>> u.s. hiring in may, the lowest in almost six years. u.s. stocks, closing down. is, "what'duestion you miss?" >> today's perils report all but odds of a... the jobseat spot from report, emerging markets headed to their highest close, in hopes will delay a rate hike. >> love them or hate them. newest way to the beat volatility. >> we begin with our market minutes. the s&p 500 just closing below 2100. we'll see if we can inch over that. and we can't get there. but we pretty much have grinded thatay higher following disappointing jobs report. the dow was down as much as 149 points at one point. cut its losses to only being

down five points, ending the about 32 points. but the yen remains strong and it hasn't really changed. and the two and ten-year yeerldz their -- yields are holding their lows. >> today was pretty impressive how close we came. story was dollar down, literally everything else well,m fixed income to, not quite u.s. stocks. >> almost. >> that's the story today. >> you've got to remember, the dollar down generally kind of would be good for a market that is struggling from earnings that these head winds et cetera. but nevertheless, we missed out on the 21 level. day that we didn't last very long above 21. the other thing i think is here is, looking at some reversals, in the stock had small caps, which have been outperforming. now underperforming. financials that had been doing pretty well the past couple of weeks, now doing very today. pretty bad stuff.

they were caught offguard. a lot of people there that didn't really see this coming. interest. i think that definitely hurt a lot of people. >> financials had been liking rates.lk of higher but obviously that got slapped back today. let's take a look at government bonds. saw real sharp yield declines. diving. yields, 10-year yields, tumbling. we're back on to early may levels on the 10-year yield. i want to mention germany real boons areecause the just a powerhouse. you see german 10-year yields ending the week at record lows. look at that! 10-year yields. >> we have alphabet, the parent company of google, saying that the head of nest labs, tony from thetepping down company. he will stay on to advise, as well as the c.e.o., larry paige, he leaves the company.

we'll get you more details on that as well momentarily. meantime, alphabet saying tony fidel is stepping down, prummably leaving the he will continue to advise. you were talking about treasuries? everywhere.wn >> if you look at currencies, you talked about the dollar falling. really the way to look at it, i think, is that the yen had been strengthening. it goes from strength to days,th the last three even more strength. there's that plunge lower in the versus the yen. they are ending at 1.06 and change. there were some bumps in the road but the dollar had been grinding lower. the yen had been appreciating. today's move brought the dollar yen to two standard deviations. as muhammad was telling me earlier, this is a total nightmare. >> one other currency to pay

attention to, the ran strengthening. also, s&p declining to downgrade rating,rica's credit giving it a bump. at its highest level since early may. >> those are today's market minutes. let's take a deep dive now into the bloomberg. all the following charts using the function at the bottom of the screen. piggyback, with the change in leadership today. that was today certainly. backdrop. kind of the this is a function that illustrates the rotation taking place within equities. i like it, because it's like a weather map. but really what it shows you is staples, utilities, telecoms. those were the leaders today. the best performers in the first quarter. in the second quarter, they went thisthe leading category, quadrant up here, to the weakening category. are.they financials, and that's this blue here, had been going from lagging to improving.

hawkishness from the feds. tech, as we can see right here, oft's the red line, has kind been stymied. they still remain in that lacking category. >> i always think this chart looks like something you see on a dorm room wall in college. >> nerdy college students. >> the pink floyd prism. at bondg to look yields. it was really everywhere, in the u.s., in europe. in particular, one of the functions that is one of my favorites, called hrr, this game return, breaks down -- or actually we're looking at hikes now. this is joe's. mine.s is >> let's switch to the other one. >> joe, take it. >> while we have this chart go.- there you >> all right. it's friday. we've got hrh. you the returnng distribution, what typically day with aany given

two-year bond. this is a normal curve. median is basically your move. this is what typically happens day to day. today, down we are here. this is in a percentage move. i get, these are bond yields, just roll with it. this is basically an 11% move today. this doesn't happen. incredible, because obviously we've already seen, year to date, this move down in yields. yet today it moved further down. pretty incredible. ati want to take a look where we stand with the fed today, because it doesn't seem long ago, even just yesterday, when people felt very going to that we were see a hike this summer, this is that blue line there is the odds of -- sorry. let me update the time on this real quickly so you can see. 27. was as of may but if you bring it as of today, you can see sharp drops everywhere. hike,ue line, the july had been close to 50%.

