bloomberg television. ♪ betty: we are going to take you from new york to london to berlin. here is what we are watching. we will talk with yale university professor robert shiller as the latest s&p schiller index shows home prices in the 20 biggest cities up more than forecasted in march. plunging 86%. highlighting the challenge volkswagen faces in emerging from the diesel emissions cheating scandal. transfersald trump his prized assets to a delaware to potentially result in a tax savings for the presidential front-runner. let's cut to the market desk for

julie hyman with a closer look at the economic news coming out this morning, including consumer confidence. 92.6 is the consumer confidence index number coming out for may. by6 uses 96.1 estimated economists. lower than estimated. we have a lot of data, including the case schiller number and a personal spending increase that was the largest we have seen in seven months. we have been seeing strength in some of the economic data. that seems to be feeding into the narrative that the fed could move in june or july. change in stocks. the s&p and nasdaq were higher, but not huge gains and the dow is lower by four points. not moving on the consumer confidence data. aregroups on the move, we seeing more gains and losses in

terms of the sectors in the s&p 500. telecom doing the best, followed by energy and utility. discretionary with consumer are doing the worst. apple is in focus after the rebound that the stock has been experiencing. up 11% since a low on may 12. that was the lowest since june 2014. it is slightly lower today. it is only down 1/10 of 1%. that thei is reporting company is going to extend the time for model changes from two years to three years. there have been concerns related to that report, but the stock is performing well in the face of that. we are watching allergan. late breaking that carl icahn called has taken what he

a large position in the company and is supportive of the ceo. .hares of one quarter percent typically when it reaches 5% you would have to report the details . we can presume it was lower than 5%. betty: stocks are pretty much had it -- why is that? what about reaction in the market? julie: we are seeing a push and pull looking at the fed outlook. i want to mention that we are seeing in other assets. we are seeing more of the movement, particularly in oil prices which we saw spike of in 15 minutes ago. -- spike up 15 minutes ago. it might be related to the saudi arabian report saying they might be seeking a $15 billion on sale. it is unclear -- the timing would seem to coincide, but oil is getting closer to $50 a barrel. that is why we are seeing the

gain in energy stocks. treasury is something we are watching. stocks are outpacing gains. this narrative in the fed is beginning to change. the 10 year yield is actually at a one-month high, which is what you would expect given the changing outlook, 1.88% is where the 10-year yield is. mark: falling for the first day in 6. in sixt winning run weeks. here is a statistic. going for the third straight monthly increase, the longest winning streak that's march of 2015. this month's winning streak, or again, is the largest since november. the five day gain has petered out. the stoxx 600 down by one quarter of 1%. the big corporate story is volkswagen shares falling a four-point 7%, the most since february. the namesake brand fell by 80% in the first quarter, giving the

market operating margin a .3% short of the medium-term goal of 6%, highlighting the challenge the automaker has in coming back from the emissions cheating scandal. it has a long way to go before it puts the crisis behind it. the shares down by 1.3%. down by 17% since september 18, the day that the scandal broke. shares were down as much as 43% a couple of weeks after the scandal broke. they have recovered somewhat. shares arising as much as 3.6%, the most since january. the company said first-quarter profits beat estimates and released estimates after the monday close. the chief executive says the marja byrter was disposable income and private consumption.

the company has to whether an increase in the gross gaming revenue tax from 30% last year to 35% as of january 1. shares up by 4.8%. i want to show you a company i don't often talk about. a swiss company that makes frozen convenience meals. it will be hit by restructuring costs that will be higher than some expected. third-quarter sales also missed estimates. shares down by 5.1%. they were down 6.3%. three words, welcome back, betty. way toyou always find a add in surprises. less check in with the first word news. vonnie quinn has more. vonnie: in the u.k., a new coal shows supporters of the european union to lead those who want to leave here at 51% of those surveyed want to stay in

the eu. 46% want to pull out. and a rock, government forces making progress in attempt to retake the city of falluja from the islamic state. they've recaptured 80% of the territory around the city. iraqis have been advancing into falluja. civilians are still trapped. displaced of afghans by war has more than doubled to 1.2 million. that is according to amnesty international. an afghan government policy meant to improve conditions has been blocked by corruption and lack of capacity. strike against oil refineries in france is starting to hurt the construction industry. they cannot get to building sites because of resources. to combatn to strike labor reforms pushed by president francois hollande. living in modern slavery, and ightstrong and based r

