central bank is still on course. trade data disappoints, and the people's daily is warning of rising debt. david: welcome to "bloomberg ." here with jon ferro. amanda lang is joining us. welcome, amanda. amanda: it is great to be here. i did not bring my hat. the kentucky derby was quite a raise. we have a number of guests coming up. in a rare and exclusive interview, jim coulter will weigh in on how the private equity market is changing. bank of america, head of global economics, ethan harris, will talk about how friday's jobs report affects the rate

decision. and seth marion is here over worries about characterizing volatility. jon: let's get a check on the markets for you. futures positive, dow futures up 41 points. over in europe, after the --gest weekly drop since euro weakness, switching of the board, euro-dollar was on a five-day losing streak. 1.1389.in there at and then nymex crude, up two full percentage points. it is seen as a tussle between the news over the weekend, the new oil minister in saudi arabia, and what is happening in canada with the wildfires spreading over there. i want to go live to the city of london and get the latest with bloomberg's will kennedy. let's talk about the immediate

-- the spread of the wildfire, the reality that one million pounds of oil a day, production, has come off. how short-term is this? >> that is a very good question. at the moment, it is a million barrels. even if the fires calm down, which it looks like they are doing, it will be at least a week before they get back online. many thousands of workers have been forced to flee, and it is a question about how quickly they can get back. maybe overly optimistic. we always knew at some point that he would have to step down. i want to gauge with the market reaction would be off the back of this. but muddying the waters a little bit, what do we see out of saudi arabia? more of the same? the new guy has been at saudi aramco for years.

he knows the saudi oil industry inside out. i would not expect radical changes in the short term. however, he is very much aligned with the new policy of saudi arabia. mohammed binose to salman, who is driving policy. there's a reason to think that saudi arabia will change its policy. i think they are hawkish. they are willing to let oil prices level, and that may be bearish. the final question, as we spin forward into the june opec meeting, through the chances of an output freeze diminished somewhat? will: i think that was off the table as soon as -- i do not think there is the time needed building blocks in place. kennedy, thank you

very much. amanda? amanda: disappointing trade data sent shares in china sliding. let's go live to hong kong to get the very latest from enda curran. enda: good morning indeed. there was some tepid trade out of china this weekend, and there was not much in it for the bullish outlook. chinese economy stabilizing, but it is not really turning the corner. perhaps there is some weakness in demand as well which can be a concern. but on the import side of thing, we saw the old issue of trade invoices flare up again. we saw imports from hong kong rise almost 204%. economists that they are using fake trade invoices to get out of china and india hong kong because they are fade that they are afraid the

yuan will weekend. i think people are disappointed and concerned on the import side. amanda: we also have this theaordinary morning from people's daily from an authoritative person, a spokesman for the government, about that levels in china. what do you make of that? enda: this is quite a powerful message today. when you see this person turn up in the front page of the people's daily, we pay attention. the warning today is that china's economy cannot continue to depend on this drip of cheap credit and debt to keep things going. they will have to push through painful reforms that are needed to put the economy on a more broad footing. the markets are reacting by interpreting this interview today of saying perhaps the easy credit and the mega-stimulus will be eased off in the coming months, and the authorities will focus on the hard things like, the coal factories.

some of the hard reforms are on the way, and that is why people reacted the way they did. thanks so much, amanda. don't become upset, not yet, at least. that is even after the somewhat is appointing numbers we got on friday about jobs. that is what two or three influential economic advisers are advising us. did we asked too quickly? michael: there is a fascinating face-off between the fed and the bond market. the bond market has been saying there is little chance of a fed rate increase even though fed officials are saying do not count us out yet. we spoke to a couple of old veterans of the bond market who told us remember the old maxim, don't fight the fed. >> i am not sure that june is out. we have heard from bullard, from stanley fischer, from williams in san francisco, and they all seem to get it. they all seem to know that at

some point they should be raising interest rates in order to preserve some semblance of profitability for savers and insurance companies and the like. hikes, seeing one to two one certainly, maybe two. the fed has learned it has a window. financial markets, relatively calm. the dollar has depreciated. remember, when the fed looks at whether to hike a market, it looks at the famous equation that bernanke set out in 2010, about benefits, costs, and risks. michael: that is the same message that new york fed president bill dudley has given in an interview in "the new york times" this morning. will tell youan the same thing bill dudley does. if we continue along the same path, do not write off june. is the fed trying to keep their options open, or do they really think they may hike in june? michael: they want to

raise rates. they feel the mandate on employment, and now they are starting to see some inflation out there. 160,000ages rise, and jobs is enough to keep the unemployment rate still going down. if this continues, we will see more fed speak suggesting they are getting ready to move because they would like to get this out of the way. they would want to raise rates. the only thing that would keep them sideline, even if the numbers are good, is the possibility of a brexit mode in june. david: we will have an interesting six or seven weeks ahead of us. that is mike mckee. "surveillance" radio host. will or willthey not, i think the market has answered that question pretty loudly. matt: check out the world interest-rate probability count -- interest-rate probability calculator we have here. the probability of a rate hike .n june is only at about 8%

here in red, you can see the probability of a cut. here in blue is the prediction that we will stay the same, 89%. and in white you see the probability of a rate cut really has come down, especially after the jobs number. if you pull down on this yellow are come you can check the possibility of other meetings. the december meeting, that is when the market things there is the possibility of another rate cut. if you look at the morgan stanley index, and they have a custom index for this. you can check this out on your bloomberg. this is thethat average hourly earnings, and a lot of people are saying janet yellen is more concerned with what people are getting paid and the inflation there then she is with the headline number. that rose to 2.5%. it has been strong and continues

to stay fairly strong here. the morgan stanley index comes down now to only one month until the next rate hike. so that is weathering nexis calculating. amanda: time now for your first word news. here is vonnie quinn. vonnie: it is british prime minister david cameron's latest attempt to sway voters not to leave the european union. in a speech, he warned that it would affect the british economy of the country's edition. david cameron: i understand why many people are wrestling with the decision and why some people's heads and hearts are torn. and i understand and respect the views of those who think we should leave. even if i believe they are wrong and that leaving would inflict real damage on our country, it's economy, and its power in the world. vonnie: the british referendum on the e.u. is june 23. firefighters battling the wildfire in western canada may get a break. a cold front moving through the and may bring rain,

forecasts show the fire moving east away from the oil sands operation of canada's biggest energy company. it also lead to 80,000 people fleeing the city of fort mcmurray. russia marks the 71st murder theversary -- russia marks 71st anniversary of the defeat of not to germany. germany.i global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus i am vonnieorld, quinn. jon: breaking news on lending club. the ceo has resigned after an internal review. review sales of $22 million of loans to a single investor, violation of actresses, unacceptable, and some are not aware that -- the ceo has resigned after an

internal review. you see the stock getting hammered, down 11%. david: and it was already down substantially and they had a lot more competition in this space. they do not need these -- they do not need this news right now. : saudi arabia's new oil minister is expected to stay the course on keeping rates high. ♪

jon: good day to you all from new york city as we kick off a new trading week.

we are talking about the weekend's news out of saudi arabia. this is "bloomberg ." new oilabia putting a minister. the move is part of mohammed bin wider rebound. jason shanker joins us live from austin, texas. you have followed the oil markets for years. the chief guide used to be to listen to saudi arabia. that really meant listen to z al-naimi. >> there were stories that he was going to retire, that this might be his swan song. .t is not to bank surprising that at 80 years old there is now a replacement for him. al-falih is a solid choice.

amanda: is the expectation that he will keep on on the same track, keeping promotion levels -- keeping production levels where they are? >> i think some of the stories naimihe weekend were that has been sacked and that would be a change in policy. that ish is that remaining the same. --lso expect prince abdullah one of the sons of the king -- i expect him to also still be there. there is going to be a lot of continuity in terms of how the delegation is composed. so anyone who views this change of guard as price bullish can find themselves burned ahead of the next opec meeting. david: i wonder about the leadership. i wonder whether -- and i would

like your view on this -- is this really a message from the deputy crown prince that he is in charge, he is putting his people in place? >> i do not necessarily know about that. there have been a lot of different changes of minister. there was an unusual circumstance where it was quite tense between iran and saudi arabia and the iranian minister was replaced and they sent in the minister of's -- the minister of sports in order to be a temporary placeholder for the ministry of oil. that was quite precarious and sending a bit of -- that was quite precarious and it was sending a bit of a message for it i do not think that is what this is here. i think this is more continuity, and you can expect that the saudi stance is not going to yield or change in less there is a concerted agreement among all of the opec members at the meeting on june 2. jon: -- david: i want to bring in matt

miller. matt: my question is, will the new minister change policy? the oildecide that price action is more important than market share action? we know the saudis get 70% or 80% of their oil -- of the revenue from oil. this shows how other stocks move in relation to oil. this is a correlation chart that shows you that all of the other stocks, the other businesses in saudi arabia, are correlated 80% to the price of oil. there could be impress for them to move the price because it decides basically everything in saudi arabia. jon: i think you get ash david: you cannot see the chart, jason, but you get the point. fed, thest fall, the fdic, and the occ issued a warning on november 5 that was largely ignored by everyone which warned about the leverage and the oil and gas debt of the

