francine: the day after indiana. -- cruzns, crews quits quits. june is a real option. rates could rise next month. have the markets got it wrong? -- g upstream ♪ francine: welcome to the pulse, live from bloomberg's european headquarters. quickly let's check on the markets. we got a lot of earnings coming out.

a lot of stock movements. we have shown you resources as there is movement you can see on the stoxx. your stoxx 600 unchanged. fed presidents were talking about a possible rate hike in june and ruble at 66.8. let's get straight to the bloomberg first word news with nejra cehic. nejra: shell is trading lower bepite posting profits that analyst estimates -- that beat analyst estimates. 1.18 billion. inbev -- the world's largest brewer said third-quarter excludingse 3.1%, shifts and acquisitions. shares are trading lower.

adidas and will plan to sell its -- the company said it would keep its gold shoe and a peril -- and a peril business -- and a peril business. has -- siemens has 20% to 2.1 2ose billion euros. that is after an increase in demand for energy generating equipment offset a decline. brazilian prosecutors have filed a $44 billion civil suit against the joint venture over novembers dam rupture that killed 90 people and poured -- and caused

severe environmental damage. credit suisse has agreed to sell .ts assets for $1.27 billion the portfolio inc. sold includes instruments related to 170 companies globally. the transaction results in the next two charge and about $100 million to be reflected in first-quarter results. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stores on bloomberg at top . francine: meanwhile we caught up with san francisco fed president, john williams. he says he believes the possibility of a june rate hike. >> we are never supposed to talk about what is going to happen at policy meetings. of course we give you a lot of data between now and then.

it would be a lot of -- it would be appropriate to go the next step. a lot can happen between now and the middle of june. francine: joining us, alex dryden. very quick comment on the markets. we heard from two fed presidents saying june is a live possibility. can they surprise the markets and raise rates? alex scoble -- alex: it is data dependent. the fed is always said that. the u.s.coming out of has been weak and below estimates. if that were to continue, think a june rate hike is off the table. the markets have already francine: yout

think the fed is like governor kuroda and wants to price it out . janet yellen is following the markets. as don't want to be seen following. >> i am not sure you want to surprise the market with monetary policy tightening. one of the factors to consider is we are going into the summer markets, june, july, august. highly liquid. it that is something the fed is not want to want to pull the trigger on. francine: you're only expecting one rate hike? alex: i think there's a chance they will hike rates later this year. right the data is not strong enough to justify june. francine: is a data or is it

china? alex: this is a difficult thing because the fat -- because the fed has until monday. last september the fed put a third mandate on the table saying we are looking at the global economic picture. it has made it a lot harder. francine: it has a direct impact on inflation. you have attached it to a lot more variables. investors are struggling to work out what that means. yellen is pointing at things like china and global growth. looking at a lot of different excuses. i don't think they are in a hurry. the unemployment rate has come down a long way. a lot of people sitting on the sidelines who are now getting back into the workforce. inflation has been below target for a long time. if you can tolerate a couple of years below target inflation, you can tolerate --

francine: janet yellen probably wants to see wage growth. donald trump has become the presumptive republican presidential nominee following a crushing loss in the inanna -- indiana primary, ted cruz dropped out. >> i said i would continue on as long as there was a viable path to victory, tonight i am sorry appears that path has been foreclosed. together, we left it all of the field in indiana. we gave it everything we got. the voters chose another path. francine: let's get more with our boston bureau chief, megan murphy. when you look at donald trump, is he the inevitable republican nominee?

megan: he is the inevitable nominee right now. he has probably been the presumptive nominee for quite some time. , it ted cruz withdrawing really set the field more for donald. the issue is is he going to be up to unite the party? is he going to be up to put aside what is been a fractious contest up until the last day we had these two trading insults. trump going to be up to solidify support? namely white working women as well as sort of minorities and people, they need to draw on the party to win. francine: how do you see the democratic side? could we see a comeback from bernie saunders?

megan: she cannot spend the time to formally what her message will be. her come back in terms of getting the necessary delegates, he needs to take the election away from her. the gap is just too far. he proved to be a candidate that we have not seen this type of populist -- populism that has driven his support. kenny string together another siwin? another i don't think there were a lot of people expecting to say republican candidate emerge candidacydemocratic -- francine: when you look the political risk, alex, and you look at brexit, some think that

central banks cannot deal with, yet they have to make sure there is a safety blanket. alex: when it comes to things like the u.s. presidential election, there is very little investment application as of yet. francine: even with a trump residency? alex: at he have to look past the elections. no party is going to be able to take -- there is going to continue to be gridlock in washington. the real investment indication for the market isn't the middle of march when the u.s. hits their debt ceiling again. congress could cause some volatility as the debate over expanding the budget, that is when the volatility starts. francine: we're talking about a country becoming more nationalist, looking at domestic benefits instead of looking outward toward a trade.