group says forced labor in farming him a fishing, sex work, and forced marriage. news, 24 hours a day, powered by 2400 journalists in 150 news bureaus around the world. betty: the u.s. economy, home prices in 20 cities claiming more than forecasted. march is the selling season. the s&p case schiller index up 5.4%. showing signs of healthy demand. homesgs of new strengthened more than expected in april after the economy's sluggish start. joining us from new haven, connecticut on the housing market and the economy in general is professor robert shiller from yale university. it is good to have you on the network. earlier this year

we might be at the peak in the housing recovery. are we seeing the second breath, the second life and housing? economy has been recovering. employment growth has been solid enough. people are needing houses. they are buying them. there are not enough houses. the inventory is low. they pushed the price of. it is a modest price increase, nothing scary or exciting. this could go on for some time. betty: it adds to the continuing narrative, professor, that the economy is improving. it looks like we are setting the stage for rate hike. i want you to listen to what janet yellen said on friday when with a giving a talk harvard colleague. listen to what she was saying about rate hikes in the future. chair yellen: it is appropriate,

and i said this in the past, for the fed to gradually and cautiously increase our overnight interest rates over time. probably in the coming months, such a move would be appropriate. pointing to that, appropriate in june? robert: i think sell. it is unclear what this will do to the housing market. seen a 25 basis point increase that had no impact on the market. if it is tightened substantially, it might change people's healings about affordability. interest rates have been so low s a wonderfule option. homeownership ownership looks great when interest rates are low. it might change. we do not know how the psychology will react. mark: the other piece of data that stood out, besides consumer was the fed's

preferred measure of inflation, .ce core if you look at matters closer to where im, there is no inflation in the eurozone. inflation fell by .1% last month. why is in nation taking up in the united states, but we are having problems in the eurozone, the u.k., japan -- just to mention three of the world's biggest economies. robert: i can only guess. this is psychology. the u.s. has been in stimulative mode for more years than europe. we are starting to feel confident. we are starting to think prices should be going up. it just has not sunk in in europe. llen did not mention international developments. given that the fed is calmer when it comes to international developments, much calmer than

the start of the year when we saw the bought in volatility in early january and february. robert: at the beginning of the year, we saw stock rocket drops. market drops. people thought that the fact that we were starting off on a bad foot was very significant. people were edgy. since then, it has not repeated. sometimes they drops can lead to a cascade of further drops. it hasn't happened. the confidence in the market is more stable, substantially. beforeyou have written about psychology, the psychology of the consumer, the investor, and how powerful of an influence that has on -- i do not want to say protecting recessions, but a huge influence on recessions and the economy.

where do you think we are? are you surprised that the consumer is feeling more whethert in the u.s.? or not that is a buffer to any further worries about a slowdown. robert: right now, we have investors in attention to the aggregate markets. in war time, you would think stock markets would be volatile, but they are not, not particularly. public attention gets dragged away. i'm more worried about the election, as everyone else's, at this time than what the next move of the stock market will be. likelyhat will be the impact depending on the outcome of the election on the u.s. housing market? what are your thoughts? robert: i don't know. this is a tough one. do you want me to give a

separate forecast for clinton versus trump as winning the election? mark: if you could. and how the housing market might be affected. robert: it is a wild guess of psychology. if trump's president, that will be a real revolution. probably good for the stock market initially -- then we will have to see how he performs as president. that is another question. quentin,nton? robert: -- clinton, if she is elected, it will be business as usual. continuing the obama age. he came in at a bad time. it has become more normal. i think that that is the expectation people would draw. mark: thank you for giving us your assessment of the election, the housing market, the u.s. economy, and otherwise.

robert shiller of the yale university. m&a in energy, companies across the u.s. consolidating in a billion-dollar deal. the latest on great plains energy and was star. westar. ♪

mark: from london and new york i am mark barton. betty: i am betty liu. you're watching bloomberg "markets" a look at the biggest business stories in the market. airlines have a problem as they gather for their meeting. there is a slowdown in demand. just as carriers try to exploit

lower fuel prices. they meet in dublin. global passenger traffic grew at the slowest pace since january 2016 last month. nearly 40,000 for rise in employees heading back to work employeesverizon heading back to work after a tentative agreement was reached. table at call centers and 11% raises. they make health care plan changes to save the company money. coming up short in the north american debut -- alice in lookingnd: through the glass. it was far short of predictions. the box office winner was x-men: apocalypse. it was in line with estimates. that is your bloomberg business flash. from the market desk, julie hyman is looking at the m&a news. nothing use, but sizable

deals. the first in the utility business. great plains energy will by westar energy. .51 a share in cash great plains will assume westar's debt. we have seen a lot of deal activity within utilities specifically. you see great plains pulling back, westar rising to 56.99. there has been activity and that's constraints within the utility industry. falling natural gas prices put pressure on profits from these companies, in some cases a transfer to renewable energy as well. there has been a flattening of electricity demand. looking at a mergers and acquisitions that we have seen, this year thus far has been rapid pace. last year there were $52 billion worth of agreed-upon deals in the utility industry, the highest going back to 2011.