united states. it reached almost 400% in a year, largely ignored by the market, and at that point we warned our clients that cash was going to be king, or access to credit will be king in the oil batch. arabia,s like saudi where you have saudi aramco and other select ones, will fare much better than ioc's simply because they have more cash or the ability to raise debt on a sovereign level. the ability to for saudi arabia to go out and raise debt on the markets or to do an ipo partially as saudi arabia is going to be something that could keep the going way longer than a smaller or medium-sized independent, which will be at risk of default, bankruptcy, and the like in the next couple of quarters because oil prices are low. the saudis are leveraging their position of strength, access to capital and credit. jon: a quick question to talk

about the opec meeting -- the al-naimi with opec was that he could strip out the political noise in the region. has it become more political? if the deputy crown prince can put a new oil minister in place without -- jason: i think there is always politics with these meetings. you have 13 different sovereign nations always being represented, other members of other nations, i would say at the last meeting it was particularly tense. there have been a number of intense meetings. -- that set a political statement. i will be curious to see what their attire is during the in june in vienna. it is the first time i have seen

that and i have been going to these meetings for over a decade. i think that is important, and i think this will remain very much a political situation to be worked out. jon: economics president jason shanker. . amanda: the world's --

jon: "bloomberg this is." -- this is "bloomberg ." i'm jonathan ferro. positive six points on the s&p 500. over in europe, a decent session in mainland europe. 200, 9.4% almost higher. switch up the board. euro-dollar, a five-day retreat. down .2 of 1%.

dollar-yen, what a retracement. almost one for percentage point. the crude market, it is that tussle between the wildfire in canada and the shutdown in production. and the long-term implications of a new oil minister in saudi arabia. the market is trying to work it out. i have to say, elsewhere in the commodity market, copper and other metals are matt: getting hammered at the moment. a doubledose -- >> dose of that news this morning. as iron ore slumps severely, with thetry to -- china trade data, it jobs another 10% today as it slows in stockpiles hit a one year high. they have too much of it, the prices coming down, and they have also bidded up. deutsche bank is looking at 50%

outperformance to the european market this year and says the stocks are due for a pullback. deutsche bank says metals are vulnerable to move to the dollar. so bhp, rio tinto, anglo american all down and dragging on the ftse. let's take a look at what the leading markets are up overseas. there are gainers pulling stocks. european drug stocks, big stocks , really boosting the index there. you can see that roche is up 2.5%. novartis is up 2%. , up almost 3%. a lot is going on in europe, but it is to the upside. amanda: it is time now for bloomberg friends, a look at the top stories the readers are looking at on the bloomberg. i love this company because i get a read on the global economy, not just on demand but on supply. one of the things that has

plagued this company is overcapacity. i have sat down with the ceo several times, and it is his comments on negative interest rates, the idea that negative interest rates are deflationary because it carries on promoting capacity. the companies that should have shut down, that should have gone on with others for consolidation are not because of negative interest rates. i think that is an important discussion. david: the misallocation of capital we have been talking about. amanda: he started complaining. he was a cap -- he was an opportunist. david: the question we're coming back to throughout the show -- is the fed on course to raise interest rates in june? it is the most read story on the bloomberg this morning. ♪

looking at a beautiful day in london today and markets are doing beautiful there. i'm amanda lang in new york with david westin and jonathan ferro.

here's what you need to know this hour. areks in europe rallying as crude rises above $45 a barrel. have knockedfires production of the mix well saudi arabia has moved oil ministers. disappointing trade data in the people's daily is warning about the countries rising debt in a front-page article there. international monetary fund officials will meet today to decide whether greece's government has done enough belt-tightening to gain another aid disbursement. time to see what is making headlines outside of the business world. let's check in with vonnie quinn. vonnie: greece has taken another step to unlocking the next round of bailout money could th. the greek parliament has approved payments for the tax

system. leaders will decide if that is enough belt-tightening to give greece more aid. if north korea wants to improve relations, they will have to give up nuclear weapons. the south was responded to comments from kim jong-un. he says he will use nuclear weapons of his country comes under attack. wall street is giving a financial bridge to democratic presidential front-runner hillary clinton. received 53%nton of donations from financial services executives. that is up from 33% in january. many donors shifted their support from republican candidates who dropped out. dayal news 24 hours a powered by journalists in more than 150 news bureaus around the world, i am vonnie quinn. jonathan: call it federal confusion. we get a soft data point and a miss on payroll on friday. 200,000 and bank of

america and goldman sachs throw in the towel on the june rate hike. muddying the waters is bill gross of janus capital. take a listen to what he had to say. >> i think they should raise rates in order to give savers tha a break at the bank and the money markets. at the same time, the fed probably has to support the arket -- that is the long bond market. this has to be a slow and delicate process if they are going to raise rates and there cannot be a lot of volatility . i think qe has to come back at some point only to provide funds for fiscal spending. jonathan: joining us to weigh in on this is tom keene straight off the radio. tom: you nailed it with the goldman sachs call right after they throw in the towel and say we do not know where we are. confusion is the right word. it is baffling the polarity of what we saw with the dynamics of

nonfarm payrolls versus good hourly and wage growth. everyone is confused. jonathan: he told me we would have a three-month average of around 200 k, going into a june meeting could tom. tom: what are you waiting for? jonathan: are we waiting until june for a rate hike? tom: where the fed is is up here and meeting after meeting, the market walked further and further away from what smart people think is going to happen. jonathan: that spread has been there for a number of years now could guess what? that spread his recommends from the top down and the market is right in the fed is wrong. tom: the other i interesting thing is that we are set up where all this analysis and punditry gets hit by shocks. in the distance is june 15 and you wonder what the shocks are

going to be. jonathan: you wrap this up in a beautiful quote. tom: it is the quality of wage growth. this arch back to idea that you hear from alan krueger of princeton university. do we work within a blended american economy or are there to america's out there right now? havebility distributions 5000-1 underdogs like leicester city have a 50% chance of winning everything thousand 500 years -- everything thousand 500 years. years.y 3500 so listen to traders -- fat tails. leicester city were put together at a cost of 57 million pounds. manchester united paid more for one player. jonathan: what i find fascinating about this is we're talking about implied probability and the chances of something happening. discuss is the

implied probability actually determines the probability. at 8%, the fed won't move. tom: implied probability an actual probability goes back to the ex post anti-analysis. everyone agrees that there is over communication. there is maybe now communication, but the foundational point away from the media power game is john williams of san francisco last week to kathleen hays. we are going to wait and see what the data is talk to me june 13. jonathan: we have the dog of the fed and the tail is the market . right now, the tail is wagging the dog. tom: i don't agree with that. i think the idea that the fed will wait and see what the data is with some economists adjusting mabel go i -- suggestg they will go in june. i love the idea that we need

higher interest rates to boost savings. the single most interesting thing this morning was and nielsen of denmark talking about his denmark. he had an authority about it. this is not normal, totally confused. i go back to the idea of a fed in all due spirit desperately trying to get to normal. they will determine that the second week of june. jonathan: eric nielsen, the eternal optimist. tom: are we done? jonathan: thank you very much, tom. david: i want to bring in deutsche bank's chief economist. some negative numbers. the gdp numbers were fairly weak. they were low on the total numbers. although tom just pointed out that none of the wage hours worked. is the fed too pessimistic about the economy or are the markets to pessimistic about what the fed thinks? >> the numbers on friday suggest

that when the economy gets the full employment like janet yellen says, we should expect to see employment growth slow and we should also expect more bargaining power and wages going up here that they question i've been getting is are we getting to that inflection point when inflation will start to rise. david: does that put june back on the table? torsten: one read is that they want to keep june open. when they keep the door open, that's an option for them saying, the data is great. if so, we will move. it is clear they want to move rather than later. amanda: they are driven to watch specific thinks, but they must do watching june 23 and it possible brexit. does that keep the fed on the sidelines? torsten: there are many considerations, but it is inflation and unemployment that matters. thatebate of framework

inflation and unemployment are drivers of what they do. i do think that at the end of the day, if the economic data is good enough, they will not hold back. david: the markets are impatient. they want to go one direction or the other and we are waiting. we had charles evans speak this morning from europe. take a listen to what he had to say. >> the continuation of wait-and-see monetary policy responses appropriate and will ensure that economic growth continues, the labor market to strengthen further, the wages increase more, and all this supports a potential increase of currently low-inflation back to up around 2%. david: maybe that's the right answer. torsten: i agree. a is traditionally been dovish member and now he is saying, guys, you're too pessimistic . maybe it's time that the fed might be right. annda: tom keene made

interesting point on the quality of which growth. torsten: that's also a good point. the one interesting thing is that mainly it has been jobs with people with skills and high wages have been broadening out. we have seen more retail sector jobs. that is not particularly high productive and high wage jobs, but it's good news that the recovery is broadening out to affect people than just the high skilled group. david: what is this about the sense of more people coming online? have we taken up this excess capacity? torsten: the chicago fed said that one of the numbers to keep the on employment rate constant is 85,000 nonfarm payrolls. if we go below 80,000, then we really have a problem. 160,000 is well above. it is getting closer down to where we should be, but i would still say that we are moving closer to full capacity. that is from the fed perspective the most important point. amanda: this level of

