>> uncovering for mark barton. -- i am covering for mark barton. david: -- betty: we take you from new york to london to marking. becomes the latest company to miss sales targets and cut their forecast. april consumer spending, the u.s. jumps the most in the year. what exactly is going on here? the euro area economy grows slightly less than estimated in the first quarter. germany leaving the regionwide greek economy shrinks the most. betty: apple is placing a bet on uber's big rival in china. with a two-year low, is it anything to get investors excited about?

where apple is putting their money, finally. let's head to the markets desk where julie hyman has a look at where investors are putting their money. much and stocks. after we got retail sales numbers earlier, we're just getting university of michigan consumer's been a, better than estimated like the retail sales were better than estimated, coming in at 95.8. expectations better than estimated, 87.5. when you look at the retail sales number, that defied expectations as well. even if you back out cars and gasoline, a cayman better than estimated. a lot of that strength because of non-store retailers. because of e-commerce. that number includes catalog and direct mail sales. nonetheless, it looks like e-commerce, and -- accounted for each some of these strengths. a bit of a muddling along to end the week. take a look at the groups on the move. technology a strong, only at

.4%. consumer discretionary leading the losses, because as betty mentioned, we do have individual retailers out of disappointing numbers, despite the headline number coming in. and beating estimates. energy also lagging today, down 131%. wanted to check on apple and google. since yesterday we saw google's market cap or out the cap surpassed that of apple. you can see both of the stocks are rising today, it looks like apple is back on top apple breaking the losing streak we've been seeing for the stocks recently. also, of course, the news that the company is investing $1 billion in that chinese ridesharing startup. the chipmaker's second-quarter revenue forecast topping estimates after first-quarter numbers also beat estimates. the company said it's deep learning chips are performed pretty well. and it looks like a demand from gaming companies is doing well

in helping fuel video sales. you see activision, blizzard, ada also on the rise. betty: oil is not faring well as the nigerian system gets worse. julie: you have what's going on in canada was supply coming back online. and you have nigeria and continued supply constraints there. exxon mobil invoking force majeure, basically saying it can suspend shipments out of nigeria without breaching its contract. supply back and forth. but you see some of the oil majors are under pressure here today. on the flipside, the airlines, which have been falling a little bit recently as oil has been rising, they are rebounding today is oil goes down. caroline: julie, thank you. we have suddenly got a rebound on our hands, it was going to be three days of losses, and u.s. retail data came in and kicked into gear and europe. this digs into all the industry

data they need if you are looking at the stoxx 600 index. you can see the outperformance, health almost a percentage point, you have the banks doing well, on the downside is energy, on the downside is a certain amount that consumer discretionary does seem to be u.s. data. at 1:30, suddenly sent the stoxx 600 into the green. we end the week on a high. having a look at one stock that's not ending on a high, a french satellite company. us is what happens when you put out significant profit warning. day.mbled by 26%, a brutal revenue growth is not going to be flat. it was going to be 2% 3% higher. one analyst thinking a massive profit warning. and little with going on the auto sector, we have numbers out of registrations that are being put into the month of april. not bad, 9% growth. at chrysler is doing well.

it seems to be suv makers as ofl, and indeed the likes the state is the really outperformed. currently up more than a percentage point, despite the fact that they actually saw their overall market share eking away from eight straight month. that scandal regarding the overall air quality still continuing. and we have euro growth data that wasn't as good as expected. higher,nching our way it seems to be greece is the laggards. betty: germany leaving the growth. let's check in on the bloomberg first word news. taylor has more from the newsroom. to leavehe u.k. votes the european union, it will likely feel a cold chill. that's according to irish prime minister. he spoke to were television in exclusive interview in dublin. >> if the british electorate

