real. scarlet: olive garden has a brand-new bag of breadsticks -- meet the activist investor turning it all around. mark: after a standoff in u.s. senate, a controversial spy program has expired at least for now. good afternoon from bloomberg world headquarters in new york, i mark crumpton here with scarlet fu. scarlet: we have two hours to go before the close of trading on the first day of june. u.s. stocks little changed from what was mixed data but has since turned hired on optimism over manufacturing and spending numbers. if you look at how bonds are doing, prices are lower and bonds are falling and it means a higher yield. ,he odds of a pickup in growth

perhaps showing the first quarter was an anomaly. the dollar is stronger as well, a 12 year high versus the yen. the dollar gaining for the first euro.or weeks against the mark: let's take a look at the top stories we are following -- a top executive at disney is stepping down, leaving the position to take an advisory role to his boss, disney ceo bob iger. no replacement has been named. could be of the parks the chief operating officer. many observers believe that ended the competition over who would eventually succeed bob iger. scarlet: vistaprint court throwing out the -- the supreme --rt throwing out a case the man was arrested after

making threats to kill his wife and shooting up a school. some key economic data came out today -- manufacturing in the u.s. grew and the isn index rose to a three month high. orders grew at the fastest pace in five months. consumer spending stalled in april but wages rose and so did the savings rate. they are playing the blame game in europe -- greece and its creditors are blaming each other for a of progress in bailout talks. the greek prime minister says the problem is not the fault of his government. german officials said greece has to follow the reforms agreed to before the new prime minister took office six months ago. they have to pay the imf about $1.8 billion. both sides have said publicly that greece plans to stay in the euro.

-- most importantly, greece so theo remain in europe rest can say we've had a failure, we need to fix it and people inside the euro will see what it means to be outside the euro. scarlet: -- according to goldman sachs, the iphone maker will offer securities subject to market conditions. it is a semi conductor deal that has in in the works for months. intel has agreed to buy altera. it represents a 56% premium over

altera's closing prices before the talks began. the intel ceo will be our guest at 4:00 eastern time. you don't want to miss that conversation. berkshire has the berkshire hathaway has replaced -- hasief executive replaced the chief executive at net jet. net jet cells fractional ownership of private jets to individuals and corporate clients. two countries that love baseball are reestablishing diplomatic ties after half a century, so naturally the first visit of a u.s. sports team to cuba involves soccer. arrivedos and pele have for a match against the cuban national team. talk that major league baseball will eventually play an exhibition game.

those are the stories we are following at this hour. nextet: coming up in the half hour, expect more of the stock buyback bonanza, but it might not be the best use of cash. mark: the u.s. supreme court has increased the religious rights of workers as justices revive a lawsuit claiming abercrombie & fitch illegally denied it job to a muslim teenager. we will hear from the activist investor who waited tables to turn it around. that story and more coming up on the bloomberg market day. mark: manufacturing is starting to rev up again in the u.s. a new report shows industry expanded more than forecast. today, olivia sterns and erik schatzker spoke with the owner and president of marlin steel who said the report is consistent with his company's growth. >> we are growing our factory

for a lot -- factory floor by 50% because we are bullish and optimistic about the future. what is happening right now is the american manufacturing renaissance israel and we are poised for great growth. i'm very optimistic about the future. what makes you so optimistic? >> there's a lot of things going the right way for american manufacturing. prices have been going down for years. we have this wonderful opportunity with fracking that's going to keep prices down in america and that makes american manufacturers much more come competitive -- much more competitive against other countries. >> since you just mentioned the trade deal, what do you say to critics who say this is going to cost american manufacturers their jobs?

