betty: more breaking economic news out the really disappointing may payrolls report. underwhelming. bloomberg's julie hyman has the latest. julie: we have not only the jobs report, but we just got a measure of these services industries coming in below estimates at 52.9. estimated.at was the largest portion of the u.s. economy. we also got factory orders rising 1.9% in april. this is a month's lag, which is in line with estimates. durable goods orders up 4.2%. but the composite is the newest

data of this latest batch we are getting in the past few moments. signalingtill expansion of these services industry, just not as much of a next engine estimated by economists. that is the slowest expansion going back to 2014 in february. obviously already a weak reaction to the overall jobs picture and it looks like a an acceleration in the decline. the nasdaq down 8/10 of 1%. the dow off more than 100 points as we are looking at the fall out from all of his other data. betty: a game changer. walk us through the changes in the market. julie: you see this reaction in stocks.

a clear reaction in futures. it is really dramatic when you look at the bond market. the two year yield a huge leg lower. of a leg lower after this latest number. 0.78% now. in magnitude -- it is pretty huge, but coming down from where we have seen in recent days, as expectations had been rising for june and july. in the 10 year, similar. the two-year sentence to be more sensitive in the outlook for the fed, but a big move in the 10 year as well. the dollar seeing a drop off. you can look at it versus the individual currencies like the yen and the euro, or look at the bloomberg dollar index. lower.ttle leg gold prices, we shot a sharp move upward -- we saw a sharp

move upward as people are looking for safety. but the drop in yield means there is buying there as well. we see the movement into the "safety trades." gold..6% in them wirp on the bloomberg. the likelihood of a june raise plunged to 4%. it was around 20% yesterday. the decline in the july expectations is notable. yesterday, it was around 54%. today, around 41%. changer,t was a game at least for today, in terms of fed expectations. the data point by data point, and the brexit will also be important. just under three weeks for that one to go. with all going swimmingly until 1:30 u.k. time. the stoxx 600 on 7/10 of 1% --

all the way down. 1.2% lower now. we are on track for a third weekly decline after the longest winning stretch since march. theequities declining with money move into government bonds. the yield on the u.k. 10 year and german 10 year is at a record low. the pound and euro rising against the dollar. some individual stories. to pay millions to settle claims that its managers lied about the size of the 2010 gulf of mexico oil spill still prop up its -- oil spill to prop up its stock price. bp has set aside $56 billion so far for the disaster. the deepwater horizon disaster in 2010 have fallen 44%. they have never recovered. will selln lender

stock at about one third less than thursday's closing price. a $1 billion issue. it needs to raise capital to comply with ecb demands for bigger buffers. shares down 5.3%. and we had pmi data. services showed some improvement , rebounding from the lowest level in three years. this chart, going back to 2013, highlights the slowdown we are experiencing in the u.k. economy. manufacturing services, construction, not far off the 50 line. in market economics, the economy is probably growing at .2% in the second quarter. that is a slowdown from the .4% in the first quarter. it would be the weakest growth since 2012.

the economy clearly slowing ahead of the referendum. betty: indeed. aboutare these worries whether or not this economy is rolling over here, with the jobs report. let's check in on the bloomberg first word news. ramy inocencio has more. look to greece. the country says hundreds of survivors of a smuggling boat sinking in the mediterranean will be transported to italy, egypt, malta, and turkey. the hundred 43 were rescued from south ofthat sink crete. french masters are meeting in paris. the government activated a crisis center as the country faces the prospect of continued flooding. 20,000 people have been inaccurate from their homes across the country. nearly one week of -- funny thousand people have been evacuated from their homes

across the country. 14 have died in even more are missing. officials,r including sepp blatter, afforded themselves pay raises totaling $80 million over five years. fee for says the payments -- fifa says the payments appear to break swiss law. the details of those contracts were revealed one day after swiss police raided fifa for evidence. in northern india, people are dead after police tried to evacuate thousands from a makeshift protest. you and secretary-general ban ki-moon is decrying the escalating recruitment and killing of children in conflicts around the world. the innovaro port on children and armed conflicts singled out afghanistan, yemen, somalia, and south sudan.