that would be clear with a trump rally. alex: we need to remember that both parties have come through a very difficult sort of primary race. both leaders have been pushed quite hard. they have had to bear right and left -- right and left respectively. francine: alex, thanks so much. he stays with us. stay with a pulse and plenty coming up including the ceo describes the start of this year is very awkward. we bring you the best of our exclusive interview. europe's second-largest of tires -- second-largest makers of tires and car parts. tony blair intervenes on brexit is the uk's former prime minister speaks out. ♪

francine: welcome back. let's get straight to the bloomberg is his flash with nejra cehic. nejra: adidas plans to sell its gold unit and will start negotiations with buyers abandoning brands that have been dragging. the company said it will keep its gold shoe and apparel business while seeking a purchaser for its tailor-made atoms and ashworth brands.

siemens has reported second quarter profits that beat analyst estimates. it rose 20% to 2.1 2 billion euros. that is after an increase in demand for energy generating decline. offset a shares are higher this morning it shall is trading lower despite posting first-quarter profits that beat analyst estimates. 50% to adjusted fell $1.6 billion. as -- countered a slump in oil prices. that is the bloomberg business flash. francine. francine: shares a higher after a beat estimates this morning. earnings at friends' second --

france's second-biggest bank. the ceo described an awkward start. >> the start of the year was very awkward on the economy, oil price. in that environment which was very special, i think our performance is pretty strong. the decrease in market revenues is limited to 13%. our peers are progressively communicating, if we have seen a drop in equity revenues, on the other hand, the business has better revenue. we might remain in a pretty volatile environment. the end of our first quarter was better. let's think about the brexit.

we can expect [indiscernible] carry on developing our model. with commercial success. >> the last earnings were on the rle target. it was at 7.1%. short-term? >>in what we said at the end of last year with the environment we expect. with the russian business, we are expecting -- [indiscernible] at the beginning of the year, a little above 11%. we keep this kind of objective in mind going forward. we think we can achieve that by for the transforming our

business model. .7% through 2020? year16 is a very important and we should have final decisions. we should have clarity from europe on the key elements of regulation. we will put in place our new strategy plan for 2017 to 2020. let's wait a little bit. francine: let's get more with alex driving. -- alex driving. dryden. tried how much does it have to do with world growth and bank stocks? alex: there are three big challenges facing banks. one is on the revelatory front,

becoming more expensive to make loans. the second is to challenge the negative interest rates. the third is an overbank european union. there are a lot of banks across europe and that the roads profit margins. -- and that erodes profit margins. balance: how do you shrinking your investment bank and hoping the world will return which occurred in the next 24 months? alex: ceos have been waiting for that turn. they've conducted a lot of cuts and reforms. it is going to get worse. those charges on the regulatory front continue to build up. a lot of headwinds in the european banks. francine: alex dryden stays with us. we'll be talking more about earnings. beautiful weather here in

london. equities off to a more lackluster start. we'll get more from jpmorgan's alex dryden. ♪

francine: welcome back. this is our chart of the hour. we got it done on purpose for alex. this is linked to one of the

earnings we had earlier. in first decline quarter profits. this is because it stepped up what it its oil unit. benchmarked is the white line, the container the freight benchmark. the benchmark is compared to brent. you can see both are falling. both the press of the containers and price of oil. must get to alex dryden. -- let's get straight to alex dryden. i am not sure what it tells us apart from the fact that global trade is not going to a halt but it is not getting easier. is it because of currency wars? or protectionism? alex: it is a story of global growth. the currency wars -- you have

seen it with things like draghi trying to push down the value of the euro. it doesn't matter how weak your currency becomes, if there is no in demand, your exports can look as cheap as you like. if nobody wants to buy them in other parts of the year, it will not give you the results that you want. we saw draghi step away from that. focusing on getting credit growth. agreements to be an as the story of 2015 which is a weaker euro and yen have both rebounded quite -- lose the power in the market. start to pivot toward domestic. francine: it seems that monetary policy is working more in asia. the asian central banks are staying strong and say we can still do more. we'll boj have to ease? and will it work?