uncertainty is unusual. is the fed mismanaging the root to hire? are they doing it for job of communicating the trajectory? torsten: they've been way too optimistic for several years, basically since 2010. they said that growth is coming and it did not arrive to now the markets are saying i made money that it's not arriving, so why now? amanda: it is interesting to see bill gross calling for a hike when he has made the wrong call for a long time. fedten: that is why the folks are somewhat frustrating that markets are not listening because they really do feel that it's coming now. we're getting close to full employment. there's an interview yesterday that said do not put too much weight on that because we are getting closer to the point where we need to move. david: we are going to keep this conversation going by turning to china next with the chief economist at deutsche bank. ♪

jonathan: this is "bloomberg ." i'm here in the hp green room. coming up in the next hour, an exclusive interview with jim coulter on the big changes and private equity. -- in private equity. watchingou are "bloomberg ." here's your latest bloomberg business flash. valiant has offered millions of dollars to sell off funds and keep the relationship secret. that is according to documents by the senate committee. that led to the stock falling by 89%. the pharmacy has now ceased operations. here's another example of a silken valley company battling the u.s. government over privacy.

cut off intelligence agency from using a key analytics service for surveillance. sayser says it's partner it would sell public tweets for information, but agencies were not supposed to be able to buy it. data miner has been buying surveillance for two years. inses in united kingdom fell april. prices were boosted earlier this year by a surge of rental investors trying to be a tax hike on second properties. that led to a shortage of homes for sale. that is your bloomberg business flash. ecb vice president says that new levels of oil prices are "expected to start to increase inflation." london, at a panel in he reiterated that the ecb plans to continue to do what it needs to achieve its inflation target. i'm here with david westin, jonathan ferro, and torsten slok.

what is the message he is sending clearly to the fed? torsten: what he is tried to tell us is that it is good if the fed gets going because this will be proof that central banks are actually affected in solving these problems that we have had. inre's a lot of skepticism europe and japan about monetary policy is working at all. amanda: is there any danger that if the fed gets out in front of their own inflation target that it creates the opposite and it creates concern worldwide that it is not working? torsten: if the fed hikes rates and the u.s. start to go down and it's not going to work at all, you can have some real fears. if the fed is confident this is working, then i do think there could be a consequence from lifting rates. david: one of the things that we have been fixated here is our job situation in the united states. how do we compare in th europe? torsten: in your area, it's

around 10%. the most important thing is that if trends are going down, we are moving the right direction. the question from a macro perspective is who is response will for moving it down? will it be fiscal policies are structural policies? where does the burden of proof here lie? it is clear that in both areas, the unemployment rate is moving down although slowly. david: are we at full employment in the united states? torsten: many are saying that we are near full employment. there are many who suggest we have to get to full employment and price stability. at that point, it will be a real indicator. may be in the u.s., but not quite at all in the euro area. jonathan: do you think we are in full employment in the u.s. or close to it, but why was the communication out of the fat that this was a positive thing? why does this change so much?

torsten: in january and february, you had a lot of turbulence. was january or february a one-time event or could it be that every time the fed hikes rate, we cannot hike rate further because the markets are taking this with? it's a very important debate where the volatility has seen this is a one unique situation or we will see more and more as heights go higher. david: you reported a fair amount of what is going on in china. tell us about that because i was surprised that the migration from rural to urban areas. torsten: one thing that is clear and this is what the data show this weekend is that china is slowly and gradually getting to a lower growth pattern, but this has to be a very managed process. hasdata over the weekend confirmed that the slimming down is continuing. there are fewer people coming

from rural areas to the urban areas. they're fewer people taking jobs and export factory because there are fewer jobs. this extremely statement basically from the chinese government about the need to reduce debt. what message are they helping the world will take from that? torsten: one read is that they are tried to tell us that they are indeed aware of the problems with that levels across the board from mainly the corporate sector. this is an attempt to try to tell the market and the imf and regulators everywhere that we do know that these things are important and we do know that we need to be with these things. the question is what can they do and can they do it quick enough because there's a lot of skepticism in markets? matt: let me jump in and pull it back to a big macro look here. g-8ve a chart showing consumer prices and the global bond market here. come down, prices obviously the central banks are

looking to spur growth. here you can see we are basically at an all-time low for global rates. willat point or stopping it stop the world's borrowers from going on cheap rates and driving the blue line up, taking advantage of the white line? torsten: i think many traders have that chart hanging on their wall, saying it has gone down for so many years. it starts in 2006 and there's one big downtrend. why should we believe we come to one point where the rates will go higher? it is certainly very legitimate to be worried about whether this will actually work or not. matt: if a trader does not have this chart hanging on their wall, you can access it with the bloomberg terminal. you can pull this chart up and printed out large and hanging up on your wall. amanda: where do you think the fed goes? torsten: we think it will hike

in june for the first time. if there's more more wage pressure and the dollar is falling, that will put pressure on inflation. if those two trends are moving higher, then it could make a real difficult situation for the fed as we go not only in june, but july and sitomer. amanda: thank you, torsten slok. japan's monetary supply is close to overtaking that of the united states, leaving some investors saying that this may lead to a weaker yen. is coming next on off the charts. a programming note -- bloomberg west goes east. especial series focusing on tech innovation and the entrepreneurial spirit of boston. joining us at six clock p.m. in new york or three clock p.m. in san francisco live from boston. ♪

jonathan: this is "bloomberg ." i'm jonathan ferro alongside amanda lang and david westin. future positive this monday morning. around five.es up .ains on the dax switch up the boards quickly and there is euro link -- weakness. dollar yen with a 108 handle, up now one full percentage point. 10 year yield at 1.77%. crude oil with the wildfire in flat ons around $45 nymex crude. david: japan's monetary base is %.sen to 96

that miller is here to join us ., this is amazing. matt: i found it difficult to believe at first. then i realize how smart she was and she talked me into this. this is the percentage of the japanese monetary base to the u.s. monetary base and we have come up. gone over 100. japanese montane base has eclipsed the us-based. this is what traders call a soros chart. this is what predicted the weakening of the yen. i don't want to say a collapse, but this is a young chart. in can see some weakness 2013, 2014, 2015, but incredible strength into this year. this is a chart that triggers look to to see if maybe a could turn around. -- that traders look to see if maybe it could turn around. this is a chart to show the

monetary base and dollars. david: rather than percent. matt: here you can see that back that the japanese monetary base was bigger than the u.s. monetary base. this is for an economy a quarter size of ours. the u.s. over ticket with massive quantitative easing. here's where corona went negative, firing his bazooka so to speak, and drove up his monetary base. david: the reason it's important is that it may indicate that the yen may be about to weaken because it has been so strong for so long. the other question is does it mean that there is a limit to how far growth can go? can he keep going forever? matt: the limit is what the market will allow. the yen has been strengthening all year long. the reason is that traders just want more and more yen. it is cheaper for them to take

yen and two trends that they want to do. as long as they are doing that, he can continue to print more. david: they like to flee to safety when they are nervous about the overall state of the global economy. that was off the charts. back over to you. amanda: coming up at the next hour, exclusive interview with jim coulter. he will talk about the big changes in the private equity market. ♪

fed bet.i what policymakers could surprise the street and hike in june. amanda: why tesla stock to

25%.e another ton toy jonathan: what it means for economic and foreign policy across the world. ♪ jonathan: a very warm welcome to the second hour of "bloomberg ." i'm jonathan ferro alongside david westin. increasing the iq around the table is amanda lang with us for the week. david: we have a lot to keep an eye on this morning. oil is searching for a fourth day as tesla looks to rebound itsr suffering biggest weekly decline. a june rate hike might be on the table. jonathan: really? bill gross and mohamed el-erian jesting that agenda. thus suggesting that agenda.

let's get a check in the markets. dow futures of 36 points. s&p 500 futures around that mark. we have a day of gains. it is a stronger dollar with the euro of 11384. the dollar yen up one full percentage point. 10 year treasuries at 1.77%. that tells a we talked about all day. a new oil minister at saudi arabia and the wildfires in canada potentially taking a lot of production off-line. marginally at 44.85. matt miller? matt: i will go ahead and take it now here. lending club shares sliding down after the company's founder and ceo resigned today after an internal review. a big scandal here. the board said it did not

disclose the issuance of $24 million in your prime loans to a single investor. the company's president will step in here, but shares are down 33%. freeport-mcmoran coming across the terminal, striking a deal to sell its copper to a chinese rival. they will pay about $2.7 million for the mine that will help freeport-mcmoran hey down little bit of its $20 million in debt. comingay be more sales to move that number lower as the two companies are expected to make other deals. that's more stuff in finland and in congo. another shrinking and profit as generic drug maker tivo pharmaceuticals said earnings fell 3%, but shares are rising as the total still beat the street estimate, led by higher sales of the key drug.

the shares are up 2.75%. david: if you're playing on betting against the rate hike this june, keep your money in your pocket right now. three of the world biggest bond kings are saying the federal reserve is on track for a rate hike this year. will the fed move his earlier this y this early in the year? anastasia, we were sitting around on friday when the jobs came in and we saw the markets react quite quickly, saying these are negative numbers meaning no chance of a rate hike, but to th to the market overreact? anastasia: i think, but the dollar selling off and the gold ramping up was an overreaction . the reality is that it was not as disappointing of a payroll report that markets were making it out to be and there are a few reasons for that. one is that the fed looks not in one data point. the three-month trend is intact.

will nothe fed overreact to this the way that markets did earlier. jonathan: matt miller with breaking news on value pharmaceuticals. matt: they will file its 10-q on or before june 10. the company is reaffirming its first-quarter view. this quarterly filing as far as the sec is concerned as well as canadian regulators will be on a timely basis, but most importantly, it is reiterating its full guidance. valeant the last time came out with a delayed filing that it throughout basically everything in the kitchen sink, trying to clear the decks for its new ceo to run the company. the markets at first were concerned and then relieved. are seeing that valiant is reaffirming its view for the quarter and for the full year. the shares are up 4%. jonathan: at the moment, i'm not sure who has the hardest job -- valeant analyst or those

following the fed. what i find really remarkable is that the implied probability actually shapes the outcome. if there's no need to move, they won't move. anastasia: although i do not think you will move in june, the markets can move in advance of that. you have a real real tail sales number on friday. you have a bunch of said speakers coming out this month. that is what can move the market. the probability was at 2% at one point on friday and is now moved up to six. a can now move -- economic higher if the fed does not move in june. jonathan: which would play into the fed's hand. amanda: is that not a move that compliant five? by? anastasia: it's not logical to completely rule out a set rate hike in june.

it is also not logical to assign something like a 40% chance of a rate hike this year at all. i think the fed is trying to dislodge some of that complacency and we will see more that this month. david: where are we on inflation? we do not talk about it very often, but we are at 2.5% and was wage increases in these numbers. where these expectations because that may inform the fed? anastasia: it is also the realized inflation that we have. they have started to creep back up. we have reached the low of 1.22%. we are now higher on a 10 year inflation break to about 1.5%, maybe somewhat higher. that helps, but having said that, what the fed is really lacking right now is momentum. the fed is really lacking economic data that would improve a lot. what you are having is a failure to launch and a lot of the economic data. inflation is being one of them. 2.5% wage increase does

certainly help. jonathan: don't we have to keep the wage inflation the context of real inflation? amanda: wages are going up and that's a positive sign, but on a real basis we have seen food prices high and rent prices move up. from a real consumer standpoint, are we just moving up? anastasia: the fed tends to be quite concerned with inflation because it's the biggest component of cpi and it's also one that could potentially hurt the corporate bottom line the most fear, which is kind of a predicament. the fed wants to see it, but copies may not want to see it. jonathan: just a question on the treasury market. some of it is not positioned at two years at 72 basis points, but where do you think the treasury market should be based on the data coming out of the economy and does that mean that where yields should be based on? if i look at the global economy right now and the chart that matt miller brought up, there is reason that the 10 years are pinned down to the floor. anastasia: two different things

-- the two-year should be following the fed rate hike expectations very closely. 25 extra basis points, you should expect roughly that at the end of the curve. the long end of the curve has been a totally different story. what matters there are a few things. the stock that the long-term bonds that the fed controls, which is still a sizable amount, and how much the foreign central banks are buying, which is a sizable amount. the reality is that it is not a myth it is actually a true fact. investors are coming back to the united states and buying up the u.s. treasury market not on the short end but the long and. david: anastasia will be staying with us to talk about oil, another big story today. right now, let's go over to bloomberg first word news with vonnie quinn. vonnie: greece's international creditors will look at whether the country has done enough tightening to get more emergency loans. the greek parliament

approved pension and income tax reforms. the international has demanded so-called contingency measures for $4 billion in case greece strays off its budget plans. republicans in congress hope to have a rescue bill for puerto rico as early as wednesday. lawmakers missed one deadline to keep the u.s. commonwealth from defaulting on payments. according to people familiar with the matter, republicans will propose a federal oversight board to help manage puerto rico and restructure its $70 billion in debt. some call him the most talkative u.s. presence of candidate in memory. now donald trump will soon be getting briefed on some of america's most sensitive secrets. once donald trump becomes the republican candidate, he will be let on to some classified information and some are concerned that he will let it slip out.

global news powered by 150 news bureaus around the world, i vonnie quinn. , merger monday kicking off with a $1 billion deal that aims to boost her one companies competitiveness in clean energy. oil rebounding after hitting a 15 year low in february. i will tell you one company not rebounding -- it is lending club. the ceo resigned after an internal review. the stock getting absolute battered in the premarket -- down more than 30%. ♪

jonathan: there is one company shining bright red on the premarket screen. matt miller has it for you. matt: lending club has lost about a yard of its value in the

premarket this morning. there is an internal review of the chief executive officer. he sold nearly $22 billion in prime loans to one investor. as a result, he is being forced out good the president scott sanborn is now active ceo. you can see it's now down a quarter, but this has already greatly diminished. if you take a look at my bloomberg, i've had them up since the ipo. they have come down about 70% from the post-ipo highs. they went as an idea back in december of 2014. from this high, down 72%. the shares have already gotten crushed and they are going to lose another quarter of their value because of this kind of scandal that often draws the attention of law enforcement, for example.

not the kind of thing you want to see when invested in a stock. jonathan: what a stock story. crude -- what a session it has been already. a tussle between wildfires in canada cutting oilsands production by an estimated 40%. that's about one million barrels a day. pushing prices above $45 a barrel. the other side of the trade is saudi arabia getting a new oil minister. to break this down is anastasia still with us and we turn to our resident crude expert the chief management correspondent in london. you managed to notice the writing on the wall after doha. the big question for the market is whether anything has changed in terms of policy coming out of saudi arabia. has it? >> if anything is going to change, it is going to be more various policy. he was the architect of the

agreement of opec to abandon the support of oil on highway prices and go for market shares. i think his successor is probably very similar, but the rhetoric is going to be even more bearish because he is very aligned with the deputy crown prince of saudi arabia. father and sonth have said that what saudi arabia needs to do is protect its orket share by not freezing reducing production unless other big producers agree to do so. i think we are going to see very high saudi oil production going forward. iran is also coming back to the market in a very big way. david: as you suggest, going to ha discussion, you thought they would be softer on the iran issue, but it was pulled back by the deputy crown prince. what does this tell you about the possibility of a deal coming out of opec?

javier: we will not have a deal from opec. the deputy crown prince has been adamant that he does not care about high oil prices. he wants supply and demand to price and hee wants supply to remain very high. in three weeks in vienna, we will not have any agreement to restrict production. david: matt miller, do you want to jump in? matt: i do want to jump in. we have got a red headline across the terminal. it is of great interest to me and maybe a couple of you as well. krispy kreme is going to be ab beach forjob $24 a share in cash. taking up this doughnut maker that has fallen on hard times and unfortunately has only one location in new york city. how can you expect real growth when you're only store in new

york city is intent station? -- is in penn station? that's an important story. we like to break m&a news especially when it's an all caps takeout. i will hand it back to you. jonathan: thank you. amanda: matt miller's bias is showing a little bit. krispy kreme did formally have plenty of new york stores. it has not been performing all that well. another big deal today as a french battery group is expected to be bought, hoping to expand into clean energy. in a statement, the acquisition is part of totality ambition to into renewable fields of electricity. total -- since is a small deal. jeff: and the grand scheme of

things, it's a pretty small deal, but everyone knows and united states or in europe or emerging markets, you will see a bigger push toward clean energy, the lithium batteries. it is not surprising they did this. they made an acquisition 2011 for a company called some power, one of the biggest energy companies out there. this is not the first time we have seen total make a move like this. it's a good time to move because missing energy prices move down. amanda: we have seen them pushing to renewables, but do we expect that to be a place of real support for renewables? jeff: it is. in the energy space, we're not seen a lot of deals there. 2015 was a slow year. oil and gas really was not. jonathan: it was the news that was not the news. it was the fact that we do not have the big deals that we thought we would get an energy sector, . do you think that will change

this year? anastasia: i think it will be the impetus because we do not have a pipeline for big deals. a lot of producers were fully hedged. why sell the aspects if you can afford to wait it out because you have those hedges in place? that is no longer the case this year. a lot of those hedges have run off and i think companies are not necessarily a lot more willing but they are a lot more cash-strapped. they do have to look at some m&a activity. david: thus far, the oil deals have been going the other way. energy deals being undone rather than done. halliburton. jeff: another one bites the dust perhaps. the arbitrage spread since april has doubled. basically the market expects the deal to fall apart. both of them could walk away and that's how it looks right now. the value of both companies has fallen by half with oil prices falling.