he is calling for an end to the violations and measures to prevent recruitment, killing, adoption, and sexual abuse. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i'm ramy inocencio. betty: thank you. let's get back to the surprising jobs data. u.s. employers adding only 38 thousand workers in may, the fewest since september 2010. saw i.s. m services coming in lower than estimated. so where does the fed from here? here is bond investor bill gross earlier on bloomberg. bill: it is enough of a shock to delete june into the lie for july.- to delay june into or two hikes is in the cards. the want to re-normalized

rates. but numbers like this cancels in combination with brexit. so we will look forward july. :etty: here with us now is nick us. fund futures,that the way they are trading now, would agree with bill gross. 6%.re thinking what is going on? nick: tear up the playbook. the thoughts we had that they would warn about june and talk about it in july and july was a lock -- it was all wrong. we have to reset and try again. betty: did anybody know that anybody know- did this report was going to come this bad for the jobs market in the fed? we have been hearing the continuing narrative, which is the economy is growing, labor

markets are tightening. this seems to be a disconnect. nick: we always wonder, when fed officials speak, what future data points over a no. that is the mystery of what happened. how did the fed's narrative, which was so clear a week ago, get it so wrong. so they they not have a number one week ago? it is not just a miss in the number, it is a miss to expectations and fed injections and guidance to the market. that is disturbing. betty: so june off the table for sure? nick: as off the table as you can get. betty: that is definitive. ,ark: is june is off the table i would ask questions if the fed would take up the upcoming brexit vote, before you answer that. listen to charles evans, who spoke to wes in london earlier. ofthis is adding a lot

uncertainty into the global economic environment. there is already uncertainty with global slowing. the u.s. has a strong economy now. the question is if the conditions are right in terms of tightening. asave a resolution about much as any as possible, and brexit gets in the way. mark: i guess it makes it easier and away. they do not have to wait eight days after the june 15 meeting. nick: the fed seems to focus on one geopolitical issue at a time. last year, it was china and chinese economic growth. in june, it will clearly be the brexit vote. mark: i am looking at our bloomberg terminal. the weakest projection today was from the national bank of canada. jobs. no one got close. how come no one got close? nick: to begin with, numbers

closer to zero in this data series tend to be noisy with data revision. it is a fairly wide range. the even against those backdrops, -- but even against those backdrops, it is a miss. so markets have to reset. this is something we have to focus on a couple of days. betty: but is the economy rolling over? it is rolling over from a 2% growth rate last year the second half of the year to more 1% to 1.5%. betty: but we kind of knew that. nick: that is why this is not damaging to equities. support equities. this forces bond yields to rally further. so i am not worried about equities, because yields will continue to decline. so if this does not change the economic view, does

that not still make the case for the fed to raise rates? nick: that is where it is troublesome. the fed is focused on capital market behavior the same as it is on consumer behavior. they do not want to take the ship by focusing on the slower pace of growth, if it rolls into a mild recession. there was a time when, if the fed was not going to hike rates, we would be cheering and equities would rally. is it a good thing that equities are down, bonds are up, gold is rising of the dollar is falling? that is thell us result of a number of speeches by fed officials, we were becoming accustomed to way potentially stronger u.s. economy and the probability of a hike? we were getting used to the notion the fed was on a gradual rate hiking cycle? nick: you are right.

it felt comfortable. equities finally discounted this notion of a june-july sequence of events. now we have ok, but to rethink it. we are still thinking about what will happen in the back half of the year. this is still a narrative to focus on. ttle tos have to re-se incorporate a slower first half. , chief marketas strategist at convergex. we will have live coverage of the fed reserve chair janet yellen speaking monday. she will speak at the world affairs council, a philadelphia luncheon. that is something to look forward to. we will look even closer at that in light of today's weak jobs report. coming up on "bloomberg market," purchase,xit vote of

jamie dimon's support is solicited. ♪

clock on thes the side of st. paul's. live in london, i am mark orton. has the clock stopped for the fed? betty: it seems, for now. you are watching "bloomberg market." i like your fancy camerawork. time for the bloomberg business flash. wisconsin may make a deal with may make -- lufthansa a deal with air china.

talks are "complex." stem the is looking to loss of traffic to middle eastern rivals. bayer has procured $62 billion in its pursuit of monsanto. has selected bank of america, credit suisse, and j.p. morgan chase. if the deal happens, it would create the world's biggest supplier of farm chemicals and seeds. and the five year loan is increasing to $2 billion, says biggestr of china's search engine has gotten commitments from 21 banks. baidu says it plans to use the money for general corporate purposes. that is your bloomberg business flash. mark: just under three weeks to

go until the june 23 vote. polls show support is starting to veer towards brexit. the remaining campaign is speaking all of its allies. today, chancellor of the ishequer george osborne recruiting jamie dimon. here's what he told the board. will not telld the british people how they should vote, by will give my opinions. that it is important people make decisions without guys -- with their eyes open. it is a terrible deal for the british economy and jobs. has more than 60,000 employees across six locations in europe -- in britain. some companies may require jobs be moved to europe

if brexit occurs. less than three weeks. exciting. still ahead, our weekly dive into the $3 trillion etf market. a closer look at which etf's will be impacted most. and we are following the markets posted jobs report. we continue to fall, even though expectations are that the fed will likely delay their rate hike. s&p down almost 1%. ♪

betty: welcome back to "bloomberg markets." let's get straight to julie hyman, standing by for our dive into the etf market. in 10 days, which countries will be promoted or demoted will be announced. here to look at which etf's will

's affected most is bloomberg expert on all things etf's. so there is this cascade effect to etf's. >> and there is jockeying beforehand and there is jockeying beforehand. for regular investors, the two thee tsr eem and img, cheaper version of eem. they track indices. julie: and the emerging markets indices. >> correct. if msci says we will include letter a shares, it it will ramp up to a 19% on top of the 5% of letter and shares in china and the 18% of m shares. you added up, in 10 years, china will be 40% weighting. right now, chinese -- right now, china is at 20%.

it is slowly taking over the emerging markets index. you have to like china in these emerging markets etf's. but msci will do it slowly. nothing will jolt the system. the good news for investors is the more money benchmark to the msci emerging markets, the more that should help raise stock prices in the mainland. eric: will there be some sort of julie: will there be some sort of ex-china markets? eric: there is already some. but there is an ex-china emerging market. called emerging markets year 2020. crane shares put this out. it is like china experts. the grout -- the guy who runs it has this emerging markets index

that is 40% china now. julie: why does that chart look so strange? is a dailynk it chart. but if you want to be ahead of where the emerging markets eem will be, it'll look like kemp in 10 years. julie: what about individual countries? eric: the a share etf. there is one point trillion benchmark to emerging markets. that means around $300 billion in buy orders. a lot of people will pile into the letter a etf shares. kraneshares, it includes only msci takers. these are the ones msci will say these are the letter asia's you will include in the big index. so if you want -- the letter a shares you will include in the big index.

julie: what about other countries? there is talk about saudi arabia, but it seems unlikely. pakistan seems most likely to go to frontier instead of emerging. going on inhings pakistan, but if it gets promoted, it will only be a .15% weighting. small potatoes compared to letter a shares. julie: eric balchunas, thank you. betty: still ahead, much more from bond guru bill gross. jobs number is so low, the fed has to take a pause. ♪

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betty: mark, you brought the london weather here to new york. it is awful and gloomy. mark: it's all that bragging

betty, 80 degrees you were telling me earlier this week. you were rubbing it in. there you go. this isis is -- betty: also how people in the markets might feel after the dismal jobs report. mark: it's a bit foggy. let's check in with bloomberg first word news, ramy inocencio has more from the newsroom. ramy: donald trump is still trying to make nice with the republican establishment, aided by steve wynn. he broken a meeting between donald trump and a gop strategist karl rove in new york. the paper cites to people familiar with the details. meanwhile, trunk claims -- donald trump claims there is an absolute conflict, because the judges of mexican heritage. he tells the "wall street

journal," says the judge has an inherent conflict of interest because he is building a wall. that's a reference to his claims to build a wall in the mexico border. cruise continue to search -- crews continue to search for soldiers killed in a overturned truck in a morning trading exercise. three soldiers were exercise -- were rescued. chicago's troubled police department is releasing as many as 50 videos of police shootings to the public. now under a new policy, the department will release any videos of police encounters within 60 days of that incident. it's the city's latest interest -- attempt to resort trust in the police force. muhammad ali is hospitalized, and his condition may be more serious than his previous hospital stays, according to the associated press. he is fighting respiratory

issues that are complicated by the parkinson's he is divestment -- he was diagnosed with in the 1980's. he is reportedly in fair condition. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. i'm ramy inocencio. betty: as we've seen, market reaction has been swift this morning, with only 38,000 jobs created in may. that's the fewest workers added in nearly six years. the dollar swiftly plunged to a two-week low after the labor department report, meanwhile, gold shot up as investors flocked to the precious metal for safety. for how the markets are looking right now, we continue that decline, hitting lows of the session, the dow off over 350 points. the one year chart, for markets. it shows that we have gone from being in positive territory to now deeply into negative.

in the meantime, this is today's market reaction. you can see the dow is off by 125 points. the s&p lowered by almost 1%. we are heading towards the lows of the session. besides the market reaction, fund managers are also reacting. none more notable than bill gross. gross to asked bill discuss the market outlook in light of the report. he started by highlighting artificially high prices. bill: with negative interest rates in 40% or 50% of the developed market world, there's no doubt there's a bubble of -25 basis points in the five years, -28 basis points now to the extent that that is a market bubble is almost undeniable. to my way of thinking, the markets have had a long time to adjust to these interest rates as they move lower. equity prices, in terms of pe

ratios cap rates in terms of real estate -- it all has to be connected, to some extent. it's more difficult when you get into equity risk spreads. there is no doubt there are bubbles and financial markets, is distorting the real economy. point, a normalization is going to begin to factor in common in terms of total return. tom: what will janet yellen focus on? , doesthodox of economics you focus on some new economics? there's focus on your financial system as she tries to get not only to june and july, but frankly to get into the third and fourth quarter of this year. what should she focus on? bill: i think janet yellen is very conventional, that's unfortunate, because we are in a new financial era that requires a different type of adjustment. , we go, theya suggested that a one-time price shock, whatever that meant in

terms of how you do it. that is better than qe or normalization of rates on a gradual basis. we have different fed governors in the debate, i think janet yellen, although she is in charge, and has made it very clear through her press conferences -- i think janet yellen is conventional, and will probably continue to believe that low interest rates stimulate the asset prices, and that the trickle down from asset prices stimulates growth. failure, to my way of thinking, over the past five years. i think she sticks to that, and we will have to see in terms of policy going forward. i think something new and different is required. mike: is this a dangerous time in the markets, a difficult time for the fed to interpret what the markets are saying? because of they are distorted by the fed, they have to react to this number. you have the brexit debate coming up, should the fed just

sort of shot off the noise, turn off their bloomberg machines, and make a decision without looking at everything? bill: to the extent that there are a number of different views -- it's informative, but nonetheless, it is confusing to some extent. i don't know how you shut it down once you turn it up, but to some extent, it should coalesce on a standard messaging go forward from that point, in terms of market information. tom: the last time we had an abrupt market movement and a quick retracement. -- i don't that time see that this time around. does bill gross get off the television and radio with tom keene and mike mckee, and does bill gross go to cash? bill: i think you begin to reduce direction. that was one of the points on my adjustment outlook, i talked about the penthouse and the occupants changing over time. we had four years of higher

prices, a higher stock prices, 10% on stocks and 7% on bonds. these levels, and with lower levels today, i think it some point, and investor has to begin to recognize that these are bubble types of levels, and the care -- the yield is not only unpleasant in longer extensions on the euro turn, but also in terms of credit spreads and volatility. an investor must begin now to -- reduce carry by selling bonds today, as your suggestion. and ultimately, trying to time the reversal. that pointnk it's at now, but i think it some point, and investor will be better served. mark: that was -- betty: that was bill gross with tom keene and mike mckee. mark: coming up on "bloomberg

markets," walmart is holding its annual shareholders meeting. what will world's largest retailer say about the recent slowdown in the sector? we go to fayetteville, arkansas for. stay with us. ♪

mark: this is "bloomberg markets," i mark barton. betty: i am betty liu, new york. how the markets? mark: it's a similar story, a flight to safety in light of u.s. jobredibly weak numbers, which took everyone by surprise.