down 30%. the white line, june hike, is to 4%. looks like the summer rate hike idea is quickly going away as jobs report comes in below expectations. >> i like the way you updated it live. kind of a mistake but -- >> he meant it. you can see all these charts and more on twitter. theing us now to discuss u.s. jobs report is michael, economist.hief u.s. you say that the latest report poses a risk to the baseline outlook. it does increase the odds and likelihood that any kind of subsequent move may not actually happen until december. >> that's right. we think the labor markets send clearest single about expansionaryand trends in the economy. revisions to previous months, which suggested a much weaker trend profile for hiring. think it's likely that the committee is going to say we turns.idence that this you need probably more than one

month, probably two months, september.you out to if there's a u.k. referendum injects noise, that could push you further. >> why? there's been this widespread thing q2 -- that the q2 recovery was happening. have been talking about how those have faded a bit. it seem like we're decelerating? >> i don't think we know entirely. the trend weakening you can trace back to kind of the october, november time period. so it's probably related to the due effects of a strong dollar in a weaker global forth.p and so maybe the surprise is that service has weakened, the ism today.turing was softer services had been an engine of growth. to suggest, enough well, maybe it's not a fluke in how concerning is that services

element? that has been sort of the fall back for manufacturing not doing well, but this is a services now.my >> it's what people like me have been relying on to say, it's not, we're slowing but it's a dramatic risk of a recession. but this is the type of number, very, that we take a strong signal from labor market data. so when this weakens, we have to it.owledge >> you can still point to consumer spending, because those fairly robust. >> it certainly does stand in contrast to the rest of the data we got this week. spending, quite solid. personal spending is still up 3% year on year. for all of the talk on the consumer slipping, still very solid numbers. and auto sales for may is another very good number. the labor market number does stand a bit in contrast to the coconsumption data we're seeing. see moreou need to evidence. more evidence means more time. >> do you take any solace from

4.7 employment rate, or -- unemployment rate, or does the fallback undermine that? what do you make of this false for the participation rate? >> i don't think the decline in offsetsployment rate the negative signal from hiring. our view had been that the rising,ation rate was not because discouraged workers were coming back in. exiters weree leaving at a slower rate. theeople normally leave labor market every month, slows in and out. it was really the lack of was causing the rise in the participation rate. didn't look like it would be a so weent factor for us, expected it to reverse. and you're just getting it now. >> is it troubling that this is coming on the heels of a couple of pretty hawkish commentary fed members? are they not really realizing what's going on here? me atif you had caught 8:29 this morning and asked me

what was happening, i would say the data looks fine. we're saying september with risk to july. all that seemed completely reasonable. this number hit. i think they're reacting to the data as they see it. changee is likely to views. >> so put this all together. said this suggests slowed downrket has a bit. will janet yellen alter the tone of her speech as a result? she'll be quite as much so as the governor's comments, but i think it will be in that direction. i think this is a number that to movehere we need cautiously. i don't think they're going to move away from the bias. rates,s is to higher one. there's always a chance for two. i think this is a number that little caution into her comments. >> over the last year, a number of people have said, look, we the end oftting to 150k we can even create new jobs every month, as the

labor market essentially hits employment. do you think that's an element here? that, yes, there was a slow also there just isn't room to create this many jobs unemployment?4.9% >> maybe. my counter to that would be historically we don't see that slowing, where a recovery kind of moves into a neutral mode. historically, you have very solid job growth until you don't, and when you don't, the over.y is rolling that's why we taker a negative -- take a negative signal from this. expectation would be if the economy is still going to be in above trend, you need this higherto move back toward 175, 185. >> all right. joining us, giving us your perspective. >> all right. breaking news. we just want to reiterate, alphabet, the parent company of google, says tony fidel is head.g, stepping down as that's just after two years his company to google. advise stay on to

alphabet. coming up, what effect does the havingto low volatility on the overall equity market? some analysis, just ahead. ♪

>> let's get to first word news. french officials have activated crisis center as the country faces historic flooding. 20,000 people have been from their homes across france, in operations involving thousands of firefighters and military personnel. nearly a week of heavy rain has flooding surges across a large portion of europe, where 14 people have and many more are missing.

flooding is also hitting residents hard across much of texas. nearly the entire eastern half of the state is under a flash warning.ch or days of heavy rains are lingering in creeks and rivers, and storms off the gulf of mexico are threatening to worsen flooding near houston. say hillary has the best -- hillary clinton has the president.ence to be 62% say she has the experience of donaldle 31% that trump, according to a gallup survey. 51% say mrs. clinton can work the opposing party. yet 60% say trump is a strong but only 51%leader share that view of clinton. >> global news, 24 hours a day, powered by our 2400 journalists 150 news bureaus around the world. back to you. miss?" one of the

most popular trends has been investing into an exchange trade of funds that minimizes the volatility. the same time, the viks is lows.0-year what is happening in the volatility market? from chicago.now if you look at shares outstanding in the u.s. minimum etf, it's through the roof. it's been climbing throughout the year. exactly is happening here? what are people bracing for? >> yes. at a i think if you look combination of factors, everything from demographics to unusual monetary policy, environment we're in, really impacting the demand. low vollability and providing some type of additional risk premium or return, the theory has been around for decades. is theu now have technology that now are providing the ability for even investors to take advantage of this type of

strategy. and why is this strategy around? well, quite frankly, if you look, most of the t world's fiduciaries, most of them are only constrained with around, market cap weighted traditional indices mean, to someto volatility stocks are in many cases undervalued. with the inability to add leverage, many of these large fiduciaries will use high volatility strategies in the form of leverage. of lowin, leaving kind volatility behind. so the theory has been there. there are other behavioral contributeell that to this. but now all of a sudden, you have a vehicle available to allows investors to take advantage of the -- in many cases, superior risk return benefits of low volatility invest. >> so there's obviously been you mentionede --

that the theory has been around for decade, that low volatility outperforms over time. but recently there's been this to pile people wanting into this strategy in particular. what are people getting when etf?buy a low vol what's the -- how do the underlying share assets get selected? >> absolutely. the power shares for the s&p 500 low vol, for example, is transparent. we publish the underlying stocks transparency, as you would expect. what we do is you start with the s&p 500 universe. down to the 100 least volatile stocks, and then effectively, you reweight it every quarter. transparent fully in what you're attempting to do. again, you're hoping, in a way and a fairly of being aility way,

contrarian. of, if you kind will, unloved low volatility area is an attractive way to do it. as you were mentioning in earlier segments, look at the of volatility. you want to buy something when it's low and clearly sell it when it's high. intuitively, if we're looking at historically very low volatility,uity again it's all really supported by this unusual monetary policy we see. to buy volatility when it's low. then it really helps provide outperformance when times get rough vs. the unlying the index. but when they get rough in more volatile conditions. about what's in these funds, it's sort of these vol type companies, even health extent, and they're getting pricey. is the rush into these funds of the pe levels in these sectors? >> no. lowou look at overall

volatility strategies, i mean, they are basis points of totaltage of the trillions invested in equities. really verye popular sellers. but fact of, you know, our raised volatilities, about $3 billion of assets year to date. that's a nice number. it's just basis points of the total invested market in equities. right. thank you so much. we'll be back. ♪

>> and now more on that breaking news, that c.e.o. tony fadell is leaving alphabet two years after to google. bloomberg news is following the story. we are joined now from san francisco. what can you tell us about why tony fadell left?

>> they have been struggling the last, i would say, year and a half under google's wings. they had some slow product of other newa lot products that have not emerged yet. ofn there was quite a lot argument among some of the rank and file at nest, some of the that tony fadell has quite a divisive management style. together and tony is leaving. >> so a bit of a culture clash. we actually spoke to tony fadell ago at the world economic forum about why he sold his company to google. listen. >> we've been producing new products, but we've wanted to roll them out to multiple countries. we're in 96 countries where we don't even sell today, because devices beingse connected but we can't get there fast enough. for us, going with google, we could get financing. that's not a problem. but going with google, we can to resources to allow us to move these products around the world much more quickly,

because as a small start-up, you just have to build all this. >> you mentioned the cultural issues. tony fadell previously was part of the team at apple that developed the iphone, sort of a steve jobs hard-driving part. talk a little bit more about issues inside nest, associated with his leadership. what do we know? >> there's one particular where nest, soon after google bought them, they turned around and bought a start-up that makes internet-connected security cameras. they came over to nest. and they were basically working on an update of that camera. a lot longer than expected. and there was massive disagreement between tony and the founder of the company, greg duffy. the team were being longd by tony to work very lock hours and over the weekend. there was a lot of friction on i thinknt, because there was certainly a culture clash between that start-up and way tony ran things.

that was probably the main nexus of where all this divisiveness started. >> do we know anything about what's in the pipeline at nest? throw a wrencho into things? >> so tony had an interview with my colleagues about his departure. and one of the things he did say a was that nest has a lot of new product and services in the pipeline already. and one that has been reported similare-based device to amazon echo and actually device, thathome will maybe be sort of wi-fi an information provider, and hub gadgets in the home. we can probably expect that to come out at some point. also, tony and nest were very a standard creating which is like a software standard and a communications standard. of gadgets that use it. >> you mentioned the amazon device.is connected

that seems to be the only gadget people are really talking about right now. thatuch anxiety is creating at, say, google and apple that amazon seems to be in this early leader area? >> yeah. i mean you can say that google 2014 because the designed actually made great inroads into people's homes. an early sort of anchor point in the home. sort of a search information device, which is what people are interested in. echo certainly caused a lot of anxiety at google. >> all right. thank you so much for joining us. >> coming up, emerging markets. today afterd today's disappointing jobs number. we'll discuss that next. ♪ ..

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♪ mark: donald trump is still trying to mend fences with the aidedican establishment, by casino billionaire steve wynn. when brokered a meeting between trump and gop strategist karl rove in new york. trump also met with casino billionaire sheldon adelson on tuesday for the second time in recent weeks. president obama is traveling to .or florida the two fundraisers are taking place at private residences in miami.

the first will raise money for the democratic senatorial campaign. thedge refused to reduce 1.7 5 million dollar bond against the man charged in the fatal shooting of x new orleans saint star will smith. he purposefully ran smith's suv before the shooting. charged with attempted second-degree murder in the wounding of smith's wife. the military says it conducted four counterterrorism strikes against militants in yemen in recent months. one of the strikes killed four enemy combatants. altogether the u.s. has launched nine strikes this year. global news 24 hours per day powered by our 2400 journalists in more than 150 news bureaus around the world. i am mark hampton. back to you. scarlet: let's get a recap of today's market action. a disappointing report had an

immediate effect on the different asset classes. of equities plunged immediately and granted their way higher almost to the unchanged line. we couldn't get there. weaker and thel two year and 10 year yield coming down. joel: golden silver having big days. though have -- those have been selling off. that's a pretty nice move. we have the chart here. as i said earlier, dumping dollars. inthe one thing i will throw there is i am shocked that the vicks closed -- for the most part unchanged.

betty: it is like nothing happened. the surge in emerging markets after today's disappointing jobs report. climbing immediately after the labor department noted only 37,000 jobs were added in the month of may. formally known as -- morgan, the rationale is that this jobs report delays a rate increase but at the same time it delays a rate hike because the economy is fundamentally weaker. how can that be positive for emerging markets? an: overtime that is true and to see a sustained rally you are going to need to see a stronger global economy to drive earnings growth at these companies. in the interim there is a window where you can see earnings growth come from the continuation of financing costs, and that is what came through

today. investors see probably six through 12 months of easy financing conditions which helped governments and companies. >> what is more important further the emergence of emerging markets coming forward. -- for the emergence of markets going forward? morgan: clearly the chinese economic outlook is important for emerging markets. the broader picture of global economic activity over a long hot bank of time -- long period of time is going to drive early returns. chartant to bring up a really quick, showing us what happened so far this year as emerging markets and the developed world have traded places a few times. -- by-line is the merchants is the emerging markets equity index. got really high above the developed world as of april, then narrowed. now today they are pulling away again.

going onsomething besides the idea of easy policy from the u.s.. there has to be something as fundamental. haven: two big drivers been the change in the fed outlook, pushing expectations for a rate rise. and then send -- and then secondly commodity prices. to see growth from here, to really pull ahead you are going to need to see earnings growth. what is interesting is the big gap in valuations. close to 20 times earnings. start to see you earnings growth emerging, i think there is a lot of room emerging to outperform. betty: usually it is a leveraged

play on the global economy. will the global economy struggle to gain any kind of traction yet of what is some more arguments to put money into -- argan: a pretty decent run is 3% return. you are still looking at a discount of one third on market equities. i think it is early to say it is over. growth expectations for emerging companies are close to 10%, which is a big contrast to the developed countries companies, where people expect continued weakness. i think the outlook is set up well but it is going to be a volatile ride. in order to get exposure, investors need to be selective. index is 50% more volatile than developed very often. they need to not just think about stocks but think about combining vons and currencies as

well. -- combining bond's and currencies as well. thee were talking about opportunity of emerging market bonds. --that an underside a place underside and place -- underside ? place is that a spot that is overlooked right now? morgan: it is overlooked by emerging equity investors. fact that in the brazil you can get 13% returns on bond with the potential for capital appreciation. that is a perfectly acceptable equity return with much less volatility. the blur to dogmatic about investing in one acid or the other, they miss that. -- people are too dogmatic about investing in one asset or the other, they miss that.

the country's really need to promote growth. domestic reform to improve fiscal policy, to improve governance, these are important shortfalls for emerging markets overall and really important to support longer-term economic growth. next, she layup serves up the most recent -- she serves of the most recent -- what he thinks about brazil's resiliency, all that next.

>> a cut economic forecasts and -- finance minister spoke exclusively with bloomberg about these warnings. >> i think there are teed a takeaways from this meetings. the world needs to tackle more forcefully what is going on with the economy. and they're pushing for more fiscal spending, taking away the -- that and the second big take away is more -- we had the opportunity to support a theme for discussion. our theme was positivity and inclusiveness. we should think of productivity

as -- i want to put them both together. many many things are important. >> you have been an international economist with the imf as well as in the private sector. talk about productivity, why aren't we seeing bigger gains in productivity, given the fact that it is so -- so expensive to invest capital? rigo: the economist have been slower to defuse -- there are a few frontier firms doing well. but many firms and many countries are very slow to catch up. there is something with competition that is not working well.

people right now are not up to in the world economy, to be able to take advantage of the services. more into work a much preparing our people for this new economy. >> things are slowing down a bit. unemployment is creeping up. what is happening with the economy? rodrigo: we are adapting to the end of the commodity price move. commodity prices just increased. undoing what happened.

it's like what is happening in the south, where you have a lot happening. regionally they have had some troubles in the past few years. that has had some effect. we have a really important agenda, of social change and reform. some willing to have more dialogue so people get used to this new reality. >> give us a sense of how dependent economy -- how dependent the chilean economy is on other economies. rodrigo: with prices chile was very successful.

there are lots of other things to do. if you are very open you have to find new sectors to compete. services exports will be very important. >> we talk about brazil, the largest economy in latin america. the markets have come back there . is it overblown? >> by the end of the day i want to say two things. yout -- it is not that can't have your opinions. the second thing is the economy