they are arguing in court over breaches and saying each side has breached the agreement. they fired the cfo over at energy transfer. it looks like a deal that is going to hit the curb and die. if part of this unwillingness to go through with the deals is the recent ramp-up in oil prices. oil prices are not at $26 but at $45. maybe i would wait a little longer. anastasia: it has to do with the rates of the ceo of merck is complaining about that companies that might've been looking to pair up will actually go it alone. jeff: i just don't know. they're supposed to be $60 billion in cash initially, but if we could do an all stock deal, we could more than likely do a deal that is all stock. the $60 billion in cash, more certainty up front, but it looks at this will

hit a wall and die. amanda: bloomberg deals editor jeff mccracken. can tesla get back on track or is elon musk setting up investors for a big disappointment? why tesla shares could run out of battery. we have the world's most influential bond investors are not counting out a gene rate hike. should you expect the unexpected in june? we will discuss this in our morning meeting when "bloomberg " returns. ♪

♪ last week we learned that tesla motors is stepping up its production plans rather robustly further mass-market kazan. -- for their mass-market sedan. many believe this will only disappoint investors, including our next guest. he believes tesla will not meet its production target. they have it pretty big bogey

out there -- 500,000 vehicles by 2018? as i understand it, that is more than twice the number of total electric vehicles out there right now. what is the biggest problem with meeting that goal? colin: it is 10 times where they were ye last year,'s you're talking about a massive ramp-up in a short time. they need to get the big factory online could it is a very challenging target and i think most people on the street have their doubts on whether they can achieve that. the credibility of the timing is questionable because the head of manufacturing just left. the model x has been ramping very poorly. can they really deliver the timing from a special announcement? david: that is for the batteries because they have to have batteries to make electric car work. is that the biggest bottleneck in your view? colin: they will have to retool the current facility as well. that is why there is a huge acceleration and cap x and y

they went through their net guidance for cash positive. that is probably the biggest bottleneck, but there are quite a few other challenges as well. amanda: what struck me as interesting about this is that the renminbi skeptics about the previous targets. getting more aggressive is an interesting move. what do you make of it? colin: they said in q1 that they did not need to raise capital. they had these large number of orders for model three and i think of are getting too overhyped about that number. i do think there is a risk of cancellation. i think they're using that as a reason to raise capital and i do think they will need it. they will need to raise about $2 billion. david: you have a cell on the stock. a lot people have made a lot of money on the way up. colin: it's a volatile stock and it has run quite a bit. i've been reiterating my sell around the model three reveal.

the next year and a half will be a challenge until it hits the market. david: many thanks for being here. , you are coming up saying there is a chance? bill gross and mohamed el-erian sounding the alarm on a fed rate hike. more on that meeting when "bloomberg " returns. ♪

amanda: we are one hour away from the opening bell on wall street. keep your eye on shares of lending club. the stock is plunging. resigned after an

internal review of loan sales to a single investor. we have a sweet takeover to tell you about. beech is buying krispy kreme. we will go to first word news. iran has tested another ballistic missile. in march it set off an international outcry by testfiring two missiles. tests dory says the not violate the terms of its agreement with the west. voters are casting ballots in the philippines in a hotly contested presidential election.

one candidate is drawing support from filipinos who feel they have not benefited from the rising economy. a new poll says half of europeans believe that a british decision to leave the eu could spark a domino effect. quinn.nie gross may believe a june rate hike is still on the table, but ethan harris doesn't think so. he joins me now. the fed's next move and the reasons behind them. why do you think the june meeting is not a likelihood for a rate hike? >> i don't think it's impossible

that i think the fed's body language doesn't feel quite right. they seem to be in a dovish mood. willing to forgive. -- what we in we have seen in price data. i think they will be extremely cautious. the other story is the data have slowed down a little bit. it just feels a little bit weak. let me ask you about the inflation picture. pce getting closer and closer to a 2% reading. the cpi clearly very far above that. isn't that enough? they are supposed to look at jobs and inflation and both seem to be doing quite well. to somenk the fed

degree is willing to forgive some inflation here. we wrote a piece called opportunistic reflation this past week. after having inflation so low for so long and people beginning to doubt whether the fed can achieve the 2% target, there is strong incentive for the fed to really hit 2% if not higher. the fed is also very worried about sitting around with all these other central banks. the best way to why some space buy somee space -- space is hike interest rates to a higher level. fed has been suggesting that they are not going to react very quick weight to an inflation acceleration. they will let it run higher for a while. matt: what do you think about the theory that keeping us at

ratesr negative interest isn't helping spur any growth? do you think it would be helpful to get back up to a more normal level? >> i don't buy that argument. that's putting the cart before the horse. in order to achieve 2% growth the fed had to pump liquidity and pump up the markets with aggressive monetary policy. if the economy picks up and then the fed hikes that's great. but i don't think by raising rates they can somehow tell everyone everything is fine. it has to come off of strong data and it has to reinforce confidence in the economy. if they hike without the improvement in growth, they look

like they are getting tough, they don't look like they are getting smart. bank of america, merrill lynch, head of global economics. thank you. jonathan: just under 60 minutes away from the market opening. futures in the u.s. a little bit positive. europe, biggest one-week loss since february. the dax is now up by 1.62%. crude at the bottom of the screen rolling over into negative territory. as that happens the narrative will change. less about canada and more about the new saudi oil minister. coming up, the changing landscape of the private equity market. an exclusive interview with jim

coulter on how the interview is some -- industry is somewhat different today. ♪

jonathan: this is bloomberg . i'm jonathan ferro. coming up next, we have the ceo of liquid net joining us to weigh in on concerns on volatility and its impact on markets. avid: rodrigo don't care to is a tough talking former mayor from the city in the philippines. popularity and a whole new brand of people -- politics. he talks about slaughtering and butchering criminals. he has been likened to donald

trump. nick burns is a fellow at stanford university hoover institution. thank you for joining us. there are these candidates around the world. the australianng chancellor step down because he was challenged by a populist candidate. is there something larger going on here? >> i think the larger pattern is the great recession of 2009 that hit europe hard and the united states. we are seeing in france and belgium and the netherlands and definitely in hungary and the polish right-wing government. a new right-wing populism and nationalism in europe. it with the united states with the isolationism of both bernie sanders and donald trump. there is a healthy metal. i don't think it has weathered away.

middle. is a healthy i don't think it has with third ered away.th david: how much of this has to do with immigration? >> it has overwhelmed the politics of europe. it is undercutting the schengen regime, which is one of the foundational elements. the free movement of labor. the greatest threat from right-wing nationalism is probably in europe. i don't see it as much of a threat in the united states because it is very likely that hillary clinton will become the next president, should become the next president. you see angela merkel and the other leaders struggling to overcome these right-wing nationalist movements. amanda: i feel like we need to make a distinction between what's driving european nations to the right because of what's

.oing on in america we have your full employment. we have wage growth. real recovery compared to every other country in the world. how do we explain the rise of donald trump here? >> there's an issue of income in body and a weakening of the middle class. the politics of 2016. when bernie sanders depicts an america that is failing at every, when donald trump as we are notn anymore, we great anymore, those are not true statements. the united states is healthy economically. our weight in the world politically and militarily is clearly second to none. we are not a weak country. we are not a failing country. if politicians keep telling us we are failing and has an impact on people. that's why i think there is a big mainstream in america.

hillary clinton and barack obama and john mccain and mitt romney are in that mainstream. that is where the weight of our political class should be rather than these extremist polls on the left and right. david: thank you for getting up early in palo alto. thanks for being with us, ambassador burns. jason kelly sat down with jim coulter. of tpg capital. >> the industry has grown up. it became incredibly more complex. almost 30 years ago we spent all of our time with investors talking about why private and witty. no one is arguing anymore about whether they should be in the industry. that's how much and how to do

it. it has become much more complex. do they want to do buyouts, credit. there is a much more robust set of discussions about the relationship aspect. , it was a veryor different time five or six years ago. how has the opportunity set changed? years ago it was essentially a risk on time. we were coming out of the recession and investing at a rapid rate. think thehe cycle i markets have leveled out. we are in a stock pickers market. you have to find disruptions and interesting companies and really choose where to invest. i think that is something that resonated with our investors. in terms of the type of companies you have invested in

lately. e likes of uber, airbnb. true growth stories. have you learned and how do you implement that strategy as you look at a broader buyout type portfolio flacco >> investing is not about market share. it is about inside. we have an environment where economic growth may be flattening of it. where is the change in the economy where we can get extraordinary growth. when interest rates are low, discount rates imply that growth is worth a lot. we have been trying to sort through those to create the value suggested by growth. we sent in san francisco. as the economy has moved from a tech-based economy about, could you come up with the best search

algorithm, to a new era where tech and the old economies are coming together. we have been very well positioned to be a preferred investors for companies trying to bridge the old and new world. many of the problems they faced at uber going forward were more like the problems of an airline. or the regulatory issues with airbnb. --can bring some fees something to these companies as they grew. >> this week marks the 40th anniversary of kkr. and yet the business is radically different than it was in the 70's and 80's. it wasn't even called private equity back then. it?do you define >> i think we are in the middle of a massive shift in asset management. within the public markets passive is winning in a lot of

ways but there is still a place for active management. it is growing and healthy in the area of alternatives. it's hard to define sometimes exactly what i do for a living. i invest. people have sometimes called it buyouts. we have moved from buyouts to private equity to alternatives. our job is really pretty simple. it is not to define ourselves as anyone type of transaction. cutting edge opportunities in the marketplace and bring those back to our investors. doing thatwe keep there's a place for our type of investing. >> if you look at your competitive set broadly diversified -- carlyle, blackstone. publicly traded across lots of different types of alternatives. how do you fit into that definition?

