david: from bloomberg plus world headquarters in new york, welcome. the dramatic swing for stocks, the dow having its first 200 point move since may 24, reversing earlier losses. safety plays are leading as brexit worries continue. vonnie: gold futures at their highest levels in nearly two years -- why oil is tumbling. david: with the u.k. possibly on its way out of the european union, is it still an attractive option for countries not in it? the markets close in about two hours. let hit the markets desk where rami has more on what is happening. : the brexit causing a

seesaw this morning and now here session highs. still in the red but for the dow, it had been in positive territory for a brief and hot second there. 53% to 47%shows favor the brexit. that reflected in the dow jones industrial average. we can see popping into the green and going above the flat line for an hour or so, just under the flat line. we did see the dow down as much as 168 points. i want to show you what's happening with the s&p's 10 sectors. negative territory with energy leading the declines. up the most,tions

utilities had been the biggest leader. usually as it stands with lower interest rates, that does help utilities because of their load. let's look at what is happening with oil with energy falling as the biggest sector laggard. this is its lowest in a month, now six days down and on pace for its longest losing streak since february. the fear is global growth is slowing down everywhere. we did hear janet yellen saying 2016 growth for 2016 is supposed to be 2.2% and taking a look at the knock on effect, pioneer natural down the most in terms of energy laggards. transocean and murphy oil in the second and third place. alix: haven assets really

getting a boost from all of the uncertainty. you would expect this would be happening. right now, interestingly at the flat line. chapter odds probability and brexit falling, we see gold interest falling here. take a look at what is happening with the bloomberg dollar spot index. it had been higher on the day. 10 year for the treasuries, we see this is now unchanged. this dip around 9:00 mark is when it hit one point 58%, the lowest it had seen but not since 2012. a check on get bloomberg first word news with taylor riggs from the newsroom. taylor: u.k. lycee british lawmaker has died after she was shot in bristol.

jo cox was attacked while meeting with constituents in a north of england. please say that she was shot twice. eyewitnesses described the shooter as having a homemade gun. campaigning was suspended in the european union referendum after news of the attack. prime minister david cameron says he canceled a pro european union speech in gibraltar. disney says the beaches at its florida result -- florida resort will remain closed after an alligator attack that killed a 2-year-old. he was about one foot away from the shore when an alligator snatched him tuesday night. hillary clinton's campaign launches a massive tv ad blitz today. are running three general election ads in eight states including florida, iowa, new hampshire, ohio and virginia.

weeka $10 million, six television via according to one official. hiso rubio is considering decision to leave the senate. he's been under huge pressure from gop leaders to run for reelection. they believe he's the best shot of keeping his florida seat in gop hands. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. i'm taylor bigs. alix: the fed stood pat in yesterday's meeting but forget about hiking, should the fed cut rates. the case was made on bloomberg . been at that meeting, i would have argued for cutting rates at this time. the basic thrust of information

received by the committee since december has in a couple of things that give us pause. inflation expectations continue to fall. right now, the market taste measures are at five-year close to theevens, bottoms we reached in february. shown to beres have very disappointing as well. this is the main job to keep central bank rates reflective. risks arekets, global much more manifest at least more than i anticipated. i think the way you want to proceed is to try to defend your inflation target from below. vonnie: there seems to be other

option besides cutting rates. the fed president said come out and say we are not going to raise rates until we reach that 2% inflation target. give a very specific cause and effect. what do you think of a solution along those lines instead of -- instead? guest: i think wedding what i said to what charlie said makes a lot of sense. i think president evans is right on it. you need to spell out your goals and be clear about what you are trying to achieve, but i think you want to take actions that are more aggressive in terms of what he laid out to achieve those goals. why should we treat the interest rate increase as a given? i see no reason to do that and, when you do that, you make it

harder to raise rates ever. you start to treat them as floors for where you are going to sit said -- set interest rates. i would wed what charlie said to cutat my proposal rates and i think the two together would be very powerful. where did this bias toward normalization come from? back been going through some research and reading transcripts from 2009 and 2010. tos a very human instinct try to get back to the way things used to be when they were easier. bias toward normalization is a very human instinct to say economic conditions look like they are back to normal. can we make policy the way we

used to when it was easy to make policy? unfortunately, i think the answer is no. think that is driving the feelings on this. >> you had some real hawks to deal with. i'm talking richard fisher down in dallas. guest: that isn't just in question. president fisher was often concerned about the potential about instability. you do your best to bring your metrics to the table and say these are concerned you should have.

justok at the date we don't see that on the table. that's the best you can do on that dimension. onnie: that was earlier bloomberg go. planning job cuts after bill gross'departure. at 1.5 pimco's asset sit trillion dollars. for more, we are joined by our reporter in los angeles. guest: i cover investing firms. vonnie: explain why this is so important. this is a sign of the time. that is pretty phenomenal. we got a memo that said

the eight jobs they are officially cutting this round and they are offering buyouts to a bunch of people. we don't know the terms but they are cutting some of their strategies that have not generated a lot of their returns. a lot of terms are facing cuts in money management because vanguard is taking all their money. david: we were talking about pimco's assets under management -- we're not talking about the bottom of the trough. normal course the of business and we have to re-examine our strategies and which ones are paying off and which ones we can do better. their assets are being at -- being outsourced. what strategies are they cutting and why is vanguard

taking the money? what pimco is cutting our dividend and income strategies. there's a portfolio manager who is the only named person in these cuts. the reason vanguard is getting money because they don't charge much for money management. per year per hundred dollars charges$.12 where pimco for its total return fund which is its lightship fund for institutional investors. inre is a big gap there and an age of low returns, people are saying how can we increase our returns and one way is to cut fees you are paying to your money managers. david: one of the big trends is an impulse to go toward passive trends. you mentioned bond returns. how is pimco adjusting to meet those new changes?

guest: a lot of money is flowing into pimco income fund and that has a little bit of it different portfolio. there's a lot of mortgage-backed securities and corporate debt. their basic strategy is they look at macro events and individual investments and have a top up and bottom down. they are continuing that but shifting their assets allocations. the pimco total return fund has lagged its benchmark index and they are losing a lot of money. vonnie: a great story on pimco. thank you for joining us from los angeles. david: coming up, the rush to make lengthy of green off of marijuana with recreational use legal in four states, how is washington responding? vonnie: intel gives rare advice to the business league. i don't how the largest chip maker makes the chip found in

millions of pcs. david: looking at shares of they are down just slightly and advanced micro devices up. ♪

david: this is bloomberg markets. another victory for the marijuana business, the senate committee approved a key measure that would increase banking access for marijuana businesses. vonnie: the bill allows washington, d.c. to establish regulated marijuana stores. it could be just a matter of time before it is legal. world navigates the consumer universe, examining what is going on with all the

things people by, including erewhon a. thisis the significance of hill and is it really just a matter of time before marijuana is federally legal? guest: i think there are a lot of hurdles. there's a lot of states where it is not legal but it seems like it is going to be a federally legalized product. heading in that direction. more than half of people surveyed are pro-legalization, bigthat doesn't mean players can get involved because it is still illegal federally. even if it is legal in colorado, you cannot use banks. it is technically federally elicit. in seattleve friends and colorado and you go to those places and it's packed with dispensaries. what does it mean for the economy and those dates? guest: i did has done a lot for those states.

we have already were heard things about colorado. it's really pushing the tax revenue and created an environment where small business owners are creating businesses and thriving. the fact that it is federally illegal has created an environment where does small business owners, big tobacco, big food, those companies are staying out and there are all of these entrepreneurs really growing. vonnie: what businesses have been hurt? guest: there is not a lot of data showing people are drinking less, using marijuana in said -- instead. for people getting into the industry, they are facing challenges and with banking, they are facing regulatory challenges. it's not regulated the same way cigarettes are, so figure out what you are going to sell, it is a gray area. vonnie: -- david: we think of

the dispensaries as the economic landscape, but there are a lot of players here. than: there are more 140,000 people employed in the industry and related industries. that includes technology companies, agricultural writing companies, a lot of tech and marketing. just like any other major industry. even more so because there are all of these confusing gray area problems. david: good for lawyers, maybe. vonnie: how long do we have to wait for data that tells us of the other impacts of this being legal in some states? guest: that's a great question and i'm not sure we know the answer. some people we talked to on the streets of colorado, homelessness is up because people want to come here and not worry about being arrested for marijuana. but there is no way to tell if

that is directly related to marijuana. some of that research is just hard to do. it's also tough toit's also touh studies because it is federally illegal. as this environment changes, we will be able to change it in terms of things like addiction studies and things of that nature. and what is the standard amount of thc? you know what a standard drink is. what is the standard amount? david: thank you very much. still ahead -- vonnie: still ahead, what it is like inside intel's secret factory. ♪

david: this is bloomberg

markets. intel generally shrouds its chipmaking process in secrecy, but we were able to convince them to let us inside. our reporter joins us now. you got to get inside the holy grail of chipmakers. max: we don't think about server tips -- server chips, but it is a huge, $16 billion business and basically runs the entire internet. intel, so toe speak. we went inside and watched a magic happened and it is really kind of magic. are not allowed inside the clean room itself, but you got a sense of what it is like -- there is very pure and a special kind of water they use. what are these folks doing inside? max: it is incredibly clean and quiet. any vibration would mess up the whole process and cost the

company hundred thousands dollars. if one speck of dust lands on a chip, it's all over and they've lost money. quiet,st this very almost like a cathedral, kind of a weird feeling. there's a lot of money at stake. etching, material applications -- how long does it take and who gets trained to do it? go: it takes three months to from the silicon wafer -- three times longer than it takes going to assemble a tree minor. a car can be assembled in a matter of days, so this gives a sense of how risky it is. come awho do it our tax basically. a couple of years of college -- there are some phd's sitting there in funny out to its, writing on special paper, making sure everything goes smoothly.

we have heard about the idea that you get faster and faster with each iteration. what's the biggest challenge intel another chipmakers make. can outlaw continue in perpetuity? scuttlebutt in a chip crowd, very distinct from the marijuana crowd is that moore's law has ended. intel would beg to differ. the issue is can we do it cheaply enough? that's what all the energy and research, ilion's of dollars a year are pushing for. vonnie: this particular chip is the i-5. does intel have a competitor in this state? max: strangely, they do not have a competitor. basically any data center, amazon, facebook, google, they are all running versions of this chip.

.nything you do on the internet if you post on facebook, it is running through these data center chips. it is a great business with huge margins. they are making 50% margin. vonnie: is it going to destroy jobs? max: i guess in a sense, because of stuff gets automated, this is part of the march of the digital revolution. piece thatery cool you can read in the latest "bloomberg businessweek. the outlookg up, for gold of the brexit comes to pass. can gold hit the levels it saw in 2011 and mark -- in 2007? ♪

?c+sv david: from bloomberg plus world headquarters in new york, this is bloomberg markets. vonnie: let's start with headlines on the bloomberg first

word news with taylor riggs. taylor: we're sticking with the story and that u.k. were a british member of parliament has died after being attacked. the labour party's jo cox was meeting with constituents in yorkshire when she was shot twice. a suspect has been arrested. witnesses told the bbc he had a handmaiden god. -- handmade gun. hundreds of people marched silently through paris suburb to by thoseplease killed said -- said to be in allegiance with islamic state. toebook is being asked provide the senate homeland security committee with the information online activity of omar mateen.n, mark zuckerberg was sent a letter saying during the attack,

the team made several facebook posts and searches. the f ei is trying to establish how much his wife may have known about the attack. hillary clinton has won the endorsement of the afl-cio. federation includes 12 and a half members. global news 24 hours a day powered by our 2400 journalists in more than 150 news euros around the world. david: commodity markets are closing in new york. at's look at oil, falling for sixth day in new york trading. that's longest since the -- longest set of declines since february as concerns mount the world economy is losing strength. vonnie: the president of venezuela's stayed owned oil

company talk to ryan chilcote about where prices need to be to avoid a default. >> our cost of production, the average is no more than $12 a barrel. venezuela, it good enough for the economy of the company. that was in st. petersburg, russia today. corn futures falling. the u.s. corn belt could see a flash drought as temperatures across the region may be higher than normal. moving to metals, gold paring earlier gains, trading right around -- 1290. angst over possibility that u.k. might vote to leave the european union. reachader said gold could

1350 announced. if you look into the terminal, here's a chart showing gold holdings in exchange traded fund at the highest since 2013. for more perspective on where , ours could go from here guest is from -- joins us from chicago. what is it with the round-trip in gold today question mark suddenly we are back low the very important $1300 an ounce level. it has been a wild ride during today's market session. i they get reflects the current level of volatility that had been building in the market for the last or so. gdp withreflect it in , at least as of

about 15 minutes ago. about i want to ask you the brexit risk. what kind of difference is it going to make with price of gold? guest: it is a significant risk. u.k. prediction markers which accurate than polls suggest, there's a greater than 50% probability that britain will in fact leave the eu. oft leaves a variety concerns in terms of the overall stability as a whole. that concern is ultimately what is creating this safety bid in gold. if that is the way it happens, you can expect an exponential move higher in the gold market. vonnie: where is this money coming from? sovereigns around the world and corporate debt, you name it, the yen, currencies and there is a

safety bid there. is it a safety bid going into gold or is it money eating parsed until something else happens? if you look at the overall landscape and the market as an overall blueprint, you see fear everywhere. if you look at the vix on the s&p 500, you see yield on long end of the yield curve fall and volatility in the gold market increase. you see price reduction in the gold market increase and you see the fear of the marketplace overall. as a whole inet terms of market direction has not followed that. anticipations more in anticipation of the market overall. the reactionary move is where the strength comes from and makes that move potentially a lot more dynamic. exit from the u.k.

or the u.k. exit from the eu, we see the overall stock market begin to fall apart, this could get ugly fast. thed: i was thinking about panoply of risk we face here. you seeingrisks are as big driving forces behind the price of gold? guest: i think what the market is trying to figure out as we've seen a consistent decline in activities globally. european performance has been extremely poor. we have negative bond yields in germany. we've seen declining numbers in the u.s.. any metric you look at, the news is negative. it's creating a a lot of of anxiety building across all major markets. david: you mentioned of volatility. that explains where gold might be headed.

look at volatility, how does that indicate where gold might be headed? the gdc indexes a good gauge. i spoke about this when i came on your show back in april. $15 level,ng that we've seen pretty dramatic movements in the past in gold. at $15 and last trading day of may and proceeded to rally over 50% since that point. that keyt $20 as support level suggesting the safety play is in. as long as we hold that $20 in terms ofpside market direction we feel is there and that 1450 level is a target that is definitely reachable. oil today --p in

was that specifically due to the fact that we don't have as much as we thought we did? guest: can you repeat that? vonnie: why did oil retrace some of its gains guest:. the overall market environment has been poor. we've seen it in energy markets, grain markets, so that risk appetite is a bit on the defensive. i think energy complex is participating in a broader sentiment today. similarre we seeing sentiment in gold or sterling? silver has the lag effect. ind led the rally beginning the year 2016. silver had an aggressive catch up rally. gold is leading the market

higher or at least leading metals markets higher. we feel it is poised to play catch up against. , weeel when it does that have a very aggressive move higher from there. vonnie: thank you. david: coming up in the next 20 minutes of bloomberg markets, ukraine custody prime minister joins us and we look at the most challenging issues facing that country. employees --e [indiscernible] david: the nasdaq down .3%. more bloomberg markets, coming up. ♪

david: this is bloomberg markets. time now for the bloomberg business flash -- a look at the biggest tories in the news right now. two banks in abu dhabi are looking to form the biggest lender in the middle east. are falling at banks in the region because of lower government spending and a decline in asset quality. amazon is taking aim at alibaba and other places that connect chinese sellers with u.s. buyers. amazon will/sydney --/shipping fees for small items. 67%ges will fall by up to and most items will cost $10 or less. david: it is the biggest passenger jet in the world and now you can rent a used airbus a3 84 a discount. a leasing company trying to's

her demand for superjumbo's. they will return them after the completion of 10 year leases. that is your business flash update. stocks and treasury yields making wild swing today is speculation sways back and forth over the idea of written leaving the year -- britain leaving of the european union. david: the deputy prime minister of ukraine joins us today. how would the brexit effect ukraine if they vote to leave the european union? you very much for the question. i think the challenges will be not only from the ukraine, but in the u k and and european union, trying to see how they can manage the new situation and define the new europe, so to say. we are keeping our fingers crossed that the brexit

referendum while taking place will not result in any deviating position from continuing and going together inside the european union. morewise, that will even challenge the unity of the european union that we so much need right now for top vonnie: madam deputy prime mister, is light years away, not just for you cain -- not just for ukraine . no country is anywhere close to the goals they would need to meet. when do you anticipate it becoming a reality? guest: right now, we are concentrating on doing our homework and implementing the and is is still on a

provisional basis, so we are trying to approximate the legal unionork of the european and put into our legislation and work on the implementation of a lot of different reforms and making a substantial effort on the government of the parliament and civil society. are not acting -- not asking when exactly that will happen. we are asking how this could bring our country to a more democratic and prosperous light that the waiting countries in the european union would take a more responsible stance to come in with the finalization of the ratification of the association with the ukraine and would come into force and that would be the first step to continue and build on this. david: easy lobbyists asking

some european governments to ease some of those sanctions brought about because of what happened with russia. theyou concerned that could rolled back before the agreements are ratified? guest: i'm counting on the responsibility of leadership that they have had of all the european capitals that will be gathering together to take that decision with the rolling over of sanctions because we have not seen russia delivering on any of its obligations within the minsk accords and there is no ground to even considering weakening of sanctions because so far, russia anynot then showing progress in enforcing its obligation. how are you faring in a world where we see low growth battlesicult currency

between nations? guest: it is a difficult situation. i want to remind everybody with the occupation of part of the territory by the russian federation any illegal annexation of crimea, we actually lost 20% of our economy. all of the other processes when we have to allocate 5% of our gdp to defense and security measures to keep an army on the the armedine between forces of the russian federation and our arm forces in the east of our country, we are losing a lot of possibilities that we built into the economy and one of the major important tasks for this country is to ensure macroeconomic stabilization. toalready see positive side

trying to achieve this task. we are anticipating we will have at least 1.5 or 2% growth and tos is fully corresponding the imf and so far, this is being the case and i think we will be making sure we are lowest behind the economic problems, the biggest economic problems that we have and we will be seeing slowly developing growth. the white house is announcing is going to commit $220 million to ukraine. he was a sense of how that is going to be spent. guest: that is money that will be helping us to start a big the customs office.

we are hoping that will ensure of thensparency procedures that are being dealt with and we will be adding to that point where we are more efficient in our fight against corruption. david: thank you very much for joining us. vonnie: let's head to the markets desk for today's sectors by your reports. i'm looking at oil was about a 3.5% negative and that's having a knock on effect with what is happening in the energy, exploration and reduction sphere. gas a look at the oil and excipient equity, down by about 2.5%. that's because of falling oil.

let's look at what's happening with the biggest percent the kleiner's on that -- biggest , on the orderers of nearly 10%. its lowest in seven weeks. laredo petroleum not having so much exposure, on the you order of about 7%. happening andd despite the data coming out of north dakota seeing its biggest ever monthly drop in terms of about, down 6%, a drop of 100,000 barrels from march there. let's look at what is happening with oil itself. wti crude down about 3% on the day but over the past x days, falling ever since june 8, it down nearly 10%.

that's the most since early february. despite some losers, there are some gainers with cheaper oil and it is namely the refiners. philip 66 is up three days in a row, marginally up higher on the day. finally, i want to take you on a look year to date at the sop. year to date, still looking pretty ok. view,g at the longer-term the price of oil up by about 27%. vonnie: thank you. investors will be watching to see if oracle shifts to the cloud is making process -- making progress for top --

making progress. ♪

david: this is bloomberg markets. vonnie: oracle reporting earnings after the bell and it will give us a look at how the software maker is faring in its transition to the cloud. joins usry johnson from san francisco. oracle late to the party, to the cloud party. how are they when you compare them to companies like salesforce? cory: i think what is interesting is that it's probably 8% of revenues on a trailing basis, but it's growing at a 30% clip, fueled by acquisitions they have done. i think we will hear a lot about how those acquisitions are faring and how important they are to oracle's overall growth. see what curious to

goes on in terms of earnings after four successive quarters declined.d oracle may reverse that and start to see some of the benefits of the move to the cloud. vonnie: what is oracle doing in the cloud? how is it differentiating itself from its competitors? under thehave to get hood to see the differences, but they are competing in places head-to-head with salesforce and i think we will hear a lot of that in the call where they are suggesting integrated solutions. we are also paying attention to what's going on in the hardware division, sort of a cloud in the box. that's been a struggling component of their earnings for many years, looking for some excess or at least to see the bleeding stopped. this company has made a

lot of money off of licensing software for top is that going to be part of their future? cory: oracle is massively profitable. as the world is turning to the cloud, they are embracing this greatly and talking about these changes. we will get this tonight when we've find out how fast that change is happening. to please wall street and stay relevant, they need to see that rapid growth continue. vonnie: you can see more on oracle earnings on "bloomberg west." up, vince reinhard thinks a july hike is still possible. ♪

is 3 p.m. in new york, 8 p.m. in london and 3:00 a.m. in hong kong. david: welcome to bloomberg markets.

from bloomberg world headquarters in new york, welcome to bloomberg markets. one hour to go in the trading -- the s&p. stocks 500 was down but is working to stay positive. jewel has a's crown big problem. some f-150 super cabs falling short on emissions and fuel economy standards. can ford had off the regulators? david: disney opens in a shanghai to large crowds despite tragedy. we are one hour from the close of trading. let's head to see desk where ramy: -- where ramy inocencio has more for us. ramy: