information about the current economic conditions in each of the 12 federal reserve districts. david: it is published two weeks before the next fomc meeting. erik schatzker is live in washington, d.c. with the breaking news. word, mass. -- mess. yes, the economy is still growing, but at only a modest pace. to fed used the same word describe wage increases since the last beige book in april. this is not the kind of assessment that turns hawks into dubs. s. dove the one area i will say that stands out is labor markets,

which the fed describes as tight. difficulty hiring should translate into wage and inflation pressures in the months ahead, but for now, only slight growth and price pressures. moderately.was up better than modestly in the 11 of 12 fed districts. confidence to the borrow more. the beige book can be a bit of a sleeper, but two weeks away from the june fed decision, it takes on greater importance. strong casemake a for a rate hike but does not take the fed off course, either. david: i wanted to ask you what commentary there is on signs of

inflation in the beige book today. erik: not much. that is the slight growth and price pressures. on the push aside, yet the tightening labor market conditions -- you have the tightening labor market conditions. anecdotally, the fed does not report a lot of price pressure now, describing it as only slightly growing. david: i want to turn to julie hyman. julie: not much more than a mess, no. not seeing much difference from before. stocks have been trading in a tight range. declines across all the major averages. they have been bouncing between gains and losses, now all in the red. in the case of the s&p and nasdaq, it is barely in the red.

what has been getting more attention throughout the day with the manufacturing data we saw this morning. the beige book commentary not seeming to dissuade any investors from the focus they've had on the u.s. fed and the fact that it may raise rates in june and july. friday's jobs report could be more pivotal for the markets. looking at the various manufacturing reports. china with this line, the eurozone pmi and the u.s. measure of manufacturing. this pink line is the 50 line. the dividing line between expansion and contraction. you saw both the eurozone and all above 50,hina but not much above 50. that seems to because in some be causing some

pause for some investors. bloomberg dollar index not seeing much movement in the wake of the beige book. it has been down across the day for pointer percent. -- .3%. is where ited level has been for the last half hour. we saw some buying in the treasury market earlier. oil prices, quite a bounce around. still down about .6%. not really any change as a result of these beige book headlines. on the downside, looking at copper and gold. oil going lower, copper going lawyer, gold going lower. it is down 5%.

is up. ofsaw speculation because , butcquisition of celator besides that, not much going on with endo. it is the best-performing stock in the s&p today. more reaction, let's bring in erik schatzker again and guy lebas. last time, we talked a bit about igns of downturn in energy. erik: given the rebound in oil prices to $50, we hoped for signs of life and energy, but the 12 districts report that the energy sector remains weak.

cleveland and dallas, those fed those fed banks report optimism among their constituents that oil and gas prices have bottomed given that of $24 off the lows in january. shery: how does the beige book compared to data seen recently coming out? we had manufacturing data, consumer spending yesterday. the fed think we are doing compared to the actual data? guy: either modest or moderate.

they don't like repeating the same word. that has been in the federal reserve's lexicon going on three or four years now. i will choose the consumer portion of gdp as the biggest indicator. we saw a growth rate of 1% in the first quarter, neighborhood of 2% for the second quarter and that is what we can expect for withate or roughly in line trending growth. they grew only slightly -- how worrisome will that be to the federal reserve? on a three-month annualized basis, the core pc is running at a 1.88% rate. is normalizing.

2% is their target. we are drifting towards that. the rebound in energy prices is supportive of that, if nothing else. shery: price pressures depend on wages. what is the beige book saying about that? reportse beige book modest growth in wages despite market conditions. this is strictly an anecdotal report, but what this beige book does not show is that wage pressures continue to build. in april, there was this positive momentum.

we do not see a continuation of the momentum. modest is certainly healthy and perhaps additionally health and given the state of the labor market. it is not strong, if you will. the housing market has been a bright spot in the data we received. how big a bright spot is that for the fed? guy: a tremendous bright spot. also a small portion of the overall economy. 19% annualized and yet, that was only enough to add .1% to the overall gdp number. there are some knock on effects that are not measured. encourage home prices the wealth affect.

