloomberg radio's michael mckee and kathleen hays in an exclusive interview earlier today. bullard: when you look at the economy overall, five 84%

unemployment, underlying inflation, one and a half percent. -- 5.4% and implement, underlying inflation. inflation is low but it is not that low and we did get a stronger cpi, core cpi. i think inflation will move back towards the target, on a planet will continue to fall. our onll be right on implement target and write on our inflation target in the not-too-distant future. when you look at policy itself, we are still in emergency settings. we have a huge balance sheet. by are we getting policy back to normal if the economy is getting back to normal? there are long lags. he cannot be saying, that we are going to get all the way back to perfection before we even start to normalize policy. i think that is too much.

the best cases that we want, at least for me, that we want to normalize policy, but we do have to get by this issue about the first quarter of gdp. is carl -- andow -- part of this was in opposition to what we heard janet yellen say n. james bullard is on his own? guest: he is in the hawkish camp which puts him outside of the dovish core of the open market committee this year to janet yellen. dudley, fisher, and some of the others. while those are not reflective of the underlying tone of the committee, he did sound dismissive about the inflation numbers are as tenant in her speech last friday said that actually it is more troubling that we are missing on the inflation side of the mandate to a larger degree than the employment aside. a very sanguine

view towards the outlook. they want to do something this year, even if it is one and done just to do it. we heard him talk about asset bubbles. where is the biggest risk? pat: you mentioned a large country or of that of the to the west of us called china. it has one of the largest asset bubbles going on. it has nothing to do with that policy, it has to do with the shenzhen hong kong linkage that has been opened up. in the u.s. it is hard to find asset bubbles that are interest-rate fueled. you could argue that their asset bubbles among social media companies and startups. housing, lending is pretty subdued. most things that are debt fueled and you would think would be going bananas given low rates, well, people seem to have learned lessons from 2008-2009

and lending standards have remained strong. that would keep carl up at night. what keeps you up at night? pat: china keeps me up. it is utterly bananas what is going on over there. even scarier thing is reasonably soon, the next couple of years, willig index companies have to include chinese a shares meaningfully, in huge indexes. that means that index seekers will be forced to buy clearly fraudulent businesses. it is kind of scary. alix: thanks so much. pat dorsey and carl. we will be right back.

♪ alix: welcome back to bloomberg market day, i am alix steel.

the google annual developer conference is going on right now and cory johnson has been at the event all day. highlights,f the what were the standouts that google is really trying to move to? we will call them the highlights for this event. they were a couple of products that they talked about in the past, we kind of knew they would come out today. those include a new android called m.system new additionbout a to google wallet or a new word for google wallet. it will be tested in the same places. you can watch hbo go on their google play devices. those announcements, the things they talk about in their keynote event. product announcements are not the point of this event.

the developer and the people that work on this most used operating system in the world. this announcement, not so much. you seem unimpressed, i have to say. this is a few weeks away from apple's own developer conference. where can google stand out? by the way, they are coming to take me away. i know you have been waiting for that moment. how with a coin to make money off of the stuff? giving away their software for free. listen to what they had to say about how google makes money, was something like a new photo app? from google's perspective, the focus is on building great user

trust, building great user features. focused on building a great product. i virtue of building this amazing product, building a vehicle system and getting people to solve these important problems, we forgot about where we're at. -- we feel good about where we are at. those apps that have no revenue model, this is really a place where people will come and get an idea about how to write software. you can have fewer on my nexus nine down. a big product announcement and so on, not so much. compare this to what we might see from apple in a few weeks. apple is conservative about the way they infest. they save information up. it's a closed system. the software will run only on apple hardware.

they can try to build up suspense around the announcement. there is a lot more revenues flowing. there are more devices out there. they want more revenues flowing to the devices. for a lot of them a graphic reasons, the way the platform works, there is a lot more revenue. the ad makers who will show up for the worldwide developers conference for apple might be a much greater buying the people there, but also there might be some actual announcements and some new things announced their at the worldwide developers conference. it is possible with apple that when you can do it, it is nearly impossible with google. they sell the services of they can sell more ads. this is different than an apple model. cory: a lot of their information

is about the collection of data. that all happens in the background. is very different from apple which says they don't want your customer data. they don't want to know who you are. business, at the apple, they are trying to do something very different about selling stuff instead of selling you stuff. thank you so much cory johnson, bloomberg editor at large. that wraps it up for today, thank you for watching the bloomberg market day. alix steel, we will see you tomorrow.

emily: google is going head-to-head with apple pay. and they are that big on their virtual reality boxed. i am emily chang and this is "bloomberg west." the new york city once the power to approve huber and lift app updates. pandora's plan to expand it to news, weather, and sports. i sit down with their finder. pebble's ceo is here with the new smart watch and we will compare it to the apple watch.