>> 95% of the world consumers are overseas. that means that's where the big markets are. it is not domestically. the future of american manufacturing is to sell to more people overseas and right now, obstaclesl kinds of to sell into japan, into peru and these other countries. if we can get the transpacific partnership done, we should be able to sell to these countries like never before. are means our factories going to have to ramp up production, hire more talent, increase the number of people in the middle class and these are great jobs. the average american manufacturer paid $77,000 year for their loyalties. these are the kinds of jobs we need and this is going to happen. we need washington to come together and president obama to lead on this and washington to sign off on these trade deals. erik: what percentage of your revenue comes him outside the

united states? >> 25% of our sales. , canadaall over europe and mexico and we also sell to china. erik: and you are not feeling the impact of the strong dollar? >> last couple of months have been really tough. europeansouthern client respective, we raised our price 25%. of course we didn't, but compared to our german competitor, we look very expensive. it's not helpful to american manufacturers. we make everything 100% in the usa. give uspens is it will new markets to access and lower the barriers and make obstacles lower so we have more prospects. one of the things that will happen is we will have more intellectual property protection. that is the secret sauce in america and by having these trade deals, it makes for an

countries not be able to penetrate easily. let's try to find other ways like trade deals so we can enter into new markets and grow our economy. you on theo press issue of manufacturing jobs. we have a chart that shows a 1970's the u.s. in the and has been steadily declining. you see it slowly picking up. i recognize the trade deal would be good for exporters and their bottom line, but we were just showing video of robots producing steel. are you going to actually be generating working-class manufacturing jobs or are you ?enerating jobs for management thehere's no question that complexity of the job is

different than it used to be. we had employees who could hand bend wire all day long and now we have employees getting paid for or five times the amount when i started this company who are now running fancy machines, quarter million dollars machines and they are 10, 15, 20 times more productive than they ever were. are using their brains, not using their brawn and they are much safer. we've gone 2300 days without a safety incident. our employees are not doing scary things anymore. they're doing healthy things outside the cages. changing in manufacturing. they're clean jobs and they are rain jobs. it's a new paradigm that has to pierce conventional wisdom. really productive employees, you can pay them better and group them -- and give them health insurance.

we have much more coming up on the bloomberg market day. what to do with all that corporate cash. according to goldman sachs, m and they might be the best answer. -- m&a might be the best answer. ♪

mark: welcome back to bloomberg market day. i'm mark crumpton here with scarlet fu scarlet:. scarlet:let's go to julie hyman with a look at the markets. a lot of movement in casino

stocks. mostly.ownward movement let's look at some of the big movers, particularly the casinos that have a lot of business in macau. if you look at these companies, all of these companies get more revenue from the cow and all are trading lower today. that's because of what we continue to see with macau -- this is a measure of gaming revenue in the company. it peaked last year and has been falling and falling, in fact down for 12 consecutive months. in data released earlier today, we thought was down 37% year-over-year. 2.6 billion dollars. that is where we are left at the far end of that chart. we have seen a clamp down on corruption in china and that has affected that revenue in micallef severely as well as general economic conditions in china.

however, if you come back domestically and look at some of the stocks we are watching, we saw an upgrade for boyd gaming on the outlook for potential improvement in business in las vegas, stability in atlantic city, and those shares are trading higher by about 4%. down 13%. is decision thaturt may lead to the company to come under renewed pressure to make peace with its creditors. bondholders are seeking to collect $700 million in debt. caesars has a complicated corporate structure but it is related to the debt of one of its associated companies. a bottom line is that businesses struggling. julie hyman, thank you

so much. u.s. businesses are cash rich strategist says corporate managers should use the cash for m&a, especially by using equity. s&p companies spent $2 trillion in buybacks and the issues here -- the issue here is that management tends to have not great timing. the s&p 500, dow and nasdaq are close to record highs. in other words, stocks are not cheap. the last bull market, buybacks peaked in 2007 and you know what happened after that. mark: even though we are seeing buybacks and valuations at peak levels. why? scarlet: activist investors have been agitating for it, so they reward companies that do it. so it is a virtuous or in virtuous cycle, depending on your point of view. here's a chart that shows the

buybacks since 2005. buybacksast the most since 2007, which was the peak of the last old market. -- last bull market. if you look at it as a total percentage of cash, let's show you what it comes out too. goldman sachs estimates companies will spend 28% of their total cash on buybacks. we saw that story being told in 2008 and 2009. we were just in the beginning stages of the financial crisis. scarlet: companies spent 34% of their total buybacks, so those bars could get a lot higher. mark: let's take a look at some of the top stories crossing the bloomberg terminal at this hour. dennis hastert will be arranged on federal charges in chicago on

thursday according to news reports. charges areformal brought, the former speaker of the house is suffering the fallout from a cover-up of alleged sexual impropriety. his alma mater has dropped his name from the school of public policy center. wheaton college says it has accepted the former speakers resignation from the board of advisors. he is accused of lying to the fbi and making illegal bank withdrawals to conceal past behavior. hillary clinton will officially launch her campaign for the presidency on june 13 in new york city. a new poll shows mrs. clinton is still the overwhelming favorite among iowa democrats, but bernie sanders has been rising quickly in the polls. mrs. clinton is the first choice of 57% of democratic caucus attendees. sanders, an independent senator from vermont is at 16%, three times where he was in january.

he is seen as the anti-establishment candidate. , who hasident biden not said he's running for president, is at 8%. secretary of state john kerry is on his way home for treatment on a broken leg. also on the flight are additional medical personnel. he accident happened when he was cycling in france over the weekend. his travelimit justice talks with iran and its nuclear program enter a crucial stretch. the u.s. another world powers and in curb the program exchange, they would ease economic sanctions. those are some of the top stories we are following at this hour. scarlet: coming up, the supreme court bolstering religious rights of workers. we have more on that story, next. ♪

washington, the u.s. supreme court is supporting the religious rights of workers after ruling in favor of a muslim woman who sued abercrombie & fitch for not hiring her because she were a headscarf. it will require businesses to avoid religious excavation when they interview prospective employees. discuss it is phil mattingly. this is back from 2008 -- i can think of a lot of reasons why abercrombie & fitch was looking to narrow down its potential prospective employees. : they have a bit of a history and they have changed a little bit. but they have a history -- this case stems from during the interview process, according to abercrombie & fitch, the case centers -- the young woman did not declare or make any point

that this was because of her thereforebelief, but abercrombie & fitch was not discriminate in because they didn't know. initially, she wanted employment discoloration case of about $20,000. that was thrown out by the appeals court. when i got to the supreme court, and 821 ruling with antonin scalia saying this was really easy. the big point you are seeing now and this is something the court has backed, this particular court has backed with regularity is when it comes to religious liberty and religious issues specifically, the court is going to lean toward those concerned about the freedom of religion and away from companies, which is a surprise when you look at how this court has been toward big business. the onus ishis mean on a future employer or company to tell a prospective employee what the rules are? phil: that is the initial reading. this goes in line with what the

obama administration was pushing for in their filing with the court. they would like more onus to be on the court to figure this out, not the potential employee to have to come in and declare things. a don't want to use it as a way to disqualify right off the bat. not only how employers will try to react to this but on future discrimination cases, whether this opens the door for a significant increase in lawsuits, we have already seen an up tick in discrimination lawsuits based on religion by about a thousand cases. whether or not this contributes will be an interesting thing to track as it goes into effect. scarlet: thank you for the latest on the supreme court. breaking news now on greece. olivia sterns has the latest. olivia: we are learning according to a person familiar that mario draghi, the chancellor of germany and the french president will be meeting this evening in berlin to

greece. these are said to be top level talks to hand out a proposal that would be presented to greece as it only option as a realistic chance or safeguarding its membership of the euro. meeting said to be representatives of creditor institutions to discuss a plan to resolve the deadlock over greece. these talks are at the highest level and involve christine lagarde, the managing director of the international monetary fund and the european commission president. is breaking is that they are all said to be meeting this evening in berlin to discuss greece. here we go again -- another 11th hour attempt to avoid what could be serious financial repercussions for greece. scarlet: it is actually going to

be a big week for markets, not just because of the friday deadline for greece but a lot of data coming up, collating with a big jobs report on monday. there are a couple of central banks meeting -- the reserve bank of australia, the reserve bank india and the brazilian central bank. and take a look at the euro right now. scarlet: not much movement on those headlines. the euro remaining weaker against the dollar. mark: i'm out. i will see you tomorrow. scarlet: we have much more coming up -- "star wars" taking -- to the olive garden. ♪

