bubble will burst. vladimir putin appeared at the st. petersburg international economics for and covered an array of topics with charlie charlie rose. that interview coming up. scarlet: one strategist at s&p says energy stocks have done so year that thelast group are betting on an eventual recovery. scarlet: good afternoon, everyone. friday! alix: let's get straight to a look at the markets right now. take risk off the table headed into the weekends -- that is what you are seeing right here. ito need to point out that is quadruple witching. basically, everything is expiring at every point. you will see increased

volatility around the opening and close. scarlet: for most of the day, it seemed like we were going nowhere. we have picked up our losses going into the close, but it was like nothing was happening. jpmorgan had a note out earlier talking about the s&p would not make sustained new highs without any kind of fullback whatsoever. there's no reason for it to keep grinding higher. scarlet: it's interesting because we managed to defy greek stocks. alix: i want to point out hershey. that was a story that came out earlier, downgrading its full-year guidance. the reason why i wanted to bring this up is because chocolate growth is below expectations in china. this is coming on a day when we see chinese stocks enter a correction for the week, down below 13%, and the idea that the middle class was this big boon for everyone including food

providers, and maybe this was an outlier. scarlet: maybe expectations were too lofty. that has been the case with a lot of things related to china. a quick check on the euro. it has moved quite a bit today, but in a pretty narrow range and is now little changed on the day. not going significantly lower, a little covering. we want to look at some stories making headlines at this hour. the suspect in the fatal shootings at an historic black church in charleston, south carolina, just had a bond hearing, and dylann roof did not appear in court but was visible in a video link with the county jail. he wore a jail jumpsuit with handcuffs and spoke only to answer questions. when asked his age, he told the judge he was 21. he also told the judge he was unemployed. he's charged with nine counts of murder and a weapon charge. bond was not set on murder

charges, but a $1 million bond was imposed on the weapons charge. some relatives of victims were in court and delivered tearful statements at the hearing. thrown: the ecb has another lifeline to greek banks increasing the level of emergency cash the banks can tap. depositors have withdrawn more than $2 billion in the last two days. last night in athens, thousands of protesters demanded the government come up with a way to stay in the euro. in st. petersburg, russia, prime put the alexis tsipras blame squarely on the european union. prime minister tsipras: the european union should go back to its initial principles of solidarity, justice, and social justice. issuing strict economic measures will lead us nowhere. the so-called problem of greece is not just a greek problem. it is a problem of the whole

european union. scarlet: monday, eu leaders will be holding an emergency meeting on greece. the bailout expires at the end of the month, and greece may have to default on debt payments if there is no new deal. russian president vladimir putin said his country is weathering the crisis better than expected, especially with challenges from slumping oil crisis -- slumping oil prices. in an interview with charlie rose, he said the u.s. is meddling in russian affairs. tin: they are trying to impose on us their standards without thinking about how we understand our own interests. as a matter of fact, they are trying to say that they know better what we need. let us decide ourselves what our basedst, what our needs on our history, on our culture. alix: he also said his government has maintained control over inflation it has a

sustainable budget while the economy has shown resilience. scarlet: julian assange is marking the third anniversary of embassy.at the london he entered the building to avoid extradition to sweden. he denies allegations of sexual assault. british authorities stand outside ready to arrest him if and when he leaves. says the state department global terror attacks are up 35%. islamic state and boko haram are to blame for much of the increase last year. the number of deaths are most double and kidnappings nearly tripled. the state department said there was an increase in so-called lone wolf terror attacks in the west. one of the pioneers of the cable television industry has died. ralph roberts founded the company that became comcast. he started by buying a small cable tv system in tupelo, mississippi.

