in 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 deals are still in

the works. by some growth is what it comes down to because they are not eating that topline revenue on their own. let's look at treasuries -- prices are lower enemies higher yields. higher-- that means yields. that translates into the dollar, looking at a 12 year a yen, but the dollar index continues to grind higher. you get better economic data -- perhaps when do we see a rate hike? working its way out in the currency and treasury markets. scarlet: a top executive at disney is stepping down. officer isinancial leaving the position to take an advisory role to his boss, disney ceo bob iger. in february, disney said the would becomeief

the chief operating officer. many believe that ended a competition over who would eventually succeed eiger. scarlet: intel has agreed to by to buy altera. it represents a 56 premium over altera's closing price on march what he sixth before the speculation began. guesttel ceo will be our on the bloomberg market day at 4:00 p.m. eastern time. you don't want to miss that conversation. global management is buying a chemical maker and will take it private. it's more than 20% more than their closing share price. scarlet: a merger in the health insurance industry could be in the works. humana is said to be considering a sale when they were approached by cigna. the combined company would be

biggest medicare advantage insurer and could be the leading company for medicare part the drug coverage. alix: americans made more money in april and save their wage gains rather than spending them. consumerort says purchases unexpectedly stalled while personal income grew more than expected. household spending accounts for almost 70% of the economy, so for the economy to grow, spending has to pick up. scarlet: manufacturing in the u.s. grew more than forecast last month, rising to a three-month high and orders grew at the fastest pace in five months. that probably helped the economy after shrinking in the first quarter. still, progress can slow down. alix: lindsey graham has formerly launched his bid for president in the small south carolina town were he grew up. senator graham: i want to be president to meet our problems

head-on, honestly and realistically for the purpose of solving them, not hiding them or taking political advantage of them. i want to be president to make government work for you, not the other way around. alix: he's a prominent senate voice seeking a more muscular foreign policy. he wants 10,000 more u.s. troops in iraq to stabilize a world he has categorized as falling apart. hillary clinton's campaign says she will officially kick off her campaign for the white house on june 13 in new york city. a new poll shows the former secretary of state is the overwhelming favorite among iowa democrats, but bernie sanders has been rising quickly in the polls. a new poll shows clinton is the first choice of 57% of likely caucus attendees. sanders, an independent senator from vermont is at 16%, three times where he was in january. he is seen as the antiestablishment candidate. joe biden, who as not said he is running, is at 8%.

alix: dennis hester's alma mater has dropped his name from the schools public policy center. wheaton college says it has accepted the former house speaker's resignation from the board of advisors. pastored graduated from the small christian liberal arts school in 1964. last week, he was indicted by federal authorities, accused of lying to the f ei and making illegal withdraws to conceal past behavior. he will be arraigned thursday on federal charges. that's a look at some of our top stories this hour. scarlet: coming up, intel made the deal of the day. one analyst says the pressure is on for another tech giant to make a move. alix: three u.s. spy programs aimed at stopping terrorists and it today. we will talk about how the senate is racing to restore some of those hours. scarlet: we will introduce you to the economic earners called the henry's. alix: greece is under the gun

yet again. the country must make a payment of 1.8 billion dollars to the international monetary fund this month starting on friday. the talks included the german chancellor and french president anderson to be taking place in berlin to hammer out a proposal that would be presented to greece as it only realistic chance of avoiding default. the former head of european bank morganh and global -- i stanley says there is a need for greece to eventually need the euro. >> the key issue today is there is a constant bank run. greek voters are voting against their own government because every month, they pull out about 2 billion euros and the ecb has to keep replenishing the liquidity. eventually, this has to stop.

what i find it very hard as the average spanish, french, italian and german family has already length about 2000 euros to greece. that has already happened. and theyly, on average got very little back in terms of reform. have canceledhey increasedion and minimum salary. most of the reforms have happened at as a result, it's very hard for politicians elected democratically to say here is more money against what? the only ones, keeping it alive is the ecb. you have the bank run which is what has happened for the last six months. >> are greek depositors acting rationally? asking for, they are

more money and putting it back into germany or russia. , justre acting rationally in case. ownhe same time, their politicians keep asking for more money, so there is a risk that greece becomes a lack: where european taxpayers put their money in. there is still quite some money left in the banks. why would you keep money in the greek egg? the possibility of opening a bank account abroad probably already has done so. people will only have a greek bank account because the cost of opening a bank account abroad outweighs the savings they have and as a result, they don't.

