♪ >> coming up on "bloomberg best," the stories that shaped the week in business. saudi arabia moves beyond oil. the bank of japan has new policy statements, and earnings come fast and various from a slew of major companies. >> they give us another problem. >> this is a serious realignment going on. >> this machine is working, stay out of the way because we will not stop. toy: from nobel laureates leaders in sports, there is no stop to the interviews. >> the eurozone has been a failure. >> we think they can handle a

franchise. >> we have a rate increase, maybe two more. ramy: and brexit, the date of decision draws near. >> it will be a shock if we were to leave. there is consensus on that. >> there is the freedom to find new markets in the world and take back control. ramy: it is all straight ahead on "bloomberg best." ♪ ramy: hello and welcome i am it ramy inocencio. this is "bloomberg best," the most important review of analysis and interviews from around the world. let's look at the headlines, we start in the middle east. bloomberg has been reporting on saudi arabia's plan to diverse if i is economy and actually reduce its dependence on oil.

diversify its economy and ask a its dependence on oil. jonathan: all eyes on saudi arabia, the economic shakeup has been led by the deputy crown to go mohammed, trying away from the decade of crude reliance. take us through this blueprint. what do we know so far? >> we are talking about the biggest economic shakeup since the kingdom was founded in 1932. they will list the company, take the money, the sovereign wealth away to goould use away from oil, increase subsidies, taxes. mark: looking at the oil revenue are employedd 2/3

by the state sector, is this a little too late? >> we will find out in the next time. there is round for hope, not all of them great ones. one of them, they all understand it will cost the royal family, but something has to change. it doesn't be extraordinary. -- it does appear to be extraordinary. they pull that back in, that is another area. this is still a monarchy, and of the king wants something and the sun wants something, they can push through. >> apple shares slide as the world company grapples with slowing demand for the flagship product, the iphone. we knew they were declining for the first time since 2003, but they still got some analysts off guard, and there could be another decline this quarter. what are the takeaways? of revenueit is 2/3

for the company. emily: and is saturating and still growing at 7%. apple.have shrinkage at this is increasingly a seasonal product story, secular growth taken away. the real concern, and the reason the stock, the margin number was disappointing. you wanted to stay high, but they are coming down. a serious realignment of the market and apple is suffering from it. the smartphone i have is sufficient, i don't need upgrades that often areas i have a big screen. i will keep it as long as i can. that foretells a very different future for apple. it is good that services group, because that is opportunity. >> i don't agree with bob. overlooking how tough the compare was with a year ago and the huge worst off the large -- burst off the large-screen iphone. will we see a burst of new

innovation that will motivate people to get back on two-year upgrade cycles and get the more excited, and one other factor, can apple keep drawing, converting people from android, which they are not doing in europe. ,> no change in interest rates scarlet, but the federal open market committee drafted a policy statement with a somewhat hawkish tone, and that is a surprise. gone is the reference to risks closed by global and economic financial developments which the fed used to explain its decision not to change policy back in march. translation, the fed is not as concerned about the external risks to its outlook and the focus is back on the domestic economy. was this up hawkish or dovish statement? >> we thought it was dovish because they may set themselves up for a june hike.

they clearly did not do that. and i think there is a sort of more subtle reading of it that the committee seemed quite that they have underpinned the risk asset recovery since the last meeting. that is why the june hike, people talked about it, it is so unlikely. to be banished from your mind. >> to be learned anything about what the fed is going to do? >> it is much i do about nothing. -- ado about nothing. a mentioned june. that is the long bond for the u.s., but we did not learn much. we will learn more over the next month or two as long as global equity markets are stabilized. that is the key for yellen. she has assumed the role of

global banker in the last two meetings, indicating global, not just domestic risk markets, are critical. this may stabilize the stock market and bond prices. the commentary about artificiality of yields and financial impression that has gone over for six years now. through, andmped they kept its stimulus program unchanged. there is large downside risks, half of 1%. >> the thinking is that governor kuroda wants to see what it will do his economy and the bank longer-term. >> that is right. governor kuroda in the press conference underscored the fact that there is more that can be done, and he will do more as needed, including with negative rates. but they just took back in

