from bloomberg world headquarters in new york, i am shery ahn. here is what we are watching. janet yellen says a rate hike may be coming. yellen: it is appropriate, and i have said this in the past, to gradually and cautiously increase our interest rate over time. and probably in the coming such a move would be appropriate. climbing ine still light trading. seeties are on pace to their best games since march. airline stocks have been grounded this year. will the troubles with long security lines lead to even more

headaches with the airlines? in two hours. they went lower on yellen's comments. let's check in with julie hyman. what does it look like right now? julie: although a lot of investors did not expect janet yellen to make any comments, there were some with a more dovish tone. some were expecting a more dovish tone, and she did not deliver that dovish tone. she has been saying more of what we've been hearing from federal reserve officials, that june is on the table, that may be the market is not pricing and effectively the number of expected interest rates. stocks across the board are still higher, but not as high as when she began speaking. nonetheless, holding up relatively well. as they have for the past week or so in the face of this changing sentiment. take a look at treasuries as well.

an increasing yields, particularly on the shorter end of the her. curve. we are also watching the u.s. dollar. .05 percent. we also want to take at w.a.r. t on the bloomberg. t on the bloomberg. an increase of two percentage began since before she talking. at one point, it was fluctuating a little bit above that level. shery: what about individual stocks? telecome are looking at because verizon, for example, in , reached anr agreement, in principle, on a new labor contract.

we saw those shares spike a little on these headlines. that is a stock we have been watching in the wake of that. we have other telecom and tech stocks we have been watching. rallied more than 2% and is getting ever closer to fordeadline for yahoos business. we tend to watch alibaba as well, not always in tandem with yahoo!, but there is correlation there. they are surging by 3% today. shery: mark crumpton has more from the newsroom. u.s. national oc and again atmospheric association says the emergency beacon was detected from egyptair when the crash occurred on may 19. found smallve only pieces of the plane. president obama became the first

sitting american president to visit to the city destroyed by an atomic bomb. wreathnt obama placed a in hiroshima, where the u.s. dropped the bomb in the closing days of world war ii. mournsaid he was there to the dead, japanese and americans. president obama: since that fateful day, we have made choices that give us hope. the united states and japan forged not only an alliance, but a friendship. japan's prime minister praised mr. obama for what he called his courage in visiting hiroshima. a debate between donald trump and bernie sanders? the networks are interested in but mr.the showdown, trump has required a donation of healthlion to a women's

cause to participate. networks have not commented on whether they have agreed to the terms. the world health organization is considering whether the rio olympics should be canceled or moved because of the zika outbreak. nearly 100 officials have called for the games to be delayed or relocated out of concern for public health. the games are scheduled to begin in august. global news 24 hours a day, powered by 2400 journalists in 150 news bureaus around the world. i am mark crumpton. back to you. shery: thank you. let's get more on janet yellen's remarks this afternoon. height --ing a rake rate hike may be appropriate. little,ipped a but it was really the dollar that saw a huge reaction after those comments.

the two year and yield both rising because traders are saying janet yellen's onboard. she did not go far or get specific, but she did push back against the conventional wisdom. they believe she is now committed. we will find out after we get the data next week and after she makes her june 6 speech. that will be the real symbol to the market. talked about what needs to happen for a rate increase. the marketo see improves. they need to see growth continue and get better. she said she expects those things to occur. we are data dependent. we need these kind of signals, and i think we are going to get them. at least we got better numbers for the first quarter

revised this morning. how about consumer confidence? >> consumer confidence is always very important to the psychology of the markets. it isn't that important to the economy because there is no direct correlation between how much we spend and how much we say we are feeling confident. but as long as people are likelynt, they are more willing to spend. the real numbers people want to see are the spending numbers. did we continue to spend in may? and the inflation numbers that are part of that. if it ratifies what we saw, inflation still rising, that's another signal to the fed. and of course, jobs. that's always the big number. is, of course, key. what are we looking at when we talk about volatility in the markets?

