david: from bloomberg world headquarters in new york, i am david gura. nnie: and i am vonnie quinn. david: factors driving the markets. a major shakeup is underway in a campaign. makerump wait too long to a move? speaking of donald trump, his opposition to trade deals has been a big part of his campaign. what about brexit? i will talk to representatives froman. reporter: we are up at least 1% or higher, and that is because s are subsiding just

a little bit. there is one camp that is favored over brexit, and the dow jones industrial is up, the s&p is also up, and the nasdaq the biggest leader, up by about 1.4%. let's go ahead and break this down into the 10 industry parts. you can see it is basically a broad rally, pretty much aside from utilities, down by about 2/10 of 1%, that consumer discretionary is up the biggest, behind bylosely industrials and energy as well as information technology. let's take a look at some of the biggest percent gainers, as well. discretionary, and priceline, for example, is up about 3.5%, and this is more than double the consumer discretionary group. it is also seeing a high, travel stocks also seeing a gain, expedia up by more than 4%.

this is after they raised the stock to an overweight with a price target around $130, and they are expecting earnings growth. trivago.as well as and wells fargo is basically saying if you think the u.k. will stay in the eu, then cruise lines are the best industry to play, and looking at the financials, financials are up. number seven of financials, pretty much across the board, also seeing above higher. highestsachs seeing its point in about the past five days, and very quickly, because we are talking about brexit, let's take a look at this cross, and we are seeing just for up, itshe intraday is highest level since june 7, and this is because of the fears that brexit will happen.

mentioned fears. what about gold? reporter: it is a risk-on environment. we are seeing treasuries rise by 1.6%. highs, it was about 1.68%, but this is the biggest about three weeks or so. let's also take a look at what is happening with oil as well as gold. nymex crude is jumping by about two and two thirds percent. this is down a quarter of a percent. david: thank you very much. and mark crumpton has more from our newsroom. reportedly, hillary clinton could use -- lose selects if she elizabeth worn as a running mate, according to donors on wall street. there is bad blood after attacks on the financial services industries.

donald trump's economic proposals would boost deficits and weaken the economy, according to moody's. the report says the economy would become more isolated with less tread come immigration, and foreign direct investment. report also notes that deficits would growth as mr. trump proposes, quote, massive personal corporate tax cuts, with significant cuts in spending on the military. than sixlots of longer months during deportation proceedings should have a chance to be released. the obama admits her she is seeking to overturn a federal appeals court ruling that says any immigrant detained more than bondonths is entitled to a hearing. in italy, a setback to prime minister renzi. there was a man of elected as mayor of rome who will be the city's first female mayor. another five-star candidate was

selected mayor of turin. and the cavaliers back in cleveland. the airport, fans celebrated a championship for the first time in 52 years, scoring 27 points to lead the cavs to a 93-89 win over the defending champion golden state warriors and in game seven of the nba finals. it was the highest rated sports that network or sports channel espn in 10 years. about 1/5 of the millions of households with televisions were watching. the parade is wednesday. we will have more on this story coming up in just a moment. news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. back to you., vonnie: fears of brexit

andcting things this week, a guest is with us now. about $80 billion in assets. creating global instability. tony, some say it has already created global instability, and it was that a month ago it could be a sign of underlying instability. would you agree? >> i think we have to take a step back and look about what the financial markets are talking about. clearly, you can see today there is a lot of affect on the currency markets, and that is probably where we expect to see the most profound effects, but it,oes have another feel to where if, in fact, there was a brexit, it would take at least two years for england to go through negotiation with the eu to put that back into place with

trade agreements, so i think from an equity market perspective, it probably does not have a's profound and effect as you might expect, but on the other hand, you are going to see a big impact on the dollar/pound ross, and that affects u.s. and has an impact on what the fed can do here in the u.s.. analogy, how much have you been doing things with your portfolio ahead of this? tony: first of all, it is pretty uncertain, so we are not going to make a big trade. we are looking for positions that we hope will play out over the next 12 plus months, so we are looking for longer-term positions. we already come into this position neutral on equities. we are looking actually for more opportunity in credit markets that we are in the equity markets. yes, fixed income markets are showing signs of progress? where?