january, and he wants to give more time to have an impact in the economy. clearly a wait and see three he did not prepare the the markets on this when he took action this negative action in january. francine: they don't want to be dictated to. >> it certainly looks like that. he does not mind surprising the markets. he chooses as a weapon or other things discussions, in the background which we don't know, we simply can't say which way or the other. he does not seem to be gearing very much about preparing markets, preparing the public. he is not using one or the two of central banks. >> oil huge story, oil hitting the highest since the timber, exxon mobil with quarterly profits the lowest it has down 3%.cents 1999,

it still ahead of analyst estimates because it cut capex by 33%. cuts in theeen big first quarter. will be the legacy of these for the -- what will be the legacy of the company with the hiebert service replacement ratio? >> we have the right thing for the long-term. the pullback in investment is going to affect the servant replacement and the production down the road. they will go flat to the end of the decade. even hitting the target will be difficult given the pullback in investment. jonathan: cost management has been terrific, bp a great example. , 18 month low. how does that set you up if you want crude. >> we will go higher into the

year and, and we will still see $16 on a barrel at the end. but the price, saudi arabia is no longer trying to price this out in the various quarters. ramy: we will have more earnings highlights later in the program, including mixed results from european banks and bold words from t-mobile's ceo. more news on the summary. ♪

♪ this is "bloomberg best." i am ramy inocencio. so many headlines, let's keep moving on the world tour of top stories, starting with statistics from asia's locket -- second-largest economy, japan. >> japan is increasingly working for shareholders unlike any other. we are talking about the nation's dental bank. -- central bank. it is a top 10 shareholder in about 90% of the nikkei 225. bloomberg colleagues dug through messages, and wow. that is the reaction.

the policymakers in japan don't disclose how them buying etf translates into individual stakes in individual companies. the fact is we can estimate, and that is that we have done for their own record, regulatory findings by companies and also etf managers. >> it is state capitalism from a new direction. in the old days, governments now to own companies, and we have other things where they have privatized on the one hand, others talked about a strategic direction. this is not strategic. this is buying them and ending up with it. it is a very weird new version of the bank of japan capitalism in its own way. scarlet: drugmaker valeant is getting a new chairman and ceo as the other one leaves to help execute a turnaround after a series of scandals last year. is this about leaving, or is he really up to the task?

>> pair ago, when you seeking go, he had a perri pretty spectacular run up until april last year. shares gained. that is pretty good for any ceo tenure. but i got embroiled with really nasty takeover fight with myelin , made promises to investors, then they said they would cut their forecast. theyg a charge on a deal finished up last year. and the stock is down by half since reading that august peak. so with a momentum he gained in the first part of his tenure has not been maintained over the last 12 months or so. had on,your fantasy ceo whatyou think -- hat on, you think his first task will be as ceo of valeant? drew: restoring credibility.

you need to say, i got this, financial reporting on time, it will be transparent. you will know what is in this business. d.c. and has 18 $37 billion contract to build 12 submarines for the australian navy. has won a $37 billion contract. biggest ine australian history and the biggest upgrade of the navy since world war ii. 2800 jobs and also the heavy use of australian steel. the contract is also big -- >> the contract is also big for talon. >> i think the french government and the australian government created the proper development for this. , andve created of bridge

industrial bridge between australia and france to begin confidence to both parties. mitsubishi motors has --itted falsifying emergency emissions tests back to 1991. they are now investigating up to three months. thepresident apologize for scandal, which has wiped out half of the market value since last week. can the company survive this scandal? >> speculative has turned to a couple of scenarios. one is a buyout and the other is a bailout. thethe buyout, there is possibility a chinese company, maybe an indian carmaker, a domestic japanese business. the forecast is not good at all. of the smallest