scarlet: welcome back to the bloomberg market day. canada pension plan investment

board is in talks to buy general electric's private equity lending business. people say ge is planning to ship most of its financial operations. the deal would value the ge units equity at more than $4 billion. kfc is suing three companies in china. the reasons are claims on the social media about its food -- including that it's chickens have eight legs. kfc is demanding cash settlements and an apology from each of the three companies. here in manhattan, authorities say a terrifying accident could have been a lot worse. a giant air-conditioning unit being lifted to the top of a skyscraper broke loose and felt 28 stories. 10 people were injured. authorities say it's fortunate that happened over the weekend crowdedtreet was not

with people. a small group of doctors account for a large chunk of medicare payments. bloomberg crunched the numbers 39 found medicare paid doctors $5 million. stories atur top this hour. coming up in the next half hour, credit squeeze has big plans for saudi arabia as the arab world's biggest stock exchange opens to foreign direct investment. hedge funds are piling into catastrophe bonds as hurricane season is set to start. and three controversial u.s. spy programs have expired, but maybe not for long. that and much more coming up on your bloomberg market day. all of garden debuts its new menu today. star boardmes after value one all of the darden

seats back in october. erik schatzker and stephanie ruhle spoke with the ceos -- the ceo and president of all of garden. >> we did not come in and take control. the board is an independent board. we just think the board is better and more qualified. aree are nominees, but they independent thinking and they are not going to do just what we say. you took control of the situation. >> we did. we made a change to make sure the board was doing there job to better represent the interests of the shareholders and to make sure they are doing the job for the company. part of that is listening to management and allowing the best ideas to come through with the guidance of the board to make sure we are coming up with the best ideas from everyone. what has been easier than you thought and what has been

harder than you thought? >> on the upside, one of the things that is wonderful is we realized not everyly that board member worked in a restaurant. so once we got on, every board member worked inside the restaurant. operating with the manager of the restaurant, walking around, i was waiting on tables and food, inuest, serving the kitchen -- all of us did that and it was an amazing experience. we felt as board members, how are we going to a -- be able to make good decisions without knowing what is going on in the restaurant. the restaurants are doing a great job and the employees are working really hard. they care a lot. we are making sure we are giving them the tools so they can do the best job succeeding for us. upside, the employees are working great, how can we make

sure we are providing the best opportunity for success, which means improving the menus and coming up with utter items. it is a large company and you have to make some decisions and the people part is the most time-consuming part and it's also the most rewarding part. what is amazing is that in the darden situation, it has worked exceedingly well, far better than i would have hoped. but the marriage between the board and the management team has done very well. we spent a good amount of time and it's a good team environment. set some pretty ambitious targets. for all of darden, 300 $25 -- $325a year -- how million year.

darden on the whole is cutting costs. what have you been doing inside? the bottom line is to save money , make it more efficient and illuminate waste. >> the first thing we did his focus on the guest and make the experience great. we did is lookg at every aspect of the business are there ways that do not impact the guest experience. is landscaping, linen contracts, landscape contracts -- we reevaluated every single one of those and looked at all the expenditures we had that were non-guest facing. and we found some opportunities. some of the other stuff you talked about doing was talking about reits. focus is improving

the guest experience in the restaurant. sure thesemake guests are enjoying the experience more frequently. we will also be looking into the real estate opportunity and that has been another goal of ours. that is something we can do that has no effect on restaurant operations. unlock a lot of value and restaurants can continue to run. as relates to the opportunity to spin off some brands or work with different restaurants or acquire some brands, we are holding off. ?rik: until when >> we have to get our goals accomplished in terms of operational elements and improve our cash flow and work on the real estate projects. after we accomplish those goals, we will take another look.