>> we have never defined ourselves by how large we are. i think that is a fallacy of the marketplace. it is how you differentiate yourself from the market. we define ourselves as being large enough to address opportunities around asset classes arnd the world but small enough to make sure we can find ways to differentiate ourselves in areas that are not as accessible if you are going for size. we compete against excellent firms. they have earned their place in the market. theant to be different from leaders in what we do. >> you have remained privately held. many of those other names are publicly traded. that question would come. i have consistently answered that for eight or nine years now. time where it a makes sense for us.

it is not that moment today. we wereeen rumored that going public for eight or nine years and am sure that rumor will persist. >> the buyout bust. a lot of huge deals were done that we may not see the likes of again. what are the lessons you take from deals like that? >> there are extraordinary industryearned by the in that timeframe and we see them playing out now. one of the less is late in the cycle after you and your extended success there tends to you have been through a period of extended success there tends to be lots of -- our fund this time is smaller as a direct learning from what happened before. sure you do make not lean into the marketplace

late in the cycle. in generalthing is large deals tend to happen late in the cycle so be careful on the larger deals in the marketplace. some are attractive but in general any one firm should not be overweight in large deals. david: that was tpg capital's jim coulter. jason kelly joins us now. terrific interview. he said we do not define ourselves by helping we are which is convenient when they are not getting bigger and the competition is getting a lot bigger. is he kidding himself? take's a very interesting on what's happening in private equity because you have seen a radical shift at this time. the last time they raised money was 2008. they were doing the biggest of the big deals and others that didn't go so well. they have shifted much more toward growth equity. and in some of the names that we all know.

spotify and, others. that is a different flavor of private equity. a different playbook from what we are seeing from blackstone and kkr and carlisle. at thatit seems we are stage of the cycle where private equity is selling to private equity. do you see that? it is something -- the notion of you have to behave differently in the latter part of the cycle, especially with all the money coming in from investors. .here is some worry are you doing the right deals and what is the exit? is the ipo market something that is viable? jonathan: when are these guys going to liquidate? we've and waiting a long time to

see one of these tech beasts go public. >> the ipo market has not been friendly. unicorns are looking for the big unicorn to go public whether it is uber or airbnb to pave the way. because private equity investors only get paid when a company gets liquidated in some way or another. hard to see anything other than an ipo for a company the size of uber. david: thank you for being with us, jason kelly. jonathan: coming up, what is up with chinese imports from hong kong? we take a closer look in battle of the charts. that's next. ♪

amanda: this is bloomberg . i'm amanda lang. time for battle of the charts. jonathan: this gets nasty. way to gaugeest capital outflows from china? fx reserves the denomination key here, dollars. reserve take higher. the key is dollars because what we have seen is a weaker dollar. that is probably the reason you started to see fx reserves take ck up attle bit -- ti little bit. me that's not the best way of telling the story at all. i go to chinese trade data and look at imports china from hong kong. what you see in the previous

month is this line here explode. a move of over 200%. china imports from hong kong up 200%. the story around this is fake invoicing. you get your money out of the country by importing something from hong kong and that for me shows that the capital outflows hasn't abated that much at all. i feel like jonathan thinks the longer he talks the better his chances are at winning. this was sent into me by sam. this is a senior loan officer's survey. you take the u.s. senior loan officers and look at their increasing standards or tightening their standards of lending. they are unwilling to lend money when we are headed into a recession. here is loan demand. it falls when we had into a recession. are we looking at the same kind of trend here?

tightening lending standards and a drop in loan demand. tough one. is a this is confidence of the chinese in their own economy. this is about the credit cycle. amanda: where are we in the cycle. kind of an important subject. i'm going to go with loan officers. where we are in the cycle is the biggest question. it is not scientific. david: i'm going to go with jonathan actually. i think china is such a big determinant. jonathan wins. coming up, we will be joined by seth merrin. talking aboutbe paralyzing volatility and what it does to the markets on bloomberg . ♪

david: wildfires continue to rage through alberta. a wind may shift the fires away from oil-producing areas. amanda: some top bond investors

say the u.s. central bank is on course to raise rates. the founder and ceo resigning following an internal review at lending club. ♪ david: we are about 30 minutes away from the opening bell. this is bloomberg . i'm david westin alongside jonathan ferro and amanda lang who is our colleague from canada. she is adding some class. amanda: that is a low bar. jonathan: futures firming up in the session. dow futures up around seven points.

a big day of gains on the dax. a weaker euro but stronger dollar in the fx market. rolling over on the dollar. crude higher through much of the session now in negative territory, down .5%. the concern over the new saudi and canada's wildfires taking down productions in that country. let's get to matt miller. shares downg club by assistive their value premarket. valueifth of their premarket. out followingshed

an internal investigation that found over $22 million of loans to a single investor. downeer-to-peer lender was over 46% already. lendingclub has pulled its sales and earnings guidance as it investigates intuit's internal control. watch this space for a lot more news on what looks to develop into a scandal. krispy kreme doughnuts up 24%. on itsn hang a sold sign one store here in new york city after it reached a buyout deal bab the privately held jb beech. jab manages the wealth of the austrian billionaire ryman family.

the group already owns a controlling stake in keurig and peet's. up after theares gas driller may need to sell more assets. a lost a third of its value last week. p a little more than 2%. jonathan: here with us is seth merrin, ceo of liquid net. three top bond investors saying don't count the fed out even when the market is and disappointing trade data out of china. crude plunging 1%.

andere up by around 2% rolled over in the last half hour or so. cuttingildfires production on the one side. over the weekend we had news about the saudi oil minister reshuffle. javier blas joins us from london. i have no idea where crude is going to be in terms of long-term fundamentals. the news over the weekend, game changer? >> i think it's more of the same for saudi arabia. al-falih is the new energy minister. he sounds more bearish than the last one. potentially over the short term as the markets start to assimilate to a new voice the headlines may sound more bearish in the past but i do not think

it is a significant change in the oil policy. matt: looking at contracts going forward. the third month out ahead of the second month out, it is trading for more although that spread has come down. what do you think about futures pricing in oil contracts? >> i think that is a clear indication of a market that is beginning to tighten. it is very closely watched by the market peaking around $12 in february. things have come down to less than three dollars today. to tightening is about happen. at some point in the next couple of months maybe the markets will reach supply and demand. we will have to go through a lot of inventories over the next coming months.

is showing to me that the lows of the market are behind us. are we going to rally? probably not in a big way. amanda: we have seen production shot in. how long before we start to see it come back online? some of the production in venezuela and nigeria elsewhere are a sign of -- that is going to take a while for recovery. the disruptions we are beginning to see in nigeria and venezuela, others are going to be quicker. to thees recovered today $50 range, they a -- may start to add more -- that's going to take a few months. for the rest of 2016i think none of the production is going to be

clearly on the downside. jonathan: javier blas in london, thank you very much. seth merrin, the intraday noise coming from the crude market. do you take any signal away from that noise? you can see that crude on a short-term basis as traders market. long-term fundamental market but on an intraday basis it's just traders. which makes it very difficult as an indicator. we know ultimately a lower price can benefit businesses and consumers but it is the volatility we are paying attention to. >> i wouldn't take anything away from today's ups and downs. certainly the canadian fires are terrible. it is where the saudi's are going to come out. are they going to push supply or cut back? it may be ironic that a shift in wind is moving the price of oil today. some of the world's most

influential on to investors are saying don't count the fed out. el-erians and mohamed say the fed is on course to raise rates even after friday's disappointing jobs report that had a lot of things the opposite. i'm not so sure that june is stann we have heard from fisher and williams in san francisco. they all seem to know that at one point they should he raising interest rates in order to reserve a semblance of profitability. one of my favorite charts is the extent to which the predictions of rates have been wrong overtime and they are always higher. they are never right. these are people who may be talking their book in one way or another. what is your take on how much

noise there is around where rates are going? >> since i will lose nothing by disagreeing with these pundits i will they there is more risk in the system globally then there is reward. we have earnings down 5%. we have brexit. fundamental problems where the risk is much larger than the report today. -- reward today. i can't imagine the fed is going to raise rates in june. if anything it's going to be later in the year. we will have to see. things are changing rapidly. not for the better. amanda: it's not as though the fed raises rates and creates inflation. if you raise rates prematurely you could really wallop the modest economic expansion this one country is experiencing. david: that's correct. we are talking about the third story. chinese stocks sinking to their biggest today lost since