carmakers in japan, so it is unlikely that part of the business would survive. yahoo! shares are slightly lower after announcing star board getting new directors. is this a surprise? >> no, this was the option we all thought would happen. star board was running a proxy contest and they wanted to replace all or most of the board of yahoo!. that would have been miserable for everyone. happened, thee field process would have run, and then they would have picked a winner. star board would have started this again and they would have to begin again. sense. makes it is for board members out of 11 who will be on the board, they seem to be supportive of what is going on and the sales process can continue. scarlet: and there was a statement after this announcement that said, this revolution will allow us to keep

our focus on the issue important objective. we look forward to working with the entire board, including new directors to maximize shareholder value. jeff: if verizon wins, they will probably get rid of marissa. tim armstrong would run the whole thing. they may be the one party willing to pay the most to do it. >> there are some big health and pharmacy deals that came out. abbott laboratories has agreed to buy st. jude medical at $25 million. and at the will buy stem centrex. carol: what do you think happened? >> it begin with the thing up and down. it really got slow. today is a pretty busy day, health care is leading the way. that is not a surprise. with the obamacare and the push

for consolidation, you will see more companies whether we are talking about arma companies or device companies or insurance and hospitals. something will keep happening. carol: that is like top of mind in the health care. nopi and astrazeneca will get aggressive. this will be in play for a while. comcast plans to buy dreamworks animation. it is a $3.8 billion price tag, if you percent premium over dreamworks' last close. could this be a rich valuation? comcastestion, it is who is doing it. beenworks animation has for tailed it for years, and what bankers and advisers in the industry have told me for years, jeffrey katzenberg to not want to give up the business. he wanted to run any company

post sale. he is giving up control of this business by selling it to comcast. this is a huge multiple for this company. less multiple however you look at it. one thing that makes it appealing to comcast is the theme park connection. scarlet: yes, kung fu panda and shrek will be at universal studios. x: they also make how to train your dragon. tie into kidsar movies, this was appealing to comcast. ♪

♪ ramy: you are watching ." oomberg best

i am ramy inocencio. investors wrote the roller coaster this week as companies release the quarterly reports. there is the big beefs and major misses. afterebook shares surging hours. start jumping as much as 9% in extended trading, better than expected revenue. and positive engagement metrics and steady growth in daily active users. the biggest surprise was the proposal for a new class of stock. mark zuckerberg wants to issue a new class of nonvoting shares to the continued -- so he can continue to make big bets on virtual reality and find his initiative without diluting his inner ship -- ownership stake. what do you think of this, what does it mean? >> it means he wants more control in the terms of direction of the company. he is wise to do that. thatood news, given runaway success, investors will be fine with him taking the reins.

this is making it very clear he is in charge of this company and he wants to see some longer-term bet. he does not quit -- he does not want pressure quarter to quarter. emily: what do you think of this? are goingn things well, it is a good thing. when they are not, it is bad. i am not sure this is the right thing, but he has earned the right to steer the ship because he is doing it in a great way. . smashing first quarter estimates -- rishaad: smashing first quarter estimates. what samsung has done is taking advantage of a lull with the iphone release cycle, releasing its premium smartphone a month early. so far, it seems to be tracking well globally. we will see. the iphone 7 is coming in a few months. how long he can most -- maintain momentum. rishaad: is this a turnaround?

edwin: seeing what apple has shown us, with the pc downturn, we will see things turn a dime in this market. shares are following three straight years, so investors need some convincing. twitter shares getting whiffed in the forecast for the second forecast. dropping $77 million to summer between $690 million. but user increased to 10 million, slightly more than 308 million. was aboveer number expectations. there was call back from third-party vendors it was , so that was positive. they solved one problem i gave us another one. that is large brand advertisers. the how much they spend on the platform. as well as the current quarter

we are in right now, the they guided a low. results, shares are surging despite the profit dropping 64% and the route short of estimates. i was looking at the headline numbers and thought why is this dropping so much? to make up the story on the loan. there is a big drop in revenue, 24% on last year. a huge amount of for a company to be down by. the big beat this morning was on the loan impairments. investors have been very scared this company was growing bad loans as the slowing economic growth in asia takes its toll on the banking, which is focused predominantly in that region. it wasn't as bad as expected. beach onere was also a the tier one capital ratio. how important was that?

hard: tier one capital is of the investors and banks around the world are excited on at the moment. it rose to 13%, and that is a glowed level -- good level. and they need to support regulatory purposes. the capital dictates how strong the balance sheet is and how much dividends the institution can pay when it has finished the turnaround program and a couple of years time. >> we got new first quarter european bank earnings, creating a mixed picture for the industry. the chart shows yesterday a beat while bloomberg loan impairments improve. profits are 25% to 793 million pounds. analysts were thinking of 346, so something they like. there was a drop but beat -- thiss, net pound

number heavily affected by foreign exchange. our clays going through this but you have profit down 24%. it is not as bad as it could have been. investment banks need to hold up better than some of the u.s. tears. they had a weekly earnings quarter, somewhat easier of a comparison. trading held out, better than expected. there is some negative good news, and a lot of the bad news came from businesses that are exiting. investors can say, if i believe they are going to get out in a timely manner, i can look past that. deutsche bank profit declining in the first quarter, still beat estimates. profit hit by a slump in trading revenue and the ceo speaking to the bank. how important is this? >> of the estimates were ranging

very widely, the company is going through a deep restructuring. it is very difficult trading environment for analysts to have much visibility. that is because you have an investment bank doing better, but you also have improvement on the numbers are in primarily by local -- lower legal charges in what is difficult for the bank for many cases, as we saw this year. also the illusion of capital, inch has investors worried the fourth quarter in particular. if you are not generating enough earnings, you will struggle to boost capital buffers. shery: bp has reported earnings. analysts had expected a loss of

244 $9 million. takeaways fromig bp is they are repositioning business to be free cash flow positive at a price range between 50 and 55 dollars a barrel for oil. that is on the back of the company preparing for or six dollars oil. profitable, to be they were anticipating $60 a arrel next year. to be able to pay the dividend without having any money. what they are doing in this earnings statement is saying, we are recalibrating the company so we can make sure we can ensure the dividend for you, even if the oil prices is as low as $50 a barrel. >> t-mobile earnings out, beating estimates for earnings and revenue. >> you summed up verizon's call and a wrap. how would you sum up t-mobile? >> 12 quarters in a row we have

talked to customers, the model is working. we are not generating huge service revenue. it is leading to cash flow growth. this machine is working, stay out of the way as we will not stop. emily: amazon shares popping over 12% in exciting -- extended training. billion up 28% year-over-year. were $1.7profits billion. it continues to be a juggernaut source of profit. the cloud computing arm inerating $2.5 billion revenue, 64% year-over-year growth. what are your takeaways? >> the unit growth accelerated from 26% in december 2 27%. that is also higher from the september quarter. of this, they are taking over the wallet. that was the biggest takeaway.

a quick side point, putting this in perspective, edp grew that gmb, so 1%. 1% versus 27%. this is only about 6% of company. but a vast it is only 64% over year. very powerful. it is really changing this business. an all-star panel from the business and finance world dissected the prospect of brexit this week on bloomberg television. we have highlights ahead. and opinions on the world economy from outspoken interview guests including a nobel laureate who calls the eurozone a dismal failure. ♪

♪ best." is is "bloomberg i am ramy inocencio. it is time to rephrase the most interesting interviews on bloomberg television, and we start with erik's conversation with the chief of the largest asset manager, blackrock ceo larry fake. >> i believe what is happening in spain with the lack of , andnance since november they are going to push the new elections in june, there is not any real government. you have the fear of brexit in the u.k., the phenomenon of new party leaders in the united states with donald trump and bernie sanders, and i think all is, is an issue around how many people in these

democracies have been left behind, and what about their children's future? so i believe all of these elements of this political instability is going to force were is the leaders of spain, the u.k., and united states, we are going to see a greater emphasis towards fiscal policy. . think this is going to be key there was a major increase in fiscal policy. i do believe the candidates in the united states are trump and clinton, both will be talking about fiscal policy stimulus in the form of infrastructure. erik: the problem is most of the people who support these candidates whom you speak of would be here in europe, they want to spend more money. spending more money is not really an option, is it? larry: france is getting worse, spain, no.