what is the key issue in my view greece, as a system has so far done very little in terms of reform. had on the table a credible offer from the chinese which could account for greek gdp and they canceled that. they want to invest in greece, creating employment and creating jobs on the same argument that the prices and fair. take it, get the economy going clearly someone is investing and they have to make their own returns. >> is greece a smokescreen for other european leaders? >> i came to the conclusion that 2011, theback in european institution didn't have

the shield to deal with greece. hence we were at risk of the reflexivity trade. then, we have to create a hospital room, and emergency room. so you created this institution with shield. greece is at a lehman brothers moment act in 2009 with an opposite result. to relieve the euro so that the remaining rest of the euro can say we had a failure, we need to exit and we will see what it means to be outside the euro. greece goes well, we probably shouldn't the in the euro. at the end of the day, are we better off without?

the market within the euro has grown so much. u.k. with the eu's are has had a positive impact. as a result, we need to see what it means to be outside the euro, and we will see. alix: coming up on the bloomberg market day, senator lindsey graham throwing his hat in the presidential ring. how did he do in his announcement speech question mark we will talk to mark halperin on his report card. how many people now on the republican field? alix: i don't know, 10? scarlet: it feels like a lot. ♪

scarlet: this is the bloomberg markets day. alix: let's go to julie market -- to julie hyman about an hour before the close of trade. we are seeing oil trade lower today. we have a higher dollar, which does not tend to be good news for oil prices. people are also anticipating the opec meeting later in the week but they are not expecting much, according to oil analysts in terms of meaningful production changes. oil prices not much changed, off about .1%. in terms of bringing it back to the stock market, we see airline stocks doing very well on balance, if you look at the industry. southwest helping to lead some of the gains after the company said its capacity this year will

grow by 7%. last year, he said is going to be around 8% that set off the lack oft capacity constraint the airlines have expressed in the last two years, that maybe that era was over, but there seems to be some reassurance on that front. we are looking at available seat miles for southwest. that's a measure of capacity and over the past couple of years, we have not seen it grow by much, just .5%. whether it is 7% or 8%, is going to be the biggest gain we've seen since 2011. is it a new europe? like southwest might be backing off the plan to some extent. pressured mean pricing for these companies and that's why there has been concern on that. i love that chart.

julie: all from the bloomberg terminal, of course. alix: the supreme court bolstering the religious rights of workers. justices revived a lawsuit fitchng abercrombie & night a job to a teenager because she wore a headscarf because she was muslim. the u.s. supreme court has thrown out the conviction of a pennsylvania man accused of making threats on facebook. the justices ruled it was not were -- was not enough for prosecutors to suggest would make a reasonable person feel threatened. secretary of state john kerry is on his way home to boston for treatment on his broken leg. also on his flight are an orthopedic surgeon and additional medical personnel. it happened during a cycling accident in paris just as talks with iran enter a crucial stretch. the u.s. and other world powers nuclear ambitions in iran. those are your top stories.

alix: lindsey graham announcing his campaign for president this morning with his plan for a resident -- to be a president for both parties. senator graham: to my friends in the other party, i will work with you to strengthen the country we both love. our differences are real and we will debate them. but you are not my enemy. you are my fellow countrymen. cruz,t: he joined ted rand paul, and marco rubio. mark halperin joins us -- his announcement was low on energy and lacked specifics. if you were to rate him, how do you think he did and does he have what it takes to take on all those republican rivals? generousave him a d-because the senate would --

the setting was nice and toned down, but it was kind of low energy, not big on specifics, and seemed more like a personal moment for him as a guy who would like to be president, but not the launch of any sort of movement. if you look at the people who look strong this cycle, their announcements were more high octane and more directed toward forming a national movement rather than having a personal moment. wind up takingou away from the most? has actuallytimes chosen the correct republican runner except for once in the 90's. mark: except for newt gingrich, taken the right nominee. i think if he is in the race and does a good job over the next two months, he could make the primary move and be the winner.

i'm not sure how much second place would be worth. he also has the potential to be a kingmaker if he decides to run the race and then give his endorsement to someone, that could make a big difference. there's no front runner in south carolina. jeb push or marco rubio it could be anybody. .t's an unusual actor you have to go back to 1992 and tom harkin running for the democratic nomination to find one of these favorite son candidates and look at how that shapes at the dynamics. i want to talk about the results of the new bloomberg and "des moines register" poll. tell us about whether you were surprised by any of them. mark: scott walker, who gave a splashy speech, is leading on the republican side. that's a bit of a surprise since

