♪ betty: we are going to take you from new york to london. bank of london at a record low. potential that brexit is weighing economic growth rate: we will take a look at the terminal and deutsche bank. the lender saying it is money laundering and financial crime control. for -- hat is next the company could be barred from receiving payments for medicare. ♪ let's head straight to

the market desk where julie hyman has the latest on a declining market. julie: a declining market, we are not seeing moves in today's session. but we are saying the downside. the nasdaq is losing steam at the moment. if you look at the overnight session, using the futures, you can see we came up from the lows where we were overnight. see things could've been even worse. we hit the highs midmorning and started coming down again once the regular session was happening. the focus is on bank earnings once again today. we have wells fargo, bank of america, and my crock -- blackrock. blackrock and wells fargo seeing a decline. there was all this optimism yesterday surrounding to morgan after those numbers came out

beating estimates after many analysts had cut estimates going into these reports. i want to point out, the movement we have seen recently in the s&p financials. the have risen for five straight sessions, even though we are seeing a little bit of it line. they rose for four straight sessions and undecided where they will end up on the day today. this gives you an idea of the momentum going into the earnings report. as we talked about yesterday with j.p. morgan, the bar had been set so low that the perception was it was going to be easy to jump over for j.p. morgan. that is not necessarily going to be too for all of the banks. betty: indeed. the numbers- we had yesterday, but we had inflation data this morning. kind of muted, the reaction. exactly. that is what we are seeing. even the you could argue that the data we got on inventory was

somewhat negative, we got data out on the iea talking about oversupply that was negative. and crude is unchanged. gold futures are trading down, which is interesting giving that stocks are off. you are nothing more buying of gold. let's take a look at the u.s. dollar prices -- consumer price index coming over a year over a year aces, slightly over than estimated. not doing much one way or the other. now -- the 10 year as we take a look at the movement, again, a small movement. on the charge, it looks at a relatively big one, but up one basis point -- 1.77%. mark: the gain in the stocks here is stuttering. food and beverage stocks are rising. -- we had been

down as much as 4/10 of 1%. to nestle, reports phone with an estimated 3.9% increase in first-quarter sales. were boosted by marketing in the face of increased competition. this is a lovely chart showing you the three big food groups in europe in the last year. unit labor reported first-quarter sales. nescafe done by 4%. want to move on to the luxury sector. unilever, burberry, or did weaker than expected sales and predicted sales issue of at the low end estimates in the stock down the most in six months, putting more pressure on christopher bailey, the ceo.

can bailey leave the company effectively while being the head designer? .his is how they fared first 2014, you will see herme up roughly 20%s. know, as if you did not this is light a ski run -- this is like a ski run. 80 the eagle -- eddie the eagle. interesting, the retro could be weighing on growth. officials consider the implications on policy of a brexit. could be serious applications for asset prices and the pound.

go and see that film, betty, "eddie the eagle." in on let's check bloomberg first world news. david gura has more. david: in japan, a powerful earthquake struck japan. tsunami.s on a one person was driving home when the quake was struck. an aftershock measuring 5.7 struck 40 minutes later. u.s. officials say russia and fighter jets came very close to a navy destroyer in the baltic sea. the maneuvers were unprofessional's. russian officials dismissed those complaints. in a rare move, american ships have started conducting joint

patrols with the philippines in the south china sea. ashton carter says nearly 300 troops are with combat aircraft and helicopters remain in the philippines to the end of the toth part of a buildup inflame tensions with beijing in the south china sea. belton prosecutor says a judge has ordered mohamed abrini and five others be ordered -- be held for another month. abrini, the man in the hat, leaving the brussels airport the morning that suicide bombers detonated suitcases killing 16. president vladimir putin says russia posse economy will be starting to grow next year. leader use the rampy televised event to up his image. global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world.

i'm david gura. betty: thank you. the banks remain in the spotlight. deutsche bank says it fell systemic failures in internal controls meant to make money laundering and financial crimes. that is a conclusion of report. details were reviewed by toomberg news related russia. that links together. keri geiger has been all over this story. it takingen so great this complicated story in bringing it down to the nets and bolts. this story gives us a look into when you have what is described as a systemic failure theontrols, where you have

mirror trading issues, were you saw several billion dollars of trade flowing out of russia that may not have been properly vetted for money-laundering controls and policies. that is the broad issue that deutsche bank is dealing with great though are under investigation by the department of justice. what this report shows is what happened in a periods of a year where you did see people within an extra part of the bank raising flags about the trades. betty: there were phone calls? keri: phone calls and people were alerted. betty: what you see is a breakout and communication. keri: you see this happening accompanies a lot across wall street with many different legal issues for you do have a few have that breakdown in communication. you can get to that worst-case scenario. what is important for deutsche

bank is the steps they are taking to address these. with their new ceo, john cryan on, he has taken personal responsibility. aside from having quite a big chunk of legal issues they're dealing with, they are under pressure from shareholders to increase profitability. it is a big challenge, but you do see things happening with the banks in terms of management changes, and your organization that are addressing some of those concerns. mark: how costly could this be for deutsche bank? it has been weighed down by legal issues, desperately trying to put its legal woes behind them. be,costly could this because it is being investigated, isn't it? keri: yes it is. the department of justice is looking into it. the difficulty is a lot of the issues we see happening in banks ,appen at every bank sanctions

violations, fines, and all these different things you can guess what you take this might be. this particular case has no precedent. it is difficult to determine what type a punitive actions they will take on this -- what type of punitive actions they will take on this. what other types of legal issues they could be facing. betty: thank you so much. keri geiger a bloomberg news. we are switching gears talking about media and netflix company the world. we are talking tech and all things media with chris marangi. you are looking at a live shot of imf president christine lagarde. sounding more optimistic thing the global economy is not in crisis mode and sentiment is getting better. we will monitor this. ♪

♪ live from london and new york. betty: i'm betty liu. you are watching "bloomberg markets." back to the bloomberg best with julie hyman. the first move is -- the first movers are not in the green. drives, company is reporting third-quarter earnings that missed estimates. they are saying demand in china was weaker than they had participated -- anticipated. the company says fiscal third revenue will be $2.6 billion.

teslas $2.7 four billion. was -- the previous report $2.7 billion. steep declines for seagate. airlines are doing better did delta coming out with its numbers. more important than the numbers for last quarter, it's the fact the company may be willing to reduce capacity in order to increase revenue. that is a shift for delta. it has been increasing capacity. those shares are up better than 2% if you look at the rest of the airlines. we are seeing advances for them as well. spirit, american, jetblue -- spread between the low-fare carriers in the more traditional carriers. i wanted to take a look at the charts of the company's it he. it's available seat miles. i got this from bloomberg intelligence. to 20 13. goes back

at that point, you had a declining capacity tread in the industry when they were fewer seats, airlines had more pricing power. since then, we have seen an increase in capacity. in increasingbeen capacity. the airlines have been helped along by the decline in feel prices. they have been able to increase capacity. they have been cutting costs and have still been profitable. the trend is starting to change. this particular company has seen a decrease in yields. betty: they are jamming tons of seats into these airplanes. i can't even fit into these rose. [laughter] julie: exactly. it betty: thank you, julie. aftertop -- stock darling -- netflix shares have fallen 12% this year. next year, ceo reed hastings stage.terstage -- center

joining us now is an all-star media investor, chris marangi. we were putting it in our producer meeting, netflix getting to be middle-aged? malone called it a wonderful business. reed hastings has done a masterful job of building to a global scale, clearing the regulatory path in the u.s. it is a great business. they have a lot of pricing power. the topping on most people's' mind is what is going to happen to subscriber growth. betty: particularly, in the u.s.. we had a chart, chris. -- this goesowth back to 2013.

further, itback would be more of a strain. as you can see, it has growing pains in the u.s.. -- are they going to get to you can call it 100 million subscribers today. 45 million is a pretty impressive number. the games going for it will be on the price site as opposed to the volume side, which is adding subscribers. mark: chris, if you see the slowdown in u.s. subscriber growth continuing, they are already tweaking prices next month. will they have to selectively tweak prices in developed markets and cut them and others? what will their price strategy be? chris: i am not sure if there is one global strategy. he will adjust pricing accordingly -- they will adjust pricing accordingly. dish in the and

u.s.. at&t may be prepping and ott product. it is not just them alone anymore. they're pricing is a bit constrained by competition. they are adding more content and giving you more bang for your buck. mark: the earnings will be overshadowed by who is going to bid for the company? who is going to end up winning for the bit of the company? what is your take? have five dollars of value in the core business. that leaves the rest for alibaba. share ofth $32 per yahoo!. what happens to the core business, but where you get the value servicing is the eventual purpose. betty: let's talk about facebook. what did you make of that

bizarre exchange in the late afternoon between facebook and at parlor? laid outcebook has their five-year plan. surprisesno big there. they are experimenting and they are clearly the future with google ad growth and globally. betty: re: going to see softness in the first quarter? chris: it is possible. i don't have a particular view. obviously, they have tremendous secular tailwinds behind them. the outlook for advertising, i think, for the main industry raleigh is very good. i think you will see strength in television. chris, what is the bellwether for you? chris: clearly google and facebook are the bellwether for advertising growth.

we look at the more mature names -- comcast, viacom -- betty: bike on. agree -- we have to take your outlook the scope of the curve might be. we get some more data for affiliate revenue growth and advertising. the expectation and advertising is improving. mark: chris, good to see you. thanks are joining us. still ahead on "bloomberg tackle thee will latest twist in the stardust saga. ♪

betty: you are watching "bloomberg markets." i'm betty liu in new york with mark barton in london. there are knows and its ceo

elizabeth holmes. u.s. regulators have threatened sanctions against the blood testing company including closing down its latest lab. we are joined by sheila who has reported significantly on their windows -- theranos. who is the regulator and where they proposing? forms, which is a center medicare and medicaid services. they regulate most labs in the u.s. ranos ant thei letter. they are suggesting they might revoke their lap permission, basically take away their license to run a lot. if they do that, it would mean the ceo would be barred for operating any lab

for two years. comes in response to an expection cms did of the lab in november. they had been very unhappy with how the company has responded. it betty: of a funny the are not complying with standards? issues found a number of when they came on-site and suspected -- inspected the california lab. the company had a certain amount of time to respond and fix the issue. -- weay the laboratory see evidence of correction is not acceptable. they are saying, whatever they have done is not enough and we are taking really extreme action. theranos has to figure out how to respond to this. betty: sheila, thank you very much. we are getting to breaking news. investors are asking to pull

more than $1 billion from the firm. the deputy chief officer richard, is leaving the rm. investors are asking to pull jones'an $1 billion from firm. much more ahead on "bloomberg markets." ♪

♪ live from bloomberg's world headquarters in london. i am betty liu. mark: and i'm mark barton. this is "bloomberg markets." let's check in with first word

news. this check in with david gura. david: the new york primary just days away. hillary clinton and bernie sanders return to the debate stage. clinton trying to stop a seven state losing streak. the latest polls show the secretary of state ahead 10 points. donald trump is the most unpopular presidential candidate in decades. duke waslux klan david more unpopular. he is unfavored 66%. the unpopularity of ted cruz has reached its highest level yet at 53%. john kasich is at 39%. the political fight over immigration comes to the supreme court. tasteurt is weighing the -- is weighing the fate that could shield 4 million people of deportation.

michiganr problems for as elevated lead and copper levels have been found in nine detroit schools. they are working to fix the problem and providing bottled water. cause behavioral problems and sick and adults. a tank was the for the space shuttle program, but never used in flight. its the home of the california space center. global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world. i'm david gura. betty: thank you. it is time to get caught up with all the action around the world. let's start in asia where there is a big rally in japan. all of that due to the weaker yen. the singapore dollar falling sharply after the monetary authority unexpectedly policy to

shore up growth. southeast asia correspondent reports. reflects -- it is the second unexpected decision in less than a month suggesting economic conditions have worsened since the last meeting. singapore is feeling the effects of the global downturn and china weakening economy. growth came to a halt in the fourth quarter, bank loans have dropped every month since october, the longest period of decline since october. we're 58 minutes from the end of the european equities session. let's see what is happening with the stoxx 600. it has been a choppy day.

stocks of an up and down. the focus is very much on earnings. here are some of the industry groups that are rising. the best-performing industry group is the food and beverage. they are up 1%. news from nestle, they report summer than estimated 3.9% increase in first-quarter sales. firster is in line with quarter estimates. in finishing off with the level of sterling today and the u.k. bond market. big day for the bank of england. rhetoricep up its ahead of the referendum on june 20. let's get back to the states with abigail doolittle. she has the latest from midtown manhattan. abigail: we have been asked that trading -- let's check out the big rally in airline stocks that includes american airlines and

jetblue. here as delta first-quarter profits. all the stocks are trading much higher. investors are encouraged that delta is focused on capacity growth. yesterday, jetblue says their capacity in march grew 4.5%. of jetblue, mark, are down 25% from the record peak last year. suggesting the last few days of moving higher to prove to be a brief reprieve before perhaps the shares returned to the recent lows. mark: abigail, has the strength in the airlines core and travel -related stocks caused them to trade higher? abigail: priceline is trading higher. it could be off some of this airline strength. first-quarter checks on price on a very positive. analysts believe first-quarter results could come in at the high end despite the brussels bombing.

growbelieve bookings will going into the strong, summer travel season. she was a priceline are up 5% your today. mark: abigail, thank you very much indeed. abigail doolittle, of course, live in the nasdaq. a record low for seven years. it was unanimous in today's decision weighing heavily on the minds of its members is the upcoming referendum taking place. joining us now an economist from dauphin. he is a former member of the bank of england's monetary policy committee. david, always good to see you. england morning the referendum might already be weighing on growth. much of an impact as a going to have them both to leave the

eu? increasediously, uncertainty are a big problem. we have certainly seems decline in business confidence over the last few months. i think if you -- the probabilities are, that brexit won't take place, but if it does come, the great uncertainty in the markets is obviously a concern. that is what the bank has started to one about. that has political implications. there have been a lot of people from the campaign that think that the bank should not do it. absolutely, it should. i have heard you talk about the so many times, uncertainty is really pretty bad. this is having a slowing impact on the u.k. already. at the time when the imf warns the global economy is weakening further. i think this is a concern. i think the bank was right to say they are concerned. i think the next move will be a cut. mark: that is interesting,

david, because we have a chart here that shows the market outlook, the interest rates, as you know, keeps on being close to be further and further back the economists are saying it will happen in the first quarter. if the referendum ends, do you think the markets and economists are going to become closer in expectations? what is lucky to be the next option? david: the chances that the --nomy will perform better it is pretty unlikely. the reality is, when you look at the u.s., look at the first quarter. in the middle of march, everyone was thinking the first quarter with the -- would give you .5% or so. in a month, we moved toward 0%.

together, move closer but the evidence is that the global economy is slowing. central banks have in trying to watch the data, and the data does not look to be strong. maybe they will come together, but it is hard to see great news is on the horizon. betty: speaking about the fed, atlanta fed president dennis lockhart spoke earlier this morning. you heard him. i want to ay for you for those who have not heard him come up art of what he said about the fed rate tightening cycle. dennis: if you look at the calendar, there are enough meetings remaining this year, that if the data were to suggest it's the appropriate policy to have three moves. i don't know, two moves, three moves. both are possible. it will depend a lot on how the economy evolves. betty: i don't know if you does not know. he has to know.

[laughter] david: no heed does not have to know, betty. his right. -- no, he does not have to know, betty. you have to look at the data. betty: no one will know until we get more and more data. it what it -- what is looking light, danny? in a: we have never been cycle liked this before. there are no textbooks to tell us what to do. there is no plan other than to watch the data and see what happens. he is right. this, but the data does not come in liked that, q1 data is really bad. due to starts to look -- q2 starts to look really bad. markets have to understand there is no textbook to tell you what to do. i think dennis lockhart was absolutely right.

yes, there is room for rate hikes, but i am going to look at the data, and i don't think april is something i would vote for. i think that was a very good, clear interview. betty: do you think that fed officials and janet yellen are in lockstep with what officials outside of the united states in the global economy go christine lagarde just wrapped up her own press conference in washington, where she, as you mentioned, the imf sees the downside risk in the global economy. she just said that she is appreciative that the fed is recognizing the global risks. do you think they are connected? david: i think they are connected, but i take these things are fast-moving. the announcement we had from the fed less time was in the middle of march. much of data has weakened since then. noticeretty hard not to

the global economy is weakening. i have a sense that in 2008, there are some similarities from then and today. the danger is potentially that china could weaken even further as we are at a downward turning point. i am not saying we are, but it makes sense to look, watch, and wait. i think people are in lockstep, but the global economy is not looking strong. the imf cut its global forecasts and that will have an impact on the united states. mark: david, what is the in game of this global experiment in unconventional monetary policy? --it helicopter monday helicopter money and where are we all headed -- where we all headed basically? [laughter] david: great question. we are already eight years in.

the question you ask yourself, is there a recession coming? what is the fed and the ecb going to do? they were taking about helicopter money. the big concern in the u.s. is that we have not heard from the dead about what it could do -- we have not heard from the fed about what could they do. the end game is trying to .estore ourselves to a long run i don't think that is on the table because the neck shock is rates and you cannot cut from 500 basis points. the end game is to worry about what is inevitably coming. mark: david, always great to see you. thank you for joining us today. coming up on "bloomberg markets," north carolina and mississippi paying the price for their anti-gay laws. how big businesses are standing up for the lgbt community.

stay with us. ♪

♪ mark: this is "bloomberg markets." i'm mark barton in london. betty liu in new york. time for bloomberg business flash. roseof living in the u.s. less than forecasted in march ,ropping grocery prices excluding food and energy, the consumer price index gained the least since august. weak economic data kept the fed from another interest rate increase. 600bureau says it has cut

jobs in its banking division outside of japan. hampered regulations the company's efforts to return to profits. the retreat comes eight years awarded --ureau aborted business in asia. house republicans struggle to help the island deal with it $17 billion debt. the house committee canceled a vote because republicans are divided on how congress should move forward. puerto rico will likely default on the payment. that would mark the island's first default on general obligation bond. that is your latest business flash. betty? betty: there has been this corporate backlash to north carolina possible dbt loss. paypal scrapping its expansion plan.

north carolina's governor says he will as lawmakers to tweak, but not remove the anti-bailout. jeff green covers lgbt issues for bloomberg businessweek. jeff, what is the governor proposing in terms of tweaking the legislature? jeff: he has been talking about giving protection at the federal level for people who are lgbt. but the main thing that has people upset is the inability or people or transgender to use a restroom that is their preferred gender versus the gender on their for certificate. that is what he is not budging on. betty: deutsche bank, paypal -- where else has been a fallout? who else has refused to do business or expand in the state? jeff: there has been one other company looking at expanding in new jersey into north carolina that said they are reconsidering

both adding a research facility and a hit orders or office building. a lot of the fallout has been music groups and sporting organizations saying, while this is the case, we are not coming there. if you look around, what is happening in north carolina, you also have it in mississippi, you have it in missouri, tennessee, south carolina. these are all hotspots with these kind of proposals are being considered either for transgendered, or for religious freedom ask. -- acts. mark: the national dialogue for lgbt issues has really shifted. jeff: that is what is going on here. you have what happened in the supreme court on gay marriage. quickly becamery legal for people to be married. some states said, we need to have some protections.

it goes with our views locally, the state legislators saying we want to build in some protections to get ready for the inequalityhich is at across the entire country. 28 states are not covered under civil rights rules for lgbt. you can be fired or denied rent for being gay in most of this country still. betty: ok, so, is there any chance that these laws both the mississippi and in north carolina can be revoked or repealed at all? jeff: it depends. the fact he got past -- once the log is passed and if a governor does not veto it, there is will to do this. will they question is come up with a federal campaign in the supreme court, or in congress, to get this taken care of one way or the other. resolve is on a federal level and all the state issues go away. this is a state-by-state ability to retain some of these

protections. at the same time, there is a national campaign to make everyone the same. betty: jeff, take you so much. jeff green reporting from our detroit euro. -- bureau. still ahead on "bloomberg markets," now he's making a puppy version that may be more affordable. we will show that to you, next. ♪

♪ to "bloombergback markets." saids of burberry predicted earnings this year. city the stock down as much as 8%. -- sending the stock down as much as 8%. product posting it --prada

posting it slows estimates. companyceo be the effectively. he became chief executive may 1, 2014. the chart i showed you show the divergent forces between and its peers. it is underperforming its three major peers. a billionaire -- you don't have to be a billionaire to own a museum. the american artists that set the record is now producing a pipe sized pup. david gura reports. >> a balloon dog is a -- is in a permanent state of optimism. very, visuallye

luxurious. mark: apologies. we lost the audio on that. we will try to bring you that package a little later about the mini balloon dog, which you can buy for $400,000. little reiteration of what is happening to european equity markets. we have been up, we have been down. have a look at the major benchmarks. for the fifth consecutive day, that is the longest winning stretch since march two. don't forget, we are coming off the back of four consecutive weeks of decline. that is a losing when we have

not seen since october 2014. it is predominantly the beverages and food companies that are leading today's advance. from unilever and nestle. you have the business flash. betty: a look at some of the biggest business stories right now. bob plans to eliminate many positions. lender isargest developing a departure campaign. the bank is seeking $1.1 billion by 2019. wells fargo says first-quarter profits dropped 6% in the bank continues to deal with slumping oil prices. the bank is trying to keep expenses and chat while increasing deposits and asked bank and expanding its loan

portfolio. a union will be and mcdonald's stores around the country. the fight for $15 campaigning says low campaign -- low-wage workers are coming out to show their solidarity with mcdonald's. that is your bloomberg business flash update. a quick check on how u.s. markets are trading about an hour and a half after trading. we have declined from our lows of the session, but struggling to break into the green. we'll be back. ♪

betty: it is 11:00 a.m. in new york. i am betty liu. mark: i am mark barton.

you are watching the european close on bloomberg markets. we will take you from new york to london in the next hour, here is what we're watching today. the bank of england holds off keeping its benchmark rate at a record low, mark carney warning they won't rush into action with the potential for a so-called bricks it -- brexit. betty: facebook shares are arriving today after losses. the partner now saying the data was authorized. mark: shares of nestle are rising today. nescafe and espresso sales boosted the market.