alex: we are approaching the limits of where central banks can go. the top 50 central banks have cut one is a 60 times. that is one interest rate every three trading days coupled with $24 trillion worth of assets. they run out of firepower's -- firepower. francine: you mean that it backfires or it is useless? are seeing is firms are able to survive, rather than thrive as of the low interest rates. companies that would have gone to thewoods just going wolves are able to pay off the cheap interest rates. that sucks capital away from more productive this assists. that is what we are starting to see. productivity has been absent since 2008. the impact that such a banks have had our large part of that.

francine: is a technology? or is it the deflationary technologies like uber? is a something much more sinister about the labor market? alex: some of it is the misallocation of the market dragging down productivity. low inflation numbers and also the damage that 2008 has done is still very present in people's psyches. people still remember losing their jobs at the top businesses who survived. it -- they may be reluctant to invest in that new factory. we are still in a recovery mindset. that translates into the productivity numbers. francine: alex, thanks much for coming in here today. he is the global market strategist at jpmorgan. burning rubber as car parts maker continental says earnings jumped faster than revenue in the first quarter.

we speak to the chief financial officer. we will be talking about cars like tesla. he is open to win more than market share. that's coming up next. markets are down. ♪

:rancine: welcome to "the pulse " live from london. let's get to the bloomberg first word news. nejra: shell is trading lower despite posting first-quarter profit that beat estimates. profit adjusted for inventory changes fell 58% to $1.6 billion. as better than expected earnings from chemicals production counter the slumping oil prices. ab inbev has reported sales

growth that missed estimates on weakness in brazil. first-quarter revenue rose 3.1%, excluding currency shifts in acquisitions. it had estimated in advance of almost double that. adidas plans to sell its golf unit, and will start negotiations with potential buyers. the company says it will keep its adidas golf shoe and apparel while seeking a buyer. herbert heiner will be speaking to bloomberg "surveillance." has reported second-quarter profits that beat analyst estimates. industrial operations rose in the three march, after an increase in demand for energy generating equipment.

brazilian prosecutors have filed billion civil suit over rupture thatm killed 19 people and caused severe environmental damage. shares have plunged on the news. credit suisse has agreed to sell distressed debt for $1.27 billion to tpg. estimatess 270 related to 170 companies globally. it results in the next or charge of $100 million to be reflected in first-quarter results due may 10. global news 24 hours a day powered by our 2400 journalists in 150 news bureau around the world. you can find more stories on the bloomberg at top . francine: thank you so much. the latest news you need to know. now, let's get to some of the earnings we had today.

2016 cashl raised its flow forecast 11% after earnings jumped softer than revenue. lets the to the chief financial officer. who joins us from hanover. joining us.r first volume had a pretty good set of results. your share price is a little bit off, down 3%. do you think you are being unfairly judged? >> i think most of this is at your bootable -- attributable to the industry. automotive is volatile. and there is at the moment, if you look at the european automotive stocks, there is an security. -- in security. this is reflected in our share price. we are basically developing with the market and this is what we have seen in the last four months. francine: do you feel it getting

better when you look at european growth, when you look at european spending? do people seem to be buying more cars? we have the car data but you are a barometer because you are cross-border and you look at other parts of the world. actually, yes. we do expect that europe -- has development in 2016. the first quarter, was our customers a little bit weaker inner automotive business, but we see that the markets should stay on a good level in 2016. the same is true for the u.s., north america. good start. should develop for the rest of the year. as well as the other big automotive regions -- china with close to 5% growth. we expect this continue -- to continue. we expect the business environment for us in the automotive in the next three quarters should be good. francine: how do you look at the tesla model 3? andtesla has become cooler

cooler. do you supply tesla? does it mean that it is the cooler german cars that will lose out? >> well, actually, yes, we do supply to tesla. we will supply to the model 3. yes, it is an attractive car for the electric market. it is far too early even with isher volumes which tesla expecting to talk about anybody losing out. it is still a very small fraction of the world card make market. francine: you dno't thi-- don't think e-cars will supplant traditional models? when they do, what does it mean for the combustion engine? is another question, if

you ask about overall electric cars. we are quite sure that 10 years from now the market will shift much more to electric vehicles. the share of electric vehicles will increase strongly. some, there are preconditions to be fulfilled to make the car attractive for the consumer. the range has to be extended. the cost of the electric car costs much higher than comparable combustion engines. and you need the infrastructure and the loading time. loading time should not be longer than a coffee break. countthree, or if you infrastructure, four preconditions from our assessments will only be achieved in 8-10 years from now. is a while before the electric vehicle finally will make it into the market. thecine: you know

automotive market like no one else. what are the main products that will make a huge difference to drivers in the future? it is i think obviously one, electric drive in replacing the combustion engine. we talked about that just right now. thethe other thing is autonomous, automatic driving, which is starting to be in cars right now. sign recognition, distance control. more and more functionalities will be automated when you drive the car. yearsinally, probably 10 or later than now, this would be completely autonomously driving car. francine: one last question. betweenhe big fights data providers, i'm thinking of apple and carmakers is who owns data that will be generated by all these different confluent producers. how valuable is that data?