but in the u.k., with its economy, and the u.s., if you spent it in infrastructure, that would be frontloaded. in the back and, it does produce positive gdp, creating jobs, better and more efficient grid, roads, airports. >> the eurozone has been a .ailure, a dismal failure we promised to things. they promised it would redo economic austerity, bring a political -- prosperity, bring up political cohesion. they failed on both of those. economies are doing terribly. >> it makes me think about your president barack obama yesterday, saying it was not much of a feel year because at least we haven't started a war. let's go back to present. do you believe this would be a big risk in terms of a shock?

it would freeze the financial markets if brexit were to happen? joseph: they are always looking for reason for a shock. it would be a big event in that term. i think the big event is the train of events that will likely lead there on. there is the failure of the led to large constituencies of each of these countries wanting to get out. they have a much shorter argument for getting out of the euro than britain has for getting out of the eu. >> we have a goal of a revenue by --g to to $5 billion $25 billion by 2025.

how will twitter and facebook be in achieving that goal for you? >> it is to do it in a sustainable way, think long-term and not short term. we are not trying to get to a number. we want to grow the nfl. that includes on a global basis. we believe that international is a great opportunity to expand our game. we are playing in london, mexico this year. we have plans to play in china in the near future. we want to continue to bring it to saudi arabia. i understand these are sold out for the most time. is there a london franchise? roger: we think that is a potential. we are playing several international games. we think there is a great potential for us to continue to inw probably with more games

the short-term. at some point in time, if we continue to be successful and can work out the logistics and competitive issues, we think one that could handle a franchise, and that is exciting to us. >> janet yellen has been extremely dovish. she becomes a lot more hawkish in the next couple of weeks or months, what does that do to emerging markets and that? -- debt? >> emerging markets are better prepared for this growing credentialed in a year or two years ago. but last year, and the volatility this year, a little bit of jitter, stimulus jitters in the market. the fed has to be very careful. we had a rate increase, i expect to have another, maybe two more. the market can handle it. francine: are you concerned about brexit? bill: we all are.

it is something the u.k. should be able to vote for, but on the day after, nothing will happen. life will go on the date before. there is conjecture about what may happen. i think even if the u.k. votes to stay in, if it is a close call, there could be some element of uncertainty with the matters. leaves, that would be an adverse scenario, there is risk that creates tensions in europe that will destroy it. ♪

♪ ramy: you are watching "bloomberg best." i am ramy inocencio. in less than 60 days, great britain will hold a referendum on whether to remain in the european union, the so-called

brexit. it is still undecided. on friday we had politicians and influential business leaders together for a debate on the implications of brexit. so many bad things happen within the eurozone that no one, no one can speak of the euro prices. we have lived through very difficult, and i can testify to this financial crisis within many members of the eurozone. but the euro has been unimaginably strong sense the very beginning -- since the very beginning, and sometimes stronger than the european producers who would say -- >> i want to comment on the point about peace. it is a complete myth that the peace created piece in --

in western europe. it is nato that has done that. we live in a different world from which people travel, there is trade, doing trading without the eu, lots of tourism, global media. it is not the eu that has brought about this happy condition. the one condition the eu had to bring peace was in the balkans and yugoslavia. the eu made a complete mess of that. you were ever -- you are member of the external fund affairs spokesman talking about the balkans crisis. he said this is europe's hour. not america's hour. america had to come in and clear up the mess that was left by europe. >> hold on. i want to pick up on this point of economic shock. this point about there being a shock if we were to leave, that is amiss consensus on that.

even jeremiah confirms that. and the other thing about young people, i couldn't agree more. i am not one myself, but i have read, they know what they care about. they are confident about the future within the european union. it is not just jobs. this is a generation that went through the financial crash, saw this out of university and school, and are we really going to do it again? will be in place another down term, short-term recession for this trade deal, we have no idea what they might look like. >> we are running out of time, so i will ask you all 10 seconds , come the referendum, what people should be thinking about. bewhat people should thinking about is what the european union is about. the european union is about political venture which we wish to be a part of. it is the economic benefit to

the european union itself. it is one of the slowest growing countries in the world, groupings in the world with one of the highest levels of unemployment, which is very sad. so it is a political project which we do not, the british people, do not wish, and the french don't either. elite who runthe it. but there was an article in le monde where the french people were asked if they want to do have a referendum like the british people have to leave the european union, and 53% said yes. >> there be huge queues if people knew what to think on that day in the booth. >> i would think as a british citizen, do i really have much greater confidence in the political class in the u.k. then

i have generally, and what i feel comfortable in having this political class leading me and my fellow u.k. citizens in the rather careless adventure of going -- perilous adventure of going against the wind at a time when countries try to combine rather than pursue nostalgia through disintegration. >> i went to appeal to might right side, right on target. if i was younger, one thing i would pick up in the eu is the level of youth unemployment. they might prefer someone else. >> it is about what is best for the next generation or create the career paths, prosperity, opportunity in the u.k. and globally. that should be in the mind of all of us even those over 30.

>> it is what is best for the young people and where are the opportunities. it is where are they globally. europe is failing, slow growth economy, they need the freedom to find new markets in the world and take back control politically of their own affairs. >> i think the british people are benefiting today, inside and outside of europe. we shouldn't make any mistake, there are eight size, they are part of the eu and also outside because there are lots of things that have elected to be a part of like shenzhen and the eurozone. so they are benefiting from the best of two worlds, and i wouldn't say what it is to live one of the good worlds. visit bloomberg.com for more coverage of the brexit debate. you can see the news, polls, and

indicators using the function brexgo. this is "bloomberg best." ♪

♪ wiy: the bloomberg function chancesws investors the of a move that is gathering in june. if you look at the bloomberg, we c that allows you to see the supply chain, sdlc -- splc of any company you enter. mhif you run an hd, not -- d, you can see what is in the fund. there are 30,000 functions on the bloomberg. keep watching to learn about our favorites. here is one more to check out, quicgo.

it gives you access to the entire library of quick takes. let's take a look at a quick take from this week. today,publisher of usa $50 million unsolicited from publishing. comes with the overall newspaper business a day. here in the u.s., the revenue has fallen by a third since 2005. here is the situation. papers like the washington post are pushing digital's capuchin plans. -- subscription lands. and that you take independent newspaper said they would stop print publications, and we see this echoed in australia. a survey showed the number of u.k. consumers who would consider paying for digital comment -- content in the future is only 7%. here is the background. newspaper has been under assault

from other providers since the age of radio. but they grew in size and importance by classified advertising sales. , it hit of craigslist print news. locals have with her. the industry decline has scholars wondering if it is essential to democracy. it is because newspapers conduct import investigations. relations in 2013 about the u.s. government electronic surveillance program came from a leak by government workers to an independent journalist, a fierce critic of the tournament. some say this journalism could blend with traditional newspapers. and people still want news. one survey showed a proportion of those paying for news who have an online news subscription has grown by 59% in 2014. ramy: you can also find quick takes as well as business news from around the world 24 hours a day on bloomberg.com.

that were upset "bloomberg best this week to read i am ramy inocencio. thank you for watching bloomberg television. ♪

♪ john: welcome to this edition of the best of with all due respect . it was a we do it hillary clinton and donald trump inched closer to becoming the nominees while the remaining rivals through everything but the kitchen sink right at them. and john kasich try teaming up to put wins on the board in the upcoming contest. crews also took the unusual step of naming a running mate before the convention, hoping to promise and put it carly fiorina will tantalize voters to join team ted. john: