>> from bloomberg's world .eadquarters, i am david gura funny bank and i'm vonnie quinn. : and i am vonnie quinn. the biggest u.s. airlines got burned on oil prices. they missed their chance to lock in the cheapest energy costs in years. david: regaining control of viacom. who is running the company? vonnie: we are one hour to the close of trading. >> we're talking about the s&p of 1%.t losing down 2/10 the worst performer has seen the theaq 8/10 down -- seen

nasdaq down 8/10 of 1%. the nasdaq holding near a four-week low. talking about tech, talking about health care. if you look at the function on the bloomberg, you can see that health care just leaving -- just leading that decline while tech is being led down by apple and some of its patent issues in china. we are seeing some weakness throughout the year in the sector. now that we have a potential brags it next week that could affect the industry, not to mention a sentence hearing on drug pricing next week. we are seeing some uncertainty growing in the sector. we are now seeing the dollar weakening for a third consecutive day and that is helping oil, paring some of its declines and oil reversing six days of losses to regain 3.9%.

down for tenths of 1%. we have some speculation that the fed will only hike once more this year. >> what are the big movers today? >> this is a stock at the highest level ever. it is gaining more than 3% today. inare hearing they joined the rush for deals in the chemical industry and now going division for four consecutive sessions and the highest level ever. take a look at biomarin pharmaceutical. we have some margin speculation. that they reporting werebeen looking -- they pursuing -- but they were growing frustrated with that pursue.

gun stocks are up today. smith & wesson now predicting they will have strong demand despite that mass shooting in florida, and not to mention to just upgraded the stocks. david: let's check in on the bloomberg first word news. absent -- british opposition leader parliament will be recalled from recess on monday. corbyn says he asked prime minister david cameron for the unusual move and the prime minister agreed. the two men appeared side-by-side at the site of the killing in northern england and laid flowers. lost one oft has its most brilliant campaigners, someone who epitomized that part them -- at the demise that politics are about serving

others. i think it is a moment to stand back and think about some of the things that are important about our country. he called thursday's killing an attack on democracy. iraq special forces have entered the center of falluja, taking over a government complex. iraqi forces are now clearing nearly government complex. former president george w. bush is heading the campaign trail for some gop senators. the new york times reports muster bush is trying to help senators whose reelection has been , located by donald trump. he also plans to do the same for some mothers. mr. bush announced last month he will not support mr. trump. -- a weekendma nasa no park in

mexico and yosemite national park in california. will highlight the challenges threatening the national parks at the system nears its 100th birthday. powered by 2400 journalists and more than 150 news bureaus around the world. you.to david: let's turn back to the market. the s&p 500 has retreated, the vix hass popped -- the popped. index and volatility is up about half. let's bring in -- i'm looking at the imap here. i see that energy has been the best performer all day. as you look at your portfolio, how big of a role is oil playing? >> that is a good question. you see equity risk premium across s&p rise over the past

few weeks, especially as global fears have emerged. the best-performing sector as we see in rally and crude oil. it is something we are still constructive on. look at the fundamental picture, we see the supplies ateaway, but if you look 2015 versus 2016, we went from about one million barrels per supply.et out all the you're actually going to a stock draw of 160 barrels per day. most of that is going to happen in the second half of 2016. the opposite of that, in terms of the consumer, are you positive on those? part of that reason

is as you have seen this -- let's look back to the last session. we saw that the household sector was a source of weakness. now we are seeing the corporate sector is the source of weakness. we have seen a slowdown in hiring. firing ofso seen some temporary workers. all of that is going to slowly resonated to consumer spending, but they are in the step base. onare a little less bullish the discretionary side. the press statements, conference that followed, what was the biggest take away from that? what did that do to change how you are looking at things? stewart: the summary of economic projections was more dovish than we expected. possible to change that medium from 2-1.

we now have six participants expecting one hike versus just one in the margin of -- term, i think what they are saying is we could tend surely -- we could potentially be at the end of this hiking cycle. vonnie: what does that mean for second-quarter earnings? stewart: it's actually a great question because i think the market is not focused on earnings. 11 and astart on july consensus thinks earnings are going to decline 5% year over year. i think that number is relatively reasonable. what really concerns me is q3 and q4. did clear around second quarter you see full-year expectations and i think we are going to see a lot of softening as far as

guidance and expectations, not by the company but by analyst -- by -- and license analysts themselves. we see the curve continuing -- that is going to be for banks especially. david: all of this risk, what are your clients saying to you about all of that on the horizon and what it is making them think about? stewart: to go back to your point about the vix, we have seen massive swings in equity market volatility and implied volatility three at if you look around where it is today, that is striking because the s&p has only realized a volatility of seven, which means 40 basis points of movements per day. if you look at next week's

options between thursday and friday, the market is implying about a 2% move over those two days. onhink people are looking the hedging side, looking to hedge these types of risks. and seeing how you can profit by selling it. vonnie: you're not thinking in terms of trading, what is this brexit issue something that goes away for the long-term trader? stewart: one thing we have noticed consistently over the geopolitical events, even like the fed or boj meeting, volatility rises as people whatd to hedge a user -- to hedge long or short. short. to hedge long or

if you look out to july, given that the fed is almost off the table, you can see it has really collapsed next week. if we have a situation where all of a sudden you look forward to july and there's no risk on the table. what are you going to be looking for when it comes out? week the cmc puts out a report on futures. as of last tuesday, as of june net shortition for vixvicks futures -- and futures is as short as is to has ever been -- as it has ever been. we will actually see that number moderate this week.

david: lower oil prices were supposed to be a godsend to the airline industry but some air carriers missed out.

david: this is bloomberg markets. vonnie: a quick check on the markets. we have the s&p 500 down a quarter of 1%. down for the dow jones industrial average. 70,006 .5 for the figure there .- 17,694's the figure there david: a look at the biggest business stories in the news, oil explorers put the drilling a third to work for

straight week. strong demand growth for oil, global supply destruction and lower output could mean the crude market could come in to balance this year. vonnie: almost $3 billion raised for the sale of new shares. the lender says it is raising capital of about $70 billion. post a losss it may this year and suspend its dividends. david: mark zuckerberg and his wife have taken their first theirstep in giving away -- giving away 90% of their facebook fortune. vonnie: the pixar sequel finding dori has taken and 9.2 million dollars in thursday's preview. finding dory could potentially

past toy story three for pixar's biggest opening. i will believe it when i see it. that is your bloomberg business flash. carriers missed their chance to lock in cheap gas. two on the u.s. gulf coast were trading -- of 80% on generate 20th. most jet fuel customers didn't lock the sin. let's bring in senior airline analyst with bloomberg intelligence. why didn't the airlines do this? george: the competitive landscape has changed a bit. in to the big three, when they bought american u.k. management there, then everyone else had to wear that if fuel prices were going down and america i was unhedged, american margins were going to be better. you have to make sure you don't

side on thef off wrong strategy. ceo was speaking with bloomberg a couple of weeks ago and here is what he had to say about hedging. >> the recent we haven't hedged for the last year and a half's system with volatility. we lost about $4 billion cumulatively. you could take the view that while we lost that kind of money, it was an opportunity cost because oil prices were down and we should be happy, and we are. if we were to get back into the market, we saw a point where there were longer-term stability . vonnie: it sounds like he has a view on the hydrocarbon economy. he doesn't think it is going to result in oil prices have being higher anytime soon.

george: i think there something like that as well. on the economic side, i think the -- i think before the u.s. we were pumping out oil in the middle of the country and we really lowered the price. if i think there are probably people in management and airlines who are thinking that oil prices are really lower for longer. is it easier to be unhedged in a world where we are lower for longer and we see bouncing around, but we have $50 crude to roll back down. they probably don't want to play that $3350 crude game. back in 2008, we watch when hundred $40 per barrel. i think it is a bit of a change.

david: they have given up for hedging -- given up on hedging for a time. does the landscape look different than it has been in the past? george: yes, fuel prices have dropped and airlines that haven't been hedging can actually be more competitive by lowering fares and taking market share. have now in the u.s. businesses we have the u.s. market is relatively good. is adding too much capacity but not as out of balance as the international market. these want to grow to net -- these want to grow domestic capacity and they are watching their competitors, but their competitors can give lower fares . they can lose market share. can't do that, have to stay unhedged. it -- is there an

average cost for what it costs me to send it. george: they have come down significantly with fuel. we typically look at them as x fuel. we care most about what those --erlying costs are control about how much those underlying costs are under control. vonnie: george ferguson, senior airline analyst. david: one strategist tells us what he thinks some big investors are anticipating significant shakeups in the equity markets.

vonnie: this is bloomberg markets, i vonnie quinn. david: it is time for options insights. >> joining me for today's options insights is the manager at kkm financial. it is great to see you. we are heading for another week of losses, the second consecutive week of losses. down the sixth way out of seven. is this another panic? dan: it is not a panic yet. you saw the vick's spike up. we saw a range here. we were able to hold their yesterday. market hold above those levels, i expect volatility to hold in this level where we have multiple news items. shery: multiple event risks. could we see a shakeup in the market?

dan: absolutely. the market is on pins and needles. maybe now the probability of a brexit is reduced a little bit. next week we have fed chairman janet yellen speaking on tuesday. that is going to be options participate's -- options participants elevated. certainly the expectations are that they will come in and if they stay there is a concern that the volatility will sweat much higher. shery: what is your trade? sidewe have seen some out moves and one area is the bond market. looks like it has gotten ahead of itself. in the volatility,

race and the protective areas. .'m looking at that 137 level i think we are going to come off this level. is i'mly what that is selling the call, which is august 1 36 call, buying the 130 to put in august. all the time i'm collecting the premium while i wait for the markets to come off a little bit. shery: when do you see the fed moving again and what will that do to your trade? dan: i think the fed will ramp up a little bit of their chatter again. if we get through there unscathed the market holds together. right now the sentiment is swung back toward basically no move this year. if they can change that sentiment back we see rates bounce back to that range. thentially moving down to 127 level, having that downside put in place allow you to participate to the downside.

shery: sending it back to you guys. thanks. thank we will explain next. ♪

vonnie: you are watching scarlet: markets --

you are watching bloomberg markets. we head out to mark crumpton. mark: a major setback for the limpet dreams for russia's track and feel athlete. the association of athletics federations the set of to uphold a doping related ban. >> the statement we have made clear indication that over the long haul our responsibility is to protect clean athletes. mark: the russian sports ministry says it is extremely disappointed with the ruling, which could be challenged. president obama met with saudi deputy crown prince today. the conflicts in yemen and syria were among the topics on the agenda. the visit comes after the u.s. senate passed legislation that would allow families of 9/11 victims to sue the saudi government despite saudi objections. talkbeth warren gave a pep to heller clinton staffers at

secretary clinton's new york on campaign headquarters today. that is according to the washington post. a senator warden visited her washington home last week. haswall street journal reported the clinton campaign is actively looking at waldron come along with other potential candidates as a running mate. concerns about the long-term safety of the drinking water in flint michigan. theadministrator says distribution system is too big, letting waters stagnate in pipes and possibly for venting chlorine from fighting disease causing pathogens. she also says flynn's water plant is understaffed and lakhs experienced personnel. per dayews 24 hours powered by our 2400 journalists and more than 150 news bureaus around the world.

scarlet: abigail to little is live at the nasdaq. abigail: another bearish ending to the week. we have the nasdaq trading down 9/10 of 1%. from a technical perspective we also have the index back below its two hundred day moving average. the selling could continue or accelerate during the days and weeks ahead. nasdaq down ahe week. the first weekly drop since the end of april. and it's second weekly drop in a row. the weakness this week for the nasdaq is really coming from the technology space. alphabet, apple, and microsoft among others. applehared classes of combined, the stock is down 3.5% on the week. one source of weakness, year

for searchrowth marketing spending is likely to decline in the second quarter. we could see a second-quarter gross revenue similar to the first quarter. apple was another big drag, down about 3% on the week. we did have it cutting its price target. jpmorgan also cutting a price target. banning the company from selling the iphone 6 on a patent infringement. if this is the beginning of more bearish news. microsoft, and other big tech drag on the week. the nasdaq down 2.5%. the longest losing streak since beginning in january. mindsors try to get their around the recently announced acquisition of this linked in

for $26.2 billion. investors tried to figure out if that is the right price and what it means for the company going forward. scarlet: a drag is the best way of looking at it. when you look at how they fare the week, none of them are down 5%. abigail: in terms of big percentage losers, american airlines stands out. renewed concerns around the effects of terrorism and travel. the stock was down 30% on the year on the trend of falling fares and rising wages. the stock is taking a tough time in 2016. another stock, whole foods down 10% on the week, down as a letter was issued, ordering the company to clean up and

unsanitary plant in massachusetts. among the condition cited, the stereo. increasing competition in the organic food spaces. that is a look at the nasdaq. doolittlebigail reporting. what is the cofounder of microsoft think that the company's plans to scoop up linkedin? in an exclusive interview, bill gates voices his support. phil -- phil -- bill: i think it is a great transaction. built ane team there incredible audience. microsoftith what does, working with people in productivity, helping professionals communicate, i think there will be a lot of synergy there.

i'm glad to see it, that it really happened. been far investors haven't very supportive of the transaction. should they be? bill: i'm no expert on what the stock price should be day today. i think the value of the two companies combined is greater than the two by themselves. i love the idea that the market wants them to show that. company is expert in software and managing this audiences. and it is great they have an opportunity to surprise the world to say this professional feed, that is how i want to learn about my career, my company, my industry. if we can make that is valuable as the social world, that is

huge value creation and i will happen over a period of years. >> the execution and integration is always tricky. what is the key to not screwing it up? bill: a lot of what linkedin does will stay exactly the same. the idea how you get the user profiles. it is easy without changing a lot of the engineering. microsoft has had deals that has gone better than others. we got good preparation on this one and the name synergy is pretty clear. scarlet: does an exclusive interview with bill gates. we have been watching shares of

viacom all day, not just because of the management drama. a less than stellar forecast was given for the third quarter. there is a battle going on for control. lucas has been covering the story from bloomberg news. when it comes to the earnings forecast, this is a preliminary forecast, it fell short of analyst estimates. to what extents -- to what extent are they a to be doing to management losing focus? >> investors see -- manage -- to be preoccupied. those a stretch when the stock was up, even though they released these forecasts that's just the numbers were not going to be up to snuff. hewe is some dispute as to deserves the blame. viacom has decided to point some of the blame at the redstone family.

they said it impeded a deal with a subscription video demand service. are paid services like hulu and amazon. at the same time big knowledge the real root for this ,nderperformance is the movie "teenage me ninja turtles" sequel and growth of tv networks. scarlet: he is no longer chairman of the board, what does ?his mean for his tenure as ceo is it inevitable he loses his job? >> he is still chairman of the board. that he has been replaced, but it doesn't happen until a delaware court approves it. we are in this weird limbo state where he is chairman and ceo, but national amusement shareholder has moved to replace the board as a dead man walking unless he can prove that this move was invalid, which is what

all these different court cases are about. if they get their changes approved, which most legal , whats expect they will was really curious yesterday was board,m, sitting on the was not removed from the board. that is fueling speculation he could be an interim ceo unless they go after the company. >> is he a loyalist? have been working together for decades, which is why a lot of people assume they would go together. inbe he has decided to throw with jerry redstone. philippe and tom both left the company around 2002 form a firm together. joined atike they are the hip, except in this case national amusements only booted one of them off.

scarlet: i think a lot of people assume sherry redstone is behind these moves. what is the number one problem hat viacom faces? >> the cable networks. for all the drama, this is a company that got to be as big as it is and then as successful as it has been because it has one of the strong brands -- because it has the strong brands, nickelodeon, and so on. their performance has fallen. the leadership has stopped pretending all things are rosy. they brought in new leadership to try and reinvigorate the brand. teenagers are spending a lot more time on youtube, on social media, on other devices. to spendnvinces them more time with cable networks. scarlet: national amusements

control cbs as well. do we know if cbs has a little bit of unsettling drama as well? test: the assumption is cbs is stable. they have executed very effectively over the past several years. not been criticized publicly. there has been a lot of talk about cvs and fire being put back together again. privately't mean that conversations aren't happening. but for the moment they seem far more stable than viacom. bloomberg news in los angeles. closing the week in the red. the s&p 500 currently off by 1.25%. we will discuss all the factors next.

scarlet: it is time for the bloomberg business flash, a look at the biggest business stories in the news. u.s. profiteers have abandoned their case against -- after a two-year questec bring a civil suit against them. mozilla is the cofounder. piteel the financial crisis he denied any wrongdoing and said the national real estate collapsed was at the root of the prices. ford is knocking a week off the traditional two-week summer shutdown at three plants to in -- three plants to help increased demand. the cubbies north american plant

was closed for maintenance and -- the plant was closed for me to and then send scheduled for retooling. netflix had set aside $6 billion this year for buying and producing shows. that is your business flash update. next week at this time we will likely know if great britain will be on the path to lead the european union. until then investors will be on edge awaiting the outcome. brags it hasen the increased a man's for assets. joining me is joe weisenthal, also cohost of what you miss. this is the main game of the sentiment here. , there are all kinds of ways to look at it but the pound has been driving the show for the last week. if you look at any risk asset it

lines a pretty closely with the pound. the fed was not the main story this week. it is hard to imagine anything happening in the next four trading days after today that would change that. >> you can also look at pound yen. >> they are all roughly the same. what i like about it is there is this fact that if the pound, if they do vote to leave, you may get some weakness in the euro as well. whereas the frank is the local safe haven. i think it is a very nice expression. we will see some money flowing. >> i have that chart on my

terminal if you want to show it the interesting part is the swiss national bank also had its meeting next week and mentioned brags it as well. >> that is another interesting aspect of this week. it was not the most proud moment. scarlet: basically saying we can't do anything. >> they are in the middle of this long-term fight. in the meantime things are coming up. scarlet: our program today, we are going to be discussing three of those. i know you have a conversation about helicopter money. >> we have a good show today in terms of big picture idea. basic income.

and talking to a resolution group about this idea. trade volumes are falling off. , ithe u.k. does go to leave would mark a pretty dramatic moment of countries retrenching, pulling away from each other. beeno long the trend has more open trade, more open borders, more integration. it wouldo go to leave mark a big turning point. it would mark a fairly significant problem. scarlet: thank you so much, see you in a few minutes. the close of trading is a few minutes away. desk get a final look in the major averages. losing 7.5 point. its 200 dayelow

moving average, off by 1%.

scarlet: we have the u.s. stock market closing in just under 10 minutes. shery ahn has your check. shery: the second consecutive week of declines. s&p 500 losing 4/10 of 1% before the week. the nasdaq is the worst performer and near a four-week low. we have to take a look at the pound as we head into next week, because of a bad brexit vote, and the pound has been a gauge of sentiment on the referendum. the week has gained 7/10 of 1%. we have the campaign think suspended for seven days. also have an opinion poll on voter sentiment. that has been giving the pound a

boost to their. investors have been embracing. vix sort of this week. we saw more than 40% in two days to climbing few sessions. today is a quarterly event. , which means options contracts and futures expired. these are not that uncommon. it is now pairing weekly decline. that adds the weaker dollar giving a reason for investors to be given a week. scarlet: thank you so much. the latest in the markets. for the final few minutes of the trading day, we want to bring him michael regan for much needed perspective. i guess weleague --

can't talk about the markets without mentioning brags it. you had a chart looking at the brexit odds. michael: online gambling as the chart shows, tracking very closely, the volatility tracking the odds thehe brexit, obviously murder of joe caulk spring them odds down a little bit. such a strange week. started the week with his giant acquisition. back in our day that would get the animal spirits going again. waitingeveryone is just with bated breath on the brexit.

there were some other stocks that moved on the linkedin deal. maybe there is some speculation there. the business software companies like workday and human resources company, showing a pretty big game. not holding onto those gains too much. surprise was even this $26 billion deal cannot get the animal spirits going again. very fascinating. a good story, talking about the volume in exchange credit funds. etf's that attract volatility and accounting for more than 4% of all equity volume. first time that has ever happened, four straight days. all the attention is fixated on .he macro

the bigger question is here we are, we are back in this range of 2100 in the s&p 500. what a resolution be enough -- would a resolution be enough? is the the question, market ready to march on the higher levels? or is it going to be strange? scarlet: right now to answer would be there. michael regan. thank you so much. that doesn't for bloomberg markets. ♪

♪ i am scarlet fu.

joe: i am joe weisenthal. "what'd you miss?" alix steel is on assignment. scarlet: u.s. stocks closing lower. oil jumping. joe: the question is "what'd you miss?" scarlet: european stocks climbing with the pound. we have the charts you can't miss. , theglobalization of trapping hundreds of millions of people at lower income levels. notlet: helicopter money is the best way forward for world central banks. we begin with the market three-weeke vix rise. u.s. stocks closing lower.