scarlet who is off today. [closing bell ringing] u.s. stocks closing higher this tuesday afternoon, the best day for the s&p 500 since march. joe: the question is "what'd you miss?" global stocks taking a breather from the brexit selloff. on farm ais focus week. we will take a deep dive into the global business of pharmaceuticals and biotechnology. matt: nike has more than doubled the total of the s&p 500 but has fallen far behind in 16. we will break down the company's earnings in just a few minutes. carol: a lot going on on this tuesday and we are going to begin with our market minute. let's walk you through what is going on in terms of the major

averages. all 10 major industry groups in the s&p are higher today. we see gains in energy and that is leading the way. we have breaking news out of turkey. an explosion at the airport. let me bring in our reporter from our istanbul euro. he joins us on the phone. know this is an unfolding situation. give this and of data where we are. -- give us an up date of where we are. guest: there were two blasts at the airport causing multiple injuries. the justice ministry says at least 10 were killed in the attack. it is not quite clear who's responsible for the bombing and there are reports the incoming

flights have been diverted from turkey. there have been a string of terrorist attacks across turkey's main cities this year. turkey is dealing with the spillover from the civil war in isis and kurdish militants at home that have claimed responsibility for several recent, tax. the situation is still -- several recent attacks. the situation is still unfolding. joe: how big and busy is this airport? how big a disruption could this be? constantine: this is turkey's biggest and busiest airport. turkey is suffering from a major slowdown in the tourist industry this year and dealing with a political spat with russia that

ended up in some sanctions. russian tourists make up a huge bulk of visitors to the country. there have been 10 consecutive months of declines in tourist arrivals. this month alone, there is a 35% drop in tourist arrivals. this is likely to add to those fears and concerns and pressure the tourists industry further. carol: what are we hearing from officials here? : the justice ministry as saying there have at flights killed and that to the airport have been closed, incoming flights. latest detailswo i have right now. carol: thank you so much for

that up date. our istanbul euro for bloomberg news. let's head back to the markets because we did see a bounce back in the tuesday session. huge gains in today's session. we saw the biggest gain on the reasons march 11. it could go back even further because the s&p accelerated into the close. massiveeurope, we had gains with the ftse up almost 3% , making up for the drop we saw yesterday. i showed a couple of charts that made people want to buy british stocks over european stocks. i have the premium you will pay if you buy british stocks.

it is the highest relative to the euro area as far as p/e ratios are concerned. this chart goes back 10 years, so as far as price-earnings ratios are concerned, the price of stocks have fallen in you see a massive premium for british stocks over the eu area stocks. think that's very interesting considering the price action we have seen. the british index did not all as much right a m&a as we saw. joe: one area where the bull market continues his government on. with the 40 year following at one point today -- i don't even know what else to say. carol: let's take a quick look at what happened in the pound.

on friday and monday, down about 11%. it did bounce back versus the u.s. stock. are seeing a little bit of a move back. stable.ks positively time will tell as everything gets worked out. that's a look at your market minutes on this tuesday. joe: joining me now is the head of asset allocation at blackrock. has been an extraordinary few days. -- basically anything risky has been sold off. safe currencies and government bonds. is there anywhere that you see where people have dumped the

baby out with the bathwater? it is a matter of finding individual securities, taking amongst the rubble. one thing this is making clear as we are stuck in this low rate environment. for a 10 year% and you pay for the privilege of lending the government money. one of the themes we are looking at is where can the source yield a reasonable price? in a world where they cannot get income sources, it'sal important because where else are you going to get that income strength? carol: a lot of money went into the black wrought etf yield. we saw a big infusion that went into it. suggesta place you

investors look into? that includes high-yield and investment grateful if you believe we are stuck in this theneconomic environment, things like investment grade and offer yield with less volatility, maybe a good you wouldthan experience in the equity market. clearly, we are not in an environment producing double-digit returns. doesn't some part of you want to back up the truck? 30%.aw rbs all aren't there bargains to be had when there's so much blood in the street?

the u.k. market is not articulate cheap. we see cheaper markets in asia. u.k. is a sizable current account deficit and how it plays out in terms of separation is far from clear. i would be cautious about bottom fishing in the pound right now. joe: since the financial crisis in 2009 has been a successful strategy and we have had a number of scares, whether it's 2011, the japanese earthquake or last august with the remember the devaluation, at some point, , perhapshat strategy the luck would have run out and we see a market that is close to all-time highs and we concerns that it could be the start of more nationalist movements

across europe. how you weigh the risks that could get worse? guest: i think in terms of the nativist and protect this insight, it's not just the u.k. ishaps the bigger concern you raise a fantastic point about all these opportunities that are a case to buy the debt. often, there's a response from the central bank. difficult formore central banks to rise to the rescue. stimulus,at monetary without the sugar high from easy money, weston is what is the catalyst? higher, ittocks move has to be on the case of utter fundamentals which has to come from a letter of global economy.

or even worse, it is counterproductive as we have seen with negative rate. i want to talk about people piling into the high-yield. how do you approach currency rate when it comes to high-yield? does it push you back into the asset classes? want to haveill that overweight position in the dollar. the fed is clearly going to take their time. the futures market is more likely to cut them like we are not likely to see the massive andulus we see in the ecb we are not likely to see more stimulus from the bank of japan, all of which suggests the dollar is likely to do relatively well against foreign currencies. carol: we going to continue the discussion of the exit on financial markets. this is bloomberg.

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two explosions have occurred at the a stumble airport, leaving at least 10 people that according to the turkish justice minister. the blasts were reportedly the work of suicide commerce who detonated themselves after being hired on by police. the airport is closed to flight at this hour. we will have more details on this breaking story as soon as we get them. warning forl has a the u.k. will not get favored treatment once it leaves the european union. she said she would make sure

what she calls a cherry picking principal will not apply in negotiations. senate majority leader mitch mcconnell says there's no time for amendments to puerto rico pasta that bill. he says he's optimistic the administration can get democrats on board. the vote is tomorrow morning. mcconnell says failure is not an option and the measure needs to be passed by july 1. senate minority leader harry reid says he would vote in favor of the bill. donald trump announced a seven point plan today that relies heavily on trade policy reform. he says it's the fastest way to revive u.s. job growth. he will appoint a sick or terry to renegotiate the terms of treasury would order to label china as a currency manipulator. he said if hillary clinton is elected presidents -- elected president, inner cities will remain poor and borders will remain open.

south korea is planning a $17 billion this. let's package used to create jobs and support regional economies that would be hurt by corporate restructuring. they cut the growth forecast from 3.1% to 2.8%. global news 24 hours day powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. back to you. carol: we have breaking news -- nike earnings crossing the bloomberg terminal. the company reporting eight any feet when it comes to earnings per share. eight $.24 billion, pretty much in line. fourth-quarter gross margin, 45 white lincoln -- a little light when it comes to gross margin. north american futures orders up

about 6%, compared to an estimate of about 9%. greater china futures orders up than thettle better forecast which was looking for a 23% increase. worldwide futures with an impact -- 11% was the estimate, up about 13%. down a little more now, close to 6%. the markets not loving this result. carol: let's get back to the markets. i was just looking through the mikey release. -- the nike release. the ceo says it's a great time to be in sports and the nike brand has never been stronger.

the calendar of sports moments promises to build on our business omentum and inspire consumers. they have had a great 2016 so far, the olympics is questionable. consumer,f the u.s. we have all of this unrest in europe and we have all of this unrest in the middle east, we have these concerns about the chinese economy, is the u.s. consumer one of the strong parts of the global economy? the consumer in the u.s. is deathly a fallback, western is how strong? consumption has held up much better than other parts of the economy. a strong pillar against a week manufacturing or. growth, decent income low rates and low gasoline. the question is how much the events we've seen over the past few days, how much uncertainty undermines that confidence any

propensity to spend. confidence, the reading today was really up the. important to u.s. consumers at this point? is it jobs and wages or what's going on in europe? guest: i think it is the former. the average u.s. consumer is concerned with their job and what they are paying at the gas station rather than what is happening in europe. this is an important point. we are fixated on the long-term implications of the brexit and this is a lip on the screen. that part of the economy may keep humming along. we talked about the huge rally in government funds. another area has been's talks with bond like characteristics.

if you look at consumer staples, they are basically at their record right now. continue to cea a rally so long as rates keep going down -- keep going down? thet: if you can't get yield elsewhere, you will go to the dividend paying stocks. the amount of people are willing to pay for staples and utilities ad telecom is very much function of the alternative they can get in other rates. the price you pay for the utility company is arguably higher. joe: i'm looking at a chart here of commodities. rallyas an incredible with all of the shenanigans going on here, plus the fact that central bankers are cutting down the places we have never seen before.