comcast has grown to become the nation's biggest cable provider. ralph roberts died at the age of 95 of natural causes. greece is buying time from the ecb. european leaders holding an emergency meeting on monday that could determine the future of greece in the euro. earlier today, pimm fox and i spoke with the economic professor at dartmouth college and former policymaker at the bank of england. me a lot of what happened what i was at the bank of england and the weekend was crucial because all the discussions were actually about the fact that you really worried about what happens when the banks open on monday if you do not do something. the central bank has been saying you are saying it's a liquidity crisis. in essence, all the things you talk about suggest to anybody

sitting in greece there is a fundamental crisis and they probably should get their money out. it has been coming out during the week. this looks to me like first of all more palliatives. the worry is monday, but i think fundamentally what we have not heard is a long-term fix. this is just a short-term band-aid, if you like. where is the long-term fix? i wrote that there is no such thing as an expansion. only fiscal contraction. i do not think this is in any sense if fixed. either something will happen by monday, or it will happen at a future monday in the next two or three months. scarlet: in the meantime, what would force the greek government to enforce capital controls or , as it isnagement being called now?

danny: money going out of the banks. it has been doing that the last few days, but if you listen to what happened today, presumably you would think if you had money in a greek bank, it was time to get it out. , but i thinkorry we should go back and see what here is actually going to do something to help greece raise its gdp and lower its unemployment rate? i don't see anything. who are the key players in this besides the greek prime minister and greek finance minister? obviously, the german finance minister and angela merkel are clearly important figures here. i think a are really the two main ones, but i keep saying greece actually does have a bargaining chip. i have not heard people say that rants and germany actually have that greeceeuros owes them. greece has been in default half

of the last 250 years. if they default, that's a huge amount of money. it's a political disaster, but it also has an impact on the other members of the community, of the euro zone. i think the whole thing has contagion in the air. we do not know what the long-run effect are of the u.k. and even the u.s., and that's the fear, that this generates another global financial crisis, and in some sense, that's the card that tsipras is playing. he's in russia today talking to putin. this is high-stakes poker i guess you would call it. betty: do you see anything coming out of that where russia can come in and be a white knight? danny: i don't know about being a white knight. obviously, there's an issue down the road which is that all the eu members will vote on the renewal of sanctions in a few .onths' time obviously, that is part of it.

apparently greece and russia signed a deal today with a pipeline going through it. i think this is political positioning. what i keep going back to where is the long run fix here? what suddenly gets the greek economy to expand? i think that is the point. output is down 25% since 2010. if the measures imposed by the troika our implement it, i just the unemployment rising again and output falling further, and eventually, the people will speak, and the young people have in speaking over the last few days. coming up, it is a crowded field for gop white house hopefuls. the campaign is just beginning. scarlet: coming up, we hear from south carolina senator lindsey graham on his hopes.

scarlet: welcome back to the "bloomberg market day." happy friday, everyone. alix: we go straight to julie hyman for a look at some of the today. losers cyclical sectors weighing it down. julie: yes, they are, and i'll talk about energy movers in a minute, but the biggest mover is a shopping mall owner, and a little bit of an interesting and complicated, nuanced story. why is simon property of here? that company had offered to buy macerich a couple of times. those offers were spurned. there is a block of 5.7 million shares traded. quick and italy, simon property owns five points 7 million

shares of the company, about a three point percent stake -- simon property owns 5.7 million shares of the company, about a 3.6% stake. that leads people to believe that simon unloaded it stuck. or had been speculation simon might come back again and make an offer, but that appears to be off the table. bloomberg intelligence has mapped out the stock trajectory ever since simon property made its offer. in the fall is when simon said it was taking a stake in maceri ch. spring,ward to the simon offered $91 a share, and it's best and final offer, $95.50 a share. notice shares never rose to that level, and since then have fallen quite a bit. in other words, maybe there's

some regret going on. who knows? the stock has not performed very well since they spurned that offer. scarlet: interesting. love that chart. we have a look at top stories crossing the terminal right now. we begin with shares of katie .ome -- k.d. home basic contract backlog rose 39%, considered a good measure of future sales. the average selling price also higher, rising 6% to $338,000. says profit will be lower than estimated because of slowing growth in china. the company also plans to cut 300 jobs, which will result in pretax charges of as much as $120 million or $.35 a share, mostly in cash, but the changes 75l save $65 million and million dollars before taxes. hershey has approximately 13,000