i can say that, categorically. you look on the bloomberg and the most pessimistic forecast has an increase of 90,000 jobs. that was still way too optimistic, more optimistic than the actual final figure. down, we haveis gains in london, the first daily game this week, mainly because of an increase in mental and minors. at taxes lower, have a look -- the dax is lower. have a look at the industry group, basic resources are benefiting from the weaker dollar, the dollar slumping against a whole array of currencies after the week jobs jobs report.k in the euro, the biggest gain of sincebuys much is 1.8%, december. the biggest gain of the year, still on track for the worst weekly rise and by. 1.8% by up as much as

the dollar. this is fascinating. the yield on the u.k. 10 year has fallen to the lowest level on record today, and the yield on the german 10 year has also fallen to the lowest on record. that demonstrates this light equality we are witnessing off of that jobs report. thing, flight to quality here. you are seeing the equity markets, all that risk is being taken off. the dow is down about 110 points. we are coming little bit off the lows of the session. , might that be coming back with this jobs report -- recession? the euro rising, the dollar plunged after the jobs report. it's over 1%. all of this talk now about the fed waiting to reason for

straights. for look at how technology stocks specifically a reacting, abigail doolittle has more. abigail: the disappointing report is waiting on technology shares and the nasdaq. we have index down .9%. lows, but thehe reason it's down more than the dow is the s&p is the biotech sector. the nasdaq biotech index down 2.1%, but the other big drags our technology shares, including all of the big names -- element, microsoft, and amazon are some of the big drags. you could say some of those stocks would be considered at the equality here nasdaq, but even now, investors are weighing in on somewhat negative tone for technology shares at the nasdaq. betty: you've been watching broadcom as well, what's going on there? abigail: this is one stock blocking the bearish trend.

they did be physical seven quarter -- second quarter estimates. their ceo saying a certain north american company is driving this rampant growth, as that company ramps the next generation of its phone. the iphone seven does come out in the fall. when we go to the bloomberg and we use the supply chain function, this is a really a great function. we see suppliers for broadcom on the side, customers on the other side. you see the importance of apple for broadcom, roughly 10% of revenue between apple itself and the iphone manufacturer. this is positive for apple, which is also bucking the bearish trend, hitting the other big technology names at the nasdaq. betty: abigail, thank you. the nasdaq.ittle at on the disappointing jobs report, walmart is celebrating its annual shareholders meeting in fayetteville, arkansas. what does this jobs report mean

for a company like walmart? thenon pettypiece covers company and joins us now from the meeting in arkansas, and shannon, were there much talks at the annual meeting about the jobs number, and what that can mean for this company? shannon: not yet, but expect that to come up later this afternoon when the ceo will be meeting with shareholders. historically, a bad economy is good news for walmart. even in january, when the was talk of a recession, we saw walmart shares go up. they were one of the best performers, shares today are down, but not compared what we are in the rest of the market. in tough economic times, people trade down, they go from target to walmart, macy's to walmart. maybe from whole foods, they will start buying organic products that walmart has been pushing. it may not necessarily be bad news for walmart.

when it comes to hiring, with unemployment so low in some areas, employers at the lower end of the wage scale have been having a hard time finding employees. that can help to as the job market tightens. it's only one month, we will see where things go from here. i don't think it is doom and gloom for walmart. betty: they're going to want to strike an optimistic tone today. what is going to be the main focus? wennon: all of the talk -- had a full day of presentations yesterday by management. comingthe talk is about back to fundamentals, good retail basics, as well as technology. technology,d drones, uber. i talked with them yesterday. >> this is not a back to the future, it's accommodation of putting in place -- a combination of putting back in place principles that have not

changed for hundreds of years, and making sure that we infuse in the best thinking and the latest technology that we can. a lot of the technology has to do with fortifying the wall around their grocery business. that's more than half of their revenue, making sure they don't lose to amazon and google and everyone else trying to get into online grocery. mark: tell us more about this idea of delivering groceries using uber and lyft. shannon: they are just testing it now, in two cities where you order groceries online, and then a driver will pick them up from the walmart store and drive them to your house for seven dollars to $10, you pay a delivery fee and they arrive on your doorstep. and anything they are pushing is order groceries online, pull into the walmart parking lot, the store gets a memo that you are in the parking lot and they