were to decide to leave the european union, ireland would obviously still stand up for britain and would talk about those close ties a european level. but he could not determine what the outlook of what the response from the other 26 countries who had arrangements with britain would be at that stage. ireland hasays reached out to the one million irish citizens living in the u.k. so they know what the consequences of a leave vote would be. brazil's new acting president has his work cut out for him. he takes office facing almost a double-digit inflation, rising and implement, and a multibillion-dollar scandal. he: resilience to have faith. he replaces dilma rousseff come to the senate voted to suspend. the islamic state is claiming responsibility for an attack on a coffee shop north of baghdad. at least 13 people were killed, 15 others wounded. ae attack was carried out by group of gunmen, including two suicide bombers. the u.s. navy has fired the

wasander after their boat held by iran. the executive commander of their unit at the time has been relieved of his duties. other navy personnel also are likely to be suspended. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. i'm taylor riggs, caroline. caroline: thank you. one of the key stories of the invest $1 will billion in the chinese right rival. service a fraction of the $200 billion is taking,hat apple opening up questions about more investments in increased dividends. joinedhite of drexel "surveillance," this morning. if apple was a buy,

sell, or hold. >> definitely a buy. it looks like it's very cheap and the profit cycle bottom of the june quarter. we have a company with $233 billion in cash and lots of opportunity. tom: if the stock goes down like it has done, this is a good time to be a trueblue stock and deploy cash to shareholders. deploy cash to shareholders like they are deploying cash to china. >> exactly. they have $250 billion cash to plymouth strategy increased from $200 billion in april. a biggerike to see hike in their dividends. they just hiked it, but if they could get into a 3.5% yield, think that would be very attractive for investors. lugo back to dividends in the second. on china, apple to say -- apple today saying this is the biggest competitor to google in china with $1 billion. are we going to see more of this kind of funding for small rivals tuber or other american

technologies? a couplee sense on fronts. it allows apple paid a spread throughout china. it does build goodwill with the chinese government. and number three, it is an interesting area and there's lots to talk about apple being involved in autonomous cars. think of all the cash that apple has overseas that they can't bring back to the u.s., including china, since the generated over $58 billion in revenue last year. dividends,ou want the same time using this is a good deal. would you not rather apple invest in more deals like that in 5, 10 years can bring you a bigger share price incident giving back down dividends? >> i think they can do both. they announced a $250 billion capital deployment strategy from $200 billion previously through 2018. part of that is dividend, part of that is by back. i think it higher dividend yield would be very attractive.

caroline: that was brian white of drexel. apple is abide. -- is a by. gives andk rivkin investors take on today's mixed bag of global economic data. stay with us. ♪

caroline: live from london and new york, i'm caroline hyde. betty: i betty liu, you're watching "bloomberg markets." business the biggest stories in the news right now. u.s. authorities are ramping up their part of the gross

investigation involving brazil's estate owned oil company. that's according to people familiar with the matter. the petrobras bribery probe has led to 150 arrests in brazil. the u.s. is looking into one of brazilianrporations, law doesn't allow criminal charges against companies. hsbc's hiring 175 people for the financial crime compliance team, they will focus on anti-money-laundering and sanctions compliance. that's according to people familiar with the plan. yuki lenders are required by law to isolate the consumer banking units from riskier trading businesses. that is your bloomberg business flash. global investors are sifting through all of this data that we've got today. hong kong's economy of excitedly contracted in the first quarter is falling retail sales in a weakening property market weight on growth. the euro area, growth was revised down slightly, even as germany's economy accelerated at the fastest pace in two years. in the u.s. we have retail sales

offers climbing 1.3% in april, despite the trouble that we saw from retailers, what ceos are saying is a glum picture for consumers. what exactly is the global picture telling us? fromrivkin is joining us outsiders advisers, which manages $2.5 billion in client assets. good to see this morning. can you make any sense of this? look at the employment numbers and add up the actual wages combined with the increase in employment, you have money available for consumption running a rate of close to 7% up. i think that's why retail sales are good. folks are not saving all this money, they are spending some of it. i think the retailers are looking backwards as opposed to forwards. they are not paying attention to the numbers. betty: what do you mean? what they're looking at

they experienced in the first quarter, and everyone knows the first quarter is a bizarre quarter. people are hiring in buying and all kinds of things. betty: fed officials are saying that sort of like what you are say -- i think people are underestimating the u.s. economy. eric rosengren's set this as well. you hear his exact comments on this. >> many on wall street, and if you look at the financial futures, they are expecting at most one increase over the course of this year. that would be consistent with an economy that was actively -- actually pretty weak. the underlying strength of the economy is stronger than that. the fundamentals of the u.s. economy are strong enough that we are likely going to be removing accommodation in little more quickly than is currently anticipated in financial markets. betty: why is wall street so pessimistic?