imclone use globally. scarlet: there's a pile of gold in new york, and texas wants it back. texas governor greg abbott signed a lot to build a depository for the state costs 5600 bars of gold, worth about 650 million dollars stored in a rented vault here in manhattan. while texas would like it back in texas, it is not sure where to put a depository. when it does figure it out, it will be the first state to have one. those gold bars are extraordinarily heavy. i cannot actually pick one up. scarlet: how big is a gold bar? alix: about like that, but they are really thick and heavy. republican presidential candidate lindsey graham released a memoir in the form of an e-book this week. bloomberg sat down with him to discuss the influences and experiences that have shaped who lindsey graham is today. senator graham: i grew up in a

very gregarious environment. we owned one of the two bars in the town. everybody worked pretty much in the cotton mill. clemson university was right down the middle. when they would change shifts at 3:00, they would come in and drink. stiller: people are getting to know you, soy what to talk about one of the bigger moments in your life. talk about how they were emotionally, and a sum of going through that phase in your life, the biggest thing to start with is your parents dying when you were 21 or so just a few months apart, a little over a year apart. talk about your mother, who died of hodgkin's disease. what was that like? how long was she sick for? senator graham: diagnosed in 1975, and died in june of 1976. reporter: how did she tell you and your sister? myator graham: neither of parents finished high school.

i'm at the university of south carolina. i convinced myself i would not get kicked out of school. in 1973 as a freshman in college. i remember when my parents drop me off, my sister was holding my leg. we are a close family -- the first thing about me -- i was unconditionally loved. my parents were older. my dad was in his late 40's when i was born, his mid-50's when my sister was born, so they focused on me. i was an only child for a wild. joins usmark halperin now. what was your take? how do you think these experiences will manifest if senator graham becomes president? to try to getese to know the candidates, not just here there some speeches and ideas, but to get a sense of their upbringing. he really talked in a moving way -- you will see more at 5:00 eastern -- about his emotional connection to family and his sense of the importance of living every day to the fullest because you never know what will

happen. people think of him as the quips and we willter, talk about that, but he is an emotional guy, centered on his family, his hometown. i think as president, you see a guy who has a pretty good since of humor but also could get pretty emotional when talking about emily. -- talking about family. thank you so much. tune in tonight to watch the old conversation on "with all due -- tune in tonight to watch the full conversation. ♪

scarlet: chinese stocks capping their worst week in seven years, leaving many running for the years, leading to a deeper correction.

jpmorgan sees this as a buying opportunity because they think the government will keep the bull market alive. alix: an analyst said in a recent report policy makers will step in if the market correction gets beyond a comfortable level. if the correction continues next you will hear something reassuring. joining us now with his perspective is the president of china beige book international. do you agree? lehman: i do not think the rally has run its course. the government has put a lot into this rally. they can tweak at the edges about market trading. they can allow for corrections, but if the air goes out of the rally altogether, they are in trouble. alix: literally, what do they do? you give confidence the government is behind it. you talk about margin lending. they have been careful about talking about margin trading. economy talk about the

getting better. the economy can actually get better. there's a lot of things they can push forward. what they are unlikely to do is heavy stimulus. people assume they are going to ratein with some interest cut to boost the stock market. they are focused on the economy, not the stock market. scarlet: regulators have a lot of tools at their disposal, including opening the markets even more. these are little leverage the government can pull. leland: right. on thecutting down trading going on, they are sending a signal. by talking about the fact that this is replayed in corporate balance sheets, helping corporations pay off debt, that is sending a positive signal. i was interested in what mcquarrie put out. they said topline financial growth for the nonfinancial sector last year grew at the .lowest pace in five years

you cannot make up those numbers. slow growth is slow growth no matter what the government does. leland: the first thing to understand is that the stock market is not revolving around economic fundamentals. people think that it's time to buy, they think the government is behind it, so they are buying. you also have interest rates collapsing. this is not really about multiples or economic fundamentals. it's about confidence jumping in a market, not getting your head chopped off to early. scarlet: it's about confidence and what the chinese government presents. one thing it has presented over the last couple of years in the anticorruption campaign -- we were discussing how this is a political issue and there has been some economic cost in the form of chinese people maybe not buying as many luxury items. as the economic cost over? no, i think it's

