from bloomberg world headquarters in new york, i'm scarlet fu. alix: i'm alix steel. here's what we are watching this hour. the s&p inching toward an all-time high. investors trying to shake off some of their growth worries. scarlet: the corporate bond market and the latest effort to stimulate growth. alix: boston markets reading its wings overseas. they dish on their expansion plans. scarlet: we are halfway through the trading day and we are in spitting distance of that record on the s&p 500.

julie: it's more like we are inching toward it. we do have increases but they are not large ones. he nasdaq earlier did into the red and the nasdaq was very little changed. now all of them are up around .2% or more and commodities have a lot to do with the rally but so do industrials. we have some economic data out of china with car purchases rising for the ninth month out of the last 10. industrials and the top spot followed by materials. we still see a strong rally despite that. if you look within those industrials, we have caterpillar rising jacobs engineering and analysts saying there are signs

of stabilization which should be a positive feed through four dover. railroad stocks are higher, a sort of feedthrough from china and perhaps stronger demand coming from that nation and industrials doing well. all of them trading higher today. alix: commodities soaring and rob materials doing well. julie: oil has been interesting. a build in gasoline and distillates was not expected but crude has held up well after zigzagging around in the wake of that inventories report. gold and copper have been rising and rebounding because we have seen declines for them. they are also helped by the decline in the u.s. dollar, the

bloomberg dollar index falling by about .5% today. we continue to see the expectation that the fed will be pushing out its interest rates increases and that has been putting pressure on the dollar recently. alix: let's check again on the bloomberg first word news with mark crumpton in the newsroom. mark: president obama has signaled that the race for the democratic presidential nomination is over. he called hillary clinton to congratulate her on winning the number of delegates needed to clinch the nomination. she will be the first woman to run as presidential candidate of a major u.s. party. she won four of the six states that held primaries or caucuses yesterday, including the battleground state of california. it has the largest numbers of delegates. the bernie sanders campaign is downsizing. about half of his staff is being laid off. most of the jobs involve field

staff and a dance aides. sanders announced a rally for tomorrow in the washington dc. at this hour, the prime minister of india is addressing a joint meeting of the u.s. congress. the prime minister said the relationship between the u.s. and its country have overcome the hesitations of history. >> this temple of democracy has encouraged and empowered other democracies the world over. mark: live pictures of the indian prime minister addressing a joint meeting of congress. after years of being shunned in washington over religious violence in his home state.

the mona lisa is back in place and awaiting visitors. it reopened after the seine river rose to its highest level in three decades. the levels have peaked but remain 10 feet above normal. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. i'm mark crumpton. back to you. alix: stocks are up today in spite of some bearishness at the start of the year. the s&p closed at its highest level since july. scarlet: and creeping toward that record high once again. erik schatzker had an exclusive interview. he painted a promising picture. guest: the u.s. equity markets function incredibly well. investors get their trades done

better, faster and cheaper than ever before. because of the efficiency improvements, retail investors say more than a billion dollars a year. erik: why is there this persistence that the market is rigged, machines are taking over and the little guy is getting screwed? guest: when things become more efficient and automated, there are winners and losers. a lot of the losers are pining for the days when spreads were 1/16 of a dollar and intermediaries may lot more money. today, it just works much better. erik: the narrative of that storyline, michael lewis published a book -- does it feel funny to you that you and your industry are fighting against michael lewis? guest: what feels funny to me is

we have delivered an enormous improvements to how trading is done and the markets work export nearly well and yet there is this narrative that exists which i think is unfortunate. erik: the markets work well, it is cheap to trade and i believe you to be right. guest: the fec has created this committee and there are a number of things that could be improved in the margins. individual stock circuit breakers generally work fairly well, just like the circuit breakers in your house. but in a fast-moving, chaotic market when you have hundreds of circuit breakers tripping, they don't turn on back that well.

we are looking at making that much more smooth which will end up with more stock trading. erik: part of the problem is the regulators and the industry -- not fixing what may go wrong the next august 24, what ever that happens to look like. guest: that is partly true. the market structure is fairly forward-looking and thinking about what may happen in the future but the reality is you cannot protect the future. it is hard to know what will happen. erik: where does sit at l play as far as the rest of the industry is concerned? guest: seville feels like the markets work incredibly well and want to make sure that a lot of the improvements that have been made are not rolled back. i think that's really important to us. one of the things we are advocating for our things like

kill switches. so when something like a potential nightmare happens that will be stopped early on at the exchange levels. erik: at the same time, you are fighting a few things. guest: we've been a big opponent of the i.s. application we think it's approval would be bad for the u.s. equity markets. they function like a superhighway. it's going to create a huge pothole in the superhighway. at the best of times, it's going to delay everyone's commute and at the worst of times, it will create huge traffic jams and highlights.

it has not advocated a single benefit for those who would post order on their change. erik: talk to me about how much market share you think you could have. where could that be a year from now? guest: on a typical day, we trade about 15% of total consolidated volume. that means more than one in seven shares are traded. we handle about 35% of all retail orders and we are continuing to grow those businesses. some of those are in other assets. interest-rate swaps, etc.. alix: still ahead, viewing a

brexit 30 eyes of a prime minister. highlights from an exclusive sitdown with tony blair the only labor leader to win three straight elections. he reveals what a departure from the eu would mean for the global economy. ♪

scarlet: you are watching bloomberg. i'm scarlet fu. alix: i'm alix steel. this is your global business report. scarlet: what does tony blair think about a possible brexit?