jack: there are a lot of macro bets being made and they are present. concern, big rightfully so, about what's going on outside of the u.s. it needs to be a poster child for things have worked out and everyone else started on qe later. i think it's a problem now. i think eric is absolutely right that people are underestimating. i'm expecting to increases this year. in the meantime, the u.s. economy is fully primed. but that's a low-wage front and the consumptions front. i'm not so sure it means that corporate profits are going to do well, because you have wages rising, we had a lift in commodity prices, including oil. that's going to affect corporate profits. in a lot of these countries have made money in the last year selling at low prices. interesting that you talked about the fact that we are seeing global issues. macro bets. one of the biggest bets we're trying to work out is what

happening in the u.k. june the 23rd. we heard earlier from christine lagarde, i want to hear about what she had to say about the risks the brexit causes. >> a technical recession is one of the possibilities of a downside risk scenario. in the case of a leave vote. fedline: how much is the looking at what's happening in the u.k. and having to worry about a potential recession and the global aspects, the central bank to the world play that's going on? jack: they are using it as an excuse to actually talk about slowing things down. i think it mainly relates to our own political environment. the fed is under pressure from all parties in terms of everyone is going to look at the fed and figure out what they did wrong and why things didn't work out quite as fast as they should otherwise.

i think the fed, in spite of what people say, has to be politically sensitive. i think they are just afraid of doing something that could cause a problem in the u.s. too soon. so they're stepping back. in my view, they're they are using what's going on globally as an excuse to do bad. they're not being to independence. and in the data in the u.s. supports at some point here certainly one increase, and in my view, probably to increases by the end of the year. gdp data nothad living up to expectations, being brought back a little bit 0.5%. we have healthy growth in germany, should be really be seeing the negative rates we currently do across the eurozone when it comes to the bond market? jack: i think that we are seeing slow blows -- slow growth globally. when you were in a slow growth environment, every slight change seems to be something that's a big deal. i think we're overreacting to

these individual numbers here. i believe we are in a slow growth environment, and europe has a participation in that. we are actually beginning to see some trends happening in south america and in asia as well. a view on howe elections will impact the markets. have a view on this election versus all other elections we've had in a 230 year experiment. leonard cohen wrote a great song called democracy, where he says democracy is coming to the usa. we are seeing it. we are seeing ron democracy coming to the usa. fears are voting their and their beliefs, as opposed to come in from the gut and coming from the heart, not from the head. and the establishment wants an enlightened electorate voting from the head, but they're not getting it. betty: is that a recipe for

disaster in the markets? jack: i think if you look at what trump is saying any action does everything he says he's going to do, i think the markets could go crazy. he's talking about spending a lot of money. raise debt and spend, and we are seeing some of that now the democratic side as well. i think it could be positive for the market in some sense. in the meantime we have a lot of noise. betty: jack rivkin, ceo and chief invested officer -- chief investment officer at all tigress. ♪

betty: we want to get to bloomberg's julie hyman who is standing by at our dive into the etf market. sell: as the sears conferences closing down, hedge funds have been exposing fears

of a diminishing industry and closing the etf gives us an idea of the larger trend of work. balchunas, and this is something that's been on top of this discussion for a while. but it really did seem to come to a head, they love defensiveness being expressed by the people at salt. etf's, you can come of see the trends of what people have been investing in. it's not been the hedge fund strategy. pretty muchare ignored. these of a of years that you really see what's happening. all the performance stuff is erased. let me give you what i see happening. hedge funds happen to be caught up in a gigantic seachange. they are not excluded, but not alone. you see money move from high-cost products to low-cost. it's not always active to passive or mutual fund to etf or hedge fund to etf. funds,ney coming out of hedge funds charge the most. they are risk. even institutions are getting in