put the groceries in the trunk of your car without you having to get out. grocery is one of the most aggressive areas where they are coming out with this new technology to innovate in that area. mark: what about sam's club? how is that turnaround coming along? shannon: we went to a sam's club test store yesterday. it's been a drag on the business, they are trying to target a higher-end customer, $100,000 a year customer. they're doing that with a $200,000 necklace they have for sale, with the sushi bar and high-end stakes. they are tried upscale sam's. mark: bloomberg's shannon pettypiece there. still ahead on "bloomberg markets," polo is growing in popularity around the world. we hear from the king dubai is spent $500t -- million on a polo resort. ♪

mark: in today's pursuits, traditionally a form of sport for the rich and famous, polo is finding its feet elsewhere. ahead of europe's biggest tournaments, polo in the park, i spoke with mohammed al habtoor, the chief executive of the al habtoor group. i asked him what drew him to polo. mohammed: i used to just ride horses all the time it. thorough used to buy breads from dubai. and then i was invited to come and try polo. i got on the horse, and from the 1999, i did not

leave, i played everywhere. when the season is often to buy, i used to go to england. mark: you were here to play in the polo in the park tournaments. the rules have been slightly altered to benefit those who were not as familiar with polo. do you mind? don't mind. the first time i played, i was confused, i felt a couple of times because i thought it was similar to the normal polo. after one game, i consider myself experienced in playing polo at the park. that's why have been coming back. twice, i the final love this kind of polo right now. it's completely different than the arena, this is on the grass. it's much different for the horses.

the most interesting thing is the crowd that comes, they are so close to you. you can even shake hands with them. it's thrilling. mark: you can meet the fans. mohammed: i'm thrilled by the sounds of a cheering all the time. mark: a criticism of polo might be that it is exclusive, it could be labeled elitist. what do you say to the critics of polo that essentially it is a sport for the rich? mohammed: it is actually a sport for the rich. is byst of playing polo far, really expensive. it costs loss of money. -- lots of money. father said you are spending millions to play polo, and he is a tennis player. he said it cost me $1000 a year to play tennis. mark: you just need the racket and a few bottles. sport toery expensive

play, you have been at the center of promoting or pushing for this sport in the uae, and you are building a polo resort and club into buying. -- in dubai. toammed: i've been trying promote polo for very long time. i succeeded seven years ago, when i started the dubai polo cup, and invited people from across the world to participate in this tournament. hpa, as we don't have an association in dubai. they are monitoring and making sure that all of the resort and organization is done very well. , thee last two years chairman, my father, and i decided to do a polo club. it's one-of-a-kind in the world, not only fields with stables, but it's also going to have a

hotel in the middle of the three fields. from every room, you can see the field. dubai becomebuy -- the center of polo in the world? can it become the global focal point of polo? mohammed: i don't think so. but the season we are having from october until the end of april, in the whole of europe, there is no polo. there only polo in argentina at that time. but the argentinians need to travel, because this is how they make their money. the need to travel. and the only place now that's attracting lots of argentinians dubain. other than florida, which is palm beach and the u.s. open. mark: how much are you spending? dollars, it's around $500 million. mark: mohammed al habtoor, chief

executive of the group. i'm sticking to tennis. see thatjust can't coming over here. mark: is it big at all? polo? follow? -- [laughter] no. i'm sure among a very small slice of the population here. you nailed it, it's a sport for the rich. mark: he admitted it. betty: we are all about football, basketball. mark: it cost him millions, betty. i will play tennis, it doesn't cost me $1000 a year. the european closes next, stay with us. ♪

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

30 minutes of the trading session left in europe, you are watching the european close on "bloomberg markets." ♪ betty: we take you from new york to london in the next hour. here is what we are watching. it disappointing u.s. job report, payroll having the lowest gain in nearly six years. will it influence the fed's rate decision later this month? chiefj.p. morgan chase executive jamie dimon jumps into the brexit debate. he teamed up with george osborne to discuss the consequences if the u.k. leaves the eu. iron ore prices tumbling from the highest levels of the year, how will prices move when you factor in the fed actions and the dollar? we talked