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. of ourou can see two

three major indices are making a little bit of a comeback. the s&p 500 is just above the flatline. the dow up by a third of a percent. brexit is weighing heavy on what everyone is looking at in terms of the trade. we did see a new poll out of the u.k. leaning toward brexit, but the keys in the u.k. are seeing something different with odds slipping to 38 after surpassing 44, so ware seeing a little bit of a lift in the market. we can see that a little more announced as we go to the dow intraday. out, weose numbers came can see we started flirting with a flatline and we are up about .3%, trying to lock in those gains with about one hour left in trade. at its lowest point, we were down by about 168 points.

a big range in today's movement. let's look at what is happening plus 10 imf and the s&p sectors here. in the last hour, six of the 10 sectors in the red and we've done a little push ahead from that with three sectors now in the red, energy still the biggest laggard. we can see the green inching up,ly, health care utilities up the most. that's because of interest rates and the lack of any interest rate rise. let's look at some of the s&p's top performers in terms of points. frontier communications up and symantec up by three point 5% in part because of an up date -- neutral,rom a buy to a

analysts saying it's on the cusp of a growing profit tanks to its acquisition of bluecoat. merck pharmaceutical rallying after its lung cancer drug was found to meet some of its goals. david: the word of the day, the week, the month is risk. greece is not the word, risk is the word. let's take a look at what is happening with the vix. today,p on the year and we did see the vix jump higher to the 21 mark, coming off of that just a little bit. for the past four months or so, we did see adding in the vix down to the 13 mark, but pushing back higher to highs not seen since early february. i want to talk about the u.s. 10 year yield, dropping and is now up a little bit higher.

drop rightsis point there. check on theget a headlines with taylor riggs in the newsroom. has died u.k. lawmaker after meeting with constituents. ofcox, a labour member harlem it was shot twice. she was 41 years old and was elected last year from west yorkshire. police have arrested a suspect and campaigning has been suspended today in a referendum on whether the u.k. should leave the european union. the cia director updated lawmakers on capitol hill today on islamic state. he appeared before the senate intelligence committee. >> the groups foreign branches and networks can preserve its capacity for terrorism regardless of events in iraq or syria. in fact, as pressure mounts on isil, we judge it will intensify its global terror campaign to maintain its dominance of the global terrorism agenda.

says militants are trying to deploy operatives for further attacks on the west and are relying more on guerrilla style tactics to compensate for territorial losses. president obama is planning to meet with saudi arabia pasta be crown prince tomorrow. the conflicts in yemen and syria are among the topics on the agenda. the visit comes after senate passed legislation to see the saudi government despite saudi objections. up any clinton has picked endorsement from oprah winfrey. the tv mogul told entertainment tonight that it is about time the u.s. elected a female president. winfrey called the election a seminal moment for women. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. back to you. david: let's turn now to the u.s. economy. the fed kept the status quo,

deciding to leave rates unchanged, as expected. just one rate hike this year. what -- for more on what it says about the economy, let's ring in the chief a continent -- steve -- chief economist meant that chief economist. i know you were looking forward to a rate increase, but may be the fed should have cost of things are that bad. vincent: we got a dovish message from the fed. six out of 17 think there will only be one rate hike in 2016. the second dovish message was they don't think in the end they will raise the fund rates all that much. the terminal federal fund rate, 3%.terminal and came down the third dovish message was from janet yellen who says she has to be reassured the economy

has momentum. chances are they will tighten once this year and if the employment report bounces back, it is not impossible that they but weghten in july, have to have a win in the brexit referendum. this is a committee that was unanimous for a long while. now that we have seen this divide start to emerge, what does that portend as you see it for the committee going forward? guest: janet yellen has a great advantage right now and that is that markets are even more dovish than the most dovish members of the committee. she can let them talk a little bit and they can work their differences out in public and it doesn't have any real consequence because if markets are more dovish than you think is necessary, that's an easy

problem. what we are going to see is what does it say in the minutes? how many fomc participants would have been willing to tighten in june but for the british referendum and how many of them are eager to go? i think the short answer is tightening is going to have to be pulled out of the leadership of the fomc. more dovishbably than the median members. vonnie: i have to wonder, one analysts, i saw him question the fed credibility, saying the fed is addressed and it has nothing to do with the deal mandate. primarily, things coming from abroad. credibility into question? i think there are two

issues here in the primary one is inflation expectations. stillerm expectations are in the neighborhood of their 2% goal. they should be worried that survey measures have come down in the last couple of readings and that is something they should be paying attention to. in thelong as they are neighborhood, i think the fed has credibility. the second issue is tactically how much do you want to listen to the fed? the simple problem is, if you are only anticipating tightening once or twice a year, it is hard .o keep each fomc meeting live the probability of action at that meeting could get so low that the argument that markets are not prepared for itself is overwhelming. they haveso much that lost their credibility, it is just hard to communicate that they are going to go just that slow and still keep fomc

meetings interesting. david: we had janet yellen thing international uncertainties loomed large. looking ahead, there is a large domestic uncertainty, that being the u.s. election. enough,t were a cause with that not because ford laying down the line as well? guest: if you go back to the transcripts, you will not find much mention of elections. they try to studiously avoid anything that even sniffs of politics. if you are only going to tighten once and july was your opportunity and you had to choose between september and december, they would probably choose december, but if they felt the need to tighten, they would tighten and it doesn't matter whether there's an election a couple of weeks later. to one the 10 year down point 51%. what is that telegraphing?

is it a lack of inflation or the lack of federal reserve hawkishness? fact: i would also add the that the world is a risky place. if you want to question the fomc's communication, i think you would have to say yesterday was not just a dovish meeting, it was a downbeat meeting about the economy and called into question risks about economic momentum and said monetary policymakers were sufficiently risked about that limiting of the u.k. referendum to not do what they might otherwise want to do. so the headlines were a little on the dark side. comesct is, when the day for the fed to raise rates, the headlines will say fed confident enough about the economy to raise rates. defers, the headlines are all global economy

can't withstand fed tightening. reinhart, head of the monetary affairs portion at the fed for a long time and famed economist. thank you for joining us. david: breaking news crossing the terminal -- the latest wrinkle in the ongoing story about viacom. its stock climbing as much as or .5% with reuters reporting the ceo ousted from the board. we are seeing the stock climbing here as much as 4.5%. vonnie: coming up in the next 20 minutes, ford's cash cow pickup could be running into some trouble with regulators and it could be costly afford. that story is next. ♪

vonnie: this is a bloomberg markets. david: let's take a quick check of the major indexes. all of them in the green. the s&p 500 up about .1%. the dow up .4%. time for the latest bloomberg business flash. has acquired ack stake in a wind farm unit of general election -- general electric. terms of the deal were not disclosed. the wind farm was completed in december 14. buyer an investment grade blackrock did not identify. volkswagen has been given an additional seven days

to work out its emissions scandal. it was done at the request of fbi director robert mueller. it would settle a multibillion-dollar civil over alleged violations over the clean air act. that is your bloomberg business flash up date. david: to the auto market and a potential problem for ford's best selling truck. the company spent aliens of dollars to overhaul the truck to meet environmental requirements, but some still fall short. the aluminum body models don't meet mandates, coming short on commission and fuel economy mandates. vonnie: let's bring in david wells who covers deals for bloomberg news. how big a deal and how fast could they get this fixed? it's not a problem for ford this year. 40% of the trucks don't meet

fuel economy standards right now is not a big deal because the total fleet average meet fuel economy rules. this is their best foot forward because they put so much aluminum and other technology advances. as fuel economy rules get they could have a real challenge and that's where they make the most money. david: we have seen all of these companies scrambling to do that. is there a risk where there's a point you can't make a large cup truck? guest: unless they can get the services push forward, one of the costs will be the truck themselves. it had the fastest rise and that's because of lightweight

aluminum and hybrid systems that cost a lot. to get something that is efficient but has a big job to do, it needs a certain amount of power to haul and carry big payloads. some realo put technology in there. will it make it necessary to fuel up the f-150 more regularity -- more regularly? will be more expensive to drivers? guest: they will have to pass the costs on somehow. at some point, the consumer could push back and stop buying the trucks and ford would have to eat some of that and profitability does get tougher as they have to put more

technology into all kinds of vehicles. we have seen gas prices so low that i imagine that has caused companies to put making cars more efficient on the back burner. consumers may not the inclined to elect to do that. guest: if you go back not even 10 years, everyone was trying to meet tougher standards but fuel got up to higher than four dollars a gallon. consumers word demanding efficiency. all of that stuff is down and it it's the car companies in a pickle because they have to make efficient vehicles and the lightweight materials to meet the rules, consumers have gone back to buying suvs and luxury cars. vonnie: thank you. great story. david: just a couple of headlines crossing on the bloomberg terminal about confirming the ceo inger moved

from viacom. seeing five directors total removed from the board. sherry redstone remains in her current position. to a buys been raised from neutral perhaps in light of this news. to affirm thed validity of this action. five directors removed from the board of viacom. we will continue to follow that this afternoon. thestock up -- vonnie: stock up almost six percent. with the brexit vote a week away, it could create an investing opportunity. that is next. ♪

david: this is bloomberg markets. time for options insight with

ramy: -- with ramy inocencio. ramy: joining me is the managing partner from options pit joining me from the cboe. brexit polls -- odds checkers are saying the other way. you say people are going to be buying in fear and the vix has been up and down. .uest: the vix has been way up i think it is well-known that it has had an outsized move relative to the moves on the s&p. we have not seen much of a selloff at all on the s&p 500 but the vix has gone from fort -- ato a high near 23 massive move and it points toward some sort of embedded strong move in the market. i think we could see a poll favoring the leaving.

there's a lot of money if you look at online oddsmakers and the way hedge funds are set up, a lot of people betting on stay. we see a couple of polls leaning toward leaving and that could cause a real problem and could be the precipice to allow the market to flush and a real selloff. if they do decide tuesday, if britain's days in the eu, we and up with a flip -- with a fiscal cliff tight moment where the vix goes high and then nothing happens. the market has a face ripping rally out of it. that's where i see the u.s. market lining up right now. they: the latest poll says saw the 38 threshold down from 34. it seems like there's a diversions from the polls and sentiment on the trading floors. thing.it is an odd

polls keep pointing toward leaving in the oddsmakers move it word staying. a lot of oddsmakers moved the odds toward staying saying that this would cause some sentiment that could potentially keep britain in the eu. i think that's a little silly arethe sentiment here is we lining up for some sort of strong move. movee lining up for a 2.5% . if they decide to leave, we could see a one day 3% move or possibly a 5% downside, if that all goes through with the vix not doing much at all. ramy: let's get to your trade. either up or down, you are ewu which ew you --

tracks the ftse basically. why are you looking at it and then get to your trade. brexit willnk the get a knee-jerk reaction one way or another. the implied volatility is through the roof. i don't think there is a 2008 type event. the stocks are way down on the year, way down year over year. i don't think there is 20% downside. i like doing the put that allows me to get short and then get long. put and do that for easy money. ramy: we have to leave it there. ♪ get ready for the rio olympic games

by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience

nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. vonnie: from bloomberg world had corners in midtown manhattan, you are what ching bloomberg markets. let's begin with a check of the headlines with first word news

this afternoon. britishu.k. police say -- a british labor lawmaker has died after she was shot in bristol. jo cox was talking to constituents in her district in the north of england. she was shot twice. eyewitnesses described the shooter is having a homemade gun. theaigning was suspended in european union referendum after news of the attack. british prime minister david cameron says he canceled a planned pro-european union speech in gibraltar. is in orlando to offer consolation to those morning the deadliest mass shooting in u.s. history. he is meeting with families of facingilled and emergency workers. the tragedy could reshape the presidential race. president obama has been pushing for gay rights and the acceptance of muslim americans. cockpit voice

recorder has been found and pulled from the sea. it crashed in route on may 19 with 66 people on board. and the earth sizzled to his hottest month -- 2016 is averaging 55.5 degrees, reading the previous record set last year. to blame, man-made climate change and the el niño weather system. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. scarlet: we have breaking news this hour -- sumner redstone's national amusements has removed the ceo from the viacom board. betty liu has been tracking this story.

let's get the latest annulment -- five directors ousted from the board? guest: literally just a few minutes ago, we got an announcement at national amusements, the holding company theugh which stone controls -- controls viacom and cbs saying they were removing five directors, including the ceo. they also include george abrams and william schwartz. replacements.e is unclear who would be in the leadership position. , as youthose changes might know, it has been twist and turns and legal fights from california to massachusetts.

alix: -- betty: do you know what has prompted this? inst: supposedly this has brewing for a little while, soon as sumner redstone made clear he move bysupporting a viacom to sell a stake in her mount pictures, that became more explicitly obvious yesterday. support theid not ceo. the directors have been appealing statements to get access to sumner. he is elderly and there have been court battles about whether he is in a state to be making decisions about the company. what do we know about sumner redstone's daughter? he seems to have made amends.

guest: one of the accusations is that his daughter is behind these moves and it has become clear that they have patched up a falling out they had some years ago. what is going to be interesting is that in a matter of a couple both an, they have invited to the sun valley and thece in idaho titans of tech and entertainment gather, so it's going to be interesting to see if they turn up and face off in public. if either turn up or both, that would be quite an offer word moment. mest: it will be amazing for because i will be there trying

to capture it. this is a very secretive conference where dealmaking often happens and big names get together in a supposedly relaxed environment, so it would be very interesting. do we know what these new board members are going to bring? what is going to happen from here? guest: it is really not clear. a court has to approve that this is ok. board have fought so we willse moves, have to see. it is really not clear yet. scarlet: thank you for joining us on this breaking news. betty will stay with me as we make the transition to fixed income. vote,he upcoming brexit

investors are jumping into government debt and yields are hitting fresh lows. it seems like at yesterday's fed meeting and the news conference that followed, janet yellen .uashed more inflation is this the end? martin: i don't think she's quashed inflation. i think she remarked on the low levels of inflation expectations and the preliminary release of the michigan survey that showed inflation expectations have dipped down. the important thing to notice is what it implies for inflation going forward. down.d did bring it the longer-term guard was lower

and is substantially above current levels. from a dovish perspective, the fed can continue to bring down the dots even further. larry summers released an article a couple of days ago talking but the need to elevate inflation expectations and overshoot the inflation targets in the intermediate term to re-anchor those expectations and i think that is the process the fed will adopt. where is the inflation going to come from? martin: it's coming predominantly from services. you seen a contribution from shelter and you will have a lot of negative views on inflation talk about the fact the only inflation is coming from shelter and that is why he must guide us. if you look at services tax shelter, it is running 3% year over year. percent,t 60 odd

running at nearly 4% is a meaningful contributor and will continue to be so going forward so long as the implement rate continues to go forward. we also see core cpi trending higher, yet when we go back to the market expectations of where inflation will be, that has been tempted down. what is behind the disconnect? are pricing in a run rate of inflation of 1% pce or one point 4% cpi on a year-over-year basis for the next 15 or 20 years. incrediblying in an benign trajectory, implying the fed will miss its inflation targets consistently for the foreseeable future. i think that's being driven by a few things.

we have had some volatility in inflation, primarily from the commodities space. so the incentive to purchase protection has gone down. to 2010 and go back 2011, you notice the issuance of inflation linked securities in the u.s. increased significantly. we were issuing about 39 billion in 2010 and that jumped to almost 100 and exceeded 100 and 2014. a tremendous amount of supply absorbed by domestic investors, but predominantly global investors where we had tremendous growth and a lot of these end-users invested in u.s. real interest rates. 1.20 5s program is million in outstanding amounts. the buyer base is not nearly as large as it was. globally, they are on the decline. particularly in china and you

can look at the treasury data and see the role these end-users play in the asset class. pricing a benign pass, not particularly appropriate. i think the fed is hostage to global financial conditions and we have the brexit vote this week -- next week, should say. betty: you see a benign environment, yet you say markets are underestimating inflation? martin: tremendously. i don't see a benign pass for investing and i'm not a super inflation bowl but our forecast for year end cpi is in the context of 2.3% and i'm biased to push that higher, given the declines in the dollar we have seen. i think when you couple that with the fed's reaction function where they have to be

deliberately behind the curve, the price for inflation insurance should be higher than current levels. scarlet: who wants to buy inflation linked bonds? everyoneppealing to piling into asset substantially below inflation. 10 year treasuries were trading around 155. corsi p i was at 2.2%. of the assets are accepting a real return of 70 basis points. in inflation space, you are buying positive yields at cannot basis points and from an insurance perspective, by normally feel that these levels, you are not protected from any meaningful pickup or even a cpi trajectory aligned with the fed policy inflation target. thank you so much.

and my thanks to that he live. still ahead, give me celebrating the grand opening of its first theme park in china. will it give way to a fairytale watchingrk and we are what is going on in equities as we count you down to the close. doubt is that session highs. this would mark the first gain in six days. ♪

scarlet: this is bloomberg markets. let's look at how stocks are performing as we head into the closed -- best levels of the session so far. if turnaround from earlier declines, the s&p gaining almost

eight points. this would mark the first gain in six days. today is the opening day forward disney positive brand new theme park china. it's the largest foreign investment ever for the company, so when will disney get a return on this investment? guest: it's an investment in a very long time horizon roger. part of the overall global expansion the company has been going through, but it is going to take several years to pay back. certainly, it will be well. >> what sort of bottom line effect could a part like this --e for them eschew mark have for them? guest: very little. compared to the fact that move disney stocks like espn, not much. david: that was exactly my weston.

rate forthe growth espn and other basic cable properties is flattening out them. will the theme parks be enough to make up for that loss of growth? guest: it helps. i would argue that disney is the fastest-growing company among its peers. when you look at the film studio parks, international they're still growth in the core media networks segment for disney. the company should still do just fine, it's just not growing as fast as a lot of thought it would grow a teen or 24 months 24 months ago. as we look at markets, a round .f central bank decisions for more market reaction, i want to bring in joe weisenthal.

howy day, we talk about bond yields have been going down, down to down. daysies for the last five heading down as well. joe: can your member the last time we didn't talk about the new record low scarlet: it had to be sometime last year. joe: every day, it's like here is the new record low. today, we have record lows out of japan. the swiss 30 year yield went negative. it's extraordinary. it is the story of the moment. we continue to see the japanese yen, leading to questions about what the japanese bank does and whether the minister of finance has to come and do something to weaken the currency.

joe: at one point, the yen strengthened to around 103. several weeks ago, we were talking about 105 was the line where people would get nervous, so we are clearly through that. this has to be making them uncomfortable, but what can they do? scarlet: it is interesting that yields had south and the yen continues to strengthen, but we see levity in the markets. the dow at session highs for the day. a feeling that perhaps there might be a shift in the brexit campaign. at poundke to look franc as a nice proxy. the frank is the local safe haven. it tracks really well with s&p futures going back to last friday. if you look at equities, there's a good chance they will be doing

the same thing as the pound frank. oft seems to be the story what is driving risk for now. people buy bonds no matter what. but it's like they woke up and said we are so close to exit, we have to do something it's hard to imagine any other story will jump on the picture until that is clear. scarlet: and we will be discussing all of us at 4:00. the close of trading just minutes away. give you another check of where we stand -- the dow up by 113 points. if you look at the industry groups, nine out of 10 groups are higher. the exception is energy, down just rarely. just barely. ♪

scarlet: this is bloomberg markets. markets close in about 10 minutes, so let's check in with ramy inocencio for a look at the momentum here as we build up to the close. momentum definitely going higher, but it is a day of double-digit all than triple digit gains. this is where we stand right now -- the dow jones up 101 points, up about 5%. the nasdaq positive and we are pretty much year at session highs, but this is happening as odd for a exit fall according to one survey at odds checker, falling after surpassing 44 today. i want to show you nine of the tennis the sectors in the green. that had been six or seven in

the red. energy is the only laggard, down because of falling oil, but in terms of everything else, telecommunications up the most because of that related to interest rates. let's take a look at what is happening with wti crude -- at session lows, down by more than 4%, also down six days in a row. i also want to look at viacom because of the breaking news we had. of 7%,up on the order off its session highs. but this is its biggest jump in about two months. investors are a little happier here because sumner redstone has decided he wants to remove five board members, including the ceo

who has often been described as a renegade. fallingine sector across the board. 4%.ican airlines down by bank of america merrill lynch cut it earning estimates for the in higher airline industry. scarlet: thank you so much. marketlarge, the breathing a little easier today. close, looknto the at how the dow industrials are doing, making it the come back from earlier losses. steely.g in joe you have been talking to investors and traders and notice the tread of the dow coincides with another index looking at the u.k. leaving the european union. joe: that has been driving a lot of the action we have seen and the wake of the fed not giving much guidance.

being tabled or postpone -- they have been did the campaign and that is something that has given u.s. equity investors a chance to read and maybe calm some of the nerves about the equity market moving higher. scarlet: i was just looking at the odd checker index and you can lay it over the vix and they look identical. the vix had been searching before taking a turn. joe: on friday and monday, they had the biggest today increase. theck autumn selloff and as equity markets are rebounding, the equity markets are down three straight days. not too much but down below the 20 level that was the key level viewed by investors for a while and that is counter to some of the positioning we have seen in the vix.

with 4% of outstanding equities tied to the vix and is the first time that has happened. people are getting long vix and comingx products are back into vogue. you could argue people are being reactionary and maybe a few days spike we saw ending monday, but it is a seesaw rattled with six investors. scarlet: thank you very much. joe steel covers stocks for us. the next currently at 1938. coming up, "what'd you miss?" another glimpse at the major averages, the dow jones up 103 points. ♪

♪ we are moments away from the closing bell. i am scarlet fu. i am joe weisenthal. "what'd you miss?" alix steel is on assignment.

a wild ride for u.s. today. 283 points joe: the question is "what'd you miss?" oracle undergoes a major shift. joe: europe's largest banks slump on brexit concerns, three charts you can't miss. holdings of u.s. equities are now showing steep declines. we need to start with our market minutes. u.s. equities closing off their best levels of the session. nasdaq, doubt, and finishing positive. nine out of major 10 industry groups rising.