our colleagues were talking about a possible rate hike. now we have yellen supporting a rate rise. texasn you look at the 1357, it is up a percentage point today, but it has been staying well below the levels we saw in january when everyone was concerned about what was going on in the world. it looks like we have started to accept the fact that rates are going to be a little higher. shery: we are hearing the fed talk, they keep saying data , and it seems the data is quite positive, supporting a rate rise. but there is also a negative that could halt the fed from acting. it's not about watching positive signs. it's about watching something

negative. >> you nailed it. they are ready to go. they are looking for data that will convince them not to move. that could be the inflation numbers we get next week. get a bad number suggesting manufacturing falling off a cliff, that could be a wild card. and of course, the jobs report. if it comes in extraordinarily weak, especially in categories like wages, that could be another reason for them to say let's wait another month and see what's going on. are we expecting inflation to move up? >> the party line is what they have been saying for months and months. we got some numbers for april that suggested things going in that direction. we want to see that ratified in the index that runs about 30 basis points lower. but the magnitudes have changed.

bloombergsael mckee, economy editor. coming up, the strong dollar is wreaking havoc on the market. buyers head for the exit. miami property values holding their value, or is another crash coming? and, the future of television. we will meet a company called arsenic that may be on the verge of cashing in big time with a snapchat account. and here are some of the week's biggest gainers. 14%.tt-packard up on the marketsre when bloomberg television continues. ♪

shery: time for the bloomberg business flash, a look at some of the biggest stories in business right now. verizon communications and its two unions have reached an itsement, in principle, on contract. that means about 30,000 landline employees will return to work after 44 days on strike. union members should return to work next week. microsoft is set to be ready to bid for cloud-based software marketo,market oh --

according to sources close to the matter. and memorial day weekend is upon us. gasoline prices are at their lowest level for this time of year since 2005. aaa says more than 38 million americans will travel this weekend, with 90% going by car. that's the bloomberg business flash. turning now to the real estate market, the buying frenzy has come to an end. investors are no longer looking to add to their holdings. instead, they are heading to the exits. joining us from boston is our real estate reporter, who has been covering this story. what is behind this? >> blame the strong dollar. who haveages sellers depressed currencies.

how bad is the inventory glut? what are we talking about right now? are nine buildings in downtown miami that just opened over the last two and a half years. that's a lot of towers. many of them are opening with a of listings. some of them, more than a third of the building is being listed by american owners. it's a bit of a glut. it's not all foreign owners or foreign buyers taking a hit, is it? people say it's because the brazilian riel fell , but other dollar

currencies fell against the dollar as well. many of the foreign buyers are affected by this, both in europe and south america. --ilience and venezuelans venezuelans, many from south america, are the primary buyers of these buildings. shery: how is this different from what happened to the japanese? >> it's not as bad. -- what happened in 2008? >> it's not as bad. developers have shifted the risk to the buyer, so these buyers .re taking 50%-60% deposits they are less likely to walk away. , there are very stiff penalties if they do try to walk away. what we might see, rather than

thousands of units sitting empty drop --y seep prices see prices drop low enough that you can actually sell. shery: where are the bargains? listings, these owners are kind of holding their prices high. you have listings that have languished for almost a year without a sale. some of the ones that are are transacting for as much as they paid for reconstruction or less. at retail overall, prices are down 50% year-over-year. it is likely they will fall further. much. thank you so let's head to our markets desk, where julie hyman has a check on some of the day's biggest movers. at bike on.ooking

it's had a number of different developments. .here were ripped -- via con it's had a number of different developments. you can see that shares were up 3.9%. in the past few moments, sumner redstone issued a statement spokesman who said that sumner redstone will make every decision with the same bestderation, based on the interest of shareholders. that something else to throw into this saga over control of the company. at the same time, there were headlines coming out over coxe the dealtions, saying has been renewed, although the terms were not disclosed. lending club was said to be in talks with citigroup to have the bank purchase more debt

generated through the marketplace. remember, in the wake of the departure of the founder, there was concern about a pullback. those shares are up 11%. there was a surge in traffic turning the quarter, and by all accounts of analysts, doing well across product categories. firm a cyber security going in the opposite direction even though earnings beat estimates. but the fourth-quarter forecast is below estimates. there are concerns about losing momentum today and the shares are down. shery: still ahead, the snapchat account some in hollywood believe is the future of television. what you need to know about

arsenic tv, next.