the game of. consultant institutions, they are tired of paying money and not getting performance. that's why they are scared, they should be. these are pretty mind blowing numbers. active mutual funds have seen $30 billion in outflows. etf's are taking in $39 million. vanguard alone has taken in hundred $15 billion this year. in a year like this, that tells you that money is coming in for some of these places, rain or shine, regardless of performance. until we see in the etf's. the two lowest cost providers have 10 basis points, they seem to percent of all the flows and etf this year. betty: are we seeing outflows from higher cost etf's at the same time? you generally see money coming out of the high-cost stuff. the vanguard s&p 500, this product is slowly building up, it could eventually be the -- i don't know if it will be bigger than spy. but it's five basis points, and

get this. it's been around for 72 months. we've never seen anything but inflows. it's like a joe dimaggio records. i'd ever seen anything quite like it. betty: doesn't do what it's supposed to do? it does it better than the others. the lower your feet, the better your tracking. it outperforms the ishares and spy, which is the big one that everyone uses. looking at other etf the vanguard that of the most popular. this is taking in couple billion dollars this year, and it's down. flows and performance are related, but with vanguard, this money is coming in through robo advisors, to retail and advisers. this is in the hot money trying to find a trade. the into is on fire. this thing is now 75% of the assets in the real estate sector of etf's. it's rare that etf dominates that big. it's a beast. betty: i want to mention the

schwab advocate bond ecf. . they are a little cheaper. robo advisors and money coming in slowly have made schwab taking in 4.5 billion dollars. it's almost a mini version of vanguard. both of these countries are offering products that are super cheap, and that's why hedge funds are worried. betty: amazing numbers. thank you, air ball tunis. -- eric paul tunis. -- eric balchunas. are missingmpanies sales targets, and cutting forecasts. ♪

betty: live from bloomberg world headquarters in new york and london, i'm betty liu. caroline: and i'm caroline hyde. you are watching "bloomberg

markets." taylor: it has been called the financial messaging system in the world but now, cyber crooks have attacked it again. this attack involves another unnamed bank. this may be one of china's leaks ever of personal sensitive information. of -- jackformation moa and others. many tweets were quickly deleted. ship had 140 egyptians and 40 iraqi's onboard, all rescued from the mediterranean sea.

only one of the two people rescued were thought to be syrian. the secret service will investigate donald trump's armor butler for making threats against president obama online. -- former butler. on facebook, he called for the president to be killed. the trump campaign says he completely disavows the remarks. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. caroline: here in europe, let's have a quick check on how the markets are doing. 331 in london. at 31 in germany or france. -- 431 in germany or france. a sudden gain to end the week. up .7%. soft --kers like you be

game makers like ubisoft doing well. one of the real laggards today, a third of its value wiped out in one day. that is what happens when you get a profit warning. they are saying this is a significant shock. .2%.boss also down a shiver down their spines after we saw numbers yesterday that hit the companies that distribute through the carbon stores in the u.s. by 3% if you back or in dividends at the moment. out, bmw doingat and outperform today. they are selling more suvs. we've got brent just off by 1.2%. gold off by .1%.

the dollar regaining against the japanese yen. clearly a bit of a reprieve going on at the moment. reportingyou been today, here in the u.s. come april is a comeback for consumers. shales -- sales of retailers .umped the biggest gain since march of 2014. look at department store chains. jcpenney reporting revenue that missed wall street estimates following red flags sent by macy's and nordstrom's. kohl's also posting poor numbers. the foundering in of project september. good to see you this morning. you talk to consumers, you are there on the ground with them all the time. what is going on here?