well, obviously, these data have a value to predict traffic situations, to probably analyze your driving style, give you information for that and finally, as well, to make sure the car can be chauffeured in a safe and good way through the rows and through the world. very important data. i think it remains to be seen who finally can use, owns and can use that data. you so much for a great conversation. the chief financial officer of continental, speaking to "the pulse." stocks slightly lower this morning. let's head to the bloomberg. falling for the fourth consecutive day. the stoxx europe 600 is down by .25%. that is the longest losing run since march 24. b, earnings. and earnings is driving all sorts of sectors today, starting

with oil. shell beating analysts estimates. better-than-expected earnings from oil refining and chemicals production countering crude pric year low.2-ea bp shares up by 4%. chevron up by 12%. exxon up by 13%. shell shares up by 14%. this is a lovely chart which i will explain in just a minute. air france today, europe's biggest airline, fuel costs falling, restructuring measures beginning to bring down employer expenses. it did caution the industry. capacity is weighing on ticket prices and a highly uncertain travel market. something that lufthansa said yesterday. this is a chart showing the earnings estimates for air

france, which is the white line. and the stoxx 600 which is the blue line. interestingly, air france is the only airline which is -- among european airlines, yet, on the stoxx 600 it has got the lowest evaluations. the stoxx 600 is trading roughly 15 times estimated earnings. air france is trading roughly 2.5 times estimated earnings. that is the lowest on the stoxx 600. that is a great chart. finishing with what is a busy couple of days for the banking industry in europe. soc gen, it reported an unexpected increase in first-quarter profit. consumer banking. it also announced plans to deepen cost cuts at its investment bank. shares opening up by 3.7%. francine: than you so much. your asset check.

next how shell is writing out the shale slump. ♪

shell reported first-quarter earnings that beat estimates. profit still fell 58%. still let's bring in ryan chilcote. if you look at shell, was if rt from a low basis, or was it the

fact that they beat on refining? ryan: the downstream business and the refining helped both np and to-- bp and total that helped shell. what would distinguish them from bp and total, it looks like their chemicals business did particularly well. and their trading business did well but perhaps as not as well as it did at the other company. so, very good performance overall. more money, $1.8 billion. shell, while a lot bigger after $200acquisition of bg, is a billion. francine: bga seems to have made sense. on the changes on a daily basis to see who gets the top spot, but most of the time, this year, it has been

outperforming all the other big oil producers. the reasons for that, we sell more evidence today as they are cutting back on capex. they guided the market to $33 billion. they say it is going to be $30 billion. when it comes to the dividend yield, concerns about the dividend, those seem to be less pronounced when you look at shell. we heard again today to that end free cash flow positive right now. they can pay the dividend without having to borrow money. and that is music to investors years. -- investors ears. francine: he spoke to the ceo of imperial brands. it had earnings that beat estimates thanks to the strength of newly acquired businesses in the u.s. ryan spoke to the cigarette about those earnings and her concerns about brexit. >> my biggest concern is really it's uncertain as to what brexit would look like.

more importantly, i think is a business, you benefit from the freedom of trade, not only within europe but actually trading with the rest of the world as well. that will take a number of years to resolve. but also, freedom of movement of people in a business, we are big and western europe had we have people that move around with any e.u. we get that diversity of experience within the business. ryan: in terms of the workforce, you think it would be that? >> indeed, it limits freedoms. ryan: in terms of trade, what might it mean for imperial brands, if you were to exit the european union and have to construct, presumably you would have a contingency plan and some kind of talk elation to what that might mean? >> it is hard to have a specific plan because it is uncertain what it would look like going forward. i believe ultimately we can manage it as a business. i do not see significant risk but it would be very uncertain. there do not seem to be any compelling reasons to undo the

current trade assets that we have got. ryan: are you annoyed that we had a politician, an e.u. politician our office, saying it is annoying that britain's going to this expense, taking this risk? is it frustrating to you that, this whole referendum cycle? frustratedsay i'm personally. i think it is unnecessary uncertainty for the u.k. i think we should very much remain in the e.u. hear aside from what we from a lot of people, aside from currencies, this is a meaningless thing for business in the u.k. that is not something you would agree with, that idea? >> that it's meaningless. ryan: we have a lot of people say, it might affect the pound. temporary the volatility is a minimum in terms of currency but as you are aware a lot of business works on

