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.

the federal reserve says the economy is growing at a modest pace. the central bank saw inflationary pressures rising. will it be enough to raise interest rates? erik schatzker is in washington with the latest economic data. give us the interesting points of the book this time around. >> the book could have strengthened a case for a rate ite two weeks from now but did not. you heard those words and you said it yourself, modest. the key word in these anecdotal reports, modest economic growth, modest wage increases, modest hiring. not an assessment that turns doves into hawks. if anything, it raises the stakes for friday's jobs report. you have to figure policymakers are struggling. there is a tight labor market. there are signs of building

inflation as a backdrop. you have consumer spending just yesterday, home sales, and that surprisingly strong manufacturing data reported this morning. then you have the book you might characterize, as i have, as meh. there is just not a lot to go off of here. the index rose 51.3 in may from 50.3 in april. when the economist we surveyed were looking for a decline. the beige book showed manufacturing declining in four regional fed12 districts. the silver lining, six of those reported a positive or improving outlook for manufacturing. away from the decision, that is the latest from the federal reserve. that is how things look now.

>> thank you for that. let's head to the market desk. any reaction to the economic outlook? julie: it is called the beige book because of the color of its cover. all three major averages have turned higher. that is something. it is a small one with none of the major averages up more than .2% in reaction to all of its talk of modest growth. you look at the s&p 500 and you see the trajectory and the tightness of the range as well. it has been a steady and yet choppy climb throughout the course of the day with the s&p 500 earlier trying to make a break for a positive a couple of times in the railing that. we will see if this sustains itself through the close of trading. other asset classes, the 10 year

note, not seeing that much of a reaction here, unchanged through the day. you expect to see more of a reaction after manufacturing data which came in better than estimated. that is when we started to see reversed. the 2-year note saw a more dramatic reaction. this was the 10:00 a.m. jump in yields here. that.ore reaction to the u.s. dollar as well, i want to take a look at the bloomberg dollar index. it did not go positive. of the economic or fed measures of the day, it seems manufacturing for the market was the more important indicator. >> within the stock market, what is writing the gains there? >> we have got telecom and discretionary stocks lower.

staples, health care, finance, and energy, energy being in the hot -- the bottom spot. individually, the biggest contributors because of their -weighting, jpmorgan and berkshire hathaway representing financials in that consumer staples category. it is a mixed bag of what has been driving gains. >> thank you. mark crumpton has more from the newsroom. mark: two people have been killed in the shooting of ucla's's engineering building. police are sleeping the building searching for the gunmen. to shelter inold place. the suspect is described as a white melt rest in black according to law enforcement. the police chief says it is

possible one of the two kills was the gunmen. authorities told people to stay away from campus. a steady dream of traffic is moving to the canadian city of fort glory as thousands of people who fled a wildfire at the start of may returned to see what is left. the fire returned 2400 structures when it ripped leading to anty, evacuation of more than 80,000 residents. officials are expecting thousands to return today. russia arrested 50 suspected members of a hacking ring that stole money from the nation's banks. since the middle of last year, lenders have lost more than $45 million to hackers. a slightlinton has greek -- slight lead over donald trump according to a national poll. 41% favor mr. trump. men and women divided.

women go for mrs. clinton, 54%-30%. news 24 hours a day in more than 150 news bureaus around the world. >> thank you. , june canment outlook set the pace for markets. opec members kick off a meeting of members tomorrow in vienna. later this month, we will get a decision for interest rates and my next guest says all of that could make june a tricky month for markets. equity portfolios manager for j.p. morgan private bank, which oversees more than $1 million in tricky to say the

least. are all of these risks what will be driving the market this month? >> most have a view on earnings and interest-rate and currencies. politics is out of what they think is their comfort zone. events whichse will unfold, and companies go to the quiet period. i think we will have a little more emphasis on the political noise that goes with the markets. >> markets are reacting to the manufacturing data. show thatcturing data we saw acceleration in the month of may. we are seeing consumer sentiment may not be picking up. people are still concerned about the future. how do you gauge all of the economic data pouring out? asked the good news is with the economic data, we will either revise it or get another update.

i thought the tricky one, or the more interesting one, was if you we areces paid, continuing to run hotter than analysts forecasting. the concerns. we talked about wages and the rate rising, the consumer willing to stand and the sales willinglast month, but to his then we get auto data this morning, which looked weaker areas i think you can come up with a narrative where the news is tricky but positive. it beingsting to see used to three times in a six page summary. it seems to me the fed is ready to call the trigger. nothing is pretty much stopping them. is that what -- is that how you would take it and how do they position themselves? what you do here?

>> there are two for us to the question. talking about forward guidance, we will give you a clear path and a checklist comes whether it will be an inflationary target, unemployment target, and it feels like they are reverting to the traditional fed, which is we will be responsive to what we see and change our minds as appropriate to the data. if you turn that to what investors could wind up doing to that more uncertain world, equity income has become a more popular strategy because people be, to replace income and it has been a less volatile ride within the equity markets. we think people change how they and focus more on the high-yield and dividend stock. book,least in the beige we saw the housing market, that sectors of being a bright spot for the economy. are there any factors to keep an eye on in the next few months?

>> one is technology. just this morning, a large and high-profile transaction. technologies 20% of the equity market gap, so it should be a large contributor. even within text, there is a consumer and enterprise story with intact. the other place i look is consumer staples. people have looked to having earning headwinds, but if the dollar does not rise, historically, it is very possible that consumer staples lend can be a buffer and a portfolio. >> we are expecting opec to meet and they are saying they will likely to death a cap. people do not expect much to come out of it. what do you expect of the sector? in its transition.

if you look to the saudi arabia minister, the minister of oil resources, saudi arabia is preparing for a post opec world, whether they are recognizing their business model has to change in how they interact with other at orders may have to change going forward. from some opecg members that we could see $60 per barrel soon. do you think that is possible? >> possibly, i think there is an interesting disconnect. supply disruptions have been an important angle with growing demand. demand is not quite as strong as oil markets might suggest. >> how concerned might we be about global economic growth? we saw manufacturing data out of the eurozone, disappointing.

chinese manufacturing data on the official gauge was ok. not so much on a private gauge. be much of that will impacting the market? >> we're thinking it is a very mature and old expansion. we havenot feel like the likely impact of contraction in the next possibly three years. 2%want to hover around this growth in the united states, which gives us not a tremendous amount of room for a challenge or a bad winter or a hot summer. keeps non-away in the back of investors minds. to has become the old 3.5 if not for in terms of economic growth. you do not have the room for error. valuations are not cheap but not horrifically expensive. --t needle winds up being you become a more active trader

where it has gone slowly and sideways. morenk you have to be mindful of what opportunities are created. >> thank you so much. a domino effect in the sports apparel is this. shares of nike and under armour tumble. that story is next. ♪\

>> let's get a quick check of the markets. they have turned positive. in slightly terror -- slightly negative territory.

the s&p 500 up as well. they are reversing yesterday positive losses after the longest stretch since 2014. the nasdaq is also up .2%. he does of the biggest names in sports apparel are down. under armour and nike are sliding. i'm joined now with some insight. downgraded by morgan stanley, what is going on there? >> there is concern about the north american business. analysts, there is some market share being lost. adidas had some nice hits with fashion space and the under armour is doing well with --

with a basketball shoes. an impact is this to under armour? >> sports authority, more than -- stores. they had a plan to reorganize and cut some cost. they thought, sales might be reduced but we will still have them. sports authority did not make it out, the liquidated. under armour went from about a sales production of $500 this year to 5.9. they are projecting nice growth. >> we are seeing that online sales have taken over the terrorist. what happens with the sports industry?

is true that online is definitely hurting these guys. they sellhe way things. they are doing a lot more of their own sales. more throughstuff our own channels. under armour has a big.com business. that hurts the sports authorities of the world because under armour and other brands are doing their own going. i am hearing of the market is becoming very fragmented. >> true. if you think about the athletic look at is popular, women wearing jogging pants and ,weatpants, kind of casual there are many more players than there used to be. awayctivewear is taking

from traditional sports brands. times was down for a long and now they are having a resurgence. where.s you it is another trend. someone said to me the other day revenueertainers athlete. someone who's cool and hip and can plug into the universe. ahead, it has been a tough ride for car rental stocks lately but it may be time to get into the driver seat and by pyramid will tell you one and. -- we will tell you why it next. driver seat and drive. we will tell you why next.

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julie: the derivatives strategist, jim, you and i were talking during the break. seven years since we have seen the economic expansion in the since here or at least the last recession. for you to reason argue for the return to volatility. >> right. of official arbiter recessions and expansions to cycles. with june, the anniversary is seven years. two points to make. if you go over the 30 years of historically, when you get deep into the economic expansions, volatility remains structurally elevated. key.n that, there are we have been in a cyclical trough for three months, the longest time like that that we have seen over the years.

that is one reason we keep saying to be mindful that as we move up to the top of the range, the broadest cycle we care about suggests we should still have these moves into cyclical peaks. from an economic perspective as well, historically, two years after the fed begins to tighten, you're in a recession. this could stretch another couple of years. from a volatility perspective, we see this time ahead with an elevated floor on volatility. >> on want to spend a little time on your trade of the day here you're looking at rental car companies. this has been a tough day with automakers coming out with disappointing sales and auto retailers have not been doing well as a result.

a lot of companies have been hurt by perceptions of uber competition. your analysts are looking at it and saying, maybe now is the time to get it. >> our analysts does think there is a reflection. all the way back to 2012, there .as a battle to buy btg they won the battle, maybe acquisition in 2012. two andocks went up three times to late 2014. they have basically gone straight down since then. down 7% in the option market. total option open interest went above 300,000 down to about 70,000. it has -- there has been a multiyear time of disinterest. .ricing has not been great costs have been higher, all sorts of reasons.

a couple of things. pricing looks a little better to us. our analysts does some work in that regard. that is a key point and rate the summer is vacation season when people go out and rent a lot of cars. >> quickly tell me how. >> in cars, you buy 3237 and pay about $1.3 of that. by 12 calls out right. see what happens. >> capture earnings in august. >> we will see if people are renting cars and that will bring. thank you. we will be right back. ♪

>> from bloomberg's world

headquarters, you're watching bloomberg market. a check of theh headlines this afternoon. mark crumpton has more from the newsroom. mark: thank you. today'shooting on the campus of ucla was a letter into los angeles police chief charlie, who says the campus is now safe to was locked down for a time. authorities reportedly found a the and handgun next to bodies of two males. the shooting occurred at an engineering building on campus. no word on a motive for the shootings and authorities have not identified those kills. detecting signals from one of the black box flight recorders on the egypt air flight that crashed into the mediterranean sea last month. the doomed are from egypt air flight 804 but did not indicate how is able to make such a determination french is impossibley it to know from the signals whether they are from the flight data or the voice order.

the democratic national committee is targeting donald trump for refusing to release his tax or firm spirit -- tax reforms. it supposedly shows trump's tax returns, but when you click on the button to view them, it moves. theays he will release returns one of the audit is completed. a drug testing program ahead of the isles he says the budget or pregame testing will double and there will be special focus on countries whose anti-doping program is not come by and with the rules. the committee named russia, kenya, and mexico. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. back to you. >> thank you. abigail doolittle is live at the net act. theher day of gains for index. >> that is true.

as an aspect is finish higher throughout the day, we will be at the fifth consecutive update and a longest winning streak since mid february. mild volatility. the index opened lower, read around 11:00 a.m., he started to turn higher and has been fluctuating between small gains and losses. from a the nasdaq today sector standpoint and consumer staples led by costco, shares are higher in a bullish upgrade by goldman sachs as well as the health care sector being helped by biotech. the index is higher by more than half of 1%, being boosted by region, which is higher on firmsh comments from the reiterating its outperforming rating, saying that biotech company is coming into its own. it does see 30% upsizing potential. a stock that is down roughly 30 cents from its record week last year. a bullish scenario comes true

and it will actually be a bit of a round-trip. you mentioned a tug-of-war in trading today. abigail: from a sector standpoint, we have had technology down just slightly but of course, it had a big and withining here technology, chinese index technology is down sharply, the worst percent of performers and the nasdaq 500. those are among the worst, as is my do. chinese manufacturing data. 25% on themore than year after the company gave a disappointing outlook. we will have to see if that can perhaps turnaround. >> thank you so much. president obama is speaking right now on the economy in indiana. this city has seen its unemployment rate dropped from 19% during the financial crisis to 4% today. the obama administration views

it as a poster of success for his policies. remarks atch the bloomberg glasgow. president obama is giving a huge in indiana. automakers posted sales figures throughout the morning and it was a tough month for both. gm missed estimates. i'm joined now from southfield, michigan. we were expecting the declines for made but why were sales down so much? >> we are still trying to figure that out here it on the one hand, gm has signaled they were going to let off the gas. have been pulling back already on lower margin sales, rental car companies. brakes ony hit the that this month and reduced

those sales, the biggest cutback in a couple of years. retail sales fell as well. it was a surprise, hit gm about 13%. retail sales were down about 11% across the board. news that it that is possible the reason the sales are down is that the automakers are not being as stupid or as generous as they have been in the past when demand softens a little and they go off her huge offers, and discounts. maybe they are showing discipline. >> have auto sales peaked, is that what you're saying? when we do not know. last year was a record year. the longest group streak in the history of the industry. the expectation was we would the more of it this year. there was some debate among analysts, with the automakers be

really stupid or just a little? so far it seems they are a little disciplined. it is not clear that they can beat that but what everyone is near the is missing territory which is very profitable, hopefully without being stupid and doing things that will hurt the companies and brands in the long run. >> them not giving out big discounts. does that mean less of an impact on profits? >> right now, everyone is doing great. ford has been aggressive on volume. they increased fleet sales and put up record -- record profits. disciplined and they

have had record profits. it should mean it is a more stable industry going through. we have an economic downturn. >> we saw the beige book saying the company expanded from it a modest pace across the country. do you think the sales numbers will have any varying on them deciding to raise rates this summer? >> it is something they will look at. they relate directly back to employment. a lot of factories across the importanthas an ripple effect that the economy and elsewhere watch closely. sales continue to be strong. automakersseeing

produce reduction based on the sales. they are not laying people off or cutting back production. that is a positive sign. softestage will be the they have been in almost a year. it could be a note of caution. >> jamie, thank you. joining us from michigan. tesla held the annual shareholders meeting this week. elon musk defended the recent actions of the company. >> we always try to do the right thing. we care about that. mistakes, it is because we are foolish or stupid or whatever. but it is always made with the right motivation. >> i am joined now to discuss the highlights of the meeting.

is there anything unusual at the shareholders meeting? thehat was unusual was meeting was incredibly long. elon musk and the cofounder took to the stage to educate the audience and viewers online. they started with the challenges of reducing the roadster all the way up to the recent news about the model x. they apologized again about the issues. two hours in and they are going through the history of the company. i think this was an attempt to remind people that tesla has a the and interesting history average american consumer is not aware of. >> they will not be free anymore. what exactly is he saying? >> this came up in the q&a

portion of the event with a question by the shareholder. said, supercharging has a cost and the thing to do is to decouple from the cost of the car. there was not a firm number but it seems obvious that is tesla -- they willires not be able to offer free supercharging for life for a half-million customers. owners feel free supercharging is a right and a privilege to its they are entitled. took pains tothey remind people the point is to enable long-distance travel. they have had problems in the to theth people going supercharger to charge and that is not the intention of the system. the batteryon

factory because that is critical to getting it out in time. >> there is an enormous interest in the giga factory. tesla says they will have an opening party july 29. panasonic is tesla's main battery supplier and is a big partner. to playy are moving larger battery. i think it is 20 by 70 millimeters. cells,y larger battery which have higher energy density. you will see the model three get a significant range though it is a smaller car. >> think you were joining us. next, the oecd says

the world is caught in slow growth mode. we will hear from pimco on whether he agrees. that is coming up next. ♪

>> it is time for a look at some of the biggest business stories in the news right now. goldman sachs is said to have cut dozens of banking jobs in the last few weeks. jobs were eliminated across the mergers and debt and equity capital markets teams. adjusting to firms slowdowns. a deal is valued at about 2.8

arian dollars. 56% -- 56%ents a premium. acquisition is expected to increase revenue by as much as $120 million in fiscal year 2017. that is your update. the global economy risks getting caught in a loan growth trap. bet warning today, the omc puts the blame on rich government, who left failed to revive demand and overhaul economics in the 2008 financial crisis. how gloomy is the economic picture? an assessment on bloomberg markets earlier today, here is the firm's three-year to five-year outlook.

isthe global economy muddling through, and that is the consensus. the game is only going on quantitativessive easing. our view is investors should not get a false and of security by extrapolating. it is really not very secure. >> they take it a step further and say we are falling into a low growth trap. richard: we think we arty are in a low growth trap. there is a risk that we do not even keep up the growth rates now. globals the chance of a downturn. there are not a lot of policies available. >> there are not to what you do in this environment? richard: we think it is an

environment where active management is the key. it is a world where you have to take a stand on preserving capital. it is no longer about double-digit return. if we get helicopter money or more unusual experimental mantra policy, inflation may be higher than investors expect. you need to be looking globally for investment opportunities because valuation will be key. implementthers could helicopter money and which was probably won't? >> the ones that probably will not, output the u.s. in that category. it looks to be in decent shape. we are foes to death close to full employment. you have japan were there is a exactegree -- the

dimensionality's, it is compensated. we have a large program approaching 100% of gdp p. q oeiras that he helicopter money clearly. >> you are saying the ecb will probably have to press the stimulus button. growthel it lackluster but you are cautious and very selective within the euro. please elaborate. >> the good news is it is growing. but that is not going to reduce the unemployment rate. europe still has a big output gap. the ecb is fully engaged and we think that is a good idea. haveurozone, you arty

negative rates. thanks -- big chunks re: trade that we are -- we are not predicting they will go up we are just in the world of diminishing returns to that policy stance. >> coming up, the close of trading is minutes away. yesterday's losses. the s&p 500 is up and the nasdaq is only slightly in the positive. still gaining for a sixth consecutive session. back in two. ♪

>> julie, stocks are barely staying in the green. julie: it has been a bounce around kind of session.

if things and up in the green, it seemed as though things turned a little more positive after the report even though it did not say anything that alliled the narrative so three major averages are up. the s&p, it has been a long decline. it has been the trend over the course of the day ever since manufacturing data came in better than estimated. i want to look at stocks. and is a company software network cyber security. this recently got a takeover approach and according to bloomberg's reporting, it has hired morgan stanley to send off the activists over at starboard. unclear if a deal will get done.

you see the shares are up now by 4%. rising core shares are after the company came out that beat estimates. the forecast for the year is ahead of analysts estimates. outliersad notable that have not been doing is poorly and retail. the downside in terms of some of the declines that we have been watching, one of the other gains we have been watching this whole foods. credit suisse saying the company is in the early stages of repositioning. one decline is equity residential. it said basically it is seeing issues with rent in san francisco and new york and it

cut its forecast as a result of that other department also declining. >> thank you. some investors might believe that buying bank stocks are a solid move. bloomberg gadfly columnist explains why the strategy may not be a sure thing. if you had a fed rate hike, you would think that it's out pretty simple. what is wrong with that? >> a lot of people have been trading accordingly. it is almost like a knee-jerk reaction when the prospects appear to be strengthening and bank stocks are pretty much up and now as the june or july fed rate hike, it looks like there is a good chance of that, the bank index is back to trading

near its high of the year. report by an a analyst at another analyst, and they said there is no discernible relationship between an increase in the federal funds rate and a net interest margin from banks. out onlike to lend longer terms and the deposit is tied closer to the shorter rates. it is obviously a short-term rate they are lifting. ideally, long-term rates would go up accordingly and that yield curve would widen out. it has not been happening. if you look at any of the yield curves, the two year to the 10 year, 30 year, a lot of people look at the short term. the yield curve, especially

short-term, three month. a lot of us look at the five treasury and subtract the three-month rate from it. the chart shows it has really flattened out over the past year. about 108 down to asis points. they call it a bear flattening. >> thank you for joining us. on those the latest stocks. bloomberg markets is next. minutes until the close. looking pretty mixed. ♪

alix: we are moments away from the closing bell.

joe: i am joe weisenthal. "what'd you miss?" mixed.tocks joe: "what'd you miss?" we dig into the ripple effects, including job cuts a goldman sachs. eyes on the bank as it gets closer to its inflation target. economyorld's largest may be close to hitting a bottom. scarlet: market minutes, major indexes closing mixed. higher withslightly six out of 10 major groups gaining ground. this is on the