,carlet: stocks closing lower treasury yields in the dollar extending declines. joe: the question is "what'd you miss?" makers ratchet down their outlook, predicting one rate hike this year. next central-bank decision, when boj announces. scarlet: frontier market no more, emerging market status for pakistan, stocks jumping the most in a year. ♪ scarlet: we begin with market minutes. after fed decided to leave rates , indexes plunging to their lowest levels of the session. if you look at the numbers, they weren't that extreme.

index wasn the dramatic. that fed decision was more dovish than expected. downw all those dots come from a weaker dollar, lower yields, higher stocks, but the markets could not hold on to their gains. >> one thing that did catch my eye was price action between the rate-sensitive sectors. utilities were declining ahead of the fed when yields were sinking. when bondto gain yields are falling, then get a huge bed when the fed dovish decision crushes yields. werentrast, the financials a big-time heading into the decision, then crashed. market behavior you don't think you would see, but one reason financials might've caught that

bid is the yield curve. the 10 year yield fell by less than the two year yield, that is generally positive for bank net interest margins. joe: let's take a look at those intraday charts, sharp moves with a two-year yield, falling .67%, close to the lowest levels this year. obviously there is no market not looking for an imminent hike now. let's take a quick look at the 10 year yield, basically same story, not quite as dramatic, but that instant drop at 2:00. we're cleanly through that. scarlet: i was keeping my eye on dollar-yen all day. 2105.43 -- toate

105.43. we also want to do our daily check of the british pound, sterling rebounding from a two-month low after and unexpected pick up in u.k. wage growth. according to traders, the markets were pretty sure the pound coming into this report. joe: let's look at some commodities, copper having a nice day, up nearly 3%, some bullish signs there. gold liking that dovish federal reserve and the lack of rate hikes in the near turn, up .6%. scarlet: we also need to give you the fed takeaways, no fed rate increase, the jobs report put the nail in that coffin. what was a surprise was the

shift in the dots. officialsay, fed expected to rate hikes, now only .ne rate hike good th the fed is simply catching up to the market. there is a mixed picture of the u.s. economy, downgrade of the improvement, saying has slowed, with an upgrade in economic activity. want to get to our deep dive and take a look at those dots. that is where the action was today. there are a couple of things that stood out. first of all, that green rectangle is expectation for 2016. there are six folks who see only one rate hike this year from the fed. look at this red rectangle in

2017 and 2018, some fomc members that do not see any further hikes be on the one this year for the next two years. this is the revenge of the outlier.. dot. also need to look at world interest rate of ability -- interest rate probability. odds versusx .5% 16% yesterday, quite a change there. 21% from 30% yesterday. if you look out, there is nothing above 50% at any point

on this calendar, where as yesterday, 50 percent odds as february 2017 so the expectations for a rate increase have gone down, down, down. joe: those hawkish april minute seem like a long time ago. scarlet: they do, don't they? >> i would like to look at overnight swaps and what they are implying about hikes down the road. it is thewill a you pace that matters. right now there has been a huge convergence that tells you that two years down the road, three years on the road, four years down the road, and even five years down the road, the traders are expecting half a hike in each of those years. federal reserve still keying in on the word gradual, but this is definitely glacial. are huge.aps scarlet: it's getting quite big. >> they don't see much tightening in these years going forward. the fed will probably be in a where they will have

to start think about cutting rates. , a deal breaking news right at $1.63 billion, cash and stock deal. maker, cavium, buying qlogic. it will be purchasing the chipmaker for about $15.50 a share in cash. joining us today is andrew levin. also with us, tim dewey.

i'll ask the same question of both of you. what is your big take away from today's announcement? >> janet yellen saying long-term normal twice. that is a sea change. they can't be saying normal in terms of what we thought of before the recession. we are entering into a new era of persistently low interest rates. joe: professor 11, your big take away? professor levin, your big take away? >> janet yellen said you might

have noticed the changes in a couple of adverbs, but the truth was that it was not until several weeks later when the minutes came out that people understood that april was a peopleall and a lot of on the committee expected that june was a very serious possibility. we could be in the same situation in july, later this year. this is a repeated problem. other major central banks like the ecb and boj, the head of the central bank has a press conference after every meeting to make sure every meeting is a live meeting. i think the federal reserve really needs to do that. >> i like to get you gentlemen to react to a quote. in a recent call he said referring to a recent suggestion by president evans that if "the fed waits until core inflation

reaches 2%, it will have to raise rates more quickly at that point." it is a move that could cause turbulence and bond markets and unsettle investors. lawsuits --nvestor losses and gains are less important in the health of the overall economy. it is the best solution just to doing ittion hit 2%, purely on realized progress? yes, the federal reserve should set that as a guidepost. if we do end up with a recession in the near term, we will have a of inflation.e over the long run, he will make the fed's job harder. >> andrew? >> the latest data looks like

report will be on the weak side comes of it like inflation is heading upwards in an alarming way, so there room for the federal reserve to be patient. the description about the path the glaciald, tightening, would be consistent in some way with president evans prescription. joe showed us plot.t she did not dissent in this july meeting. what does it say when the leading hawk does not see the case for raising rates? andrew? thatair yellen mention briggs was a factor in their brexit wasday, so --

a factor in their decision today. it is possible she would say that she saw briggs it -- briggs exit as an event risk. assuming the markets are right, the probability of july is close to zero. to go back to what you said about the thing that stood out to you was this fed use of the new normal. would you attribute that to? what is causing them to reassess , not just the short term, but dot that keeps coming down? >> productivity growth keeps coming down. she mentioned this before.

they are saying this will call for a lower long-term interest rate than we've had in previous expansions. constant flow of evidence suggesting that we are not down sink back is rapidly than we have in the past is really starting to weigh on them and they are coming to the collusion -- conclusion that it's harder to see getting rates back to 4.5% to 5%. with us.stay we will continue this conversation and get into the fed's announcement today. ♪

"what'd you miss?" speaking it a campaign says thellary clinton nation needs stricter gun laws. stop terrorists from getting their hands on the tools to carry out attacks so easily, especially assault -style assaultary weapons that have no place on our streets. agree that if the fbi is watching you for , youcted terrorist links should not be able to buy a gun with no questions asked. also secretary clinton said quote not one of donald trump's reckless ideas would have saved a single life in orlando." atlanta, mr.n trump said in the wake of the

orlando shootings that more people need to remember the adage if you see something, say something. >> we have to be smart and we have to be vigilant. we have to be vigilant. we have to have people report other people when they see things happening, because they're not doing that. they are not doing it here it they are not reporting people, and they have to do that. mark: mr. trump says he will be meeting with the nra to discuss ways to block people on terrorism watch list or no fly list from buying guns. this comes after word that the orlando gunman had been on the terrorist watch list for 10 months before being removed. meeting in china has ended in confusion. malaysia issued a statement expressing serious concerns about the waterway, then it retracted it. the philippines and vietnam are among those challenging china's claim to more than a 80% of the

south china sea. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. scarlet: "what'd you miss?" andrew live in is still with us. -- andrew levin is still with us. deweyith us is patrick from the university of oregon. joe: we were talking about the and one of the things that struck everyone was now we have six people up from one last time who only see one additional hike. what changed since march? but werm trends change, only got that one job report. gdp and spending data has been quite solid then.

what justifies so many people switching to one hike for the rest of the year? >> one factor is that it was already starting last fall, the federal reserve board member started talking about the case for watchful waiting, and what has happened is that more and more of the committee have come around to that view. it may well be the case that if that continues further -- that that may continue further. a year ago if you ask a lot of federal reserve officials what would the economy look like if the 10 year treasury rate drop -- one 1.5 or one point point six, they would be concerned that that would be a situation where they would need to do more tightening to make sure the economy was not overheating. what we are seeing is longer rates coming down, down, down in a situation where capital investment is weak, retail sales

have been bouncing around, auto sales are not strong this year, and so what i heard from chair yellen today is a sense that the are restraining the economy are much longer than they thought six months ago. that means the degree of accommodation today may be about right to sustain the economy we have. just want to get your take on those dots. brainard'sntioned increasing role. you think the core of the fed is starting to change the perception of things? is certainly a factor going on in the background. has continuedon and they have not gotten the lift they would have expected from interest rates this low persistently, i would say that

prove mores right than wrong. the center of gravity is shifting in her direction, a much more dovish direction going for then you might have thought six months ago. that intellectual weight is important. -- wherenow if fisher he is on that continuum. your the communications guru. three months ago, we're talking about killed the dot plot. as sure you have some ideas to what could be added, financial conditions, etc., what in the fed add to give us a better clue of what might get them to lift rates? ini am a strong believer scenario analysis and contingency planning. the fed should do it for its own

monetary policy. joe: thank you so much. fantastic discussion. down, three to go, the bank of japan and bank of england our next with their policy decisions. ♪

scarlet: "what'd you miss?" the boj is next with its policy meeting. japan faces a stronger yen. let's get the perspective from the chief global economist at s&p global ratings. great to see you again. the fed lowered its forecast for .ow many increases it sees what does that do to the boj's calculus?

from fed monetary policy to what japan will be thinking will come through the exchange rate. this will be something that could lead the bank of japan to ease more. there is all this discussion about whether the fed is being clear enough. when it comes to the boj, there is a lot of criticism that governor kuroda likes to surprise. is that a fair reputation and hurting the boj? >> i think it is a little unfair. under governor kuroda is a different thank. -- different bank. i think the message is pretty

clear. he believes that monetary policy can end deflation and attain 2% inflation. he is determined to do it and has policies in place to do so. it is much clearer now than it used to be. >> we did see the yen rally whereto around the level corporate's are doing a lot of hedging, 105. we saw the perverse reaction in the market to the introduction of negative rates with the strengthening of the yen. if governor kuroda is worried about exchange rates, what are his options to get that going in the right direction? >> as you said, the negative interest rate policy has a very effecte, predictable domestically, flattening the 10 yield curve, but had an

unexpected effect on the exchange rate. what you would normally expect that if the bank of japan were to do something more, they would push the rate lower. there may be some resistance to doing that, but they're in mind that the bank of japan is already doing quantitative easing on steroids. scarlet: does the bank of japan intervened if the yen continues to strengthen? it wouldn't be the bank of japan intervening. it would be the ministry of finance. the bank of japan would do the intervention, but the decision lies with ministry of finance. i don't think we are at intervention yet. thank you very much for joining us. scarlet: pakistan is no longer a frontier market. we look at msci's latest upgrade

of that country. ♪

mark: first word news. the associated press says egypt spotted the wreckage of the egyptair plane that crashed last month. says ittion ministry has identified several main locations of debris. the plane disappeared on route to cairo from paris. no group has claimed responsibility. 1%, americans, 50 disapprove of donald trump response to the deadly mass shooting in orlando, florida, 25% approve.

62% oppose mr. trump's plan to temporarily banned muslims from entering the united states. 36% approve of hillary clinton's response, while 34% oppose it. 30% were unaware of her response. on capitol hill, senate democrats continue their filibuster over in action on gun control. democrat chris murphy started the filibuster earlier today. he has allowed others to ask questions, but has not yielded the floor. he is backing democratic proposals to close the loophole that allows terror suspects to buy guns. turkey are at odds over turkey's demand for visa free travel to europe. the eu's migration commissioner says turkey can get these are free travel if it fulfills remaining conditions, including narrowing its terrorism legislation that stands to threaten the agreement with turkey to stem the flow of

refugees, the biggest since world war ii. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. let's get a recap of today's market action. we rallied after the fed decision. market shot up, but read across the board. markets did not hold those gains. ande've been going back forth between good news is bad news and bad news is good news for a while. -- appetite for risk disappeared. joe: lower rates across the board today. >> the 10 year is at its lowest since 2012. scarlet: "what'd you miss?" oracle's head is in the clouds, and it is paying off. let's go inside the data.

the cloud market is expanding rapidly. is forecast to reach $140 billion in 2019, representing a 19% compounded annual growth rate. as for oracle, it is positioned to capitalize on the growing market. cloud software as a service posted revenue growth of 60% in constant currency terms. total software sales increase just 3%. is thetware licenses drag, falling 11%. has seen a sales decline as it shifts to the cloud. this is not really a surprise. when software companies make the transition, upfront license fees the client. is hamperingnsion its margins as well. take a look at its operating income growth as well as its

operating margins. both are trending downward. oracle management has said that fiscal 2016 will be a cross year. meantime, competition is heating up. mayle's aggressive moves hamper the growth rate of your cloud companies. salesforce recently announced its biggest acquisition yet to better defend its share against oracle and sap. afterl watch all of this oracle releases its earnings on thursday. joe: we will be right back. ♪

eye says offers came after morgan stanley was hired to fill takeover interest. the company turned down two offers. drove gawkerhat media into bankruptcy is on hold. paul cogan successfully sued for $130 million after the online -- successfully sued for $130 million after the online publication published video. barclays says it is allowing staffers to take more time off when having a baby. non-primary caregivers can take up to six weeks off with pay.

primary caregivers will be allowed to break it into chunks. report, caviumto , a 14%iring qlogic premium. surging inlogic after-hours trading by 13%. that is the bloomberg business flash. joe: "what'd you miss?" been snubbed from the msci, but pakistan is in. granted emerging market status. the prospect of hundreds of millions of dollars leeward into the market. i want to bring in the chief investment officer from stockholm. thank you for joining us. we saw the index search by 2.8%.

this has been a monster performer over the last several years. market thatbout the is causative huge bull market. back,you look 10 years they've grown revenues by 40% annually each year. that is higher than india. i think the market is following good company.

>> when we talk about some of the reason inclusions to the after they were added, it would sell the news type of event. what is different about pakistan's inclusion? going intoook at emerging markets, normally the best time is from the point of addition until they are

technically included, which is 017.2 the market could have a decent year ahead of it. joe: how much more do you see this market rallying? what is the potential here? in 2006, 2007, 14 or 15 times, normal asian market level. most important thing is that the companies are still developing. the companies are growing 14% from revenue every year. , we have annow economic corridor, $46 billion

program stimulating growth over the next 10 years. you have massive investment in the electricity sector. electricity has been a huge problem for pakistan. we see a lot of things going the right way. economic growth for 2015, the , is expected to be 4.7%, the highest in nine years. next year, the government expects 5.7%. we believe they can achieve about 5%. >> we talked about a lot of the positives, but can you outline the risk factors? in the short-term, it is politics. it is always the risk. you have questions about the

prime minister, the panama leaks, etc. politicianpposition marched in demonstrations, so you always have the political factor, but now we have elections in 2018. they seem to have changed their , so we expect a were quiet political climate until the election. about thehat headwinds from the other emerging markets, china for instance. how insulated is pakistan's growth story from the rest of the world? sayn normal times, we would it is the best environment for

pakistan. swings and a equity crashes in the developed world, that will affect every risk market. marketsthe developed continue with some doubt in some profit growth, that is the best environment. most of these markets are driven by domestic consumption and are quite isolated from the rest of the markets. scarlet: what kind of influence -- and close would you expect to see into pakistani stocks? -- what kind of inflows would you expect to see in pakistani stocks? play the't want to flow. areestimates in the markets

around 700 million, 800 million, numbersve seen much higher than that. fact that it comes in two remindermarkets is a that there is something else. joe: thank you very much for joining us. scarlet: he talked about chinese shares -- a-shares, more proof that chinese policymakers have their work to cut out to win the confidence of global investors. surprising a lot of analyst as well. put up of the firms had to 870% chance. i was telling you that we are looking at the odds being very

high that they would be included in the index, so it was a true surprise when we found out that they aren't going to be included. they will get another chance at it next year, but it seems as if the chinese and had cleaned house enough, enough distance routes and thee chinese stock market to allow this to happen, but no dice. pakistan, would it got included come the market immediately research. you would have expected the shanghai composite to selloff. it gained overnight. it doesn't behave like a normal market would with total free flow of capital. a 1.5 8% gain after what seemed like bad news. it was kind of odd, right?

you would think the markets would be in turmoil after that. we remember several years ago when it seemed as if they would be included in this index. the market had gone up and out than we had been a near peak. was $30the rationale billion of inflows, so there was this,of let's rationalize so maybe that affected sentiment. one of the positive economic stories this year has been stabilization and chinese growth. when you look at the index leaders, china is trailing. a colleague of bloomberg often talks about this big ball of china rolling from asset class to asset class. where is it rolling towards

right now? >> it may no be rolling towards anything at this point. it may be that it's parked in vancouver. well, be rolling here as but there has been a lot that has been washed out as well in the chinese market, so people have lost quite a bit of money. stabilized have possibly, and we will see where the economy is headed and what that means for the market. do you think there's a problem in and out? is this a significant cap? >> it is a real balancing act for china. that the msci wants less restrictions. one of the problems they had was

the level of remittance allowed by foreign investors, something like 20% on a monthly basis. your money can be trapped. that was one of the considerations. you have to remember that china has to deal with a market that can swing in so many different directions. it makes no sense. those allegations of stock manipulation, which is part of what marred its reputation. anti-corruption campaign is at work here in the markets, and or take a little more time. scarlet: no doubt this is a blow to xi jinping's reputation. he spent a lot of political capital on market reform and increasing market transparency. they would say why are you

not including the world's second-largest economy in this index. joe: thank you very much. scarlet: with just a week to go until the u.k. referendum vote, as short seller says he is wary of the poll getting so much attention. he highlights what he is looking at, next. ♪

scarlet: i am scarlet fu. "what'd you miss?" janet yellen conceded that brexit is one of the factors in today's decision. with jim chanos. he is not convinced the birds that vote will be tight. -- the brexit vote will be

tight. >> the polls have been unreliable. vote, thecottish polls had it no and neck. and neck. more recently, they completely missed the david cameron landslide. they had it to be quite tight andeen labor and cameron the election one overwhelmingly. newspaperreful with based polls in the u.k., given the newspapers are in the u.k.. in the betting market is 65% to 35% to stay. it has come in, but it is still

two-to-one. i trust those markets. those markets had donald trump winning the republican nomination for being the leader in the republican nomination as early as december of last year when a lot of journalists and others were saying it was still a horse race. the u.s. betting markets had trump is the presumptive nominee or the odds on favorite in late december. i trust a lot more than i do polls. happenede look at what in the markets over the last couple of days, yields on sovereign bonds coming to new lows, that the united states at a three year low, equity markets have fallen for four straight days. what is your read on what is going on right now? >> the stock market is to percent off its all-time high, the skies falling.

i don't know. one of the things i've learned after 30 years of doing this as five, manager and another it is a mug's game to try to protect the market over the short term. it can go almost anywhere. i don't know. if the market is getting afraid of brexit, they stay in, market rally. again, that's not something we are very good at. that was an excerpt of my conversation with jim chanos. you need to know to cure up for tomorrow's trading day. that is next. ♪

scarlet: "what'd you miss?" bank of japan making its policy decision tomorrow. right after that, the bank of england's decision. it's going to be terrifying for markets tomorrow. cpi, well that inflation measure continued to trend towards the feds target. scarlet: that is it for "what'd you miss?" joe: we will see you back your tomorrow. >> have a great evening. ♪

♪ mark: good evening. donald trump some very troubled run, what it means for the 2016 race. yesterday, we showed you hillary clinton leading in a head-to-head matchup. the numbers released today are no better. ai% of likely voters