there has been quite a bit of activity. there has been activity and pharmaceuticals. jazz pharmaceuticals buying gain anur -- celutor to experimental medicine for blood cancer. it is $30.25 per share in cash. will be $1.79 billion for equity. it is the maker of marketing software. mark: thank you. coming up next on bloomberg "markets," the namesake brand of volkswagen plunges in the wake of the emissions scandal. we are live in berlin, next. ♪

mark: you are watching bloomberg "markets." i am mark barton with betty liu. vw shares falling as much as 4.7% earlier after quarterly profit of the vw brand declined 86%. the chief executive says the automaker "achieved respectable results under difficult conditions." they continue to whether the emissions scandal. let's get to berlin. chris, why did shares fall as much as 4.7% earlier? was it the decline in profits of the namesake brand? chris: that is certainly a big reason for it. figures rose slightly. that was due to one-off charges. 3.9 million euros. they got currency tailwinds from

for thes they set aside scandal. the volkswagen brand is so cool or to the company. with the -- is so core to the identity of the company. with the profit margin being minimal, it is a problem for them. they have suffered from a decline of profits from china that is not reflected in the profit results. china is their biggest market. if profitability starts to slam there, that will be ahead went for volkswagen. mark: it proves that volkswagen is finding it difficult to move away from the emissions scandal that broke last september. what is the strategy of taking the namesake brand and trying to rebuild the company's reputation? what is it doing now? chris: we will know more about that in a couple of weeks. the ceo is putting together

strategy 2025 that will take the company forward. it will reorient the company and recast it into a digital automotive maker with more forward-looking ideas, instead of traditions of the past. that will be a big sign of wearable tiger is headed -- of will be a big sign of where volkswagen is headed away from the scandal toward the future. we'll know more about that in a couple of weeks. we'll hear more meuller and the strategy. betty: before they can move forward they have to settle the claims against them on the cheating scandal. they have to finalize with the u.s. what is the state of that? chris: they have very significant settlement talks they have to play out in the next couple of weeks. thereafter reach a settlement

with the u.s. court at the end of the month. if not they face significant fines. they face significant fines in any case. that is a story to watch in the unfolding scandal. they have not explained how the cheating came about. that investigation report is due closer to the end of the year. with a that point, really explain how this came about and can move on, do we really know that volkswagen has survived the crisis. betty: chris reiter of the bloomberg news on vw. next, a interview with mark attanasio on the length of the credit cycle. why this will be more like 2000

betty: live from bloomberg's world headquarters in new york and london, i'm betty liu. mark: and i am mark barton.

let's check in with first word news. vonnie quinn has the latest. vonnie: the biggest business lobby in the u.s. is launching a campaign to keep publicans in charge of the senate. the chamber of commerce is calling the campaign saved the senate. praise forcted edwards noted. the contractor who leaked classified details about government surveillance of citizens. former attorney general eric holden said he performed a public service but says he should still return to the u.s. to stand trial. with korea's latest attempts to launch a ballistic missile seems to have failed according to south korean defense ministry. the regime tried to launch the missile in violation of united nations resolutions. demonstrators filled the streets of brussels as

public sector employees went on strike across the country. the action disrupted bus and train activities. they people are prone -- protesting austerity measures, including an increase in the retirement age. it could be september gore some -- before some residents of fort mcmurray, canada can return. in aands of residents were fast-moving wildfire -- were evacuated due to a fast-moving wildfire. news -- global news 24 hours a day. credit investor mark attanasio, managing partner of capital group says that exchange traded funds are exacerbating volatility in high-yield on. at the same time, he is asking clients for permission to use etf as an investment tool.

we sat down for an exclusive interview with him at his office in l.a. and asked him about the current credit cycle. seeingink what we are and if you look chronologically, we are very long in the tooth in credit cycles, but we have a window into u.s. companies through our direct lending business because companies are more subject to cyclical downturn or economic pressure. u.s., there is still a little room to extend. we are also talking to some funds that bank more regional companies, still a fair amount of m&a activity in the more midsize or smaller company scales. there have been headlines about m&a activity that the government might stop, but there is still a

vibrant m&a activity in mid-cap companies, so if you look at all of that, it is very difficult to , but i think the prognosis is ok, this year. >> so we may not be looking at investors backing off or defaults starting to accelerate until sometime in 2017. >> last summer, you had a cinema -- set up very similar to what it seems be, here early gains and you click your coupons the rest of the way. andre mindful of that, around the edges, you try to manage it, including keeping more cash in the portfolio.

