vonnie: from bloomberg world headquarters in new york, good afternoon. is the final hour of trading in u.s. stocks are trading little changed as janet yellen signals her optimism that the american economy has softened. vonnie: more drones for hire are coming to u.s. skies. government clears the way for commercial use, but how safe are they? we will speak to the ceo of the zillow group about the major challenges facing the housing industry in the u.s. let's go to the markets desk. ramy: earlier this afternoon, i told you that range bound was a phrase, and it continues. with one hour left until the close, we saw a leg up in the past half-hour but we are now off of session highs.

this is a snapshot of where we stand now, the dow up by 49 points. the s&p 500 up by .3%. the nasdaq is the least of the gainers, up by .1%. let me show you what is happening in terms of volume. for most of the industry sectors, volume is lower against the 20-day moving average. anything below the flat line againstnegative volume the 20-day moving average. we can see materials is the biggest fall. energy, on the flip side, is the highest in terms of 20-day volume. the only other positive is industrials. let's also switch over to what

imapppening in the function. 10ing a look at the s&p's sectors, fairly broad rally. energy, telecom, information technology of the most. materials down the most, only .2%, but that is on falling commodity prices. consumer discretionary and health care down similarly. take a look at what is happening with energy. the biggest energy risers. this is in large part because of what is happening with natural gas, rising because of record heat happening in the u.s. west and southwest. also, look at what is happening

with airlines. airlines are getting a bump. united airlines corporation is why 3.6%. they unveiled a plan to save money and increase revenue. a change in its frequent-flier program as well. alaska, delta, and america also about 1% as well. david: how about some laggards? ramy: we were talking about biotech earlier. take a look at what is happening with currencies and commodities. nasdaq biotech down 1%. off of session lows. it is down 10 of the last 11 days. basically the biggest percent loser is impax. $500 billion about to buy 15 generic drugs from

tivo and allergan, who are heading for their own merger. vonnie: let's get a check on the first word news. mark: u.s. attorney general loretta lynch is in orlando, order today more than a week after 49 people were killed and dozens injured during a terror attack at a nightclub. she met with victims and first responders, and afterwards, spoke to reporters. >> we are also offering emergency counseling resources to first responders to help them deal with the trauma that they, too, have experienced. in their bravery, they shouldered the dangers that are visited upon all of us, and they carry that weight long after the smoke has cleared. we will continue to make any and all resources available to them as this investigation unfolds. the attorney general said the justice department will provide florida when $1 million in emergency funds to help with response costs. the republican governor rick

scott earlier complained washington had turned down his request for $5 million to help pay for the state response. allary clinton's search for running lane is apparently moving into the more intense phase, according to the ap, citing several democrats. those on the shortlist include massachusetts senator elizabeth warren. she is a favorite of progressives. virginia senator tim kaine is also on the list, as well as hud secretary who in castro. british airways have suspended all flights to the agent and resort of sharm el sheikh, this after they were advised to avoid traveling after the downing of a russian passenger jet. he says customers at hold bookings for the winter season can claim a full refund or can use the money to cover a new booking at an alternative destination. firefighters are doing with triple digit temperatures as they battle two wildfires in the foothills of los angeles. the blazes are growing fast and

are surging closer to each other. the fires have already forced several hundred people from their homes. more than 700 square miles have been scorched already. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. high mark crumpton. this is bloomberg. vonnie: let's get to our story of the day, janet yellen testified before the senate banking committee. among the topics, the potential impact of a brexit on the u.s. economy. it would usher in a period of uncertainty, and it is very hard to predict. but there could be a period of financial market volatility that would negatively affect financial conditions and the u.s. economic outlook that is, by no means, certain, but it is

something that we will be carefully monitoring. vonnie: let's get more insight on the testimony and the state of the u.s. economy are joining us from boston is jeffry kleintop. thank you for joining us. it seemed like the concern is receding a bit in markets. but that is probably as close as you will get to having janet yellen talk about concerns elsewhere bleeding into the can we interpret anything from that, that wants brexit is out of the way, she perhaps. elsewhere >> the fed has talked all your about global and financial allitions, and now this is focused on brexit. there will be others later in the year as we focus on china, as the growth trajectory evens out, doesn't rebound. there are a number of concerns.