we alix: will ask him in an exclusive interview. amazon is planning to invest $3 billion in india. what kind of potential does jeff bezos see? scarlet: pilot projects for universal basic income are taking hold in europe. we will explore the theory behind free money. we started europe -- the countdown to the european referendum is on and the camps are no and neck. john nichols weight sat down with former prime minister tony blair earlier and asked what he thought would happen. mr. blair: i think we will remain, but of course it is a referendum. if you look at opinion polls, it is very close, so you have to be concerned about it. scarlet: u.s. regulators have given foreign banks and extra year to found living wills. that is how a bank would wind itself down. alix: sweet news from belgium --

the diver looks to be a billion-dollar target. the world's largest premium chocolate retailer plans to open 190 stores in china. their parent plans to go public in london in about four years. fiat chrysler already has a partnership with google and driverless cars and is now in similar talks with uber. a venture with uber could be announced by the end of the year, but the right hailing service is having discussions with automakers. amazon will spend $3 billion to increase its business in india. the world's largest online retailer has targeted india since pulling back from china. the company is also looking to india for new products to sell globally. scarlet: time for our bloomberg quick take where we provide

context and background on issues of interest. universal income plans are underway in europe and south america and the results might shift the long-standing debate over the social contract between a government and its citizens. on june 5, swiss voters rejected a proposal for universal basic income that would have given every adult citizen 2500 swiss francs a month, but the idea is taking hold. in the netherlands, there's a pilot program and in canada in ontario there is a proposal. in the 1960's a basic income was part of a mainstream political discussion here in the u.s. the earned income tax credit which is a form of basic income took its place but only to supplement the earnings of the working poor. one goal was to combat the earnings cliff. here is the argument -- in

switzerland, backers of the basic income plan says it would ensure all citizens could cover basics like food and shelter. the government says it would force a tax increase and cause a shortage of skilled workers, sending jobs abroad. would fear that they may become slackers is unfounded. a study conducted in the 1970's reported the opposite. recipients were healthier finished high school at a higher rate and adults work the same number of hours except women taking time off after having a baby. for more stories, visit bloomberg.com. alix: up next, our stock of the day. long shirts and big pants, helping our mystery rack up a toy percent sales gain, but it wasn't enough to keep the bears away today.

i've got nothing. ♪

scarlet: this is bloomberg markets. i'm scarlet fu. julie hyman has the big reveal on the mistry stock. long shirts and thick pants helped our mistreated rack up a 20% sales gain but it wasn't enough to keep the bears away. holders can take solace in another quirky ad or a 100% gain since its ipo. the company is named for a city that sits on the shores of lake superior. i was not aware it was a public company. i was not aware it was a company at all until i saw it that during the super bowl during which there is a cartoon of a tub be man doing a pole dance in his underwear.

it's called the lose holdings. you may -- it's called duluth holdings. the company just went public in november and as you can see they have done very well, just about doubling. they came out with earnings that are sending shares lower today. first order sales up 21%. earnings per share beating estimates and a lot of commentary i saw was pretty positive, saying that the brand is fairly strong and has good penetration. it is going to be opening more stores, including one in pennsylvania. all of that is causing them to be positive. a couple retailers we are watching today include oxford industries. the company's first-quarter earnings missing estimates because of sales at obama.

those shares are falling today. lululemon, it's numbers missing estimates. the sales were relatively strong, especially when you back out currency effects. those shares keep climbing today. scarlet: thank you so much. alix: i learned something today. scarlet: moving to currencies, the dollar extending -- uncertain monetary policy has been a key driver. another factor could be politics. alix: some of the big long-term investors are sitting on the sidelines until the november election. for more, we want to bring in our reporter who covers that. what is the effect? guest: pretty much zero unless

it is a candidate who's going to enact protectionist policies as mr. trump is talking about. traders are basically telling me that this is just adding to the uncertainty about what is going to happen to currencies in general. you have monetary policy uncertainty with that rate hikes pushed back till past the summer. then you have what is referred to as a political discount being attached to the dollar because you have two candidates who can go different ways. there are positives and negatives about trump and the same with clinton and what does that mean for the big-money players and asset managers? they are stepping back. scarlet: is there anyway way to quantify the discount? guest: what you will probably

see is similar to what we are seeing with sterling -- liquidity is drying up and volatility is increasing. alix: do we need a new person in place in the white house or does it matter who that person is to the asset managers? guest: i think it matters more what the policies are going to enact. alix: if trump is elected, with a not want to invest in the dollar and vice versa? guest: the original thought was trump is a wildcard and impossible to predict. clinton would more follow on the obama administration and is at least pretty bowl. whether you like it or not is another story. another story is trump could create a great deal of infrastructure spending and actually lift the economy. that kind of thinking would get someone like chuck schumer on the democratic side and unify going forward and that could be a positive.

it's more than just the uncertainty and given something like $10 trillion of assets and negative yields, the fiscal policy really needs to step in. scarlet: that is a lot of ifs to consider. because of that or as a result we see a lot of strength in the japanese yen. my question to you is we do get some economic fundamentals coming out every once in a while. you have gdp revised higher. does that matter in this kind of environment? guest: it creates the discussion that that would keep the bank of japan out of the picture in the short-term. without some additional liquidity, it adds to the currency strength and may add to the discussion where the fiscal stimulus may be pushed back a little bit until after the

elections in july which could potentially become the currency and you see it with lower treasury yields. alix: we can assume it will follow this path as we get to the presidential election -- a safe haven trade and maybe a weaker dollar? guest: there are so many aspects. it is just coming into the discussion for the first time recently. you knew it was going to come eventually, but it is coming. scarlet: thank you so much. our currency expert at bloomberg. alix: coming up, the european central bank is going shopping for corporate bonds to shore up flagging euro area economies. ♪

tcapq+)ñékq& u8-o=nv& ♪ rs in new york, i'm alix steel.