february after disappointing trade data came out of china. what is going on in china? we are getting negative numbers. extraordinary story in the paper over there that was clearly backed by the chinese government warning about too much credit. his china managing their economy the way you would hope? >> i think that china is trying to manage the economy centrally and the rest of the world is not having the confidence that it once had maybe five years ago. you can see with how they manage the stock market, the currency. announced they are going to be propping up some of the less efficient industries which is going to allow them to continue flooding the market with a lot of these commodities which obviously is going to have a negative effect on the commodity prices world wide. david: we keep hearing about reform which would include

cutting capacity in state owned enterprises. is that coming? >> i don't see any reform cutting -- coming whatsoever. i think they talk a good game. we also saw the chinese government clamping down on anybody disagreeing with their economic forecast. that is anything but a free market economy. david: seth merrin is staying with us to talk about his business. let's go to vonnie quinn. vonnie: there's new words that the north carolina government will back down from a state law limiting protections for lgbt people. the justice department gave him a deadline today to declare he will not enforce the law. a lawsuit against the state as possible. wall street is giving a financial boost to hillary clinton. received 53% of the donations from financial services executives, up from 33%

in january. many donors shifted their support from republican candidates who dropped out. inernational creditors greece will look at whether the country can get more emergency loans. a great parliament approved a set of pension and income tax reforms. the imf has demanded contingency measures worth $4 billion in case greece strays from its budget plan. i'm vonnie quinn. much more ahead on bloomberg . this week, bloomberg west goes east. a special series focused on tech innovation in the city of boston. john's today at 6:00 p.m. new york time, 3:00 p.m. san francisco live from district hall in boston. ♪

david: this is bloomberg . i'm david westin. mixed signals from policy, concerns of growth in china, and structural uncertainty is all contributing to the markets. how much these factors are affecting the markets. >> you see a lot of factors that may affect market sentiment. you see volatility but it's not the kind of volatility that translates to client activity. it's a paralyzing volatility. david: liquid net ceo seth merrin is still with us. i have always heard that when you have more volatility you can make my money on the training. this time it seems to be the reverse. complete seeing a

shift in the business models of the banks. volatility is where the banks have made most of their money. now they are not able to play in that volatility which create a lack of volume. and you can see what's happening to their earnings and revenue based on the first quarter of this year. have this volatility but it is not producing any volume because a lot of the market participants have dropped out. this fall away of volume. explain it to us. matt: take a look at volatility here. in the end of 15 but we are still hanging there for a while in the beginning of 2016. volume completely dried up. remember 2009 when we had volatility going through the roof and volume was up.

how come volume nowets crushed by volatility when it was amplified after the crisis? a huge participant in the market that banks themselves not being able to take advantage of their proprietary trading arm. the place -- they made historically a lot of their profits. also have a situation where the first quarter we saw a tremendous six-week drop in the dow. it a 20% increase in our overall volume. that's because a lot of the industry participants took advantage of that drop. it went back up very quickly as well as. now you have a situation where there's a lack of opportunity because the markets are fully valued and there's more risk globally then there is potential. this ishow much of being driven by high-frequency trading algorithms kicking in and out? high-frequency trading

exacerbates a lot of the volatility up and down but that's 100 shares in a shot. you have a tremendous amount of money that flows into passive funds and etf's. anytime there are inflows into these they have to go into the market and by the same exact and that creates a lot of volatility intraday as well. david: we have large institutional investors. is this lack of volume translate into a lack of the beauty -- liquidity? >> our customers are telling us across the board there's a lack of liquidity and that's both in the equity market and fixed income market. we are seeing a sea change in the activity of the big banks.

the market has been very manual for a very long time. the margins are so large. now we are seeing a lot of technology coming into these markets to make those markets more efficient. annda: there has been outflow from equities in the first quarter and a ton of cash. maybe we are seeing volume drop as a result. >> we have seen that on a number of occasions. the question is when does that cash come back and where does it go in? we have so many macro issues affecting that cash staying on the sidelines. amanda: we will keep you around , liquid net merrin ceo and founder. coming up, look at the stocks moving premarket. one that is definitely on the move, lendingclub. shares plunging after the ceo resigned following an internal review. that's next.

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jonathan: this is bloomberg . i'm jonathan ferro. futures rollover as crude tumbles. futures negative. switch of the board. the open about nine minutes away. wti down by 1.23%. market it was a much stronger dollar store. -- story. yieldstures in the red negative. treasuries positive at 1.76%. amanda: lendingclub shares sliding in the premarket even worse than they are at this moment. they have been even further down. we still have a 22% decline.

the company's founder and ceo resigning after an internal you -- internal review. we have seth merrin, ceo of liquidnet. how big a shock was this jonathan? everything happened pretty fast. they only started this review a couple of weeks ago. in 2007.ub was founded he took it public and it had a huge rise. they have had a whole bunch of other problems. this was completely out of nowhere. amanda: what does it say about the space? the valuations of lenders like this really have come off. >> we don't really know yet. washington has had a closer i on these new lenders.

this was $22 million worth of loans to a single investor. it was jeffries. it will be very interesting to see if there's more. david: it's not like there has been a big default. there is some wrongdoing as such. the question is does this give more impetus to regulators? >> we will see what happens next. broke this morning. this was an internal review. they cost the problems themselves -- they caught the problem themselves. we will see how the company deals with it let alone regulators. amanda: one big client that happens to be jeffries. i feel as though this story has some legs. >> i think the real problem is the space. there have been over 500 of

these online lending landforms funded by venture capitalists on the west coast and they are all fighting for the same loans. you see the shares of the sector get hammered. people are trying to find other ways to profit in this business and prop up their stock price. we might find some other nasty things coming out of the woodwork. want to have't sour grapes about losing the chart of the day competition, but matt miller's chart speaks to exactly that. >> we will see the shares of on deck capital. we will see if that is moving in tandem with lendingclub. jonathan: what does this say about credit in general? the amount of people chasing the same deals? you have the typical environment on the west coast with venture capitalists where you see a hot sector -- you have

a ton of copycats coming in. they are going after the same borrowers. there's real competition. , you seethat happens it from these new online lending platforms. the credit worthiness declines. amanda: seth merrin, sit tight. basak, thank you. jonathan: the opening bell is just four minutes away. s&p 500 futures negative. after the biggest week of losses, the dax on a climb by 1.4%. the u.s. open is next. ♪

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15 seconds as you hear the opening bell. s&p 500, futures down. that tussle between what is happening in canada and the potential shutdown of reduction, and then on the other side, the uncertainty and then just factor in, that is a volatile contract right there. one percentage point. a stronger dollar, 11394, and a little lower down by two basis and. matt miller, a lot to look out for and a lot of docs to look at as well. matt: a lot to go on here here a lot -- why don't we just jump in , coming earlier and saying it will release by june, everything it needs to for the fcc and the

canadian regulators. they are he told us the revisions they would make and they are in they will stick to those revisions. joe has basically cleaned house he is now getting ready to start from solid ground, the stock of the present. the israelis generic drugmaker coming out with better earnings than had been anticipated. the profit has fallen from last year and as a result, shares are up 5% feel in. drake?u ever heard of there is a pop singer called drake who has new records. he sold over one million copies exclusively on apple's platform. on the itunes but you can also get on streaming and there is also a special apple radio station.

that was good news for apple trading higher on the premarket. if it trades up, it will be the second of a and 13 i can scrap. the company has had a rough time. drake could save the company. let's take a look finally at tyson foods, the largest u.s. , raising itsing 3% full-year forecast after declines in the costa it for animals that is so's to you and i and this -- in the supermarket. last week,hank you the s&p 500 giving below that level, and last month, jpmorgan 's -- warned of the risk of going lower. they correctly predicted the selloff. this is what he had to say about the 2050 level. >> you will have some of the disparity. i think 2030-2050 range, could

-- [indiscernible] jonathan: columnist for our fast session, 2030-2050 level, again, why so important? >> whatever margot talks, i listen for one thing. one thing he is looking at his momentum, which has become a popular thing to trade off of. if the wind is blowing north, a lot of people sell north end south, they will sell that -- sales south. the problem is the market has been flat over the last year for the big dips in august and december here if you look at the momentum, it is a tight range above 20 100 and that would attract momentum traders to push it a little higher. below 2050 and you're starting

to look at negative momentum on a 12 month basis. we are lower at that level than what we were 12 month ago, lower than what we worth months ago, and on cream of momentum, it is good because in february was when the market was freaking out. on a one basis, we're looking at being around one month. for the systematic traders that use momentum as an input in their signals, this is the level to watch. we are starting to look at the momentum being toward the downside. an area to watch and things can get uglier from there. >> does it mean we are range bound, as we talk about volatility in the market, we will stay within the range? >> right, i think of it as a tug-of-war that keeps you in the range. from a fundamental level, you have high valuations while

earnings are coming down. that is keeping a lid on the top and. then you have the fed being dovish and the dollar weakening and oil stabilizing the 40's. -- itestion is, if usually results in one way or another. you have to wonder if that would be the case here. >> then you have all of the uncertainty, there is no conviction in the market and no reason to get heavily invested or divested. that also creates a range bound market. >> how are your clients making decisions on investments? these are not algorithms. >> one of the big problems i think we have is people tend to invest in their own backyards. in order to own their feeds and outperform, they really have to be able to broaden opportunities.