shery: this is blue or markets. i am shery ahn. television executives are paying close attention to an account on snapchat called arsenic tv. it could herald a new era for television. you can read about it in the latest bloomberg businessweek. the reporter who wrote about it joins me to talk about it. tell us what exactly is arsenic tv? i should start by saying it's probably not safe for work. it slightly racy. magazine kind of five, nearly naked women in hot tubs and things like that. they are making money

out of that, surprise, surprise. was exciting about it from a business perspective is that arsenic, despite having very little promotion, has assembled an audience of about half a million people, which is really impressive and shows how they and fast growing snapchat it -- big and fast growing snapchat is. shery: half a million people, and it's only on snapchat. .> right snapchat broadly has about 110 million daily viewers. the fact that this random account, slightly racy, is able to get this big audience, is kind of amazing. they turned down an acquisition offer from playboy. the venture capital world is very excited about this company. vc's c snapchat as

kind of the future of cable television. cnn and other channels were able to build a media empire off this nascent form. they see snapchat as the next wave of that. shery: they basically producing segments. >> yes, and it's kind of amazing. they turn uplly, to a model's house, give her a password and username, and the model takes it from there, selfies, answering viewer questions. it's super low-budget, but that's part of what makes it exciting, because they have been able to do a lot with almost nothing. how much are the models paid? >> zero dollars and zero cents. can work. that

>> if you are able to amass followers, you can charge advertisers money for sponsorships. if you are a model and you go on arsenic andgo on pick up a few more thousand followers on instagram, and then you endorse a brand. right now, the top influencers in the market are his? ?> -- who >> people you vaguely know, s, actresses, models, doing influencer-like things, but mostly people you haven't heard of, a youtube star or a fashion voice on instagram. if you areeople who, over the age of 20, you may not of heard of.

, every teenager knows a singer named baby ariel. of thee baby aerials world, the up-and-coming models. for folks in their 20's. you can read his story in bloomberg businessweek. later in the hour, we look at another venture capital story. of online the future journalism. still ahead, in just minutes, the markets will be closing for the week. they are currently up 3.25%.

okay, ready? whoa! [ explosion ] nothing should get in the way of the things you love. ♪ get america's fastest internet. only from xfinity. shery: from bloomberg world headquarters in new york, this is bloomberg markets.

i'm shery ahn. let's start with the headlines. mark crumpton has more from the news desk. and u.s.opean satellites captured an emergency distress signal from egyptair flight 804 minutes after it fell off radar on may 19 according to the national oceanic and atmospheric administration. radioing anegan automatic distress message at 2:36 a.m. local time. a ground station in cyprus received a location from the beacon from five satellites. they were able to pinpoint a crash site accurate within three miles. the data was turned over to investigators, who are now looking into the cause of the crash. during his historic visit to hiroshima, president obama met with those who bore witness to

the bombing that ushered in the atomic age of war. obama became the first sitting u.s. president to make the trip to hiroshima without to hiroshima. without apologizing for the action during world war ii, the said the bombing demonstrated that mankind means to the destroy itself. --sident putin is not president hollande is not backing down from labor reforms. protesters walked out of refineries this week, creating a nationwide shortage of gasoline. is out with a forecast for the lactic hurricane season. there is a 45% chance it will be -- for the atlantic hurricane season. chance it willit wil

be normal. the new season begins on tuesday. global news 24 hours a day, powered by 2400 journalists in 150 news bureaus around the world. crumpton. back to you. shery: thank you. commodity markets closing in new york right now. let's take a look at gold. down, not getting any boost from the comments by fed chair janet yellen. she said in an interview earlier that day rate hike in the coming months may be appropriate. along with platinum and silver, gold is heading toward its biggest monthly loss since november as investors anticipate higher borrowing costs. , corn prices are hovering near a 10 year high. there are concerns in south america, particularly brazil, about a lack of crops.

wti is closing. we turn our focus to m&a. energy shares are rising today. they are accusing equity of sabotaging a merger. smc and newetween tech seems like it may have more success. from houston by the director of navigant consulting who advises more than $37 billion in deals on energy. thank you for talking to us this afternoon. let's get started with all of these deals happening.

there seems to be a lot of talk about m&a. what are you hearing behind the scenes? had seen some price stability lately with oil and natural gas. clients are being pitched constantly. there is a tremendous amount of pitching going on behind the .cenes eventually, that leads to a lot of deals. there's a lot of investment banking activity that shows some .rice stability there has been a narrowing of the bid offer spread. a couple of transactions have run into regulatory difficulties, but there are a lot of deals, and we think this will still be a record-setting year in energy m&a. julie: bigger he -- we areregulatory deals,

talking about baker hughes and halliburton. and now the justice department has gone into it. does it give you some cause -- pause when looking into completing these large deals with competitors? >> we don't see it that way. those are unique. those are very large companies with legal issues on either side. backhere still is a lot of to the with companies in the upstream space and perhaps the midstream space, and continuing that won'twable side have the same regulatory issues. there are lots of companies out there that are not as large and don't have dramatic market power. i wouldn't use those two transactions and some of the regulatory issues to blanket the entire industry.