have a spanish election coming up this weekend. there are a number of concerns that linger. focus mainly returns to the u.s. and the pace of job growth and wages in the u.s. once we move past brexit. then the focus will come back to domestic. david: what stood out to you about what janet yellen said? she gave a news conference last week or not a whole lot of time between that and her testimony today. anything different that you heard? thatat i hear is something my friend liz and saunders has been saying frequently, that the fed has been going from data dependent to data point dependent. they seem to put a lot of emphasis on every piece of new data that comes in rather than focusing on the trend. certainly, that is what i've been hearing lately. in her testimony, we may here so as well, that there has been a shift to a very short-term view by the fed that is may be

appropriate given where we are in the rate hike cycle. but it does seem to create more volatility in the markets as the price in wide swings. vonnie: but they have always been data dependent. data comes out day by day. is it fair to say that they have become more short-term in their view? toonly in that they seem refer to it that way. it was not that long since the last time we heard from this yellen, and yet, there seems to be a slightly different tone, or emphasis to the comments that would perhaps change not just by brexit but by the jobs related data point we got. i'm not saying it is worth dismissing, but it is certainly one data point in the context of many. it seemed to get a lot of focus from the fed. maybe we are all just focused on it too much, we are listening for these things, but it is more of a near-term focus for the fed. david: talk about her outlook.

larry summers has been talking about secular stagnation. there were indications today that janet can sympathize with that view perhaps more than she has in the past. do you think we are entering a period like that? >> no, i don't, and thanks for bringing it up. we have had several phrases to describe the situation we are in. i think it can be described pretty simply. if you look at the last few years, there have been anywhere from one to four of the g7 economies in recession. last year was canada. was in recession on its tax increase. 2013, you had france and italy. you go back further, and it has really been about five years as we had all of the g7 economies in expansion mode. interestingly this year, we hit that. in the first quarter, none of

the g7 economies were in recession. gdp were the strongest we had ever seen in some time in europe. i think that is a sign that we are emerging from a recession in the global economy, and in fact, could be on the cusp of a cyclical rebound. vonnie: if we are, where do you want to move your money? >> i think you can look at cyclicals. look back at sectors like financials and technology and find there is some value there, particularly financials. more fed ratefor hikes on the back of global economic growth, is certainly good news. they face a number of risks on friday related to the thursday vote. in the near term, a lot of volatility, but if we get through that and the remains win out, we could have some upside for the remainder of the year. vonnie: thank you. david: looking at some headlines , the clinton foundation said to be breached by russian hackers.

this comes on the heels of a t the democratic national committee was also hacked. the clinton foundation reportedly breached by russian hackers. vonnie: coming up next, the markets friendly skies. the government just cleared drones for commercial use. we will tell you what that means for air safety next. ♪

david: this is "bloomberg markets." vonnie: a quick check on the markets. you can see the major industries are higher but honestly so.

just a quarter of a percent. the nasdaq is up barely green, up by .01%. david: it is time for a look at the biggest business stories in the news. to really from the biggest equity production request in its history. the nation's fourth-largest telecom operators sought protection from creditors. latin america's largest economy prepares for what could be the deepest recession in a century. vonnie: puerto rico resume talks -- puerto rico develop bank on obligation bonds and uncommon will guarantee debt last week. that is up from an earlier offer of 70%. some investors are seeking an 89% recovery rate. david: hundreds of foreign

arbiters look into cap into u.s. base in businesses are looking into a new program. the silicon valley payment firm debuted at liz a few months ago. the u.s. business account and online payments account. stripe has welcomed 440 startups from 90 countries into atlas. vonnie: singapore sovereign wealth fund is in talks to build buildings in paris'business district. demand for offices in paris is downtown business district is rising as pension funds and insurers look for investments that are offering higher returns than bonds. that is your bloomberg business flash update. the market for commercial drones got a dramatic live today, the obama administration announcing rules that would open the skies for a greater range of drone use. their safety

reporter joins us from washington. allen, these rules are pretty significant hearing give us the rundown. symbolically.ant for the first time, you will be able to take a simple written knowledge test, be licensed to fly a drone, and you can do so for hire. previously, you have to go through a fairly burden some exemption process. as opening the door to these kinds of commercial flights. david: who is going to come through, who will look forward to using these drones commercially? saying, theart by sky is the limit on this. it is not unlike the introduction, i would say, of the personal computer. a lot of the uses are yet to be even dreamed up. for right now, there are a lot of basic things.