semi-priorities you can have. we worked on a five-year plan to prioritize our initiatives. he have to make sure you are focused on those and then you can move to the next ones. scarlet: that was erik schatzker and stephanie ruhle speaking to the president and ceo of all of garden. coming up, open for business -- ♪

scarlet: welcome back to the

bloomberg market day. i'm scarlet fu. the arab world's largest stock exchange lancet foreign investment in just two weeks. saudi arabia will open up as a plan to liberalize its markets on june 15. at the moment, only members from inside the gulf council can invest in saudi arabia and stocks. everyone else has to go through equity swaps and etf's. worth $40s could be billion and the big banks are following the money. several banks announcing plans to expand and saudi arabia according to people with knowledge of the matter. alix steel joins me now. you follow saudi arabia because of its influence in the global market but this is not the kingdom diversifying its global economy. is.: yes, it you can't just depend on oil for your revenue since we've seen the decline in oil prices. what oil didparing

to the stock market. moves in relative correlation to each other and as oil goes, could be as the stock market goes. are looking at a saudi arabia that is really trying to recover from the slide in oil prices. it only made 9% growth in revenue and therefore soft but -- saw budget deficits is the first time 2009. saudi arabia is following a playbook laid out by china and india. they will let qualified with ations gain access least $5 billion under management and have a track record of at least five years. there are also limits on how much they can buy. thetually, the whole --

goal is to get the capital index to include saudi arabia in its emerging markets index which would leave when you open the spigot and all the institutional funds can come in. alix: we have seen a lot of capital outflows in terms of companies going to buy a canadian miner. you do have institutions desperate to get into any kind of exposure. alix: and the yield is so low. scarlet: you are going to stick around because crude oil is falling marginally. it kind of stuck around the $59 level. over the past two days, it has gained just over 4%. you are talking about the resilience in global non-opec production. alix: it is huge. did you know that non-opec production is 58 million barrels a day? scarlet: what is opec reduction?

alix: 31 million barrels. almost double. there has been concerned about -- concern about oil prices these pricess to and we're not talking about shale -- we're talking about deepwater and brent. that's where we see the oil production come off, but this is counterintuitive to that. scarlet: deutsche bank also had a couple of company calls to that. alix: you want asset quality and a balance sheet where you have moderate oil prices. , looking atetroleum marathon, looking at devon. scarlet: making some calls before the big opec meeting -- to expect anything? is thatalyst chatter

they will probably maintain their quota. so do they raise their quota or do they keep it the same. the call on opec is under 30 million. the actual oil we need from them is much less than they are actually producing. so who is going to be the outlier? i love the fact that there are official numbers and then there is -- alix: then there is the quota. let's move on here because we want to look at the top stories crossing the bloomberg terminal at this hour. the german chancellor in french president are meeting with the -- europe must act together to advance economic progress.

chancellor merkel -- there are a number of members come a but no common position on how to integrate that approach and make conversion. we have 500 million people in the european union and we can do a lot if we work together. if we approach it in a fragmented way, we will not be successful. scarlet: greece has to pay the imf a total of 1.8 lien dollars this month. when uber needed help with driverless car technologies, it went to the best robotic institution in the world, carnegie mellon in pittsburgh. away 40 of up hiring its scientists and researchers. the "wall street journal" said the scientist saw their stories -- their salaries double and got bonuses. lovers in paris the where -- thousands of locks are being taken down on a bridge and it's causing -- the locks are causing

long-term damage to the paris heritage site. a chunk of the fence fell off under their weight. today is the first day of hurricane season and the national oceanic association stormsere will be fewer this year, calling for zero to two hurricanes this year which has implications for those in the disaster business. i love that term disaster business. guest: the reason they say this is the cases is is an el niño year, which means there will be warm water in the pacific which will suppress the hurricane season. but it still can produce disastrous storms. ashore inandrew came 1992 in a below average year and it was catastrophic, a category five storm, costing $25.6 billion and is considered the second most costliest storm.

the first was hurricane katrina. are and more investors paying attention to hurricane season because they are pouring money into catastrophe bonds. these are high-yield instruments -- and the way they work is if there were no hurricanes, the investor gets a good return. to if there are, they stand lose money. investors like these bonds because of the returns and if you look at how much they have grown, by double digits every year and they are correlated to weather. at the end of march, $22.1 they are becoming increasingly popular with hedge funds and pension funds. business school professors released a new book and they say the bonds are risky. we could be looking at the

makings of another credit crisis. , theam a homeowner insurance company goes to reinsurer and you can put it on their part but now we are seeing that carved up even more. scarlet: you can slice and dice it any which way. i love the lack of correlation with the stock arc it. which is more predictable at this moment? the federal reserve or the market? coming up, three controversial u.s. spy programs have expired after a standoff in the senate. but could they be revived this week? more on the nsa coming up. ♪

scarlet: three spy programs aimed at stopping terrorists have expired after the senate failed to extend them after the midnight deadline.

for now, the national security agency can no longer collect phone records in bulk and bulk answers them for links to terrorists. glenn greenwald is a pulitzer prize winner and a cofounder of the intercept supports the move. mass surveillance is inherently wrong. why should government be in the business of collecting data about what we as law-abiding citizens do and say and the people with whom we are speaking ? is inherently corrosive to basic liberties. that said, you can imagine and oversight framework that would provide some controls. the problem is, the courts and congress have proven themselves subservient to what the pentagon and intelligence communities want. they are good at capturing those institutions and oversight becomes a rubberstamp. even in theory, if you could conceive of something, and practice, it ends up not working.

>> you said you could imagine a series of controls that would provide oversight. what would those controls look like? glenn: the core principle that in thele on as a nation 70's after the abuses of the j edgar hoover years and the years were revealed, is this idea that in order to trust the government, they have to go to the court and present evidence the person whom they want to spy on is actually guilty of something more engaged in some kind of wrongdoing. robust court where two sides were in attendance at one side is arguing the case against the government and add some transparency to that court nsa had to convince a real court they deserved it, that would be the kind of thing that could work. going onthere is a lot here both on the policy and clinical front, so we are going to bring in phil mattingly from washington to walk us through it all. what are the practical

implications for ending these programs? there's a lot going on. on the policy side, the three programs, the one that has gotten the most attention is section 215, less the collection of millions of americans phone records. but there are two other programs , one killed with roving wiretaps, wiretaps were you only need to get one authorization to tap phones for suspected terrorists who happen to use more than one phone at a time, some people call them burner phones. the second was for lone wolf suspects, where law enforcement cannot prove a specific type to a terrorist organization, but they believe they are operating in a terrorist sense. the important thing is those last two programs are not used all that often by law enforcement, so the practical theications are intelligence community did not

lose a large amount of their capability. the big concern is their ability to put together the whole picture. if it continues for a long time, that is where there will be major gaps. back in with the senate session, is there a clear way to authorize these? we keep saying they have expired for now. phrase.r now is the key they are on a pathway to do that. the senate is on a path and they will consider a couple of amendments related to the usa freedom act. that's an ill past white house with 388 -- that is a will past in the house. who wouldr mcconnell prefer a straight authorization get changes to the bill to move forward? if that occurs, which we expect as soon as tomorrow, possibly wednesday, the house would have to consider the bill again.

the administration is concerned more time is ticking away. if they had it way, the senate would move forward and pass it as is. it will be interesting to watch what happens over the next 48 hours. scarlet: what impact did senator paul have on the debate? huge.politically, it was this is a sea change. if you look at what has happened since edward snowden first released these documents, it's a major change from where we have been since 9/11. senator paul has made this a big issue and you will hear about it in the months ahead as he pursues a presidential campaign. mattingly, thank you so much for that perspective. still coming up on the bloomberg market day, dealmaking in the chip industry on fire. we will speak with the ceo of s close onr the market their big purchase of altera.

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scarlet: it is noon in san francisco. alix: this is the bloomberg market day. inrlet: intel buys altera --

the next hour, the ceo will tell us why they are making the move. alix: the intel deal wasn't the only one of the pipeline. a $2 billion agreement in the most prolific oil field in the u.s.. scarlet: lindsey graham joins a crowded republican presidential field. he has to to take a centrist approach to winning the white house. scarlet: good afternoon. i'm scarlet fu here with alex steele. happy june. you are looking at the dow jones up by 83 point. the s&p up by 10 points. we had the mega intel and altera deal and if you look at the deals -- 1.5 trillion dollars, 25% year on year and $500 billion of