-- we are able to go through big expectations, some volatility without much effect on corporate and banks in the past. in the past we will have seen banks go belly up. the entire region has been able to -- financehat was the minister, rodrigo valdes. >> a look at the biggest business stories in the news right now. of -- labs is stepping down. that is just teed up years after selling the smart home gadget maker to google. google still advise the cofounder and ceo on the holding company. the problems that precipitated it --

is supposingne request to remove -- from the family trust. the trust will control the 40 ilion dollar media empire after he dies. requested trial by the end of september. that is your bloomberg business flash. betty: some breaking news. here is commentary from oaktree capital, which is the second-biggest shareholder of tribune publishing. tribune should consider the bid thatgun that -- from gun -- from gannett. all this in a letter that was posted on a website and made public. oh capital making a comments on this and meant a situation between tribute -- tribune and

gannett. chairmanpeak with the of -- company. this will happen at 10 a.m. eastern time.

joel: here at three charts that you may have missed today. he joins us now. you want to start off with

construction employment. this is the least effective by international concerns. disappointing to see the slow down. you can see the it was the slowest in several years. did we have a drop in construction payrolls, it has been two months where we have .een reducing headcount that is heading in the wrong direction. doing know if there is any data we have on that? a lot of people going into this year is one of the big ball cases for the economy. a lot of people thought infrastructure was going to come back. the state and local budget started to heal. is a broad-based? the things we have

seen recently is better housing numbers. residential housing construction employment is one of the actual bright spots. but it is such a small component of overall construction employment. most of it is specialty trade contractors. that employment is slowing a lot. >> that is interesting because the construction job is a different part of the market than what we think about in new york and service kinds of jobs. throughout the heart of america they think about how things are slow. this may be the sentiment that fuels the anger of the economy. also wonder if pickup truck sales are going to be longer. who buys pickup truck's? will people in construction. talked about part-time employment, did we learn anything new about that?

matt: people working part-time would rather be working full time. if you look at full-time employment as a percentage of total employment, that fell on a year-over-year basis last month for the first time in three years. full-time employment, we are starting to see losing ground to part-time employment. not a great sign. betty: is there anything to keep in mind because of where we are in the calendar? matt: we saw a decrease for labor force participation for people with less than high school diplomas. go againstkind of the idea that part-time employment should be higher this month. betty: we are clutching at straws. >> another thing coming you talk about this yesterday, temp labor

may be a leading indicator. what do we see here? matt: this is interesting because the job slow down was pretty broad-based. temp employment slowed as well. in the wrong direction, hopefully that doesn't flip further. >> we'll sue got a bad reading from the eye of some manufacturing components, going into contraction. why did everyone say, looks good, suddenly we get this bad data? >> that is a pretty good question and one of the biggest thing u.s. economy watchers are trying to reconcile because we had a good report on consumer spending.

these more forward working survey -- forward-looking surveys are pointed south. >> thank you very always appreciate your charts. betty: we have some new -- he is called a he is called a heated executive, former executive. the u.s. has filed new charges. they are saying he had control of his shares. once again, prosecutors filing new charges, accusing him of engaging in more illegal financial maneuvers as a former drug company -- by concealing his control of stock by using employees as well as consultants. of course he came under a lot of fire for raising prices of drugs.

the u.s. alleging that he hit controls of his other company. >> what you need to know to cure a for monday's trading day next.

scarlet: you have the fed chair speaking on monday. live coverage of her speak at the world affairs council. p.m. heon offend at 12:30 >> i will be looking at your oh -- at euro area retail sales next week. whether those stimulus measures from the ecb are actually working, that will also be monday.

scarlet: have a great weekend, thanks for watching.

john: "with all due respect" to ross and rachel, you have nothing on trump and ryan. ♪ ["friend's theme" playing] mark: paul ryan first said he was not ready to endorse donald then he met with trump and said he would vote for trump. but now he is