inspecting cell towers, inspecting smokestacks at factories. they are looking at inspecting bridges. vonnie: farming, natural disaster zones, endless amounts of usages for these. what struck me, they have to andh less than 55 pounds cannot go more than 100 miles for our. yet, these new operators only have to pass a written test. will there be complaints, objections? >> i am sure there will. last year, we had over 1000 reports of safety issues and the near misses. i would say, most of those are by the so-called hobbyists, not these people that are making money at it. thest got an e-mail from air line pilots association. they are a little concerned because they would like to see a

more formal licensing process. but the general consensus is actually codifies safety rules and will make the system safer because die you have a group of people that are very much trying to abide by these rules. david: this is something president obama talked about earlier in an interview. we are in the early days of a revolution that will change the way we gather information about the world. mesmerizedwe are all by the possibility of having goods delivered to our homes. to be clear, these rules do not cover that kind of use. >> exactly right. atake amazon and google their word that they are working furiously on this and want to make it happen sooner rather than later, but it is an enormously complex problem. they basically want to fly hundreds of these autonomous robots overpopulated areas.

we are not quite there yet. the faa today did say that they are working furiously themselves on trying to test this and figuring out how to make it work. so it is coming but not yet. vonnie: what is the going rate for one hour for a drone operator? >> i would say it runs the gamut. the license allows for 16-year-olds, so you could possibly get somebody for 15 bucks. i would say may several hundred to 1000 is the growing -- going rate for a professional company. david: still ahead, how to profit from the flight to safety. how to beat the herd mentality in investing. that is coming up next. ♪

vonnie: and this is "bloomberg markets." david: it is time for the options inside with ramy inocencio. joining me is kevin kelly,

chief investment officer at recon capital. always good to see you. today, i have been talking about how markets are range bound, with the janet yellen speaking on capitol hill, perhaps more so looking at brexit in the u.k. toyou think we are going push past this range bound session we are seeing once they get past brexit? season,de of earnings macro conditions really dictate the market. that is why we are in a wait-and-see mode with the british referendum happening. the market seems a little complacent given it is a 50/50 scenario. it could be a very drastic move either way, or another. that is a big concern. seeing thee summertime slowdown, yesterday was the official start of summer. x is generally unchanged, but you have been telling us, that is not that high historically. >> the historical norm is about 20.

it tends to overshoot to the upside and tends to under shoot on the downside a lot. it stayed stable here and is heightened in the summer months outside of earnings season. so this is relatively elevated compared to last year. that does reflect the uncertainty, especially because most of the bets that have been going on with these macro concerns is happening in the vix and options market. we have seen in a lot of products up to 5% of overall trading volume in the markets. that is significant. people are moving in droves to these markets. ramy: you can take advantage of volatility, which is what we're looking at in your trade. this is the etf that tracks treasury bonds with maturities greater than 20 years. tell me why you are looking at this. >> there tends to be a flight to safety that happens when there are these risk off markets. everyone plus two cash. this is one of the most widely that traders go to

because they know volume is there. what is nice about this, volatility is heightened in this. about 15. equity markets is 18. that is pretty good considering n instrument that owned the risk. you can go out until friday and all unique do is sell a 135.5 call against the tlt and you can produce half a percent return in a few days. flight to safety, you can generate up to 1.5%, so you get the capital appreciation from 134 to 135.5. ramy: do you think brexit will happen, where are you with the exit or remain cap? >> we looked at one of the contentions reelections they had in recent history, david cameron. you look at the poll that said he would not be reelected or a

coalition government. he won resoundingly. we think that there is a lot of hyperbole but we think the britons will remain and they will vote their pocketbook. they don't want to increase taxes and eight downturn in our economic activity. ramy: 48 hours until we see the results from that referendum. kevin kelly, always great to speak with you. david: still ahead, zillow group ceo spencer rascoff will join us to talk about why homebuyers have been shut out of the market. ♪

e

♪ >> let's check the headlines this afternoon.

