alix: u.s. stocks mixed as we head to the holiday weekend. brent in crude suppressing $50. but the question is, what you miss? scarlet: we speak with dominic quantum who says white there would be a rate increase in july better than june. alix: and pressing the reset button for the gold default market. the $9 billion euro bond sale. reporter: and el niño comes to an end, la niña may be the next global weather pattern. we look for the impact on global markets. scarlet: we begin with markets as alex mentioned, a mixed day for u.s. equities. a little changed when you see how they ended the session. this is after a strong rally. that kind of faded as we head to the holiday weekend. if you look at the industry group, utilities were best,

materials worst, and oil reaching a $50 benchmark. alix: look at the volume, it is down 14% for this time of day. clearly lighter volume in the holiday weekend. we have janet yellen speaking tomorrow. ,hey will make strong positions but i don't know what she will say about june. scarlet: if they are here. reporter: card you know what will win out. you have memorial day. alix: so what are you watching? reporter: we have a little bit of a reversal on what we are working in the mention of a rally in the past week or so. we look at financials, not to get the same point over and over, but we have a reversal with that trade. financials have been doing well, today is the opposite. perhaps a little bit of language from speakers that june is not 100%. and he wasn't had an interesting move in the nasdaq, stocks read driving higher, in particular

dollar names, dollar general, dollar t -- dollar tree. the nasdaq was up a little better than the rest of the market, which reduction in closing 0.1% up. iffy on stocks. money was limited to bonds, especially two-year. the but that yield, down 5%. mind moving in. what really caught my eye was kotter selling $9 billion of eurobonds areas that is the biggest issue with from the middle east, and that was almost double. this is ahead of saudi arabia issuing bonds. those numbers were incredible. and the dollart: raced against all of them major currencies, but a major gainer was the norwegian krone.

the biggest one-day move in about two months, gaining along with brent and crude prices. your a survey that showed norwegian oil gas companies cutting investment forecast, so their spending could drop in 2017. alix: so in commodities, the story was with brent. it was $50, it did not close there. the mexico to 1521, so i got over $50. copper is up slightly today. 30%, copperre up only 3%. cover not participating? do they have too much supply or is there weakness and demand issues? scarlet: whether the market issues. the second -- those are the market issues alix: i am looking at gold big problem. they are doing totally different things. this is commercial shorts and noncommercial bond. areommercial long

considered the dumb money, you and me, scarlet going and buying. [laughter] that is that white line there. the smart money are the commercial shorts, this is what the pros are doing. those are very high right now. shorts are up the higher, 2011 level, pretty impressive. and long is up then their 2011 level. so who is right? one needs to get shaken out of the market. i was shown this was a big red flag. dumb or smart? reporter: not a lot of concession on both sides. scarlet: i have to be in favor of dumb. looking at china, a year ago there market began the slump. so now this is 50 -- 30 day volatility, it is currently up

-- let's try that again. it is currently at the lowest since december 2014. you need to go all the way back. that is not a straight line. at the same time, turnover, the value of shares traded on the shanghai,, it is a little higher. march has dropped off as well. when you look at macro concerns, those are just beginning to melt. you have the debt concern, direction of the yen, the bubble bursting, where the ball of money goes next, a place to hide out, and the government commitment to growth. what that means for the economy if you have a hard landing or a soft landing, we'll talk about this later on. like thati really because chinese volatility is a great problem for equities here in the united states and in europe. i want to do one of my favorite short coverings. this is interesting, because if you thought the rally from october 2014 was short, this is more.