changing chinese behavior. business is going and buying a bunch of alcohol or spending money at high-end restaurants -- it changes behavior in that way, but it also gives people confidence that there is less money being slid down where they are not seeing it. from a medium-term perspective, it's probably good for the economy. short-term perspective, probably not, but it is something politically they absolutely had to do because people saw the economy as a big corruption-fest. coming: next week, you up with your second quarter look on china. will this be a situation of good news being bad news for the market and vice versa? but i don't think so yet. i think it will be pretty good for stocks if they see the economy is recovering. if they see the economy is in bad shape, it will probably also be good for your -- for stocks. the middle ground is where it will lag. scarlet: under what circumstance would you be worried about a hard landing? if the credit

environment deteriorated further. maybe a boost in consumption, which means retail sector. thanks so much for joining us. scarlet: and i am done. tgif. make sure there is still ice cream for me, guys. alix: good stuff. lots more coming up on the bloomberg market day. the discussion of an array of topics with charlie rose. we will bring you more on that discussion coming up next. ♪

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. let's get straight to a look at the top headlines. a cruise ship crashed into a

river wall in new york. many were injured and they were forced to drain the lock near the canadian border. staged a come-from-behind victory over boeing at the paris air show. they signed a $12 billion deal on the final deal that on the final days. millions ofp with orders. and the obama administration wants a 24% increase in fuel economy for large trucks. it would be phased in over a decade. environmentalists want trust to be -- trucks to be more compliant. while we await us in court ruling on obamacare, the congressional budget office has come out with a new report. they are repealing obamacare, and it would increase the

deficit by billions of dollars. report as appealing it would also raise economic output, that is mostly because people would work more to make up for health care subsidies. germany's government raised more than $5.7 billion from the option of mobile phone frequencies. the total was about 16% more of the proceeds raised from a previous auction in 2010. that is a look at top stories. coming up in a bloomberg market is finalizing a line of credit, that is according to the wall street journal. buy energy stocks. why it is begging to be bought. and greece runs out of time on a bail out deal, but the markets shrugged it off. all that and more, coming up.

spokesia, vladimir putin earlier today at the annual st. petersburg international economic forum. he answered questions on a variety of topics, including russia's relationship with ukraine. >> we are not the cause of that crisis phenomenon which is happening in the ukraine. have supported , whichegal coup d'état finally resulted in a serious confrontation in ukraine and a civil war. what has to be done now today, agreements of minsk should be observed.

let me emphasize, if we were not content with something we would not have put our signature there. our signature on those documents and we will seek their full implementation. i want to do that, but we cannot do it unilaterally. i repeat it over and over again. they are telling us that russia has to influence the situation in ukraine, but that is not enough. keyhave to be exercised in -- kiev. we cannot do that. this is the avenue that has to be pursued by european and the u.s., let's work together. as you know, the united states believes that you are encouraging the separatist and arming them and using russian armed services and that adds to

the conflict that heightens the emergency. and many people worry that it is moving toward a new cold war. you know, cold war is caused not by local conflicts, but by global decisions like the unilateral withdrawal of the united states from treaties. that is a step which pushes us toward a spiral of confrontation. it is a shift of the global system. this causes conflicts. curiously, warring parties always find arms somewhere. and the same goes about the eastern part of ukraine. what i want to say is that if today's situation isn't resolved by political means, no arms will

be required. but to achieve that, there needs to be goodwill as well as the willingness to be engaged in a direct dialogue. we want to facilitate that, we will facilitate that, but we everyone orgree if anyone somewhere will try to speak from the position of force , either with police, militia, or armed forces. what areose: acceptable borders for ukraine and russia? what borders are acceptable for you? >> what do you mean when you talk about borders? geographical borders or political borders? what are you talking about, specifically? -- lie rose: >> as for cooperation, there is

nothing new, despite all difficulties of today i have always thought that ukrainians and russians are one people, they are one ethnic group. certainly, they have their cultural really are these met peculiarities,- but they have common history. whatever happens in the end, russia and ukraine are destined to have a common fertility. alix: that was vladimir putin speaking today at the st. petersburg international economic forum. uberg up, we are talking and a $2 billion line of credit that is finalizing. ♪

welcome back. want to take a look at the markets, just 15 minutes before closing bell. truly, it is a down day. julie, there are distortions out there. like investors do not want to go along into the weekend, but even as we has -- even as we have stopped pulling back, s&p 500 is going strong. take a look at the three major averages, it looks low, but we could see volatility because of

the expiration of contracts. you tend to see that happen at the open and close and have a surge in volume. given volatility, let's take a measure. it has picked up, but nonetheless it is not surprising. of where we are seeing selling and buying. not a lot of buying. ,nergy, technology, it is a mix because utilities are more defensive. but a lot of groups doing selling. take the financials, we have movers, jpmorgan, morgan stanley, wells fargo, trading well. wells fargo has been trading at record. take a look at the pullback. on the plus side, we are looking

at homebuilders after kb home saw a jump in home orders. this has been an underperformer, so this is a bounceback that has seen today. it is pulling other homebuilders along with it. and the airlines are rebounding today. this has been a volatile group morey, so there have been pressure on affairs as there is expansion. jpmorganalyst from said that delta introduced a fare increase, two dollars one on domestic fares, but that is on top of another increase from last week. so perhaps, we will not see a pricing war. american airlines trading higher by 4%. others gaining ground.

this is a group that recently, if you look at the index, they beara better market -- market. alix: the dow transportation average is something you can look at and see where the dow might go in general. looks like a flat line. now top stories. the senate has set up a showdown with the white house over spending. lawmakers approved a spending bill that would get around mandated spending cuts. it within the president's plan to close the military prison at guantánamo bay. there are less than two weeks before the bow matt reached -- diplomats reach their deadline for the deal with iran. they will not accept just any agreement. >> the only deal we will get is a good deal. there will not be a deal if we do not get a good deal. if we are able to get the deal

finalized that meets the parameters that were agreed on in april, it will be a good deal and it will cut off their pathways to a bomb. alix: congress would have 30 days to review any deal. over the trade agenda shifts to the senate. the house has approved the presidentving the fast-track authority. that comes after a week of democratic rebellion that almost killed the proposal. it will take up a worker's assistance bill, as well. and in sports, a rare moment of glory in oakland. they are in the national spotlight. it was the warriors parade with the championship trophy. they returned after defeating the cleveland cavaliers. it was their first fastball

championship in 40 years. was followedarade by a rally at the end of the roots. it could be your piece of the gate,game, -- the flake one of the balls on auction. they say that tom brady of the new england patriots was balls.g under deflated this ball is properly inflated and it runs for about --. traffic world had the biggest movie opening of all time. now the dinosaur thriller may go for second. it looks like they could take in more than 100 million this weekend. and the latest from pixar will be in theaters, as well. that is a look at top headlines. $2 billion, that is how much

money uber is finalizing as a line of credit. we already knew that you were was talking to banks, but the ballpark deal was around the $1 billion mark. emily chang tells us more. what happened, why the increase? banks it looks like the have fallen all over themselves to help huber. and they were originally looking at a $1 billion line of credit and now it is $2 billion. the rates are lower than what they were talking about. toer-- uber does not need raise the money, but the old adage is it rains it when you do not need it. so, they are not immediately ipo, but they are caging relationships with banks -- gauging relationships with

banks. whenever ipo is ready to be filed, they will be in a good position. morgan stanley is in the lead. but there are other banks participating. alix: what are the other steps that they would have to do in order to file for the ipo? emily: we do not know what is going on in the company. people are pounding the pavement, trying to figure out if it needs the ipo, or if it is closer. we can certainly be surprised by filings from time to time. but they are preparing themselves for when that time may come and it could happen potentially in 2016. alix: i read that their billion,n could be $16 why bother going public? emily: companies are staying

private longer and valuations get higher. this looks like a steel. airbnb potentially at $24 billion. snapchat at $16 billion. what is interesting about uber, there are a lot of potential things that could impact their business model. the california labor commission ruled this week that drivers must be considered employees, which means that they would have to pay per employee for benefits. they have filed to appeal that ruling to dispute it. but if that comes down the pipe, that could have a huge impact on their business model. we do not want to get too far ahead, because it would have to be repeated in other jurisdictions. for now, it is not a good sign. alix: uncertainty has directly is something that investors do not like in the public market.

thank you so much. ahead, one strategist at s&p 500 says that energies talks have done so orally, the group --begging to be pot -- a bot to be bought. ♪

standard and poor says it is time to buy energy stocks and wait for recovery. this is the index, the energy index, it has been 26% in the past year. the global 1200 index made up of stocks around the world, rallied almost 2%. that results in this chart, the biggest spread into decades. stovall joinsl -- t

us to explain. what does this divergence tell you? >> good to talk to you. i was looking at the different , i lookand industries at the 12 month strength to see if i can spot turnaround and when i looked at energy i was amazed to see that whether you look to be 500, the equal right 600, that the cap energy sector is trading at the lowest level in the history of the index, going back to 1990 and 1995lobal 1200, for the small caps. lowest level, all were trading at below two standard deviations for the mean.

the pressure was, if you believe in it reversing to the mean, over the longer term these could be good buying opportunities. alix: make extension for which stocks look most attractive. there is something different shellthese energy stocks, continues to be a wildcard, with how much they can produce and for how long. >> there is a variety of companies within the energy, the upstream companies most responsive to energy prices, you have the downstream companies, refiners that are responsive to a reduction in prices, and then the integrateds which have a piece of everything. those companies that are closely ,ligned to the upstream especially the onshore upstream, those of the ones that will not do well. if you look at companies engaged in offshore activities, ftc technologies is one in which it

is a deepwater equipment services company, they should do well. , balancedanies between shallow and deep water activities, that should do well. valero energy, because of bring in low-cost energy, but they benefit from the higher cost gasoline. so they have a robots at the bottom of the ocean, that is cool. one part of the energy group, the debt, drillers debt in particular has ballooned. it is a 16% increase from last year. how do you factor the debt and interest payments into the model? >> when we look at the individual stocks, those factors are built in. when i look at performance, looking at the group realizing that energy itself is not going

to be affected, not going away, but realized it is part of a burden -- broader strategy. i published my portfolio recently which looks at those sectors with low correlations with one another and when they perform best in a cycle, technology is an early cycle performer, and energy being a late cycle inflation hedge and finding that having equal proportions of sectors, going back to 1990 for the large, 95 for the small caps and global, you outperform the market by 300 basis points and to do so may be every 2-3-- do so years. you need to use technology and energy as staples, as water wings.

alix: that is how you minimize risk, taking energy as a late cycle play, is that what you mean by minimizing the risk? >> not only by realizing where does best in the cycle, but offsetting it with five there's -- with sectors that have correlations with one another, depending on where we are in the cycle, we don't know sometimes where we are, but having these points to this plane, you can end up outperforming just by having equal representation in those sectors. alix: i love that. do you have any calls on any of the upstream players, you like shale.mpanies >> you do have to be selective when you drill down into some of these individual stocks, face

it, they have been beaten up so badly that there will be overhead resistance for when they do start to recover. that many people getting out, saying i want to dump these and move on. if you go the individual stock route, be selective, but if you are going the etf route i would diversify and put on those water wings of tech and consumer staples. alix: thank you, sam. we have much more ahead. going into the close on friday, the dow is about 68 points down. we will be right back. ♪

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

so, picking up a little bit of scheme. off,ow is finishing -- this is can blame picking up steam on the downside, like i mentioned. and you had factors weighing on stocks. these was the word the whole day, who want to head into the weekend with massive uncertainty. the reason why you saw financial and energy leading the way down. i need to point out