he has not campaigned hard in the state but talking to other republican operations in iowa, people have said he is strong. no one is particularly strong in new hampshire. his leave there is not all that surprising. " will be talking about it on all due respect" -- ernie goal,s has tripled his but he has emerged with drawing huge crowds in iowa, the biggest any candidate in either party has drawn as hillary clinton's primary rival for the democratic nomination and he is shaping up tobe someone with appeal grassroots and a potential problem for hillary clinton as she tries to coast are to the nomination. , thank: mark halperin you very much. be sure to tune in tonight -- "with all due respect" with john

heilemann and mark halperin. what does it mean for shale and the american energy industry. is my jam. i'm very excited about this. ♪

alix: is shale production back? from pioneer rat -- from pioneer national resources for $2.5 billion. a lightly refined oil the u.s. actually allows to be exported and frees up some cash, so what

will pioneer do with $900 million after taxes? joining us is a man i literally when i have an oil question. what does pioneer get? what is the big take away? guest: what it ends up with his additional capacity. reengage activity specifically in the wolf camp play. they will add on average starting in july two rig's per month through december, roughly 12 rigs on top of the 10 they already have drilling horizontally in the play. what this allows for is an additional eight rigs to come online. net/net, what they could have is a horizontal rig count similar to the count they had prior to

the june crude price he. -- june crude price beat. alix: where is the production fall off? where did it go? scarlet: you asked if shale production is back. did it ever go on hiatus? guest: the one thing we have is the market will be surprised at the resilience of the output because of this just in time shorter cycle development in the unconventional players. you have an opportunity here to byng this output act on completing the wells that have been deferred and allowing for out put to rise in an improving oil price environment. alix: you have the will to drill but if is not filled, it could

come on quickly. does this mean we are going to see more in the m&a field? guest: this is a midstream asset sale, so infrastructure is an important piece of the development. i loved it. thank you for joining us. scarlet: we were just talking about and. we have more coming up because the intel ceo will be joining us. alix: making that $17 billion move. is qualcomm on the docket? ♪

just because i'm away from my desk doesn't mean i'm not working. comcast business understands that. their wifi isn't just fast near the router. it's fast in the break room. fast in the conference room. fast in tom's office. fast in other tom's office. fast in the foyer [pronounced foy-yer]

or is it foyer [pronounced foy-yay]? fast in the hallway. i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business. alix: welcome back to the bloomberg market day. we want to get straight to a look at the top stories making headlines this afternoon.

top level talks are reportedly underway in berlin. the meetings are designed to hammer out a proposal to give greece what would be its only realistic chance of avoiding default and safeguarding its membership in the eurozone. representatives are meeting with the german chancellor, the french president and the european commission president. if they succeed in crafting a proposal, they may presented in the next couple of days. chancellor merkel said europe must act together to advance economic progress. chancellor merkel: there are a number of initiatives in individual countries but there is no common position of how to integrate that approach and make it more conversion. people in0 million the european union and we can do a lot if we work together if -- if we do not do so and approach

it in a fragmented way, we will not be successful. pay aboutce has to $1.8 billion. the first installment is due friday. circle theempting to world without a drop of fuel had to make a stop in japan to wait out some bad weather. 2 had to land in japan before what was supposed to be the longest part of the journey. it is the seventh of 12 flight gets old. that's a look at some of the top stories at this hour. coming up on the bloomberg market day, three u.s. spy programs aimed at stopping terrorists expired earlier today. we discuss how the senate is racing to restore some of those powers. we introduce you to the economic earners eating dubbed the henry's and why the u.s. economy needs them to spend more money. and we will hear from the intel ceo on the deal to buy altera. that and much more coming up.

transaction on intel comes on the acquisition of broadcom, the largest ever in the semi conductor space. it adds to a record year of industry consolidation. guest: if you back out the cash altera has on the balance sheet the purchase price is more like $14 billion. intel would argue it is a defensive move that will help protect their turf and servers which accounts for about 50% of the profits. having said that, when we run the numbers, the deal looks like it's only about 2% or 3% accretive to intel posco earnings, which isn't very much. they are buying a business that has been under some pressure the last few years. why then did intel feel it

had to buy altera? they couldn't come to terms on the price and it seemed as though intel was going to be disappointing. all discipline flew out the window. i think intel pass initial offer back in april when -- we think it was about the same price. from 54en't gone up shares. does it look like the full price? it looks like about a 35% premium of where altera was trading before the talks. are already big in this .hips for service sector

a lot of the deals we are seeing done at the moment are about putting that mode around what you already have in making it eager and stronger. deals and -- is the expectation we will see more semi deals? i think so. there's always been a huge amount of speculation that we will see this or this. we have seen since the beginning of 2013 to almost the end of the , one quarter this year billion dollars of reported deals in the semi space and then we have this deal. we've gone from almost nothing to this huge hit already. who's next? is tough to speculate on specific combinations, but we believe qualcomm needs to do a deal in this space.

market, smartphones, is maturing and they certainly need to diversify. erik: what would make the most sense for qualcomm? broadly speaking and perhaps specifically? guest: we really can't comment on potential takeout candidate. what is it that qualcomm needs? where is the cupboard there? just announced a product or an intention to get into the server market. the road to doing that organically would be very long. otherlly, if you look at companies that have a presence in the data center and server competitor -- se stephanie: what do you think?

guest: in terms of more consolidation, i think it is inevitable. there will be one big deal and it will trigger other big deals and it's just running and running and running. potential target, you're probably not going to get at her value, so if you are going to sell, sell now. hour,in the next bloomberg's cory johnson will interview the ceo. what is the burning desire? what is the question you want to know? i don't want to give it away in case the intel folks -- they have done some big deals in the past and one of the things that's difficult for intel is to take their giant manufacturing prowess and put other stuff through their factory. that something taiwan semi

conductor was built to do. great chips and don't have to worry themselves with the manufacture of these chips. now they can make an altera chip even better than taiwan semi conductor. they should know this stuff better than just about anybody. those cost-benefits -- why is the manufacturing progress going to show great skill when it hasn't always in the past? we have seen apple and samsung -- they have built out their service -- their server operations. deduced?the price

cory: they talked about the ability to create some new products, where you have altera theting the capacity, that intel chips already have. the notion of new products that and wide openle for computing power on the intel level is an interesting one. but power consumption is another deal. are lowdesigned chips users of our. the intel chips, not as much. can they get some sort of power efficiency neither company has shown so far? alix: when they talk about how they wind up integrating -- what about cross cutting -- cost-cutting across the board? the alterahe -- are sales people so good at selling technology that you could wire to do anything once they arrive?

salesequires a certain staff, different from what intel has. does intel think there salespeople could handle the chips? wetera-like will be talking about that in just a little bit. alix: 35 minutes, you can get it. be sure to tune in because that's coming up in the next hour. also on the bloomberg market day, three controversial u.s. spy programs have expired after a standoff in the senate, but could they be revived? ♪

welcome back to the bloomberg market day. i'm alix steel. just 15 minutes now before the closing bell. let's go over to julie hyman. the overall averages, we've had a little bit of a balancing act today. earlier this morning, a mixed session for the major averages. now we have moved a little more decisively higher after the mixed economic data. it looks like it is being read mostly positive. i is some reports with income rising even as spending was flat. i want to look at the best and worst performers today. probably not a big surprise on the best performer -- it is altera on the news and confirmation that it is going to be -- going to be acquired by intel for $54 a share.

although it should be noted, not moving up to the offer price. the offer price, $54 a share in cash. we were talking to our bloomberg intelligence analyst about why that might be. he said it's not exactly clear why it isn't closer to $54. on the other and of the s&p 500, we have wynn -- macau gaming revenue came out and show the 12 consecutive decline in revenue for that region. they get about two thirds of their revenue from macau, so those revenues are off. to illustrate more what i am talking about, take a look at my bloomberg terminal. is the games of fortune gross revenue and this is a five-year chart. climb and a big everyone piled into macau.

since then, we have seen declines and a chinese government clamping down on corruption. that has spending on those macau casinos and spending not growing as strongly. we have had that drop off in that revenue. alix: julie, thank you so much. for a look at some of the top stories making headlines -- berkshire hathaway has replaced the ceo of its troubled net jet unit. johnson be the new chief executive and he replaces jordan hansell. net jet cells fractional private jets to wealthy individuals and corporate clients. staying on warren buffett -- his annual lunch option drew a top offer topping a million dollars in a charity event plus first

full day, better than the pace of last year possibility. the charity event is now at 60 year and concludes on friday. he has raised close to $18 million for san francisco plus glide foundation by offering admirers a chance to get face time with him. microsoft will come out next month with its latest version of the operating system. it will be available for pcs and tablets as a free upgrade for people using windows seven and windows 8.1. senate,standoff in the three controversial nsa programs have expired. the senate could not reach a deal extending the programs because of objections raised by senator rand paul of kentucky. what does this mean for the future of the nsa program and how does it impact tech companies like google, yahoo! and others question mark emily

chang joins us now. lake reading a he's by eli thing that there are going to be workarounds for government. annalee: i read that also. he seemed to follow the side of allah takes. likely going to pass this bill and it's going to be kicked back to the house. we will speak with the chairman of the house judiciary committee about what he thinks about the amendment the senate is proposing. are there any poison pills? when will the house take this up? certainly the debate about how much data the government should be able to collect is not ending today and is not going to and any time soon so long as congress is looking at these issues. as well as what does this really mean for tech companies?

an issue to debate? there are probably workarounds, but how important is it? not necessarily that important. we have been documenting the huge shift in u.s. intimate when it comes to this from 9/11 to this day 14 years later. an interesting point -- if you are a terrorist -- it seems public opinion is weighing on the side of we do not want this data collected about us that the reality is this program is going to go back into place. is the senate it proposing and how will the house look at those? alix: you will be talking about google and online education with runstian done -- sebastian -- thrun. annalee: a big partnership

announced between google and his company last week. google is offering what sebastian called a nano degree, which is essentially a certification course that you can take in studying android development. android is suffering from a dearth of developers that do not know how to write apps and they are trying to change that as android continues its rise around the world, making it a platform people not only want to develop for but is quality. we are also hoping to get his thoughts on some of the things going on with the nsa. he has an interesting perspective on a given his ground at google. thank you so much, emily chang. that program is coming up at 4:30 eastern. they will be talking to congressman goodlatte. you don't want to miss that. nearly rich

americans are choosing to be frugal about what they are buying. we'll find out why after the break. ♪

alix: six years after the worst recession since the 1930's, the nearly rich are not spending nearly enough. unity marketing, a luxury research firm says that henry's or high earners not rich yet are americans to make between $100,000 to $250,000 a year are facing sluggish income gains and spend less on luxury income items. it reminds me of mostly dead from "princess bride.

all, how important are these consumers and how much of a percentage do they actually make up? if we look at the henry's and of people who are rich, that demographic makes up a disproportionate share, so it really matters what they are doing to impact the rest of the economy. while it is a dangerous term to drop out there, trickle-down, that's how major parts of the economy function. create a lot of jobs and economic activities for the lower echelon. supposedly, they are spending 10% less in the fourth quarter than they did in 2013 in the fourth quarter. so let's look at the stock they might buy. i was looking at the s&p global luxury index.

a lot of these companies at least sell their products in the u.s. and it is a diverse index. you are looking at everything lines toegian cruise v.f. corporation's. it is down 8% over the last year , which reflects some of the trends you are talking about. if you go back further and look at the 10 year, there has been a rebound, so it's been a question of in a question of in the shorter term, are we seeing stagnating ofor that spending rebound we had not seen before? alix: where are we spending our money's? this is a little bit of a chicken and egg conundrum because julius talking about the stock rise reflecting a lack of demand. but lack of demand is being driven by uncertainty. we have seen some real gyrations

in the stock market and we have kind of talked out of it. the pace of increase is much less and there is growing concern of how late in the cycle are we and our we do for a correction? that upper income group tends to be more highly invested in more sensitive to the headlines showing up on the front page of the wall street journal. alix: could it just be that the henry's are spending differently? at michael kors that watches did not sell as well as expected. at the very product. when you are looking at these companies, there are things that are company specific and things that are macro. you could argue there have been strategy missteps, overexposure in the marketplace and too many openings of outlet stores, so

you have to allen's out how much of it is the economy or just not being on point stylewise and how much is the broader economic trend? guest: julie is hitting an important idea here -- the micro versus the macro. any personal income and spending data, we see a shift toward service spending. consumption of durable goods and nondurable goods actually declined in the most recent report and services barely got a game. but we are seeing a shift here where people are paying for experience as opposed to tangible goods. structural or cyclical shift? guest: i don't know what it is. i'm still convinced the backup we saw in the savings rate of the first part of this year is not going to be sustained.

the peak in the first quarter happened in the month where everyone was snowden and could not spend. downs starting to trend but that's not the case in today's data. peavy age is reporting just a few minutes. julie: the owner of calvin klein i thinky hilfiger -- where olivia sterns is mes,erned, if it is not her it is not luxury. the dollar is going to have an impact. alix: thank you so much. we will be back with the closing bell. the dow jones up by 22 points. ♪

.

alix: we are moments away from the closing bell. this is the bloomberg market day.

you are looking at snob -- stocks snapping a two day losing streak. the dow settling up to 29 points. at one point up 95 points. still relatively higher on the day. the u.s. dollar hitting a 12 year high against the yen. is going into stocks. i am joined by the bloomberg markets managing editor and they don't collect merger monday for nothing. but is definitely part of the driver here. >> another deal in snapping the losing streak. $1.5 trillion of m&a