one of the big problems the funds are facing, and that all the hedge funds are faced in, is there all piling into the same investments. 40,000 out in the world today. if you want to outperform, there is only some country -- always some country moving faster than others. you have to run out your active and be able to take advantage of opportunities anywhere around the world. until the investors do that, we will have a problem with limited returns. matt: i have a great function on the bloomberg terminal, which were the volume is and where trading is happening on different platforms around the country. i, youportion of this can see this is the biggest. this is set's's business. there was a lot of concern of

outcry during the financial crisis and the flash crash that this was a problem. seems that outcry has died down and people are no longer concerned about dark pools. why? >> people understand that dark fools play a role in market infrastructure. the investors managing money on behalf of all of us and the pension funds, people put their money into pension funds and mutual funds, and anytime they want to buy and sell large stocks, which they have to do to perform, they want to do it under the cover of darkness. people do not pile in an trade ahead of them. matt: isn't it a problem that the majority of trading happening in the u.s. is going to dark pools? -- biggest slices of the pie >> i do not think that is a problem. entrants -- market entrance like market trading. a large institution has to by millions of shares. what is available on the floor

of the exchanges is about 200 shares. that is a balance that the theing firms have to take balance of. that is why the institutions want to trade under the cover. all of the executions are reported after the fact area the problem is understanding that if an institution says they want to buy one million shares of something, the whole world will go crazy and trade ahead of them is not good. it is an example where the institutions are trying to protect the information of individual investors into a better -- a better job for them in terms of dying and selling the stock they are required to do. will that change the paradigm at all? allow institutional investors to go back to the markets under that model?

classic provides more safety for the institutions and there is not one market pressure or once aleutian that would be perfect for everybody. but what we do know is if you have to buy one million shares of something, you need different tools than if you want to buy 100 shares of something. our average execution sizes anywhere from 100 to 300 times that of the exchanges or the other dark pools. jonathan: great to have you with us. thank you. for more fast commentary, you know where to find it. and also search on the internet. >> still ahead, wildfires are raging. an estimated one million barrels of daily oil output. we have the latest after this. ♪

up later today, through wednesday, 6:00 p.m. eastern, 3:00 san francisco time. ♪ vonnie: you're watching bloomberg . $850 million -- poisond offer filter that gives shareholders the right to buy more shares at a discount, a defensive measure against a hostile takeover. selling off another asset to reduce some of the $20 billion of debt. they have agreed to sell and the democratic of congress. the price is almost $2.73 in

cash. the share fell 71%. housing prices in the u.k. fell in april. earlier ie boosted rental professors try to be a tax hike. that led to a shortage of homes for sale. that is your latest. jonathan: stocks marginally positive. matt miller full of something today. matt, over to you. matt: a lot of movers i want to talk to you about. whole bunch of stuff and not just art. feeling the effect of droopy hedge fund these, after falling to a loss. due to somepart prominent collectors only in their war net income from investments fell. first-quarter losses due to the low between the spring and art season. it may be seasonal.

a home goods retailer, revenue topped the highest revenue in the first quarter as it added customers. loss was still reported for the quarter even after the average ticket price rose 3.4%. the company is trying to pay a from market share. krispy kreme doughnuts, let's take a look heading to breakfast here. shares are soaring. a $21 in cash offer per share from a private investor group. the austrian billionaire will add the donut to its coffee empire that already included pizza brand, and i have a bloomberg correction. apparently, drake is not a pop singer, but a rapper. >> break with", that was beyond the pale.

job.eat let's go now to bloomberg's abigail doolittle live at the nasdaq, starting with horizon pharma. >> we have shares soaring after the biotech company beat first-quarter earnings by 12%. tim walberg is saying the company expects to see operating cash flow increase sequentially through the year and the company authorized a 5 million share buyback. shares may have served higher in the range. the biggest drag on the nasdaq here, the chinese online offered be handling but a consensus you for the second quarter and sales are expected year-over-year, relative or down from first-quarter growth in sales of 47%. back down toade

buying support. >> we have been talking about wildfires raging throughout her to. an estimated one million barrels of output from canada's energy hub has been knocked out of reduction. with us now on the latest is jamie. itsounds as though perhaps is not as bad as had been feared. >> you could characterize it as it is turning into a situation that is controllable, now at a level that is much smaller than what officials were fearing over the course of the weekend. it is still 1600 kilometers. it is moving away from fort mcmurray and toward the saskatchewan border. something moving into phase two,

stabilization and assessment. >> it was suncor that was most effective. any update from the largest energy company about the status of its operations? >> several producers have been affected by this. the one million figure is a confident look at what is going on across several producers. canadian natural resources as well. it stands to be 40% of oilsands production. is lot across the energy sector for sure and economically, it will take a lot of time to recover and get back to her things were. >> more broadly, are the conditions such that we might expect more from these wildfires? >> looking ahead of the forecasts, officials seem to be saying cooler temperatures will prevail over the next few days. rain andct more light

the cooler temperatures yesterday allowed officials to get the fire under control. classy mentioned this was already a region suffering because of the dramatic drop in oil prices. i think i saw a billion dollar figure but that was a few days ago. in termswe expecting of the cost to the region and the federal government in canada? >> it is unknown. she is warning she is taking media with her. could be alarming to the general public, there could be widespread devastation. impact, very ,ramatic estimates right now but that seems to be well in excess of her things are going. muchs that are very uncertain.

certainty.ay with some forecasters suggesting the national gdp figures will be cut to zero so for sure the magnitude is having a wider impact. >> thank you for being with us. jonathan: up next, bloomberg markets with betty liu and mark barton. betty joins us now. up.y: a lot of coming jim is joining us. also, chairman of j.p. morgan securities, he will be talking about regulation on european banks, but also, the recent rules that came out on wall street banks on compensation. then we will have a great article from bloomberg businessweek reporter devin leonard about his rise in the child family. he is of course mr. evoke a trump --mr. evoke a

ivanka trump. cognac being auctioned off by the auction house. i imagine that. about 20,000you euros. i know you sneak your telephone bit in a commercial break. thank you very much. 20 minutes into the session, stocks are opening marginally positive going into the session. the s&p 500 up in the dow up about 1/10 and the nasdaq up 16 points. ♪

our viewers

worldwide, good day to you from new york city. toy three minutes into the session. let's get you up to speed on where stocks are trading this morning. in new york, we open a little higher by 17 points. the s&p 500 is also higher by about one quarter of 1%. 0.2% to be process. since february, the second straight week as it is kicking up 1.6%. euro-dollar -- the dollar yen at 1.6%. treasury yields, it does not matter what the fed or anyone does. it just keeps grinding lower on the 10 year by two basis points, 1.7 6%. amanda: a look at the top stories terminals are reading on bloomberg. you can find those on readgo.

top bond fund managers saying the fed will move in june, do not count them out here the reason i think this story is fun is those bond fund managers have been pummeled either direction of rates for the last few years. bonds could be the best by you could make for huge stretches of time. their positions tend to be wrong to the fed has to look at employment and inflation. it is not as though they are not also looking at data. out of china, out of possible grexit vote coming up. it is all in the mix here. the idea that they raise in june seems far-fetched. at then: they're looking probability of a hike. chafe the outcome. if the market is not expecting it, it will not make a move. market pricing down here, the fed is somewhere up there and when that results, it usually results with the fed coming down toward the market. >> you have to feel a little sorry for them. they are out there trying to keep the option now the open and

yet the markets will not let them do it. you would think the percentage rate would go up in probability and it would not do it. they do not have a nationality. >> they can raise the short end all they like. they tend to get the long end of it. jonathan: you're taking out growth and inflation and the long and comes down. it is a conundrum for them at this point. >> yes you're right back on the underlying economy, it will be a real problem. >> the rest of the world, it depends on the u.s. growth to be real and genuine. this is a recovery to let them breathe a little bit rather than choking off. >> you have got to look at corporate earnings. the u.s. economy. someone has got to make money and they are not. >> wages go up and markets come down. jonathan: that is the big story of the year. how does the spread between corporate earnings and employment games -- games, how

does that reconcile? >> top file is not growing. it is right out of the margins are it on the agenda for today, the minneapolis fed president speaks at the economic club of minnesota at 1:00 a.m. eastern time. some of the companies reporting earnings coming up after the bell. tomorrow, credit suisse reporting earnings. thursday, back in the city of london. and on friday, u.s. retail sales shaping up to be a busy week. david westin and amanda, that does it for bloomberg . bloomberg markets is next. ♪

betty: it is 3:00 p.m. in london. i am betty liu. marx: live from london, i am mark barton.

♪ betty: we will take you from new york to london in the next hour. some of the world passes top bonding investors are saying, do not count the fed out. monitor among those arguing the u.s. central bank is still on course to raise rates here. saudi arabia gets a new oil chief. producing crude at near record levels to defend its market per --while -- it sans production by 40%. betty: a closer look at donald trump's powerful son-in-law. what washington and wall street wants to know about him.