sentiment, and uncertainty is not good for sentiment in terms of decisions that businesses take. and that is really one of the concerns. there's no compelling reason to change the freedoms we currently have. francine: how was she? it was interesting the rebranding exercise to be seen as more politically correct. ryan: absolutely. she said that is because they are expanding into nontobacco products. because she has to deal with a $7.1 billion acquisition in the united states. she has to take into account u.s. politics. but i think what was interesting is what she had to say about referendum. how frank was she? you talk to ceo's all the time about brexit. francine: i try to. they do not always respond. what point is the director of communications going to interrupt this conversation because you heard her.

she said, i do not think this is a good idea as a u.k. citizen. i thought that was notable church he thought it was bad for her ability to hire people that work well in the markets she operates in. francine: talent one of the key issues when you talk about visas. thank you so much. up next, you've heard the business take on brexit. the politics about as former prime minister tony blair intervenes on the debate. ♪

francine: tony blair has said he believes british voters will do the sensible thing and vote to stay in the european union and next months referendum. he spoke to bloomberg at the milken institute conference. prime minister blair: europe has been good for britain and britain has been good for your. and the larger europe, with eastern europe is profoundly important for our security and prosperity. francine: the former u.k. prime minister tony blair. let's stay with the british theme. london goes to the polls tomorrow to select a new may appear at the issue of brexit with one in favor and the other against. let's speak to rob hutton. on theo have you

program. first of all, so the referendum is on june 23. president obama showed up. now we hear from tony blair. does any of this sway voters? rob: we certainly have not seen a massive shift in the polls post-obama. so, the short answer is it has not made a big difference yet. fromrgument that you hear the government, and these are their words, when people are making big decisions they ask what their friends think. and those are very carefully chosen words. they want you to think about this the way that you thought about whether you would get married or whether you should buy a house, and you went and spoke to your friends and said, what do you think? and here are our friends, they say. here is president obama, here is tony blair, whatever you think is doing a press conference. i would not be surprised if he has a view. everyone is being wheeled out. it's, one individual will not make the difference is the argument. but the idea is they are trying

to create an atmosphere where everybody says the sensible thing is on the side. francine: so, talk to us about the mayoral elections in london. two candidates, opposing sides. what do polls tell us? of had the labour candidate firmly ahead. we had one overnight -- the polls had the labour candidate firmly ahead. the tory candidate is behind. london is a city, the received wisdom is that london is a labour city. lastted labour in the election, and you can only win by being something exceptional. the last mayor, boys johnson, one twice but boris -- won twice, but boris is a candidate that is on first name terms with the electorate. very few are like that. francine: i guess the third

arrow to u.k. politics is the they havety, because enjoyed drawn up and racist and anti-semitic comments. do we know if this party can survive such flak? rob: tomorrow is not just the london mayoral elections. there are elections up and down the country, councils and elections for the scottish parliament for the welsh assembly. one very interesting question is what is going to happen to the labour party? is it going to go into third place in scotland. is it going to lose seats in wales? is now talkingy -- jeremy corbyn denies this -- that they will lose council seats. no labour opposition has lost council seats since 1983. oppositions always win in councils because it is a free chance to kick the government. there is an interesting question as to what is happening to the

labour party at the moment. francine: something we will watch closely. are zach goldsmith and kahn just two candidates standing in tomorrow's election. you can see the other ones on the screen now. "surveillance." is up next. we speak tothe adidas ceo, herbert hainer. of earnings and market news. we have a little bit of news regarding the fed. first of all, the shell quarterly results beating estimates thanks to earnings on refining. ryan chilcote will bring the latest on some of these oil majors. let's check in the markets because this is the picture for european stocks overall. this is the fourth day of the clients. i want to show you -- this is the fourth day of declines. i want to show you miners. we have pressure on bhp. commodities -- but also brazilian prosecutors filing a $44 billion civil suit over the

november dam rupture. i'll be back in a couple minutes when "surveillance." be gins. ♪

francine: the day after indiana, trump wins. cruz quits. can he take on hillary clinton weakened by the sander setback? >> we're never supposed to talk about what is going to happen -- francine: fed presents a rates could rise next month. going down string to beat. -- going down stream. shell focuses on oil refining on, but production. this is bloomberg "surveillance." tom, a little bit of movement on currency, a lot of earnings in europe. of course, we ar