mark crumpton is any newsroom. it is said to be among the organizations reached by suspected russian hackers. attacks on the foundation's computer network as well as those of the democratic party and mrs. clinton's presidential campaign were new concerns about her digital security. the breach was first identified by government investigators as recently as last week. a spokesman for the foundation said he was not aware of any breach. meanwhile, secretary clinton is going after donald trump on the economy. she said there is agreement across the political spectrum that mr. trump's economic plans would bring dire consequences. conservativesd say trump's would be disastrous. the chamber of commerce and labor union. mitt romney and elizabeth

warren. economists on the right and left and the center, all agree that trump would throw us back into recession. went beyondlinton economic policy, attacking his business record and his fitness to lead. mr. trump's presidential campaign has poured $6 million into his companies, that is based on a review of federal election -- election filings. that includes $520,000 the campaign paid to trump tower commercial. ,000 was spent that his club in florida and a more went to his restaurants. he also lent his campaign more than $46 million over the past year, most of which he has not recouped. the head of russia's olympic committee says the country will appeal to the court of arbitration for sport against the blanket ban on the countries

track and field athletes. they met in switzerland today to consider further measures to crack down on doping out of the summer games and rio de janeiro. putin is not think whether russia's entire team could boycott the games if its track and field team's band. mark sanchez and other professional athletes were victimized in a ponzi scheme. they say it was orchestrated by the same investment advisor. sanchez, along with baseball players were defrauded out of about $30 million according to a recently unsealed lawsuit filed in dallas federal court. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i mark crumpton, this is bloomberg.

we have u.s. stock market getting way too close in just under 30 minutes. lessor over to the nasdaq. >> the nasdaq trading moderately higher at this time. this, after fluctuating between small gains in losses all day, and real battle between the bulls and the bears. especially between biotech and technology. we have the nasdaq biotech index down sharply. a continuation of this year's volatility, lots of up and down within the ongoing bear market. as for that bear market in the biotechbelieves index is likely to go to back to this year's close but he does not think the range will break down. he does not think the biotech bear market will get worse but rather continue sideways. technology, this includes apple, microsoft and facebook.

facebook is high on the news that is the graham than half a million users. he said this is a tremendous benchmark for instagram. netflix hasee days, been down sharply. as investors take pause on the recent streaming services disruption that was resolved but still not a great thing to do -- to hear about. plus we're in the end of the second quarter. let the speculation about whether the company could miss or guy down in the upcoming quarterly report next month. economists are expecting numbers to continue to rise, especially if wage growth accelerates. estimates -- our reporter is any by. -- standing by.

>> let's talk housing. those numbers that are going to come out tomorrow, it feels like ortiz anecdotally that if you look at the different cities, the housing market, particularly in the lower end, is tight. does that indicate the housing market is healthy? >> over the last 12 months to have appreciated 5%. the reason for that is because of constraint inventory. especially at the lower end, entry-level homes are very tight on inventory. we're looking at a percent fewer homes for sale today compared with a year ago. in certain parts of the country, that inventory constraint is even more stark. >> it that is the case and why are we not seeing more new homes built? >> it takes time. where building around 400,000

homes a year. it bounced off the bottom and we are coming out the other end, but it takes time. we need more homes to be built, we need more new construction inventory, that will help alleviate the shortages. but it takes time for permits and shovels to get in the ground and new home sales to come out the other end. >> is that a 2017 story? >> it is. you are already seeing it happen , but we are on the upswing. >> from the macro side, let's draw down into your business. integration complete? >> absolutely. zillow group is now five brands. to the industry, when we sell advertising to the real estate industry, we are integrated under zillow group but to consumers they might use one of our different five websites.

andintegration is complete there are standalone brands, but the listing fees and other data, that is centralized as part of zillow group. >> is that the biggest positioning for the integration? tell me where you are using that advantage? >> it comes from our scale. we are a scale and media companies need scale. we have around 150 million unique users every month. that is between 60% and 70% of all people shopping for real estate on the internet. they are using one of our brands. the advantage of having local brands is being more places where people are shopping for homes. to our advertisers, that allows them to reach a massive audience. >> are you going to leverage that scale to go into the online rental market? are already the largest rental site on the web.

it is a smaller business for us out of the total but it is growing very rapidly. >> how are you going to take advantage of that? >> what is unique about zillow group is we have these multiple brands, but we also have not just multifamily properties, not just apartment buildings, but also single-family inventory. is most single-family inventory on the internet has been on sites that are not widely known or not reputable, we are the only major site that inventory asmily well as multifamily inventory in the same place. in addition, our leadership on mobile is unprecedented. because we are so strong on mobile apps and web, you can now shop for home or a rental on any of our brands using mobile which is a real differentiator for us. companies finally came together with a settlement. now that you have that behind

you, what does that allow you to focus on? >> we were the victim of a lawsuit. ago,re sued a couple years and we have been fighting in defending ourselves for the last couple years. a couple years ago we settled the lawsuit, i'm glad it is behind us, it allows us to focus on the business. billion a year spent on advertising. most movie sites that have the largest audiences and i like our chances there. it allows us to focus. >> were the things you could not do? >> no. our legal team has more time available than it did before and we are saving tens of millions of dollars that would have otherwise been wasted defending ourselves in legal fees, so it is great to have it behind us. but it did not slow down our business. our traffic group come out

revenue continued to perform and the business did great. it is just my to have the lawsuit behind us. note, i know you just launched your podcast today , office hours. and you are on snapchat. you are building your social media brand, why are you doing that? >> i gauge in all kinds of social channels. that is how employees want their leadership to be. they want us to be accessible. it is a court example -- core example of our country. what we lost today allows people to be a fly on the wall. i have this incredible opportunity where i am always talking to ceos of other companies i wanted to run the lights and let others enjoy what we are talking about. we launched it today. the first guest is the former ceo of twitter.

he and i are talking about leadership management and company culture. we have a lot of other great guests which will be of interest to yours. -- viewers. if you're interested in management and leadership, check it out. now anchor. you will be doing us soon. thank you so much. back to you guys. >> be sure to tune in for betty's new show, bloomberg daybreak asia. 7:00 a.m. hong kong time. you can also watch on bloomberg where you are. do not forget to watch that. the biggestxt, fixed income rise in four quarters. is this a sign of things to come? ♪

♪ let's take a quick check on where markets are headed. look at the chart to see the misdirection that we saw. markets could not anywhere to go for two and a half hours. you can see here we are losing a little bit of steam heading into the close but we are right around the height of the session. but not a lot of movement. to come of offe by 5%. >> that is a good point, volume is very light.

you look at the industry groups within the s&p 500, energy leading the way up about 1%. telecom and tech are also higher but it is a mixed picture with six out of the 10 industry groups gaining. ,he losers are the materials which includes automakers, retailers, as well as the health care group. but the declines are not too large. >> a light day. some positive news for banks. after a plunge in bond trading revenue, and -- it is the biggest increase with the firm since the third quarter of 2014. you can see the net income still tell about 10% from a year earlier. let's bring in laura keller for more. to what extent are people seeing the worst for jeffries? >> i do not know that anyone is

calling bottom. but what we spoke to the ceo cannot go quite as to say everything is fine, things will be amazing. but he did say the worst of behind us in the sense that we do not have the volatility that we have seen. i think that coming forward we can expect more stability. but it think it gives him a lot of credence to settle what the larger banks are saying. this quarter is going to be better and we have recovered. i think there are a few questions. investment banking is an open question, but it is probably going to be better. the harbinger of what will come for the bigger banks. what did we wind up learning today? >> i think people were surprised at how high fixed income did go. $100 millionas more than they expected.