the white line is corrected a month late, twice a month the data comes in. so look back in october. it was poorly -- mainly a high. and in august, look at this move here. this came in the other day. that is what i think an actual shortcoming looks like. so bottom line, that is the goldman sachs rolling index. when you look at what happened last time, the short side, the index, he did not have a huge move. i look at a couple parts of the index, energy and a lot of coverings, discretionary still pretty short. that we may have seen that come to fruition is interesting. alix: we finally got that short covering rally. scarlet: we have breaking news, the jury for the oracle google case has reached a verdict. google has beaten the oracle copyright suit, $9 billion claim

according to the jury. google makes their use of oracle's java copyrights. they had sued google in 2010 for the use of java computer language that they found they did not need a license for java code. ,o they beat this be right suit $9 billion claim. we'll keep an eye on the movement in these companies in after-hours trade. is a funding us now manager from blackrock. thank you for joining us. reporter: i went to jump right into a reversal from the trend of the year, the outperformance of markets. januaryo show you from up until mid april, we had a strong performance by emerging markets equities, even against the developed mind -- world minus the u.s. so what is happening? there are two arguments. the first of which is there is

such a strong outperformance. some form of correction is needed. evaluations are surely threshed. the market was becoming overboard. but i have two things happen. are these sustainable? we need data out of china. maybe it will be good, but maybe it is delayed. so the weakness in china is an issue, and then the fed. after promising there would not hike in 2016, now disagree may hike twice. -- now it looks like they may hike twice. can this be reversed? alix: so you talked about the euro dollar contracts. emerging-market fx, we have not seen the kind of volatility we saw back in august, back in december, january, february. is that going to come, or are things better? >> i would bet on not coming.

basic argument, what happened in january was a convolution of factors. you had a surge in the dollar. very quickly, very fragile market, particularly china, but also commodities market. ande survive, it is china commodities. so that has shifted. commodities have been aced, at least oil has. it is shortlike served by the crisis. my sense is, this rally probably still has room to move. scarlet: so how long does the pause last four? we've ah i knew, but number of indexes. the market is taking a beating. we had to see if the fed will hike, and see the new set of

chinese data. and we do have brexit elections. there are a number of things we need to come to terms with. as china isy, so ok, [indiscernible] to see this shifting that negative story in any way. reporter: you talked about vaginas just how china's growth this is a different way. >> this is a huge bet that i fear. got to keep growth in china strong. you dig deep into the data we are talking about, there is a sweet for how bad it was in the first quarter. stimulus is working. it is working.

the jury is out, but i am more optimistic on that. alix: so if you have a big run-up in a emerging-market assets and want to take a pause, where will you put money next? from the bigg away trades, things that go up and by emerging markets, and looking at strong belief -- and what we are talking about, there are other places we are interested in. indonesia. argentina, everything is a good story. we are becoming more and more optimistic about brazil as well. so you other places we are focusing on interest rates. alix: the local rates or sovereign motor >> indonesia local rates are cheap and the currency is still practical. result, everything is cheap. -- brazil, everything is cheap. scarlet: how early in the cycle

are we in some of these countries? brazil to get a run-up before the trial. .> there is a lot of issues if things go well, things will go very well. some of the problems they had recently were associated with politics, fiscal. hiking interest rates, the currency weekend. -- weakened. so can the fed deliver on the promise? if they can, we have a long way. but that is a question. alix: thank you. moreet: we will get you details on the news that google one a trade verdict that denies a $9 billion price to the android phone business. ♪

♪ mark: let's go to first word news. the republican presidential nomination is in hand for billionaire donald trump on the horizon. the selection of a running mate. he was in bismarck, north dakota and said he expects women to be vetted for the vice presidency. donald trump: we are looking for absolute confidence. i expect we will have many women involved. i have had it with the campaign, but many women involved. you will that. you'll see that very strongly. mark: he will be willing to debate the candidate bernie sanders, and such an event could be millions for charity. marco rubio says he is unlikely to run for reelection to the u.s. senate. the reason, lieutenant governor

of florida is seeking a seat. they say that he and other gop colleagues are among those threatening review to seek a second term to ensure republicans keep the florida seat. michigan governor rick snyder looking to stop administrative investigations into how to state agencies handled the plant drinking water crisis. they are hampering state and federal inquiries. the attorney general of michigan says it could have a chilling effect on the criminal investigations and could lead to a obstruction of justice. nasa hit a snag while releasing air into an experimental written vital room at the international space station. -- inflatable room at the international space station. willl goes well, the pod swell four times in volume and have a new way of living for astronauts. it was $17.8 million to test

this if edible habitat contact -- inflatable habitat contest. inered by 2400 journalists more than 150 news bureaus around the world. i am mark crumpton. back to you. news,t: more on breaking the jury reaches a verdict that google of developed this without oracles use of java. cory johnson joins us with more. what was at stake was a $9 billion slice of google's android business that oracle no longer has claim to. reporter: it is interesting because oracle acquired this, they said during the trial, one of the reasons was the pile the desk all you take be placed on java. it is an open language and shared. the entire order of job required

licenses. android was built entirely on java. they did it without requiring a license, oracle top had a big claim to that. just thought they had a big claim to that. oliver: so what will oracle miss out on, a lump sum payment? $9 billion. they spent a lot on the trial as well. this was the second trial. the first was also, it was not with they wanted. they got kicked back to court, same judge, overseeing the trial once again. so this means oracle cannot pursue other arrangements and other suits. it will be harder for them. the court found, or the jury found that the free use, the fair use of java was what google that --. and on top of without a license, they were breaking the rules. there were damning e-mails from

senior people at google that they talked about with the license, they said if we don't get a license, we will get sued. they knew they were operating without a license. they managed to win this one twice now. alix: does oracle have any other options? reporter: this could have been the most value for job out there . the android business is so big, 80% of the smartphones run on android. the notion that google should have to pay for all of those could have been interesting. and also in licensing terms. alix: i want to point out oracle stock. if you look out here, it is down 1.25%. you can see some reaction off that news. reporter: but it was sort of predicted. oracle is taking this very seriously. the owner is on the stand with

great wisecracks. she ran into an executive at google at a party, i ran into this party, and he said old rules do not apply to us your google. shaltid, what about thou not steal? scarlet: what other value has microsystems provided to oracle? reporter: oracle got into the hardware business with persistence areas -- persistence. . this to gopect better for oracle. if you look across world hardware, you see what is happening to ibm and the oracle sun hardware business. they declined in europe. the oil and that really uses them is cisco. oliver: you talked about the team and their contingency plan. reporter: they really thought they would win this one.

even though it was the same judge from the last trial. alix: thank you very much. cory johnson from bloomberg. scarlet: charts you cannot miss on the u.s. economy. ♪

alix: three charts you cannot miss on the u.s. economy. matt vogler joins us now. you are looking at financial conditions. the third is the fed hike telegraphing that financial conditions will tighten and hurt the fed, but you are not seeing it? matt: if you look at important financial expressions that cause a lot of tightening a few months ago, you can kind of see that in this chart, equity volatility,

treasury market liquidity, and then you also have the probability of deflation implied by markets and investment-grade credit threat. this shows the biggest tightening essentially in at least four years. scarlet: and it goes up. matt: exactly. we are finally getting back to normal after four months of significant tightening. if you look at what the fed is saying about it, they are treating the slowdown we saw in the first quarter and the fourth quarter of 2015 to the financial tightening. it is not clear they are ready to test that again. that is why june or july may be a little early for a rate hike. we will have to the. oliver: we were talking about this earlier, the fed has gone hawkish on a dime when people are talking about june or july on the table, and this string of data. any coincidence? you concerned about overheating?

you look at big data releases like the jobs report, inflation, consumer spending, a lot of that has been pretty mixed. we have seen a slowdown in job creation. we are seeing a downstate in inflation and after acceleration we saw in the first quarter. so looking at the data, a lot of us is not so bad. but not too good either. there is not a lot of concern about overheating, which is just another reason why like we've heard in a speech, we should not be in a huge hurry right now. scarlet: and companies are spending. you are looking at this all the indicator. -- paul mccully indicator. matt: he likes to capture the animal spirit of the economy, business is willing to invest. this is core orders have been trading year-over-year which is

totally unprecedented outside of a recession. one thing that jumped out on the f1 was a line about how how said business f1c contacts are being cautious even though financial conditions have been normalized. they are not putting on sending plans, hiring plans, that sort of thing. so that caution speaks to the upside risk, sort of unlimited right now. oliver: and that indicator is ,ynonymous with cap x goods excluding the one that was revived to 3% from the previous reading. the that feed into your gdp? was good, but boosted by volatile aircraft , and the internal report that people look at feeds into gdp, it was not good. that was caused concern. are looking at how

much basically consumers are spending on credit cards, the balance of percentage of limits. we are not signing the max amount? -- spending the max amount. matt: this is because of the caution not among just businesses but consumers as well. so we saw consumers, consumer spending data was weak in the first quarter. that shows the balance sheet are really being prepared in a good spot. they are not spending. spend, butapacity to it is a question of when it will go. right now we are not eating that. -- seeing that. that is with the commission shock -- financial condition shock as well. really have a month of data. we will see how that plays out if you see consumers coming back. alix: thank you very much. scarlet: up next, we talked to dominic constant of deutsche bank. ♪

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mark: let's get the first word news. donald trump and paul ryan spoke by telephone, the conversation was an attempt to break an impasse over an endorsement. conversations, i'll staff's have been meeting, and we had a very good phone call. to members of donald trump's team believe a full endorsement is imminent. the news comes as the associated press reported that donald trump has secured the necessary delegates needed to secure the nomination. of election results has not changed the outcome of

kentucky's primary. every clinton leads bernie sanders by just under 2000 votes. both candidates are and 27 delegates in the primary, but one delegate has not been awarded yet. he acceptsders says the outcome and will not order a recount. fighting between iraq and islamic state outside falluja continues. of a the fourth day large-scale military operation to drive ice is out of their key stronghold. the militants have held the city for two years. iraq's prime minister is act asking to postpone protests so forces can focus on the military operation. warned of a risk to the world economy. he said commodity prices fell 55% to 202014 and the start of this year, similar to the margin

by which they fell in 2008. if there is a major shock to japan's economy, he would delay a scheduled sales tax increase. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. i am mark crumpton. back to you. >> let's get a recap of today's action. you've been tracking the moves all day long. >> we pretty much went nowhere. maybe there is a lack of people on desk and this is a tight version of the range we have been trading in. janet yellen will be speaking tomorrow afternoon as well. its sharey seeing

moves is gamestop. first-quarter earnings per share beating estimates but this quarter trailing the consensus. downaw earlier that it was , but now unchanged. "what'd you miss?" we had a risk on trade this week, but that is on pause. there is momentum building for the fed to raise rates. our next guest said both of these scenarios would represent policy errors. why would that be a huge policy error? >> it would not necessarily be a huge policy error. the issue is whether they tried mark expectations for more aggressive rate rises.

one and we will go again in september, then it would be a policy error. it is all going to be about how they want to convey the tightening. alix: why? the issue is the great news that we have had since the last -- march tightening has been the drop in real yield. real yields have come down from a high. has lifted a lot of risk assets, including the s&p, and that is very important. by drivingnd that real rates up, the dollar will alsock up, but you will undermine the risk assets that have performed well recently > e of the questio\

-- >> >> you can see where we are now. you can see what happened to the two-year, but this economic surprise is going up. two year yielde only jumped 10 basis points, what can we expect this time? we don't expect the two-year to jump that much. about one andng an eight or something. there is an argument that if we think we have got through a slowdown phase in the u.s. and are accelerating, then clearly there is scope for the fed to become more aggressive than the

market might be -- and the market might be of take it a little better. , andiggest concern we have the fed is a must ignoring this, know in principle the payroll numbers should slow down and in some sense people think that is fine. that theys signaled can reduce accommodation even if the job numbers slow down. the problem is that if you don't see the wage inflation, the real issue with that highlighted in some of the credit card data we rates are going up in the states. income growth is slowing down. you can figure out what will happen to consumption growth, it will stagnate. we have had generally weak consumption this year.

that's the issue we would have basically. alix: there's not enough demand and at some point companies have to fire employees. in the u.s., depending on how you measure, we have seen 2-4 straight quarters of profits, underscoring a week global demand. >> the profit story is still really bad. the profit story is bad because pro-dex entity is bad. recognizing now productivity is bad. if productivity goes up, it's normally because companies are shedding workers at the end of a tightening cycle. it does not want to see the wage inflation coming through, and it forces companies to raise productivity. tomorrow janet will be

speaking. what are you looking for? >> i don't think she will say much at all. she will focus on the accomplishments. we don't expect anything from her tomorrow. there is a chance on the june 6 thing that she says something. scarlet: what does that do to all the fed speak we have been hearing? >> they are preparing you for a june meeting that will pre-commit in a larger sense to a july tightening. they only have two more payroll numbers to come, and the less they are significantly weaker than it, my guess is we are gearing up for some kind of july tightening. they may like to do that because it is off schedule.

they can show that any meeting is live. they avoid the whole brexit thing. the real issue is whether they market they the will squeeze out something in december and that is it. aat they mustn't do is give sense that they are accelerating tightening, then you run into .he problems we talk about >> has the market become overconfident? you have to distinguish between the front end and the long end. the front in the has been pushed around a lot by the fed speak. repricing'ssome big in the fed funds futures contracts for june, july, and august. the long end a gores it because end ignoresd -- i it because it does not care.

basically you have extremely low yields around the world, the cross currency basis is very negative. those are the things driving the long end. alix: good to see you. thank you for joining us. scarlet: we have a lot more to talk about. qatar a record $9 billion year old on issuance. bond issuance. ♪

scarlet: it is time for the bloomberg's newsflash. google has emerged victories in

a copyright lawsuit brought by oracle, wiping away a $9 billion claim. google madethat fair use of oracles copyright. oracle says it will appeal the decision. tox: microsoft and facebook build an underwater internet cable across the atlantic ocean. it will carry data between america and southern europe. capacity to unused other customers. scarlet: gamestop falling after the company said it sees second-quarter earnings trailing estimates with comparable sales declining 4% to 7%. it did reaffirm its full year outlook.

that is the bloomberg business flash. "what'd you miss?" sold $9 billion in bonds wednesday, double the amount expected. this marks the biggest ever 2016 offeringsts to more than $9 billion. our bloomberg is reporter. to hear middle eastern governments sell bonds to raise cash. what is going on here? for gulfquite a change governments. had has happened is we have these low oil prices, putting pressure on the ledge it's -- on the gulf, and that means a lot of them are looking to international investors to fill those budget gaps.

seen bonds from qatar, abu also other dobby -- dhabi. any reads there through about commodities on this deal? and i think you could may be try to extrapolate. if they are rushing to the bond anket it might indicate extended time of low oil prices, but they are also taking cheapage of relatively finance costs, taking advantage of the rally already seen in all oil, today going above $50 a barrel, and that has reignited some interest from investors on debt issuance. of orders forrth

the cap tar bond, eventually upsize to $9 billion. alix: what is this mean for saudi arabia when it goes to price its euro bonds. >> you could read it either way. successfulay this is issuance signals renewed optimism. investors are clearly looking for returns, interested in debt from gulf countries, but the other way to read it is we have seen $9 billion worth of bonds come into the market. the region isfrom up by a third to a record $23 billion or so in the first half of this year. that is a lot of money for the market to digest, so it could mean that saudi arabia decides to wait for investors to digest what they had just taken on.

like theyly seems might not get it done before from a don, but we will have to see. .- run it looks like qatar will need cash to help you complete the construction for the 2022 world cup. what other issuances are in the pipeline, aside from saudi arabia? is a bonder big one issuance from saudi aramco, another big deal for the region and something we have not necessarily seen a lot of in the past. kind of all change in terms of gulf capital markets. interesting thing is that all a lot of private placements taking place, which means that they are not as public as some of these take international debt issuances, but they are taking place under

the radar and come with higher funding costs for issuers, but if you're trying to avoid disclosing a lot of your budget, that might be something you will trade-off for. much forthank you so speaking with us. a warmer summer mean for natural gas prices? the analysis is next. ♪

alix: "what'd you miss?" provide summer could support for commodity prices, especially natural gas. we've made the transition from .l niño

is there a historical pattern here? were 1998t few times and 2010, transitioning from moderate to strong down the news. when that happens, you start the summer cool, and it will trend cooler across the east, however summers in the warmer from there. warmer from there. alix: we are seeing warmer weather working its way into the east going forward. >> exactly. we will have some cool weather, but late june and july, that he returns. we just got out of an el niño condition. the latest report on monday said the el niño is officially dead, meaning temperatures dropped below half a degree celsius average.

and i look backwards for a minute? who saye a few people this is a result of good weather. was it really that warm this winter? >> this winter started extremely warm. december was a record warm winter for a lot of the country. january and february were still above average, but did begin to trend calder. heating demand was far below average, which is why we are heading into summer with a supply glut. does this mean for commodity producing countries like brazil? more price fall attila the come because this introduces more weather risk back into the forecast. starting to are move now that we are seeing this increase across those countries.

some ofegins to move, these other commodities, and so you see different weather patterns with el niño, but they are not average. anchor: what about markets and lens ofs to the weather and climate, what about shipping routes? >> travel is something to consider. also, retail. they are more willing to travel to the store instead of order online. there are any number of impacts you have to take into account regarding the weather. it could get so hot this summer that people want to stay inside their air-conditioned homes and not go to the store. strongnot quite sure how that he will be, but there is definitely a risk. you want to belong natural gas on this kind of thing. are in steep contango right

now. this curve needs a really hot summer. what you think? >> that's exactly what were thinking. were seeing one of the steepest contango's in natural gas. alix: that is really steep. scarlet: did you call that a pretty sexy contango? alix: getting crazy. >> it really is priced for perfection. that coolingee demand pick up late and summer to justify that. you have such limited natural gas storage capacity, once you get set up for the winter, there is only so much natural gas you can hold. incentivize prices those power companies to begin burning natural gas as opposed to cold. stayould see spot prices

low, but real prices could be supported. scarlet: lots of volatility to come. thetarted with the idea of hurricane season beginning wednesday, right? hurricanes, of more how does it move? do expect a lot in the beginning and then it tapers off? or will it build up to a busy hurricane season? >> you typically do not see anything this early. the el niño just died a couple of days ago. should take until later in the season to start seeing those and packs, think august and september, the historical peak of the tropical season in the atlantic. you that oilee traders will be eyeing that closely. activity,'t been much

and this summer is keying up to be something different. you're notially if using your capital expenditure to upgrade maintenance on those rakes. coming up, what you need to know to gear up for tomorrow's trading day. that is next. ♪

scarlet: "what'd you miss?" japan national and tokyo cpi tonight. china industrial profits tonight at 9:30 p.m. eastern. it has shown signs of stabilization. how much money are they making? anchor: the other big thing is you can't leave for memorial day

because janet yellen will be talking at 1:15 p.m. tomorrow. for "what'd you miss?" thank you for watching.

finalare down to the round of this group's presidential spelling bee. announcersp and your mark halperin and john heilemann. is there anything you would like to say before we begin the final round? >> we started off 17 people on the stage, and what the hel did i know about this stuffl? mark: your word is lying. >> how would you spell that? l