why are retail ceos think it is awful out there but consumers are spending? alexis: there's been a shift online that's been happening for a decade. department have a serious reality check. stores.tment are the innovating enough from the in-store experience? are they doing enough to compete with a situation in which a person can find an item online in a few seconds, check out in a have that atnd their doorstep in a few days? betty: the story that brick-and-mortar is doomed is still intact? alexis: i don't believe that. thatat apple and others are doing so much to re-create that experience in store, to innovate, to think about how they are educating a consumer as they come in. navigateare helping us

a large selection of products quickly and go to them. there's a lot of upside to the in-store format that needs to be re-looked. caroline: give us a sense of , nordstrom'sdale's due to turn these things around. what can they do to make those stores that much more engaging? alexis: they will have to start trying new things. sachs is a perfect example through gilt group. every day, the lineup is changing at noon. that freshness, that newness you have online -- i love the fact that i can quickly find my items when i walked into an apple store because some nice person greets me and takes me there directly. and answers any questions i have

. you are looking at floors up on floors of products that take hours to come through. it will take testing of different formats in the stores to get there. betty: any stores getting it aren't a techhat store like apple? anybody building really cool digital experiences? alexis: i see new brands popping up. a store be carbon 38 or in new york where they are emerging culture -- merging culture and music and lifestyle. it will take lots of tests to figure out what works for your brand. howill be a combination of you are educating a person in a way that you could never do online. how you are helping them feel comfortable making a purchase

and never getting what is often -- learningtion from those examples are good ones and learning from tech examples, too. betty: i want to show you another chart. another mysterious story here. i'm wondering how project september fit into this. , there'sles numbers been a sharp drop off towards the last few months here. however, consumer spending overall, the blue line is pretty stable. but mays are spending not be spending on retail products. why do you want to start another retail business? alexis: they are still spending on retail but are much savvier in doing price comparisons and seeking out the best value for the good available. they are doing a lot more research and i do think they're

going to the product categories and certain experiences, they are willing to pay a certain experience premium. september is project doing something different? of peopleat theme researching products today, they are regularly doing it online with the benefit of a smart phone in her hand at all times. individuals sharing beautiful, creative imagery of across driving the began way consumers discovered and purchased products in a whole new way. we wanted to take that phenomenon of how individuals were influencing the purchase, creating beautiful work and see how we could create the first

immersive visual shopping app. consumers could come in, see something that captures their tap to check out immediately and earn an income stream directly. you can buy straight from the pictures. let's get a quick check on how u.s. markets are trading right now. digesting all the earnings and resale -- retail sales numbers. abigail: after the nasa open slightly lower, the index has been fluctuating recently. -- nasdaq open slightly lower. helping the nasdaq the most they are the shares of nvidia, hitting a record high earlier

after the chipmaker didn't be first estimate earnings by 13%. first-quarter 13%.ate earnings by he believes the company's deep learning software is likely to drive meaningful upside or growth for the company on a stock that is up more than 85% over the last 12 months. betty: what about these results? abigail: we have shares of activision blizzard trading nicely higher. it is not clear whether it is directly from the nvidia -- activision blizzard also overwatchstats on came out pretty bullish. 9.7 million users play the open beta of this game.

another stock up sharply over the last 12 months. thank you so much. much more ahead on "bloomberg market." wall street chilling another favorite in the presidential race. inshowing another favorite the presidential race. ♪

caroline: this is "bloomberg market." we are going to go by sector. betty: that's right. we will talk about u.s. politics.

wall street is backing a democratic candidate for the first time since 2008. hillary clinton gathered 77 of $.70 one dollar spent -- --every one dollar spent marc andreessen throwing support behind clinton. zack, let's start with you on wall street. the overwhelmingly favored mitt romney back in 2012 -- now, they are favoring clinton. one of the questions this raises, trump was not really raising a lot of outside money during the primary. now that he is the victor, he has turned around and say it's -- says he wants to raise money

for the election. betty: they have shown zero interest. is this going to turn around at all? zack: it is hard to say. his national finance chairman is a former goldman sachs partner. he has those connections he's using. a hedge fund guy in new york is a fundraiser for trout now. if you look stupid people who voluntarily gave to trump when he was not actively soliciting funds, it's only like $5,000 that came in from wall street employees -- if you look at those people who voluntarily gave to trump when he was not actively soliciting funds, it's only like $5,000 that came in from wall street employees. let's turn to the tech sector now. looks like he will be supporting donald trump. a republicanhe is

or because he supports the things trump has said? you look at silicon valley, there's an assumption that these are all democrats. as they start to make more money, they start to think more republican in nature. republicans thought they could tap into that revenue source. you saw marco rubio pull a lot of money out of the valley. caroline: potentially, not getting all of them. said at the age of 40 he was going to go republican. he is now going back to clinton. say --illing to tim: a lot of times, it is about

the candidate and the issues. mark injuries and knows that -- mark injuries and knows that. reessen knows that. hillary has been putting a lot of effort into the valley. she's got big names like sheryl sandberg giving to her. bernie sanders has been able to tap into the lower-level engineers. betty: how about some of the employees who are giving at these big companies like cisco or oracle or intel? who are they backing? tim: those firms were analyzed. the favored republicans over democrats. you look at facebook and google, it tends to go to democrats. folks -- atn these

established companies come in please tend to be older. -- established companies come employees tend to be older. zack: if you look at the numbers of donations, wall street gave a ton of money to obama in 2008. and a ton to run the in 2012. this time around, the numbers for clinton.ig the support for the other side just faded away. betty: just relative. caroline: that was a great debate. -- depending on whether you are a millennial or have more old-school tech giants on wall street.

he plans to sell 20,000 bottles of wine from his private collection next week. we will show them to you, next . ♪

caroline: welcome back. let's talk art. it was a topsy-turvy week in the art world. auctions in new york when from depressing monday to red-hot on wednesday. -- went from depressing monday to red-hot on wednesday. --t above the low estimate the most highly valued work was t, a painting of a water pond that's waterlily pond. despite missing the mark come

and represents the highest price ever paid for free to follow. -- frida kahlo. betty: one of the biggest wine auctions in history, all coming ch.m the seller of william ko 20,000 bottles will be available. jamie ritchie is calling this a once in a lifetime auction. better put your bids in now. this is bill koch's wine collection. just what is being auctioned off. 10-15 million dollar lot. we're hoping it will be the sale we've everel

held. caroline: give us a sense of where the moneys coming from this money is coming from. is the chinese slowdown still coming fast and furious? jamie: the buying level has come down from asia, but still important. we have people coming over from .sia, south america we expect these three days to be very exciting and have a real global interest coming to the market. bottles could catch up to $120,000. what is really going to be the top pick? jamie: bill collected the world's greatest wines. to drink them and

share them with friends. we have for those from the 1940's and 1950's. -- bordeauxs. ,ne of the great things he has , enlarged bottles. 1959 -- betty: didn't he run into controversy with fake wine bottles? against fakesaded wine bottles in the market. thatd buy some bottles were counterfeit. then, he was on a crusade to fix this problem in our industry. betty: did you have to do anything special in terms of

examining his collection? jamie: for every single sale, we inspect every single bottle. on the experts working sale for six weeks, going through everything old model. caroline: give us a sense of the new technology coming into play to check these vintages. jamie: the best technology in is your authenticity specialist knowledge, knowing what is -- how rare these bottles are, having tasted these bottles. you have to analyze the labels, the corks, the cap seals, the age of the glass, etc. phil's collection has the best storage, the best temperature control. -- bill's collection. he has two sellers under ideal conditions. ars under ideal

conditions. you can read more on "bloomberg pursuits." caroline: coming up, the european close. we had enda kenny on earlier. more in the next hour. european stocks remaining in the green. off previous size. -- previous highs. ♪

betty: it is 11:00 a.m. in new york and 11:00 p.m. in hong kong

. caroline: live from london, i'm caroline hyde. you're watching the european close on "bloomberg market." we are going to take you from new york to london to berlin in the next hour. here is what we're watching. the euro area economy grew slightly less than initially estimated in the first quarter. is it time to worry about the diverging economies in the region? betty: volkswagen continues to feel the pressure of its emissions scandal. forecasts.fit misses ireland's prime won aer enda kenny just second term last week.