most clients tell you they do not need to pay you to manage cash, the point is, we think there will be pockets of opportunity because of increased power -- volatility and other factors that we can be net buyers when others are sellers and i would expect to see a few of those between now and year end. >> even if it is the next printing game, extra innings is not a matter of years, it is a matter of love. -- matter of months. >> i think we are in quarters. there is no art to this, but it does seem that when new president elected, -- new presidents get elected, they like to take care of that business early in their term, so they are coming up for reelection, things are moving in the other direction.

it is hard to believe in the next two years, you will not , so yout readjustment need to be positioned for that. different is this recovery has been very flat and we expected it to be. we may have less of a correction down and more of a boost up in this cycle, but cycle three, a fact of history -- cycles are a fact of his 3 -- of history. morgan stanley could tell you why, but there were some fundamental questions as to whether any of these airlines could just do it themselves. i think the market is showing discipline, and that is a healthy sign because in cycles, pretty much everything got printed, and then nothing got maybe around all the

volatility, you are having some sensibility, and i would expect, when we have a correction here, it will be a more traditional correction and more of a 2000 flavor, difficult to predict, but a recession and turnaround of the 2000 flavor, rather than the 2008 flavor. you had some issues in technology, a lot of questions markets.erging you had -- a lot of accounting issues. obviously questions in china. it does not have anything to do with the market, but it gets into your mind. boostatically, it earnings -- boosts earnings.

financial engineering. >> as that ripples through, all the markets we have seen are correlated, we tried to be as uncorrelated as we can be, but they are also correlated and those kinds of macro issues are present today in a different form, and you like will have some kind of a correction. that was mark attanasio. donald trump stack strategy. find out why he transferred many of his donald trump trademarks into a new delaware based company. run ofil set the longest monthly gains in five years. opec meets in vienna to discuss policy.

we will have coverage on the ground, starting tomorrow. ♪

mark: this is bloomberg markets. i am mark barton live in london. market action all around the world, let's start in asia. they saw a pretty big rally in china, but in hong kong and japan, markets were a little bit more subdued, certainly a lot of eyes on what is going on in china. -- onpan, stocks rose in the prospect of the again -- economic minister raising --

postponing a sales tax hike. >> tuesday's data from japan suggests the economic impact of april zurich wakes were not as bad as expected, but it does paint a mixed picture of the economy. as expected, there was no change in the jobless rate, and the jobs outlook and ratio came in at 1.34, beating forecasts. even with japan at close to full employment, it has been hard to soak wage growth. consumption remains fairly beached. about 49 minutes away from the end of the tuesday session in europe. stocks falling for the first time in six.

is that winning run about to come to an end? the longest winning run in over six week. kleins in london, frankfurt and paris. here are the big moving industry groups. vw draggingng on -- automakers. oil companies down. facing resources worst performing industry group. joe maddon let -- travel and leisure -- travel and leisure falling. look at the bond board, it has been a month of the dollars bloombergg and the dollar spot index rising for the seventh consecutive man. let's get back to the u.s. abigail doolittle has the latest from the nasdaq. nasdaq: we have the

slightly higher, but lots of m&a to tell you about. -- the company's market cap more than doubled above $1 billion. this will give jazz pharmaceuticals control of experimental drug for a rare blood cancer. jazz pharmaceuticals had been trading higher and is now down a bit, even though wells fargo mark says this merger makes a good strategic fit. mark: any other stocks moving on reports of m&a? abigail: we had shares of marquette oh trading nicely, -- looks like the latter was correct, there is somewhat

-- 9% on shares of marquette oh, so not all metrics are pleased by this markup. mark: should we talk trump -tinis? betty: you talked about what donald trump would do to the market and the economy, will let's move over to the policies and down from and in particular, his business. while he is preparing for the republican primaries, he transferred dozens of his trademarks to a delaware based company, a move the gets him a chance to cut his tax bill. we are joined from fairfield, connecticut. what trademarks is donald trump putting into this company in delaware? trademarks that he has

transferred to the delaware company are all -- the best majority of his u.s. registered some euks, as well as and other foreign resident -- registered trademarks as well. betty: these trademarks cover what? >> they cover everything from hotels the golf courses to lighting fixtures to the trump-tini, which is a cocktail made with limited. -- with lemonade. betty: is it to lower his tax rate? reasons that elmer companies are used as holding companies for entities or intellectual properties like

trademarks is because the state has very favorable tax treatment for those assets. it does not tax income from royalty payments. there is a definite tax advantage to holding your intellectual property in a delaware company. this add to the mystery that seems to be surrounding donald trump's tax affairs? there are questions over why he would have held these trademarks in the first place. there does not appear to be an obvious, immediate tax advantage to that, although a senior executive in the trump organization in a trademark infringement case last fall said under oath, in his deposition, that mr. trump held the trademarks personally for tax planning purposes. aboutare always questions how trump candles -- handles his

tax strategy and given that we have not seen his tax returns and that he is a private individual, he is not a publicly traded company and given that he has said on multiple occasions that he strives to pay the lowest tax rate possible. mark: could he move all of his trademarks to an irish company because he benefits from lower taxes in ireland, from his, what is known as irish golf resort? he, he could, and we would not necessarily know if he did that. lawsnd relaxed its company , significantly, beginning last summer, and will allow irish registered companies to basically undertake any activity they wish. the issue with income shifting over to ireland is that how do you get it back into the states

bill.t a ginormous tax betty: other companies who own trademarks may do the same bank, i'm just kind of curious why he is doing it now. >> there are multiple reasons. it could be for legal liability issues and liability protections, having all of those trademarks in one entity in -- put aseparates layer between him and the trademark should any legal issue arise. it could also be potentially for tax planning purposes. he has children who are -- some of whom are active in running his company, and transferring the trademarks into the delaware enable him to give ,o those assets to his heirs

who would not pay taxes upon any appreciation. betty: we will leave it there, thank you so much. speaking of finances for donald trump, thou troubled holding a news conference in the next hour to discuss veterans affairs. essentially, how much he raised and where that money went, when he did a fundraiser a few weeks ago for veterans. that press conference is set to start at 11:00 a.m. we will be monitoring that for headlines. mark: time for the bloomberg business flash, a look at some of the biggest stories in the news. the slump in hong kong property values will have to get worse. the government lift measures to rein in prices according to analysts. they estimate hong kong home prices will have to drop another

19% before the government intervenes. prices are down 13% since september. in europe, opec's cheap oil strategy is blue drivers into buying gas guzzlers. last year's sport utility vehicles outsole every other foresighted passenger vehicle in europe for the very first time. the trend continues this year with suv's accounting for a quarter of sales in the biggest european country. spaces infiltrated my social network. stolen was says data limited to a portion of usernames, passwords and e-mail addresses from myspace's platform, prior to june 11, 2013. that is your latest bloomberg business flash.

betty: still ahead, the uncertainty surrounding the future of a luxury brand that has been family-run for six generations and is now -- we will hear from the deputy chairman. ♪

mark: -- has named the new chief executive of laura p&f -- laurel, -- as the trading in fabrics since the early 1800s and producing high-quality cashmere. 80% to lvmh ind 2013.

>> it is to cashmere what elm as is to handbags, a synonym for iconic timeless luxury. -- control material coming from remotely in the area. in the old time, it was made by hand using visual measurements. today, it is made by machines. >> the deputy chairman is the sixth generation of the family to work at the company. while the retailer has been controlled by french empire lvmh, he says every step of the manufacturing process is 100% italian. >> nothing has really changed. is philosophy of the product the student and accepted by lvmh

. they know what is quality. i think this has to be the real mission. >> the company is under review, putting call options on the emily's 20% stake, meaning lvmh could ask them to sell it or could make lvmh by it. one area they want to tackle is the perception that the product is out of reach for all except the extremely wealthy. anydeputy chief says changes that would result in a drop in quality -- look, thepe, the

fashion, it could last a season, it is something -- it should not last the season, it is something you should love forever. coming up on the european close, head of the ecb alternative, we will dive into euro area consumer prices as policymakers struggle to stoke inflation despite multiple rounds of stimulus. there is a look at european stocks, falling for the first time in escape its. the european close is minutes away. ♪

betty: it is 11:00 here in new

york. amk: live from london, i mark barton. this is the european close on bloomberg markets. ♪ we are taking you from new york to london to frankfurt in the next hour and we are going to kick off a major week for the global economy. the ecb meets tomorrow, opec begins its meeting in vienna on thursday. we will cover what's on the agenda. stocksemerging-market are back, rising to its highest levels in three weeks. filledrency gap has been by men at the biggest banks but now women are taking the reins. what is causing the shift? 30 mi