much better than previous quarters. i had to actually go back to 2009 looking for a comparable come i could not find anything. it is really good. the sense that other than -- that could -- the first quarter tends to be the busiest. of time -- period of time. not happen with jeffries. >> i think people know this year overall is going to be worse. unless we see something unforeseen coming along in the next couple quarters. in general we would like to see something on the positive and and i think a lot of people are waiting for capital markets to spring forward. perhaps we can make up for lost ground. that we might have to wait longer for. >> things might not be as horrible as they were, that is

the take away. today, a new exchange opened in the u.k. you can now change -- tradde your bitcoin. he asked them about the importance of these types of marketplaces. onlineange marketplaces create more liquidity and allow more market participants to plug in and participate as opposed to just me and you exchanging bitcoin. it is really a scale issue. >> you haven't up and running since october? what kind of volume are we talking about? aboutare on track to do $100 million. >> is that on target for what you wanted? >> every month we have been increasing month over month and we have seen the amount of users signing up the last month alone as the previous couple months combined. due to the price

increase in bit going and also the circulation of bitcoin will be cut in half in a couple weeks. there's also a lot of interest from china. we have seen a dramatic increase in interest. >> let's talk about china. one of the things that is said about been going is that it is a way to get people in china together capital out of the country. what truth is there to that? >> i'm not an expert on capital movement from china, but the bitcoin exchanges public, it is transparent. you can see the movement of it. everyone can see it move in the chain. it may not be so anonymous. it is definitely not as anonymous as people make it out to be and it may or may not be used by the chinese in that way. >> one thing for sure is that when there is uncertainty and a macroeconomic environment, people tend to favor assess the act like belly.

traditionally that would be gold, and in the month of may it was less volatile than gold for close to 30 days. >> gold and bitcoin have treated together in anticipation of brexit. is question is now becoming becoming a value depository? >> we feel the killer bitcoin at is a value and is starting to behave like that. >> it lines up with our thesis. we think bitcoin is a better gold, it is gold 2.0. when you look at the characteristics of money to make gold valuable, there are about nine characteristics. it matches or beats gold across the board. you do not to keep it in a ball. is a better gold.

we think that lines up with our thesis and we think that is positive. if you look at the market cap a bitcoin, it is about $12 billion. if it is going to disrupt gold there may be a 100 ex return from today until that point because the -- that was the founders of gemini. >> coming up we have the close of trading just moments away. final check on all the action. ♪

♪ the markets close in about 10 minutes -- seven minutes away. we're just a few minutes from

would you miss. >> let's start with the dow jones. eight members down, this is the 30 stock average. when we take a look at the entry day, what is notable is there is a lot less gyration and swing. i know the chart makes it look like there's a lot of movement but it is in a pretty narrow range. 70 point swing and that compared to yesterday when it was a swing of 209 points. yesterday average 169 points. we are starting to see things calm down a bit. >> you can make the argument that if we wanted to put a -- >> everyone is just waiting. every time i looked up today, that is exactly where it is so does not feel like anything is happening. at energy stocks, they are one of the bigger movers. they client for a third straight day. this is actually the longest winning streak in two months.

the first day was not much of a gain but it was enough to push energy stocks into this third straight winning days. >> i wanted to take a read on small-cap stocks. they are down on the date they are off their lows for the session. we see that increase around 2:00, it is the end of the day, you have to wonder. >> there is not a huge range there. >> don't forget you have the russell rebounding on friday. because of all the brexit discussion. >> one company that caught my eye was the homebuilder. the stock was down a little bit. it started over, but they said some positive stuff. what is says specifically was that the labor market is improving and as creating demand for homes, which seems like one of the most straightforward relationships you can imagine. there is talk these days about

whether we are at risk for a recession, and that is not the kind of thing you would expect to see before a recession. >> it is all about the accident. corn, wheat, soybeans, they are getting killed. corn on the most since 2013. it is crazy. there have been some weather clears up but you have some rain coming in the midwest, that helped. brazil helped a bit. the crops are not in as bad a position as we thought. that does it for "bloomberg markets." the market closes next. less than four minutes until the close.

♪ we are moments away from the closing bell. ♪

>> u.s. stocks closing higher this afternoon. the pound at its higher level since january. >> janet yellen give their first of two date -- >> two days away from a u.k. referendum on eu membership, please be to economist and author george magnus on what a brexit could do to the pound. and experimental zika vaccine will soon begin testing on humans. will speak to the pharmaceutical companies this hour about the vaccine. >> we begin with our market minutes. but it was not with a lot of conviction. we could have seen some back-and-forth trading. nevertheless, when you look at where the index is