tony: take a look and the labor market. we think the labor markets are indicating, despite this report, the labor report we had for the month of may, we think the labor markets are actually telling us that there is no slack left in the labor market, and one of the reasons to think that is we look at the job openings report, the so-called jobs opening report, and we have a record number of job openings reports, but we are not creating the actual jobs. so there is not a lot of slack in the labor market, so we translate that to the bond market, and you look at inflation, this is only around 145 for the 10-year, and we think that inflation is going to run more like 2.5% by the end of the year. there is a lot of impetus to make money in the bond market right now. david: looking ahead, i assume, to testimony this week, that is what you are focused on, as well? tony: yes.

think about what the fed talks about you the fed talks about labor markets, and a focus on inflation, right? and those two w together are supposed to give you an economic view, right? so the late report is important, because without job creation, you are not going to print a lot more, but the reality is you do not have to have new jobs necessarily. you can pay those people more and produce more, so now we are at a stage again without slack in the labor market, and what yellen is thinking, what has been a big mystery of this recovery, that can create the economic activity for the basis of hiring, and we think we are going to see greater productivity, and we are seeing in wages. we are seeing wage inflation really start to take off. vonnie: so you're saying by the end of the year, we will see 2.5% cpi, because we will have a better labor market overall. we saw some words from janet yellen, inflation expectations.

i think that is right, and i think the fed, if they have learned anything over the last year -- the fed is a very transparent organization now, in order to maintain its credibility. know three does not months or even three months in advance, because the data is independent, the looking at where the rate markets are going to be by the end of the year, ok, you cannot think about information today. you have to think about the information that will be available later in the year, and the fed is the same way. we really do not know about 30 or 60 or 90 days from now, and that is the frustration. the market always wants to read something into the dots, but they just do not know either. since you are a person on capitol hill this week, if you were a congressman, if you are in a position to ask her a question, what would you like to know from janet yellen, in light

of what we have learned over the last few weeks? tony: i think it goes to productivity, right? i want to --erstand why it is companies are going to start to invest, right, it given the environment, so one of the things that the fed approach has done in their approach to transparency is it has created a tremendous amount of uncertainty, and that has held back capital expenditures, so the pieces for us, which she has been articulating and what i just articulate it, with no slack in labor markets, companies are going to invest to get more out of their existing employees. and by the way, m&t bank, and we see this anecdotally from our clients, ok? that is what is happening. how is this with you translate ino greater productivity this environment? so we really need to see companies invest those dollars, in until the environment appears to be more certain to companies come we are not 100% sure that

those dollars are going to flow. ok, tony roth, thanks for joining. before the senate tomorrow, 10:00 a.m. eastern, we will have this live here on bloomberg. david: still ahead here on " bloomberg markets," michael with time running out in the president's term. ♪

♪ this is "bloomberg markets." i am david gura. vonnie: and i am vonnie quinn. we talkedhael froman,

about all things tpp as well as china and what a >> it vote would mean for local trade negotiations. obviously, it is up to the british people to decide, but we think a strong and unified eu is in everyone's interests. in terms of a unified view, how are they focused and in gauging? provide strong voice when it comes to trade negotiations when it comes to a larger community, and the concept of >> it would be a law of negotiation, both with the u.k. relationship with the west -- rest of the eu and others. something that, but it's your job if it goes that way, if the u.k. leaves the eu? the u.k. is the second largest economy in

europe. it is generally very open and pro trade as an economy, and it could complicate our negotiations, but we will have to wait and see what happens. david: one person is making that case on capitol hill. congress is in session for a few days more, and then they leave in august and come back in september. how are you making that case to lawmakers right now? mr. froman: well, i am out there all of the time, talking to congress one on one end with, walking through the tpp agreement, what is in there, and what our constituents and stakeholders care about, and we get a nice reception. since november. they can analyze it. they are hearing from about whats, both the upside is associated with tpp, but also with the dangers are of not getting to it in a timely way. it has big economic impacts, billions of dollars for the u.s.

economy, and, in fact, if we do not get it done this year, and that is about $700 per american family. it also has a big impact on u.s. leadership and our influence in the region. david: how has it changed since you went up to capitol hill? fundamentally. they are there to represent their constituents, and they care about how this affects their core constituency of theirs, and as they dig in, it is quite consistent. what it does for farmers or ranchers or for the manufacturing sector, for services, for the technology community, and the members of congress are having quite a positive response. david: it has become such a campaign,issue this china not part of the tpp, very much looming large as you make the case for it on capitol hill. mr. froman: that is right.

there are a couple of things going on. the u.s. leadership in the region. those at the table helps set the rules of the road, or china is, and he, just like labor and environment, to make sure that state owned enterprises have to compete on a level playing field with berms, and to make sure that the internet stays open and free, and that is not approach for itshat china takes side. hoping to launch its way to the top rather than allowing a race to the bottom to occur, where we cannot win. and this is a strategic peace. and you have for the prime minister of singapore, for example, say that if the u.s. canceled their cars and services and agriculture, he raised the question, can they depend on us for security and military issues? we have heard others say that. if we do not move forward with

this, we are creating a void that beijing is all too eager to fill. so getting it done this year is important. trump, saying a 25% tariff on goods that are china made. with the tbp, the consequences of something like that, and donald trump not shy talking about a potential for a trade war somewhat cavalierly. there has been a lot of work done out there that demonstrates that a trade war is in nobody's interest, and if you look at some of the analysis of and the wast there, an analysis just done, showing it would have an impact of 7 million lost jobs. it would put us in recession. there are others that say it would cost the american family up to $6,000 per household as things became more expensive,

and as input in manufacturing become more expensive, we become so idependent globally, think no one is really interested in having a trade war. i think instead, we need to keep on doing what we are doing to open markets for our export and for good paying jobs here. or china, do you see it as a market economy now, and if it is not part of the tpp, what does it look like us to mark what does our trade relationship look like going forward? we have a lot of issues with china that we have to deal with, whether it is technology or capacity, steel, aluminum, other sectors, and we are in talks with them. we had a strategic and economic talk just a few weeks ago with them. we want to get china to deal with those challenges, and if necessary, to bring wto cases or other cases to make sure they are held to account to their international trade obligations.

david: my interview there with the u.s. trade representative kirk froman. -- representative michael froman. vonnie: moore, next. ♪

♪ david: this is "bloomberg markets." i am david gura. vonnie: and i am vonnie quinn. the victorious cleveland cavaliers with sports coverage and advertisers, and the details on how significant this is, and we bring in bloomberg' is jerry smith, who covers media. so the biggest event in a decade. is that because right now you cannot buy packages? you just have the whole nba finals series? jerry: yes, the audience is huge for live sports, and the way it

is right now, more and more people are watching shows on demand, and the fact that a network like abc, it has all of the nba finals, and you get this huge live audience that is good for ratings, and that also means it is good for advertising dollars, as well. david: with the series, there is a 3-1 comeback, as well. yes, such fabulous athletes, that only helps the ratings. relative to the super bowl ads, are we talking multiples? gerry: yes, i think the super bowl ads are the most expensive, but i think the final numbers for last night's game are close andbout 30 million people, that is almost a fifth of television households, so that is a huge audience. advertisers are going to pay a

premium to get in front of that audience. david: i know nbc is gearing up. nbc are really putting a lot of chips in. compaq -- comcast paid a lot. they are trying to update each other and spend more and more i'm getting the exclusive rights passoadcast, and then they that on to the providers of cable, and then they are actually charging consumers more, and consumers are saying my bill is up, so there is sort of a vicious circle going on. what about the x1's. they getting people who would not necessarily be cable subscribers? they have got the

technology now where yes, cable is expensive, but you can search for a lot of the programming that you have, so for the comcast, can search on xfinity, by athlete, by country, and you can actually search it all through, and this is a technology that they are very proud of, and they are hoping it is going to be as good as the amazon at go. echo.zon gery smi of bloomberg news, thank you. thank you.y, ♪

♪ from bloomberg world headquarters in new york, this is "bloomberg market." i am david gura.

vonnie: and i am vonnie quinn. reporter: this is rising pretty much for the most part reptile whole entire day, and let's take a look at some of the biggest movers, and of course, we have to talk about energy. near crude is up about 3%, session highs, the highest in about 10 days, and natural gas is looking at nearly 5% there. this is actually because of hotter weather that is happening, more so in the western part of the united this, specifically california, as well as record forecast for the southwest u.s., and that means ac means more.re let us look at what is happening here today to with these commodities. you can see there is an even bigger, pronounced rise, and it is up 33%, natural gas up also

by nearly 18%, as well. and some industrial metals, copper in particular, copper today rising by nearly 2%, off the session highs we saw in the morning the closing very, very strongly in the green. this is the biggest jump in the past five days, and is a part of a broad rally we are seeing because of concerns over brexit easing off. we see a little bit of green and red. futures are falling in this risk on environment, and this is $1292 in change. definitelyer, but with all of the other commodities, higher. also, i want to take a look at one other index here. this is the u.s. commodity futures trading commission chart of how they are increasing in terms of gold. ve risen, and this

is happening, of course, as are.t fears and after we get through brexit, depending on what happening there, it will be interesting to see of this rises or falls. inocencio, thank you. all directorss, remain on the board at facebook, and they have approved a structure that mark zuckerberg is wanting, not wanting to cede any power, and you can watch it now at live go. and thursday's vote, mohamed joining bloomberg to discuss the risks of brexit. >> it is a big issue. if you think of it, we already have very fluid economic conditions. issues,very interesting

nominal interest rates, and now come you start putting a big on the structure, particularly in europe, so all of this is just the indication of, david, when you run an economy at low growth for a long time, strange things dark to and a strange risks start to occur, and brexit is yet another one. so is the antiestablishment issue that has given rise to this. david: in this sense, you refer to it coming to a turn in the road. you go left or right or back. the eu.de to remain in is that a decision to do what? el-erian: it is a move to the right. any still have not solved issue. until the west figures this out, and it can -- this is a

political issue. up, then westep will have uncertainty, and this uncertainty is going to stay with us for white a while. a europeanf you were leader, and it could be angela merkel or david cameron, turning to the right for growth going? -erian: reform for growth. secondly, match better the will to spend. third, deal with some overhang, and four, complete the european structure. on onenot run a eurozone and a half legs of a stool. one leg is the monetary union. another lake is monetary union. you have to complete that integration. >> that is one of the things you do. bring in your experience and put

that together for us and explain how you would construct a portfolio around what is quite clearly a huge event risk. mr. el-erian: this is a hard one. they have start with what portfolio construction results in a mistake and we cannot afford to make? because we are living in such an uncertain time that you have to ask that question. if we end up making a mistake, and no one wants to make a mistake, what a mistake can we afford to make? what mistake can we afford not why question right because correlations are not behaving like we expected them to. valuations are starting at an artificial level, and then you have all of this institutional uncertainty on top. in response to thursday, if you were sitting around the table, what kind of conversation would you be having? with the portfolio managers

beside you and others, what would you say? errel-erian: i would towards having quite a big cash cushion, which most people have, by the way. this is why you are seeing this in the market, because people are defensively positioned for this, and i would look at how much cash we have and how much to movedo we have quickly. it will be historic. david: tom at el-erian. -- mohamed el-erian. here is what was said to bloomberg . is tried to be as honest and transparent as possible, and because of that, it is being accused of being not just inconsistent but a slave to the market. david: janet yellen will be testifying before the senate at 10:00 a.m. eastern time. -- carryingurrying

the full testimony here on bloomberg. vonnie: now, mark crumpton. are learning more about the orlando nightclub shooter omar mateen. they have released partial transcripts of his calls with 911 and crisis negotiators. reporter: he identified himself as an islamic soldier, the -- pledged allegiance to a terrorist organization which is bent on killing americans. mark: still, the u.s. says he , andadicalized in the u.s. he told a crisis negotiator that the u.s. needed to stop bombing iraq and syria. republicans on capitol hill are expected to block the two democratic proposals to expand background checks and banned gun sales to suspected terrorists.

others are offering their own, which is also expected to be blocked. will make a he decision thursday in the trial of a baltimore cop charged with murder in the death of freddie gray. the officer declined to testify on his own defense. where freddiever gray suffered a spinal injury. and the weather service is expecting another day of triple digit temperatures in phoenix, arizona, and across much of the western united states. upenix is expected to heat to 120 degrees fahrenheit. the highest regional temperature is expected in southern california. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. david, back to you. donald trump up,

said he fired his campaign manager after weeks of falling poll numbers, and looking for a turnaround in the trump campaign. india, a big step forward, relaxing rules for retail stores, but how soon until we see an apple store in mumbai? david: looking at shares, up by about 8/10 of 1%. more "bloomberg markets", coming up. ♪

♪ david: this is "bloomberg markets." i am david gura. vonnie: and i am vonnie quinn. david: invalid patents, a decision that helps companies

deal with so-called patent trolls. a new appeals lord at the u.s. patent and trademark office. boeing may be able to of an item,ife close to a deal with russia's largest airfreight company. 10 firm orders, and sales have dwindled. there are other fuel-efficient planes. some say there is a storm brewing in u.s. commercial real estate, the prices may fall of 25%, and the reason includes property sales by publicly traded landlords. and that is your business flash update. major changes in the donald trump campaign, his

campaign manager out. speaking on cnn and the last he cited lagging polls for trial. let's bring in our reporter for bloomberg politics. kevin, why now? has hadell, vonnie, he a series of missteps, and sources i have been talking to in the campaign say donald trump once to have a reboot, and this is expanding in the coming days. i briefly, there are reports that corey lewandowski butted heads with others, but just minutes after, corey lewandowski was fired from the campaign, and paul had a conference call or his senior campaign officials and staffers, and i am told that was a really positive step forward. that is inampaign desperate need for some new energy. it will be interesting to see if they can capitalize on that in the coming days.

devon: i am told that the family played a role in this. kevin: it was reported last night that family members as well as senior staff had a campaign meeting with donald trump himself, and from the timeline i am gathering and can report now, it was after that meeting where he was fired from the campaign, but, you know, look. anyone who is familiar with the trump organization says donald trump values talent and loyalty, and i think there are no people more loyal to him than his adult children have been, and they have roles that are expanding. there are several key decisions. we have seen that play out, what with all due respect, let's be blunt. this is the biggest decision he has had to make about his campaign, and he is relying on his kids. this is strange that this is happening now. he stood by him for so long, and the charges of battery were

dropped. he also saw some value in corey lewandowski. kevin: following the horrific orlando shooting, a lot of folks expected donald trump up us to be as numbers to go up in the what happenedto in san bernardino and paris, but i think the trump campaign is starting to realize they have to adopt a different strategy for a general election, different from a strategy they used for a primary election. has been made about the head buddy, and donald is starting to fund raise now, and he is starting to reach out to her owners, and he has struggled to aid the necessary cash that he needs in order to take on that well oiled hillary clinton machine. what will happen if paul is named campaign manager, if he takes over the helm, and i think he is expected to question mark kevin: he has taken over the

campaign. i've spoken with two campaign officials who have confirmed that to me, and i think you can expect the campaign is going to expand. i think you will see he spots, like the medications director and the press secretary, more staffing, fundraising for the campaign. not beenese roles have filled during the tenure of lewandowski, and i think there is frustration not only in the media but also from donors and also from rnc officials who want to win against hillary clinton, but they just were not sure that corey lewandowski could get the job done. now he is going to scotland. why? kevin: he will be appearing at one of his golf court properties. he will be going to a ribbon cutting. he will have two press conferences, and this is his first international trip abroad, and he will sit down with

someone who endorsed him, dr. be carson, and they will looking to rally evangelical leaders across the country, so again, donald trump looking to turn the page, but at a very, very important time, and whether or not it is too lake, we will have to wait and see. this: ok, kevin, covering for us at bloomberg news. ramy: i am looking at the s&p transport etf, and right now, we are 1.7% above the start of the day, but i have to point out we hadile we are here, been as high as 2.8%, and part of this could very well be due to rising gas prices that we have been talking about all day today, so let me get back to that in just a second. first, i want to talk about a couple of car companies, both of hertz,ising, avis and

and it was a consumer survey that showed that more consumers are thinking about buying a car as opposed to last time -- this time last year. it's a very purchasing a new or used car versus 31% back in february, so they are seeing a bump there at both hertz and avis, and let me show you what .s happening these are off their session highs. with swift, transport, it is up and has been up as high as 3.8%, and it is really interesting. if we can overlay the rise in national gas prices, we with the -- an inverse relationship read this has been rising, and these swift transport, as i said, it is down, so it is interesting to see how this is reacting. of course, companies who do use

natural gas will have that impact in terms of cost. and spirit airlines is seeing a bit of a lift. credit suisse raising bears to an outperform, expecting earnings growth in 2017 despite those rising gas prices, and very quickly, let's take a year to date look. is up see the year today 4.3%, for the transportation sector is still doing pretty well. guys? david: ok, thank you. ramy inocencio. vonnie: recently meeting with the indian prime minister, the world's most second populace country, and why india is critical for apple, next. ♪

♪ david: this is "bloomberg markets." i am david gura. vonnie: and i am vonnie quinn. david: cory johnson joins us. let's start with what india announced today. what rules changed? hot and fast, requiring 30% of their components to be manufactured in india. the company is going to get some leeway. they will see three years as much as five years of the way to achieve that goal for the component manufacturing. therefore, if apple sets forth a plan to manufacture in india, they can start selling their now with the goal, of course, getting to that 30% being manufactured in india. what that means is they can grow a lot faster if they choose to

do so. plus, they have to reapply and start the process over again. vonnie: why is it a big deal for apple to do that? sure, there is a one-time expenditure. apple is getting a deal for its 30% of manufacturing components. the manufacturer of apple products is one of the great accomplishments of the company over the course of 15 or 20 years even. they have not had think inventory problems. companynever seen a like this, managing the supply chain so well, and this has allowed them to go to the places to manufacture at the cheapest level and to change to single source of some components and multiple source of other components, and in those cases, they had to go to where the components are. some of them are around china and other areas, so it is a sizable effort to get their suppliers for those components. india is, this is why

pushing so hard to get this, but you can see why. the success that they have had in china has really changed the company. it has changed the products they offer, and what you saw in china is that china and the last fiscal year was 27% of sales, and in large part because they were offering second party services, as they are in india right now, but the success of their stores are the brand of the merchandise and managing the merchandise in ways where they cannot control the end of the channel. we had mark zuckerberg with a failed attempt to get internet service bolstered in india a few months ago, but what is the infrastructure like for things like the iphone in india right now? cory: i think that is a great comparison, because what mark about was was talking certain things in the internet, select channels, if you will, and the projection of that is

because a lot of indian people do not want the second-class internet. they want first class and first class product. they think they might have to offer cheaper phones because it was a lot less, but what we have seen is that apple has had tremendous success, some of the best iphones they can make, the most expensive -- the iphone 6 plus specifically tailored not just for people for freaks like ,e but for the chinese market and so one might expect the same thing. theucts in india, and for products made for them there, i am sure they will consume them with glee. applet just lost the patent with china, people copying what apple does. anyway to say that indian entrepreneurs would do the same

thing? cory: in beijing, not in china. just for the city of aging, the patent law, and that is not clear what that will be going forward, -- just for the city of beijing. cory johnson, editor at large for bloomberg news, and you can see more for all things tech coming up. theie: and coming up in next hour, we are following markets with a managing director at morgan stanley, talking about japan shares, and the european central mario draghi will speak at a hearing of european parliament in brussels. we will be carrying the remarks on bloomberg television. ♪

>> it's 3:00 a.m. in hong kong. vonnie: this is bloomberg markets.

good afternoon. it's a final hour trading in u.s. stocks are having the biggest rally in a month. investors in a buying mood as the campaign for the u.k. to stay in the european union gaining a minimum before this week's referendum. vonnie: local rivals may get bolder in taking on the world's largest technology company. david: facebook holding its annual shareholders meeting. what does it mean for the future of the company? where one hour from the close of trading here in the u.s. left, i have to say that markets are almost looking sideways right now. the numbers you see on the screen have pretty much stayed