we will see a lot of transactions between now and the end of the year. what is your take on that deal? >> it is not overlapping. it is probably going to be approved. overlapping businesses are worried about market power. it's interesting because they really got hit the hardest and with the commodity prices collapsing. it's not always easy to see where there is market power and antitrust issues. but this particular transaction is complementary. i think the view is that you don't have a substantial market power problem with regulators, but we will see. julie: investors seem -- shery: investors seem a bit more glad that it may not be going

through. shares are rising today. what you think about the economics of that transaction, had it gone through? down tol comes valuation and disagreements about valuation. our business, valuation is driven by where you think the market is going to be. it's a very volatile. -- workomics worse based on certain price scenarios. it looks like the deal may not a variety of reasons. that causes disagreements, arguments, lots of legal activity, and maybe it doesn't go through, but i think there is a lot of price stability right now. oil is in the high 40's. fore not a lot of support past 55 or so, but the supply imbalance is less than two point 5%, which it has been four months. basis forld be a good

valuations and transactions across the industry. talkinghen you are about valuations, i understand that you find natural gas very attractive for buyers. the oversupply and natural gas is much bigger than an oil. we have a lot of natural gas in this country. ofces have been just south to for a while now. from is a lot of interest the power side as well as other elements within the oil and gas industry. they are attractive prices because of where gas is now and where it's expected to be for the near term. we do expect to see a lot of natural gas upstream and midstream acquisition activity in the next six months. they: do you think

direction of m&a's now towards happening between companies that don't have so much overlap? >> i think that is what regulators will look at. there's a concern over antitrust, obviously. a deal thatogether makes sense for shareholders and investors and you also have good advice on the economic ground about competition, we don't think a couple of transactions forecasts ad really lot of difficulties for the rest of the industry. it still should be healthy and oftainly look at discussions m&a across the energy space. shery: thank you for your insight. still ahead, airline stocks are certainly not soaring this year

with the s&p 500 airline index down about 15%. oil to the shortage of security screeners, we will look at when the industry may see a turnaround. look at airline stocks today also urging across the board. all surging across the board. ♪

shery: welcome back. time for the bloomberg business flash, a look at some of the top stories in the news right now. buyers are arranging funds for an acquisition of months and

tell. lending club is set to be in talks with citigroup to purchase debt. this according to a person familiar with the discussion. buyers of lending club loans have pulled back after the resignation of the company's founder and ceo. busy roads memorial day weekend. aaa says more than 38 million americans will be traveling and 90% of them will be doing it by car. drivers are no doubt encouraged by cheaper fuel. it's at its -- gas is at its lowest leel since 2000 five. that's the bloomberg business flash. as the busy summer travel season kicks off this weekend, the tsa is doing its best to offer

travelers relief after weeks of slow-moving lines. homeland security secretary a.j. johnson asked airlines to lift fees for checked luggage. there is a list of issues facing the airline industries. more, we are joined by george ferguson, senior airline industry analyst. , another one. two hours in line at the airport. kind of crazy, doesn't it? the airlines, a lot of them are the number size of of people who will fit in airplanes. that increases the crunch as they try to bring in people and put them all on airplanes closer together. a challenge asof airlines grow by adding the

number of seats on planes. tsa is trying to get a handle on how to get people through security lines quicker. we have talked about various measures that could be put in place to speed up the lines. do we think any of those will be put in place in the coming days? >> i hope so. airlines obviously don't want travelers to have a bad experience. it's difficult to get to the airport two hours before a flight for a domestic flight. some airlines are hiring employees to help with the work at the tsa lines. they can't do screening, but move the plastic bins around that you might need to put your laptop in, things like that. risingairline stocks are a little bit today, but overall, we are seeing them getting hammered. we see for airline

stocks going forward? >> as we look at the back half of 2016, the big challenge for the airlines is really going to be getting their capacity in line. a lot of the airlines have capacity well above gdp, and that's really taking a toll on fares. q1you watch the airlines in and late last one, airfare has been falling. there's a lot of competition for the traveler out there. as we go through the back half of the year, they have to find a way to make fares rise, revenue rise. not have theg to tailwind from fuel. on top of that, a lot of unions have negotiated increases in their wages, and we are seeing that rolled through the airlines

now to. they have to manage higher wage flat fuel costs. if fares are falling and revenues are falling, they will have a hard time being more profitable. that's the real challenge. shery: we are seeing business-class falling across the board. for businesst mean travelers? >> they are pressured to spend less on the road, at hotels, in airports. travelers behave a little bit travelers, trying to book further in advance to get a low fare. the airlines are having a harder time distinguishing between the business traveler and the leisure traveler. they are not getting increased fares from business travelers. that is putting more pressure on delta, united, and people who carried business travelers.

they are try to figure out who the business travelers are and extract more from them. thank you so much. ,his memorial day weekend crowds will be thrilled at air shows. team doesn't just show off its skills for big crowds. last week, a few lucky customers had the rare chance to see the show from the air. tomost people never get spend a day in the life of a top gun, unless they happen to spend several thousand dollars. >> i didn't know it existed until i did my research, and i was like, wow. in 2003, swiss watchmaker

breitling established its own jet team. making about instrumental navigation, like the watch. >> the team performs at events all over the world. last year was its first american tour and the first time the companies offered customers the opportunity to take to the skies. >> they invited me up about a month ago. >> these lucky customers got to have their very own maverick moment. day of thee connecticut hangar, hanging out with a pilot, riding shotgun in an albatross as it barrel rolled. he is a customer from toronto who thinks being given the chance to experience this firsthand could make him a

for life.customer >> every time i look at my watch, i am going to think about this experience and it's going to make me want to buy more .atches >> and that, breitling says, is exactly the point. >> it's a challenge for a lot of the regularcause way of communicating has evolved. >> breitling offered just to customer flights last year. this year, the team will host a -- eight. a day in the air with the team could boost sales to new heights. shery: coming up, the battle gawker and a billionaire bench all caps list shows no signs of slowing down. we have the latest -- billionaire venture capitalist

shows no signs of slowing down. we have the latest next. ♪

shery: this is bloomberg markets. i'm shery ahn. the founder of gawker publicly challenged a billionaire to a debate. what is the latest on this? letterwell, this open from nick denton is the latest when he asks peter thiel pretty blunt questions and suggests the two meet in person to duke it out, rather than fighting it out in court. this after peter thiel revealed he is funding lawsuits against gawker. we don't know what lawsuits he

may be funding, but he did say there are others. in a statement to bloomberg, he told us that gawker has built a peoples on humiliating and that they don't even attempt to address clear wrongs. gawker says, now you show yourself as a thin-skinned plots behind the scenes to tie up opponents in litigation he can afford better than they. one of the main issues here is a story that came out in 2007 that outed peter thiel as gay. we spoke to the reporter who wrote the original story. has turned into quite a

heated debate. take a listen. my issue is, shouldn't the person be entitled to determine and whenhey say it they say it when it is their personal business, whether this subject or any subject, to be honest? note, it is not gay or gay, it is should a human being be able to determine how it when they express themselves? >> absolutely, but to put it in the category of personal business, too treated as something other, something that anyone, anywhere -- to treat it as something other, something that anyone, anywhere, should ever be ashamed of, is to denigrate it. >> i think he's thinks of it as his personal business. i respect that i would like to live in a world like you would

like to live and where it should not matter or be a topic of conversation. >> or it should because it something you can freely discuss. emily: oh in thomas therefore the san francisco chronicle who is, as he mentioned himself, they as well. there is a debate going on about that on my facebook age if you want to join in. peter thiel is a facebook board member. facebook just found itself embroiled in a controversy over trending stories and whether they were biased or conservative. emily chang of "bloomberg west," thank you for joining us. coming up, analysis of janet yellen's speech. ♪

>> welcome to "bloomberg markets."

>> from bloomberg world headquarters in new york, good afternoon. i am david or a. shery: i am shery ahn. janet yellen says the ongoing improvement in the u.s. economy could foreign to a nether interest rate increase in the coming months, but stopped short of saying exactly when. we will follow reaction in the stock and treasury markets. get ready to wait. airports are expected to spend millions to help customers avoid long security lines, but will it be enough? and what this means for your travel plans this season. shery: protein is hot and chocolate is not so her she is diversifying -- hershey is diversifying. beef turkey? we will explain. we are one hour