that has been in fed policy since the great recession. shery: we are seeing the fed fund futures right now. traders seeing a probability of 53% of the hike in july. what do you think about the pace of the rate hike cycle right now? guy: there is certainly no urgency. running at a sub 2% level and growth is moderate. there is no urgency to the path of rate hikes, but it is clear that officials would like interest rates to normalize to some degree.

pace.ce is a snail's whether the fed raises interest rates in june or july, it does not matter all that much. 1% from atg rates, most 1.5% and that provides a certain degree of comfort to relatively low bond yields. david: a lot of this information is anecdotal. i wonder if you see global economic trends reflected in some of those anecdotes today. memory serves, there's nothing in there to suggest external pressures. a reference somewhere in those pages, but theing i saw suggests regional fed banks are overly concerned about the pace of economic growth outside the or any of the

second order effects that may on demand for commodities in any of those 12 districts. shery: erik schatzker will be back with us in a bit. guy lebas.rri david: we will have live coverage of janet yellen's remarks. shery: let's check on the first word news this afternoon. mark crumpton joins us with details. mark: two people have been shot on the ucla campus today. the conditions of the victims not yet known. spokeswoman tells reporters she did not know the whereabouts of the shooter. the campus on the city's westside is on lockdown. we have a live press conference

underway right now. let's listen in. >> i have not had that confirmed to me at. -- to me yet. [sirens] >> [indiscernible] >> what about the suspects? >> i don't know that, either. happen quickly and a lot of information comes in from a lot of different sources. >> can you start with what we do know in terms of what happened, when it happened? [sirens] >> around 10:00 this morning, a shooting occurred on the ucla campus. reports that there may be at least one or two victims. we do not have that confirmed. i do not know the status of the victims or how many we have. as we have more information, i will be glad to provide that. >> [indiscernible]

toi'm here and i just talked the office. mark: a lot of chaos going on on the ucla campus. a police officer trying to have but lots oference, sirens and activity in the background. time, 10:00 a.m. local 1:00 p.m. here in new york city, there was a shooting on the ucla campus in an engineering building. it is not sure yet whether or not police at the scene are looking for an active shooter. ucla one of the premier universities in the united states of america. occurring one week before final exams at the school. you see a of the university of -- two peopletem

shot near an engineering building. no word yet on their conditions and no word from authorities on the search for an active shooter or shooters. stay with bloomberg television. we will bring you more details on this breaking news story. donald trump is pitching himself as an insurgent at the same time he is privately telling donors he will not try to remove republican leaders in congress. he's committed to keep mitch mcconnell and paul ryan in their positions. a signal that mr. trump will cooperate with republican leaders. , emergency workers are evacuating houseboats after the river overflowed its banks and flooded towns across the country. in some areas, the floods are the worst in a century and

waters are expected to keep rising. delays at the french open and the forced evacuation of two prisons. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. david: coming up later this hour, china's influence on commodities. sachsurrie of goldman tells us how china could set a downward pace for commodities in the next year. shery: arranged today on insider trading charges. how call for phil mickelson escaped prosecution. david: another look at today's trade on the s&p 500. more "bloomberg markets" coming up on bloomberg television. ♪

david: this is "bloomberg markets." shery: more breaking news on the ucla shooting. mark: according to the lapd twitter feed, two people are now confirmed dead in that shooting today at ucla's campus. the shooting taking place around 10:00 a.m. local time. still no word on whether there is a search for an active shooter or shooters on campus. according to some of the light shots we saw earlier, massive police and emergency personnel presence. the shooting took place near , at the center of the campus.

the shooting occurring one week before final exams at the school. two people have been shot to death at the ucla campus. no word yet on whether the search or an active shooter or shooters is continuing at this time. we will continue to follow the story and bring you more developments as soon as we get them. up next, back to washington, the beige book is out and the federal reserve holds its meeting on june 14. shery: the dollar falling .5% after reaching a high on monday. ♪

david: this is "bloomberg markets." let's dig into the beige book a little bit more. i want to flag something in the writeup on this -- the words "modest" mentioned 23 times. looking at the data we've gotten about manufacturing and consumer , the data in here, the only go upn here until may 23. i wanted to see if it reflected the strength we see in consumer spending or the surprising manufacturing we got this morning or the recent strong data on home sales and home prices and home starts.

seeost cases, you do not the commensurate level of enthusiasm in these anecdotal reports from the 12 regional fed banks. in the case of consumer spending and tourism, they describe it being up modestly since the last facebook in mid april. that is hardly indicative of the peace we saw in yesterday's monster consumer spending report. it was up 1% with the biggest monthly increase in seven years. through mayook goes 23, said jesting the pace of consumer spending may slow from what we saw in april. on a manufacturing front, the fed regional banks are art mixed growth -- report mixed growth and manufacturing declined in four of 12 districts. fed districts

reported positive or improving manufacturing outlook. on real estate, you heard a bit of this from guy lebas, we've had strong data on home starts. the recovery in home prices continues and there, the base book is supportive. on balance, i would say the base book does not suggest that some of the momentum that we've seen economic data will be maintained in the month of may or possibly into the month of june. shery: any anecdotes that stood out for you? erik: i always like to comb through the beige book to see if they pick out small things that may resonate in the economy in the months ahead. may mirror what we've

heard ourselves. one, a number of districts reported that online sales are eating into the retail numbers. that should not surprise us. cominghe fact that it is from the fed, it is noteworthy. something has to become a real trend for it to report up to the constituents to the fed banks and then into the beige book. car sales are growing faster --n david: erik schatzker joining us from washington, d.c. more "bloomberg markets" coming up after the break. ♪ get ready for the rio olympic games

by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you?

x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. david: this is "bloomberg markets." shery: let's start with the

headlines on the bloomberg first word news this afternoon. an update on the breaking news story we've been following. los angeles police say two people have been killed at the university of california los angeles on the ucla campus. that site remains on lockdown, massive police presence is underway. no word on whether authorities are actively seeking a suspect. you are looking at live pictures there, the los angeles police and ucla police are asking people to avoid the area. the ucla campus remains on lockdown following a shooting earlier today around 10:00 a.m. local time in los angeles that left at least two people dead. no word yet on whether a search is underway for an active shooter or shooters. stay tuned to bloomberg television per we will continue to follow the story and bring you more update testing as we get them. -- more updates as soon as we get them. a terrorist attack on a somali

hotel that five people dead. -- left five people dead. the attack on mogadishu's ambassador hotel continues and several militants are held up inside the building. signals have been detected from black -- the black box flight recorders from the egyptair flight 804. french authorities say it is impossible to know from the signals whether they are from data -- -- flight cost blackbox recorder. who are clinton will deliver a major foreign-policy address in the "fear and rebuke

and bigotry" that trump has been delivering to voters. the pga informed mr. trump last night of the decision to leave south florida. he told the miami herald the tour is leaving for mexico because it cannot find a title sponsor. mr. trump says he will attend ge june 24 opening of the olf resort in scotland. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. david: commodity markets are closing in new york. oil today paring earlier declines following a news report that opec may consider a new production deal in a meeting starting tomorrow.

nymex crude pretty much unchanged, wti closing at the $49.11. shery: data from china leading to a decline in copper today. the global recovery is set to stall this year. david: sugar and soybeans -- heavy rainfall in brazil this week will affect shipments. ore's rally was rather short-lived after advancing for three months, plunging 24% in may on concerns that profit margins at china's steel mills are shrinking. jeff: you did have a real physical increase in demand.

to creater easy supply and super easy to create iron ore supply from around the world. which is able to undercut that increase in demand we saw in march. the half-life of the stimulus they injected into the economy back in first quarter has already collapsed. it is getting shorter and anrter, meaning there's indication that we cannot expect a followthrough into the second half of this year from the strength we saw earlier here. that's why base metals are off this morning. david: where did the increase in demand come from? jeff: everybody was very bearish on china, so we saw a significant the stocking of inventories. we had the stimulus hit the market in the first quarter. $1 trillion.

that should have created an enormous increase in demand. 2.6% increase a in steel demand. shortrket was cut and we are now back to the today.s the high cost producers were hanging on by their fingernails. i don't see them coming off in a big way. have we seen a change in strategy of the major players? jeff: it has not changed, which is why this market came off. it was a demand driven pop off of the credit stimulus china injected into the system and first order. now, we are back to the same supply overhang. steal excesst capacity on a global basis, it is 30%. we saw steel manufacturers

come back into market. whatuch of this -- does theility government have to keep a better gauge on actually what can be done and what shouldn't be done? jeff: to dig into the question, why does the stimulus have such a short half-life? if you put stimulus into an industry that has low rates of return because of excess capacity, you will have a smaller impact. put $1 trillion into an industry that has a 10% return, it will grow by 10%. but when julie dollars into an industry that is contracting by 5%, you will lose 5%. that is the problem the government faces with the manufacturing sector. there are three areas to put stimulus. one is infrastructure. the other is construction.

given the excess inventory, that is not a good choice. the third is manufacturing. the only one that will lead to any growth on a permanent basis would be infrastructure. n: take a look at china and the to mine for commodities and split it up. jeff: we put commodities into groups. -- cap x commodities and op x commodities. you build the building with cap withmodities and heat it op x commodities. we are seeing that rotation towards a consumer driven economy. copy demand, jet fuel demand, all relatively strong, while the demand for capex continues

to contract. david: china is so much a driver of commodities overall. what does that tell us about commodities prices over the next 12 months? jeff: it down. have excess supply, overhang in the market, combined with the sequentially weaker china over the next it's months. you take on a copper forecast, $4200 a ton by the end of this year, $4000 a ton next year. we see lots of downside risk. shery: that was sheelah kolhatka jeff currie. david: the changing definition of insider trading. why behavior once deemed a crime is now effectively legal. shery: consolidation in the cloud computing business accelerates.

how the push into retail software will boost a millennial company. .5%.: salesforce down ♪

david: this is "bloomberg markets." more news coming out ahead of that opec meeting in vienna. delegates discussing reinstating the output ceiling to stabilize the oil market and raise prices. a deal could accommodate iran. hsbc cutting a number of investment banking jobs.

.irst quarter profit fell 15% stuart gulliver has outlined a three-year plan to cut thousands of jobs. david: a strongest indication yet that the family owning by viacom try to oust -- may try to oust the ceo. a las vegas gambler was arraigned today in a manhattan courtroom on insider trading charges. he has pleaded not guilty and his bond was set at $25 million. the judge also allowing him to keep writing in his personal jet. -- riding in his personal jet. david: davis has pleaded guilty.

phil mickelson allegedly got a tip from walters. but will not be charged. the reason why, the changing definition of insider trading. sheelah kolhatkar joins me now. if one were to describe the transaction to a layperson, it would likely sound like a crime. like a duck, sounds like a duck, but it is not. eelah: the papers when out of -- went out of their way to name phil mickelson , they are asking him to give the money back. if you describe what happened here where you have a company or --ber dashboard member company board member getting

information about dean foods come information the rest of the and youoes not have have two people, walters and mickelson who traded and make millions of dollars. if you did lay that out to someone, it would sound like something that is deeply unfair. yet, it is not always a crime anymore. shery: this underlines the challenges of the modern market. compared to 20 years ago when of cash being traded in a hotel lobby. how difficult is it? days, youn the old had people delivering cash in exchange for tips and what the u.s. attorney has been trying to argue lately is the way the market works is different now. you have a lot of really aggressive hedge funds, lower-level employees, analysts

and portfolio managers getting paid bonuses to go out and harvest information they can use to make money at their fund. is being passed along between colleagues between different funds and pass up the food chain. you have a hedge fund manager, the person making most of the money getting this information second, third, even fourth hand, may not know exactly where it comes from and it is insulating those people. people at the top of the chain are now protected. providencemuch does matter here? youou tell me something heard secondhand from someone else, we will be all right because we don't know where it came from. there is no one law that makes insider trading illegal. no courts have said we don't want to penalize people who leak , who might ben

whistleblowers -- we want people giving out information that they are not supposed to exchange for a benefit, they are doing it to help themselves now. -- help themselves somehow. suitcase of cash or the fact that you are friends and you trade amongst yourselves? you might help me get a job, so i will help you out now. these activities once considered illegal can now not be prosecuted. sheelah: the public is feeling a little cynical about the stock market for number of reasons. we had the mortgage crisis. a lot of people felt there were -- enough executions prosecutions.

have investors with access to valuable information that average investors don't have. someone close to the power center of the company can make money at your expense. you mentioned all of this is being worked out in the courts. why isn't it more explicit in the law? sheelah: we need congress to decide to do something. there is not a lot of optimism about that happening. the supreme court has agreed to take up an insider trading case that will address some of this. tips between family members. this will clear up some of it. there will still be holes in the law. a lot of this will be determined through appeals. a very slow process. david: that is sheelah kolhatkar joining us. you can read her story in the

latest "bloomberg businessweek." shery: julie hyman has a check on today's decliners. julie: tesla falling today on some comments passed from elon musk who is saying the free ride is over when it comes to superchargers. .he super charging stations likely charge owners of the model three sedan to use that. cheap, farll be very cheaper than gasoline, but there will be some cost involved. the stock is down 2%. i like to check on the short interest of this company. this chart, you are looking at the stock price in white. here is the short interest ratio. on this site, you have the absolute short interest.

it has come down to some extent likely because these shorts got squeezed out. 29% upload, still relatively high level. a lot of people not that confident in the future direction of the stock. said they will sell seven point and bill and -- $7.9 alibaba.f shares of alibaba down by 5%. looking at sears today, this appears to have to do with a lost anse here -- kmart appeal in a false claims act having to do with its pharmacy

business it is supposed to charge a discounted price when dealing with medicare. .t appears it was not doing so those shares are down by 6%. david: salesforce is making the leap to e-commerce, buying demand where -- demandware. is it worth the price? ♪

david: this is "bloomberg is enteringlesforce the e-commerce industry with its biggest acquisition yet, buying cloud commerce services provider demandware for $2.8 billion. cory johnson joins us from san francisco. seems to me like a lot of the

company salesforce has acquired is outside what the company has been known for. why is this a good fit? cory: we will see if it is a good fit. you see salesforce looking at the verticals around it. a lot of companies have sprung to otherne public services focused on medicine, drugs and e-commerce. was specializing in helping retailers do all the things they are doing on the cloud. demandware built up a business that was related to salesforce in some ways. but growing at a faster pace than salesforce was.

salesforce decided they wanted to be near that business. and indeed wanted to benefit from being closer to the customers and being present in verticals. shery: will this purchase boost competition with oracle or sap? sheelah: the price suggests there was competition to acquire this company. extraordinary multiples for the company. $67 million in sales last quarter. to pay $2.8 billion for a company that is doing $300 million in annual sales for this current year and losing money at it suggests there was competition for this deal or toesforce was really hungry add to its top line because they have added nothing to the bottom line here. area, in light of this

what does he want this company to become? wants it to become massive and prevalent in all kinds of industry. picking up those verticals. he recognized that the market doesn't care that the company is losing money right now. you can take a lot of money from to make this deal and grow the top line ends end -- and spend fortunes on marketing. revenues at a 50% pace, now down to 28% in the current expected year. with all their marketing dollars

commitment be demand where can do even better underneath the salesforce umbrella and grow faster. andfocus on the top line not worry about bottom line until the future. shery: you can catch bloomberg west at 6:00 p.m. eastern, 3:00 em pacific time that pm pacific time.- 3:00 p.m. pacific ♪

>> it is 3:00 p.m. in new york. welcome to bloomberg markets. ♪

good afternoon. here is what we're watching. u.s. stocks are rebounding from earlier losses, trying to kick up june with a gain here it investors are wondering if interest rates will rise after the modest growth in the economy. can stephan curry help under armour? shares drop after one of the largest customers at sports authority liquidates. is there another buyer in the wings? new tesla owners may be in for a shock. be charged to use the company's network of superchargers.