mark: despite hillary clinton being the democratic party's presumptive nominee, bernie sanders is not 100% in her rearview mirror. he will continue to make his case through the primary in d.c. next week. he has to vermont today and is in washington tomorrow for a meeting with president obama. scott walker not backing away from back donald trump. the governor is about the presumptive companies parties say, it is said america have such choices to land, suspended for cheetahs ears -- 42 years. she was first prescribed the drug used for medical reasons,

in 2006. thousands of people lined up in kentucky for tickets to friday half's memorial service. for boxing live in -- legend muhammad ali. some immediately went online offering to sell and other posted on monfils to buy tickets. the memorial will take place -- global news 24 hour they powered by more than 150 negroes run world. back to you. alix: another big stories out of europe, entering uncharted territory as it tries to boost the region's economy. it is about to break his own record.

the line at the top is total assets on the ecb balance sheet. final fantasy -- almost at the peak. you have got two stages, a blue section which is really small, and much more aggressive in the last 20 months. you have super cheap loans to banks with the white lines there. alix: a big impact in the bond market as well. i am looking at the total index. the bond buying program, look at that rally. what do you think happens to yields? a great chart that shows europeans invest in yields now below 1%.

if we could pull out the second chart for me, look at that unbelievable sign we have seen. we know mario draghi will be there. scarlet: there is a bid no matter what from the ecb and the ecb is looking at buying spots from the biggest companies. according to people familiar with the matter, the ecb is targeting chemical real estate companies utilities of five to eight years. eight years in auto firms and utilities of 2-3 years. a lot is riding on the purchases and the ecb has been pretty vague about what it is planning exactly. alix: if they could meet that $5 billion threshold, from her insight, we're joined by the global credit market strategist with bloomberg intelligence who joins us now from london. that is the critical question, can they make that 5 billion year on corporate bond purchases

a month? >> absolutely that is spot on. investor times over here in the moment, a marginal bar of up to 5 billion per month. having an exponential effect one on the ecb balance sheet among all the asset purchases, but also a meaningful impact on yields and valuations on corporate bond products. a product of underlying migration downwards of the going yield, with 0%. investors chasing the yield increasingly further and intentionally crowded out by the ecb. scarlet: companies are taking advantage of the bills in demand. as a company need to be rated by ratings companies? >> according to investment

parameters, it needs one investment grade rating. but, the ecb if it loses, it could get very weak as tell -- as telecom. they have a triple b minus investment grade, the lowest. the ecb as part of the corporate sector purchase program that started today, the ecb at the end of the day could be holding very interesting high risk assets in a matter of months. deteriorated what is an anemic backdrop in europe. >> are they forced to hold it and keep the risky assets on the balance sheet for up to eight years in some instances? >> it will be a value judgment at the time asked whether they keep it on their balance sheet

or their portfolio or whether they look to offload it. the criteria really across investment-grade european base, or euro-based euro denominated nonfinancial corporate, so they can buy across the credit spectrum, 230 years, and a maximum holding of 70% per issue. i think we have seen in terms of being a little more risk tolerant than much of the market was expecting them to be they will be a force to be reckoned with in terms of spread performance. >> obviously, these are european companies but can the ecb by apple's euro bonds? a lot of euro-based companies have been buying euro bonds in recent months. >> absolutely we have had these companies tapping the market. if the institution is headquartered outside of the

euro zone, no. but if they have the operational business then yes. they will fall into the ecb's bond buying purchases. very broad. we have captured about 1100 potential bonds that the ecb can buy within investment parameters. alix: do they extend those parameters or just by les? >> -- buy less? >> that is the big question. since the announcement in march. come july 18, the first day they announced how many bonds they purchased and what they are currently holding, and after that, it will be a weekly announcement. if they announced they are falling well short of that five a month, their disappointing at the level of support giving, but they raise questions about the

level that other asset classes look at, if they raise asset prices and inflation within the eurozone, excuse me. scarlet: do we know anything about how the ecb will split purchases between those in northern europe as they try to achieve a balance, or does it not matter? >> i think liquidity will be the key thing that matters to them. initially today they were looking to pick up and put into the portfolio. we have had peripheral risk added already at this juncture. they are going to try to target one liquidity and on pricing that needs continued support. they will have to spread their net as light as they can. alix: thank you very much for joining us in london. scarlet: we will stay on europe because we have got more from bloomberg's exclusive interview with the former u.k. prime minister tony blair.

do not miss that. ♪

scarlet: let's take a look at the u.s. stocks are the dow inching higher. we look at the record high coming ever so closely but we can't quite get there. let's check in with abigail doolittle with some more details. >> the nasdaq ever so slightly higher. up-and-down trading tesla is up

for the longest winning streak since early april. bullish comments saying he is more bullish or optimistic on the near term. he does have concerns on the company's high cash burn in what he calls an overly ambitious 2018 production goal. bullish for the near term. dragging on the nasdaq indexes right run even. trading at levels lasting in 2014 from the ipo dragging in the shares, are the reduced outlook -- originally, a circulation of a short report outlining the short pieces of

eps asset management. looks like investors may gain clarity in the weeks and months ahead. the companies currently unprofitable but it is profitable but point four cents in the third quarter of this year. it would truly be a feather in their cap but if not it would be bullish for the short. a lot of uncertainty here. alix: a huge job -- drop so far. does this suggest that the longer buying stocks support it? >> it is probably too early to say but right now really looking bearish, especially on today's action. a weekly chart out of the ipo we see is below buying support. if support before friday, there is a chance it will be at the top of the range. right now will be a little more bearish and j.d..com could drop from current levels. alix: thank you.

scarlet: why are stocks still going higher despite the dismal jobs report? here to break it down further is oliver. oliver came complete with charts, which is why we love him. this shows some of the pain trade in action. talk about what we are seeing here. >> the top panel is looking at the s&p versus the equity hedge index. they have basically for phil value proposition. it remained above the s&p when the market was down. as the market continues to rally continues to go up, the degree to which hedge funds are lagging goes wider and wider pair -- wider. those did pretty well.

still positive and getting harder to justify but it interesting because this hedge fund story becomes the stock market story because you have guys who removed the long position, kept the shorts and added them and we know that for a fact that bank of america had a detailed report on it and then it becomes an issue of whether or not they can hold onto these positions as the market goes down, they have to get some kind of long exposure. a lot of other things are happening in terms of how concentrated they are getting. last week, oh more concentrated than ever according to goldman. my colleague had a story about how they are doubling down on the momentum trade. a lot of questions out there. alix: looking year to date and the sectors and how they performed, what went wrong for set -- for hedge funds and what sector tipped them? >> definitely the trade, we basically follow what was

working in the past 12 months. there are different definitions for momentum. you buy the stock that has been doing well. that turned around and there is a whole shift. an interesting way to find it. he basically calls it an inflation trade in reverse, where now we have economic indicators and signs that inflation might be going up and then you basically have companies in your hedge funds that are not really in utilities or telecopy or you can see those are the big winners on the year. hedge funds do like industrials, but that is a harder place to get a lot because there is a degree of macro driven move there in the stock. hedge fund managers want to be in this divisions and how to investors about this is why no one else is in this and that is harder to justify with an energy company that will move with oil. scarlet: you have to make a call

with oil and who wants to do that? alix: and if you are sure with oil in any way in the last couple of weeks, you got really hurt. it is a fundamentals call. it is very concave and you will want to get in on energy when you eventually moved in on energy assets. who wants to do that? oliver: it is not to say let's pile into utility stocks were pile into telecom stocks in the s&p because they're not really the types of growth names they typically want to be in. an interesting point as well, basically, perhaps as a side point if ipo's start to pick up maybe some of those hedge funds will go in and capitalize on the market. basically right now, you have a group of investors, hedge funds a pretty big impact on the market, not huge but important, who will have to figure out whether they want to keep short or get long. about whether or not that will at least keep it where it is.

scarlet: the conviction is there. it is just a matter of the timing working out for everyone to all right. you can catch all of stories on bloomberg.com. alix: coming up next, boston market is ruffling up feathers in the fast market industry. the chain's new initiatives. ♪

alix: boston market is flying the coop. the chicken chain is opening over to dungeon -- two dozen restaurants in the middle east. scarlet: will the expansion open

of a new poultry paradise for the come -- for the company? george, welcome. i wanted to get your sense on your business in the u.s. and the overall environment in which politics and the uncertainty over who will be present will have on the business. what are you seeing? >> there is a lot of discussion going on in our business. retail is down. we are waiting for the election to come up for people to start buying food in restaurants again. alix: are you delaying any election decisions? george: absolutely not. we usually like uncertainty. we are able to look for great people. alix: is there one presidential

nominee who would be better for your business? >> we are in the chicken business so it does not matter. >> in terms of consumer spending. george: we always look at the administration to make sure they are rational and hair and they pump the economy. that is what matters to us. scarlet: moving along to where you are doing quite a bit, talk about the stores you have in the middle east? how will they be the same or different than in the united days? will there be local dishes or local food you will be introducing? >> we will focus on the food we serve in the u.s. the only thing that is different is we conform to dietary and religious regulations. pork is not allowed in the middle east. other than that wrote history chicken is very popular in the middle east and that is the reason why -- i spent five years living by myself, we did

business in the middle east with other brands. i think it is a great market for us. alix: a lot of guys getting into the middle east right now. what about it makes such a value proposition for you right now? george: they love american brands there. that is growing. a lot of people are moving there. they love to eat our food, so we are very excited. scarlet: how worried are you about currency fluctuations? george: i do nothing that will be a big concern for us. we trade in local currency there. it will not be a huge business. we have forage and 58 restaurants in the u.s. but we are looking forward to it banding there and being in the market. alix: a lot was very focused on oil. saudi arabia. if oil prices are volatile and they go down, will that have an impact on your investment decisions? george: we have to be

careful for that. so many tourists the area has become a hotbed. i was amazed at the growth going on in those parts of the world. alix: are there parts where you were like, we are good. at 50, are you like, my life is better? george: natalie. we feel -- absolutely. we feel better about that part of the world. scarlet: would it be fair to say your competition is more grocery stores, rotisserie chicken, and other restaurant chains? george: that is a great question. a busy mom can either go to the supermarket and get their chicken, or they can come to boston market and get their meat. in boston market, not only do we serve chicken but also the sides

and the salads. imam mom can put a full meal at the table. -- a mom can put a full meal at the table. scarlet: how do you defend market share against this? george: in the last five years up 36%. we have done very well and we are excited about the future. alix: the conversation headed into the election is the impact on wage increases. what will be the impact? george: we do not mind minimum wage going up. at boston market, we are $1.18 above the minimum wage for most states because we rely on full-time people and we do not have as many part-timers. i started in the business as an hourly employee flipping burgers. we feel good about paying our people the right amount of money. alix: you need to compensate somewhere for the margin. it is the price or you take the hit? george: we normally would price

it a bit and try to become more efficient. scarlet: the market can absorb more price increases? george: it always does. scarlet: thank you for joining us today and good luck with your expansion. alix: coming up, we will talk to the hewlett-packardmeg whitman. ♪

>> looking to bloomberg markets. ♪ -- welcome to bloomberg markets. ♪

scarlet: good afternoon. alix: here is what we're watching at this hour. hillary clinton makes history, declaring herself as a woman to run as a presidential candidate of a major u.s. political party and setting herself up for a battle with donald trump. we will get reaction scarlet:. scarlet: and grexit and european politics. alix: plus, perhaps raising taxes on residents who live there. scarlet: let's head to the markets desk. we are seeing government bonds rallying. scarlet: the results have not

yet quite come in in but it is something we are watching closely. pushing lower, 1.7% going into the option. for treasuries in general. from around the globe, to germany to the record low yields on their 10 year notes to japan as well. it has been a common phenomenon in the team around the globe. take a look, 1381, term premiums. this is a calculation the new york fed does and it looks at the premium investors are willing to pay factoring in the risks of inflation now looking at a negative premium. this goes back to 1962. we have not seen a negative premium since that time. it is the deepest negative you have. in other words, very hungry for

treasuries in the environment. just because of concerns about slowing growth -- global growth. i will check to see if we have any other results from the auction and there we have it. it looks like these are nine-year 11 month. 1.702%. we will be looking at indirect bidders, a bid to it cover the ratio, 2.68 at the previous auction. higher demand even -- even than had been anticipated in the big auction. this is the same impulse that has driven yields negative as well. people want sovereign debt. alix: 1.7% versus over in japan and germany.

it is a bargain, it is great. oil inventories, an interesting reaction if you look at crude versus stocks. >> there was also a building gasoline. we are seeing oil hold up relatively well even though this could be viewed as a bearish report. when it comes to looking at energy stocks today, the energy index did turn around after the data came out and has remained lower not by much but lower for most of the rest of the session. we mentioned stocks. all major averages holding on to the gains of about one quarter percent here. alix: mark crumpton has more from the newsroom. mark: thank you. the prime minister says the relationship between the united states and his country has overcome what he calls have patience of history.

a joint meeting of the u.s. congress that robust cooperation would benefit both -- both nations. >> anchorage and empower other democracies the world over. mark: the prime minister also cited other extremists saying we have lost civilians and soldiers as he continued the need of the hours for us to continue our security cooperation. the staffer who set of hillary clinton's primary e-mail server has confirmed the justice department granted him limited immunity from prosecution. attorneys also claimed a reasonable fear of prosecution if he testifies in a civil case. the revelation came in a court filing explaining why he was

asserting his constitutional right. not to answer questions. officials say there was no direct evidence that he committed suicide when his car struck a wall. his 2013 chevy tahoe crashed the morning after an a federal grand jury indicted him. nearly 22% -- global news 24 hours a day

powered by 2400 journalists in more than 150 news bureaus around the world. that to you. alix: the dow and s&p is up and at least one says they have room to run. >> he outlined his recent some bloomberg markets earlier today. >> i was disturbed by last friday's's employment report. not going to change my bullish estimate. i would like to see the report do a lot better than that. i am glad janet yellen basically took off a rate increase in june. i think that is appropriate. if we get a bounce back we could still have an increase in july. it is certainly not off the table. >> many say dividend stocks are richly valued.

>> the dividend yield on the s&p 500 is still over 2%. we see the 10 year treasury at 1.7 and even if the fed raises interest rates, what are people going to get on their cd's at the bank? maybe a quarter percentage may maybe at the end of the year a half percent. there is no yield competition. it is my belief we're in the early innings of a long-term gain where people are going to be thinking of getting their income from stocks and dividends instead of bonds and cd's. i think the shift is continuing. i am not saying certain stocks are cheap, but the overall yield is still well in excess of what you could get in bonds and bank accounts. mark: we have got a lovely chart

from richard bernstein, ceo of richard bernstein advisers. he has looked at data for the s&p 500 and he has looked at the low points for earnings since 1948. the index averaged a 13% gain in the next 12 months and rose all but three times in 18 occurrences. it is a great chart if you believe the story. do you believe the story? are you about to enter the rally in u.s. stocks? >> we had one of the worst earnings performances blaster in 2015, down 11% from the previous year. it almost stands out in history. we need a rebound this year to support stock races where they are. 18 times earnings is what we are

now looking at. though that is slightly above historical average, it is still very cheap compared to interest rates and interest rate that will be rising over the next couple of years. you cannot price equities independent of what is happening in the fixed income market. i am bullish and i do not agree with that there's who say, long-term p/e ratio is 15 or 16, we will go down 10%, i think that is ignoring very shifted fundamentals we see in the markets. mark: how do you view europe versus the u.s., where the record high from april last year, talking about the stoxx

600, the s&p 500 is barely 1% below its record high, why the disparity in performance? over that time, the u.s. performed better. year to date the u.s. performed better. why is that and why haven't we had a boost from qe, for instance? >> honestly, european equities for the next three or five years are more promising than u.s. equities. scarlet: coming up next, beating ernest -- earnings estimates we will dive through the data. ♪

alix: i am alix steel. scarlet: i am scarlet fu. julie hyman has a check on individual movers. julie: stocks declining here, doing poorly even as we continue talking about the gains we are ringing in the underlying agricultural prices. a downgrade from jonas who says he is incrementally less lush on prices because of discipline from the large producers. he is cutting his price forecast so we are seeing them all trade low today. we are seeing those who own apartment buildings, jeffries is cutting its outlook on the sector to neutral from positive. things that these coastal markets are starting to slow down because of oversupply and rent fatigue as well.

the stocks which were down more sharply earlier have come back from the lows. ethics properties positive slightly and at we residential still a little lower. -- equity residential, still a little lower. the analysts at morgan stanley says the company's pipeline is better understood now. on the flipside, there are challenges that perhaps are not appreciated, including competition for one of the company's key drugs. finally, f5 networks. there have been reports the company has gotten takeover approaches including a report the company had hired goldman sachs. some analysts are speculating about the odds of that happening. the company went ahead saying it would present a bear conference today particularly the ceo and executive will not be out there speaking to the analyst

community. scarlet: thank you. another company in focus posted earnings before the bell curve the company is best known for making jack daniels whiskey and topped -- let's see what the numbers show in today's the numbers do not lie. excluding the sale of its brand, a total $.83 last order, a dime higher than the average analyst estimate. let's take a bigger picture look at sales growth which declined 1% last quarter, a significant drop-off from the average annual growth rate of 4% over the past five years. when you back up the impact of changes, sales grew giving the stock a lift today. shifting its sales overseas, america, a blue size of pie, once made up 60% and now makes up only 43% and the liquor company expects current fluctuations to remain a challenge, fluctuating 7% per share on full earnings. for now, focusing on whiskey

because that is where the growth is. when it comes to volume, whiskey may surpass vodka this year, which bodes well for brown-forman. in the process, it has made southern comfort expendable and sold liquor for i should say 500 $.4 million in january. you can see over the past you years, southern comfort has really lost ground market share to flavored whiskeys. justifying the decision to focus on, in their words, higher strategic priorities. alix: now time for a look at some of the biggest is the stories in the news right now. nigeria's severe foreign currency international airlines out of the country. united now says the last flight to houston is june 30.

most foreign airlines have stopped that the nigeria's look currency after limited access to foreign exchange last year. the nation reportedly owes airlines more than $609 in sales. u.s. employees advertise jobs in nine months in april but did for -- pull back on filling them. this may reflect concerns about tepid economic growth. job openings rose 2% to 5.8 million matching the highest in -- on record back in december 2000. just under 5.1 million. so delta could become the first major u.s. city to tax sugary drinks. a tax on soda and other sugary averages and use the money for kindergarten community portals and park improvement. a vote is expected today on what is expected to be a compromise measure. the soda industry has fought the

proposal with millions of dollars in advertising. that is the bloomberg business flash. scarlet: still ahead, saudi arabia could be paying a higher tax bill as part of the new plan, all part of 2030? we will discuss next. ♪

♪ scarlet: this is bloomberg markets. alix: a quick check on the market. the rally is clawing its way higher still. positive territory. the nasdaq is the winner of the day. something really odd is happening in the market that i wanted to point out to you. oil prices on the day versus oil stocks within the s&p. we talked so much about that one for one on so many days but not today. we see the move higher from the bottom after the inventory numbers were digested, because we have that inventory draw. oil stocks are not participating in a chevron is detracting to-three points from the dow

jones today. oil is reacting to the inventory draw and oil stocks are reacting to the inventory build and products. it is one of the underlying fundamentals and oils keep rallying with -- scarlet: speaking of oil, let's talk about saudi arabia. it's plan may include raising taxes on millions of foreign residents who live there. this was included in the country's national transportation plan release this week. it is an ambitious blueprint. alix: will the proposal see light of day? we want to get context. the author of the story joins us from our bureau. does this have any leg to pass here? >> that remains to be seen. a lot of economists believe this will probably become a law at some point as the country needs to raise revenue. some economists believe there

are as -- there is no other way having to expand the tax. they are talking about a proposal to tax. they tried to play down yesterday in the conference. the finance minister was quick to say that will not be taxed. saudi arabia already started to put in their taxes, reducing subsidies. they plan to impose a tax and they are planning also taxes on lands among other things to try to shore up finances. alix: saudi arabia's's income status has been a key driver. can you give us a sense of whether any other gulf states oppose an income tax? >> you are absolutely right. so far, all the gulf states are not opposing any income taxes. so far, some are reducing

subsidies on utilities trying to impose taxes, indirect fees and so on. income taxes, they have not tried it. mostly because it is a tax haven. a lot of analysts say it will become very difficult to attract unskilled labor because the country has a very strict social code. adding taxes to the mix could mean a lot of people would forgo the opportunity. >> this made sense to me when oil prices were at 26. a 90% rally in mid february and now we are around 50. i am not seeing a lot of calls for $30 oil anymore. does this give breathing room or is this irrespective of the decline in oil? >> according to the vision presented by the deputy conference, the oil price does not matter. they want to get a financial house in order and to do that

they needed to lessen the debt burden the government carries for the huge population and saudi arabia and the fact the population employs -- government employs most of the population, two thirds of it. the imf still expects to impose 13.5% deficit this year. this is for a company reporting surplus after surplus for many years. scarlet: you also talked to global economy's outside the region. are they in favor of it? do they think it is inevitable? >> he was saying to me he thinks -- they would actually expand to include citizens and basically also provide something in return.

and something needed revenue-generating base. he thinks there is no way around it and it definitely needs to happen. he thinks it is positive that they are stopping somewhere to talk about it at least. scarlet: thank you for joining us. alix: still ahead, an exclusive interview with the former u.k. prime minister tony blair. his outlook from the grexit roughly two weeks from the vote. that conversation is next. this is bloomberg markets. ♪

alix: you're watching bloomberg markets. scarlet: let's begin with the

headlines. mark crumpton has more from the newsroom. mark: following hillary clinton's hit victory in four states yesterday, bernie sanders is downsizing his campaign. about half of his staff is being laid off. that is according to the associated press citing two people familiar with the plans. sander announced a rally in washington dc the presidential election is weighing heavily on voters might. 75% of those polled in the latest survey say they are giving quite a lot of thought to the election. 21% say they are giving only a little thought to it. those are on par with 2008 which have the highest voter turnout in four years. an fbi investigation reportedly found the former cia director david petraeus shared highly classified information with journalists according to a court document obtained by politico. an fbi agent reportedly told

that the industry had two audio recordings where the army general spoke to reporters about matters authorities viewed us top secret. the british government is extending the registration deadline for the eu referendum. the website had technical issues last night but it has been two hours since before the deadline which has presented -- prevented many latecomers from signing up. the move is respect -- expected to require emergency legislation to extend until tuesday. global news 24 hours a day powered by 2400 journalists in more than 150 news bureaus around the world. back to you. alix: two weeks away from britain's key vote on whether to remain in the european union. john spoke with the former u.k. prime minister tony blair about his outlook for the economy. >> i think we will remain.

of course, it is a referendum. look at opinion pollster it is very close. you have got to be concerned about it. scarlet: john joins us now from london with more. we knew tony blair has been very vocal. what has changed or evolved about the way he presents his position in the last few weeks. it seems he is taking more of a strident tone. classy is getting increasingly strident because he sees it as a threat on pretty much everything he stood for. sony blair is controversial but the britain he stood for was cosmopolitan, engaged, involved in europe. that has always been where he has come from pure there is a challenge from another group that wants to be independent. he does not like it. i asked him whether boris

johnson, the mayor of london, whether he would he fit to be prime minister, and he did not rush to say yes. scarlet: to what extent is tony's voice matter? he is very controversial and a lot of brits dislike him over the iraq war. >> that is true. it is interesting. he is the most successful living politician. he has 13 elections in a row. the iraq war, as you pointed out and also that idea that he spent too much time making money, a bit like former american presidents. it does not necessarily go down as well in britain as it does here. he spends most of his time doing charitable work. alix: you also asked the former

prime minister, in light of comments that he would try blair for war crimes related to the 2003 invasion of iraq. here is what he had to say. >> leave aside the fact that you know, accused of being a war criminal saddam hussein was a war criminal seen as an icon as we stand by and watch syria stuffed into submission. leave aside all of that. the issue for me is what is the best way for you to take the traditional values of the left and apply them to the modern world? whether it is foreign or domestic policy, the question is how do we improve people's lives? >> it is not just emotion, but about having some degree of purpose. >> yes. it is about

understanding that unless you are prepared to take the responsibility of power, there are two guests types of politicians and there always have been. a guy whose faces on the placard, and that is me. you are the person empowered taking difficult decision -- positions. some people go out and they protest against you. that is my type of politics. you are the face on the placard. he is the guy with the placard. he is the guy holding it. one is the politics of power and the other is the politics of protest. they are different. if you want to change people's lives you have got to be for the politics of power. >> he is like, i had to take a hard call. what else surprises you about that? click that click there is being re-shown a lot in britain. that is a trenchant attack on

jeremy to say he is someone who sat there and watched the bonds come down in syria and he did nothing. you can tell he was cross and angry and he still feels that he has the moral high ground. that may sound unlikely to many people but he has always had an element -- i think he is furious about the idea that corgan should have grabbed that here particularly the idea about the placard versus the man who is holding it. a lot of centrist politicians would feel some degree with that and he went on about donald trump as well. >> arrives of a figure like donald trump to social media, something he did not have to contend with. >> very much so. that was interesting. i asked him whether he thought david cameron had a tougher job

than he did and he said in some ways yes because he thinks the ability of social media to attack a modern-day politician makes life much harder and he also talked about the diff cokie of being a modern politician that growing up time where you try out some ideas and people cannot really see what is going on. everyone can now see what is going on. on facebook, on twitter he rages about 140 characters and it is an interesting portrayal in that way. alix: what else did you find that was most striking? >> i mentioned trump earlier. i thought that was interesting. i asked him whether he was a man, tony blair, who is able to get on with george bush, a very conservative american, they found donald trump a trade war with china, you have the wall

with mexico tony blair the european has taken more grief than any other european. he made it very clear that he finds it difficult to find any common ground at all with donald trump. that is a warning for donald trump because tony blair, who rallies to america's defense, finds you strongly, that is a difficult thing. >> i do not mean to go on and on about the social media portion, but he makes the point that social media has lifted figures like donald trump what they also oversimplify the political discourse out there and make it seem as if change is simple to achieve when it is not in fact at all. >> he goes back to the idea that he is a pragmatist but also passionate about that.

whatever you think of him and the mistakes he may have made or not, i think there is no doubt that he believes fervently in the idea of a centrist liberal in the proper british sense, a vision of the world and he wanted to push that. the idea he comes back to repeatedly, the same ones bill clinton used to have on social democracy and how unite that with market. to be fair to him, those are big ideas that most of the people around the world are struggling with. i think eglin merkel struggles with that concept. what exactly is the future of centrist politics when being the pragmatist and the person whose face is likely to be the person on the placard rather than the protester, how do you get your message across?

that is a genuinely tough question and he has probably spent more time discussing it there. scarlet: coming up, canadian oil facilities, one is being evacuated because of approaching wildfires. the latest on the damage being caused to the oil sector and the economy. ♪

alice: let's head over to the markets desk were julie hyman has a look at the latest. we are inching higher. a bad rally. julie: you've could call it a sad rally but not at what it comes to certain sectors, one of which i am about to call up. we can look at how some of these stocks are performing in today'session. -- today''s session. because of the new supply and demand model analyst's have on the market, sort of the finished product basically supporting prices above fair value according to analysts. you can see steel dynamics has big gains also having to do with the big data we have been talking about throughout the day. take a look of the charts from bloomberg intelligence that look at the dichotomy of what is

happening in the u.s. versus in china. in china, iron or prices have been surging earlier in the year but since then have been following. that is on the bottom chart here. on the top chart, a measure of profitability on u.s. steelmakers and that is in white. because the finished prices have been going up that has been helpful. iron ore prices have been going down. good for profit margins and profitability for many of the companies. in terms of percentage gains signet is rebounding today. the retailer up about 3.8%. a couple of things are going on here. sure is falling 13% ever since jim grant summarized and a couple of relatively small insider buys announced today by the cio and drafter of the board and native american merrill lynch saying the shares are

still a buy after the selloff. >> thank you. a wildfires in canada are not over yet and posing more problems for the nation's oil industry. theft was moved to a temporary place. >> stocks come in place of economic damage to canada's oil sector and overall economy. jamie joins us now. in light of the new evacuations what is the overall state right now? >> the scale of the fire is still a mess. just this morning, the latest -- producer to have an evacuation order when employees were to leave that some by helicopter, that has taken 23,000 barrels of

crude off the table. it is ongoing and it has been the way the disaster moved, the nature of it. it seems to have subsided and then it flares up again. >> yes, and this has hurt canadian oil production at the end of the day. >> absolutely. we saw this morning the latest estimates are about 400,000 barrels of production taken off-line for the month of june. down from a peak of 1.1 million barrels. that is the equivalent of about 40% of canadian oil production in total. it is significant and coming down and it will remain a drag on the economy for sure. scarlet: thank you so much. let's bring in charlie, who has a first hand account of the devastation of the fires. more than 3600 square miles of

land is still burning? >> i was there. is incredible and difficult to get a sense of how big that is. you can think of it as the size of new york and paris all put together. 70 percent of it may be contained but an immense stretch is still under control. >> we kept hearing about how rain was coming. what did not happen to make it still burn? >> fire experts have severed heatedly the only thing that could really knock this thing out is huge, soaking rain. they have not had that yet. they have had huge -- the temperature on the ground and the humidity the crossover point is sort of the sweet spot for fires to take off.

scarlet: in your article, you mentioned what a family is going through. >> really focused on a single mom who moved up for the jobs as so many do. it is the only place, one of the few places in the world especially in canada where you can go from a high school education and a strong work ethic where you can make hundreds of thousands of dollars a year. she drove the biggest shark in the world, the largest dump truck in the world. a payload truck in oil facilities. when the fire happened, she was evacuated and her son was part of the city -- was in another part of the city. some of her favorite stuff was her harley and she wanted to get that out of there here in this tells the story of the area and

of driving through the flames. classes has global implications. >> absolutely. there are so many different areas to look at. financially, we have spoken to that. this has always turned in the forest. they burn regularly. they are spring-loaded pinecones that depend on the heat that their burning hotter and more frequently every year and it seems those conditions are getting drier. temperatures are getting up. and on virtuous cycle where more fires will continue to burn. scarlet: devastating details. thank you so much. ♪

scarlet: the need for housing will be so great, it will take workers and capital away from the rest of the economy. we spoke yesterday on "what did you miss?" >> you look at the last time we had a big housing secular cycling like this, it is when we had baby boomers. the mid to late inflation was high. that lasted a long time. it is the kind of thing that, we will be old people by the time we are not talking about housing anymore. >> we talk about executives from homebuilders, there is a shortage of homebuilders. >> that is getting a lot of attention.

a lot of people have argued that housing would be a driver contributing to gdp growth, but you take it a step further and talk about how there will be so much housing activity that it will suck capital away from other industries. talk about some of the effects from the big wave. >> we talk about structural imbalances in the workforce when the economy is really weak. can we get manufacturing workers to learn code? the same thing is here. i do not know how high construction wages would go for us to quit our jobs and hit hammers all day. only some in the workforce are willing to do this work anywhere pulling for manufacturing workers in agriculture and truck drivers and things like that. how many things like that and how much demand for that work? in this political environment try to go to an economist and

say we are looking for more construction workers. >> how much do you see that accelerating or how much do you think that will continue to go up? >> i think stated numbers are understated. the way to get ahead if you are a corporation is to cut prices and cut wages. the biggest companies we have today have always been cutting prices and cutting wages. now that we have an environment to raise wages, we do not have employees used to doing that. the same way we had credit addicted firms in 2006, we have a wage cut addicted firms in 2016. a lot of outlook then there would have been. >> how many actually bodies will we need to add in the next five to 10 years to meet the demand?

>> if we had to do it today, probably 600,000. create a more of a deficit, we would probably need more than today. david: --scarlet: joining us now is joe weisenthal. joe: everybody have been anticipating the bond buying program and as it often is with the central bank, talking about the program ends up having most of the effect and the actual purchases are a secondary story. we have seen corporate spreads come in and impacts all around the world as money from the program flows everywhere. the interesting thing today is looking at once -- what specifically they are buying. >> the economy rushed to take advantage of the demand. alix: the issue really is liquidity. are there enough actual corporate bonds for the ecb to be able to buy 5 billion euros

everything a month and if not what does that do to the corporate market? >> some of the past bond buying programs they had have run in the available supply and some of the purchasing has not gone as fast as people expect. every month, can the ecb by as much as it wants and if not, can spreads go lower or is this avenue -- as good as it gets? >> olive oyl from greece. >> they are buying riskier stuff. scarlet: thanks. we will talk about that as well. we will get perspective on the currency market portugal, the ecb, and so much more. ♪

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betty: from bloomberg world headquarters in new york, i'm betty liu. vonnie: and i'm vonnie quinn. betty: is the dovish sounding fed the only thing to get stocks back to record highs. vonnie: meg whitman on the hewlett-packard enterprise. betty: is the u.s. shoe market to saturated? -- too saturated?