does that can you with gold? i think gold can continue to be welded. it comes down to a couple of things -- real rates are low and the yield start around 70 basis points and is down to 10. and monday, friday gold is an effective hedge. thinkportunity cost, i you want to have some gold in your report olio. joe: what about the rest of these green arrows? ath a stronger dollar and headwind of a possible global , do those green arrows turn red? would be less comfortable with those commodities because they are cyclical commodities. how they do for the remainder of the year will be dependent on your view of what is global

growth going to do for the remainder of the year for top my opinion is it remains very you did. -- very muted. joe: coming up, trying to pick a bottom on the s&p 500 and a check on the shares of nike -- they are falling in late trading, down another 6%. it's futures orders missing estimates and it has really underperformed the s&p 500 in 2016. ♪

carol: carol massar. "what'd you miss?" trying to pick a bottom on the s&p 500 estuary check out this chart. we have to give credit to lou

wang of bloomberg news. they looked at the ishares edge u.s. momentum etf, and exchange traded done tracking the best performers. that is the peak of what we saw in momentum stocks. you tended to see that less than two weeks before the market, the s&p 500, which is the blue line, starting to rebound. watch momentum stocks because that has been a reliable indicator. we just got nike earnings. a very cool function on the bloomberg terminal. ofhave loaded up a bunch templates. hold down the drop-down menu and

come down to ceo pay versus you want to know how much the agent of the shareholder is getting paid for kind of job he is doing. a three-year annualized return. nike is the fourth best performer of all. as far as this access, which is how much the ceo is getting paid, it's not even in the middle of the pack yet. only getting $16 million -- how can he survive with his colleagues getting so much more? the returns are there, but not making a fair amount of money. matt: american express, the returns are not great but the ceo is making $22 million a

year. what you want to be is way up here united health group, the ceo gets paid very little and he has returned a ton for shareholders. i want to talk about this extraordinary rally in government bonds. i'm looking at the daily price on treasury futures. these are two lines right after the brexit vote, to standard deviation moves. see is something we never two days and row and today was basically unchanged. this gives a sense of the extraordinary swings we are seeing. people just piling like crazy. up, we will see how the brexit might impact from signals.

-- impact pharmaceuticals. ♪

mark: two explosions rock the airport in turkey. bomber's blame suicide for the attack. kurdish militants claimed responsibility for several recent bomb attacks. say and egyptair flight data recorder has in prepared -- has been repaired and sent back to cairo, but it may take several days.

french investigators are still looking to repair the recorder. a republican-led committee released its report on the attacks on the american compound in libya. they produced no new allegations about then secretary of state. the 800 page report offered no smoking gun about mrs. clinton positive role. democrats on the committee say that it is nothing but politically motivated attacks. the obama administration's deal with china over cyber espionage appears to be inducing hacking. reportrlin signed the showing attacks from known chinese hacking groups with state interest dropping more than 80% since august.

news, 24 hours per day, powered by 2600 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. carol: your major market equity at their best levels of the session, meaning a 1.6% move up on the dow jones industrial average. nasdaq, the outperform or on a percentage basis, of about 2.1%. energy and financials are your best performing energy groups. very nice bounce back. one thing that caught my eye was still not on yields rising very much. they had gone downwards post brexit, but the bid for government bonds has not gone away. carol: matt? what are you watching? matt: nike as far as future

orders, that's what we heard earlier from an analyst. that was most important here, the stock trading down 6% in the aftermarket and post-market down already, 16% this year. this is a look at five years. i thought -- wait a second, it's not fair to look at them just today or 2016, they've had great performances over the past five years. they've returned 128% in reinvested evidence, beating the s&p over the last five years. then i plugged in under armour. look at this, the orange line up top. under armour has trounced nike, even though lebron trounced seth curry. , that's what you want as an investor. did you know that under armour doesn't even say the word nike in their offices? matt: they must have when they were watching cleveland win the national championship. carol: they just don't.

all right, matt. thank you. bloomberg is presenting what we pharma, going deep on the global business of pharmaceuticals and biotechnology with a range of stories and analysis across all platforms. joining us now to discuss how brags it affects the industry if at all and other issues in pharma, jamie rubin. the business leader at goldman sachs and the lead analyst to their large cap sector. a lot has been going on there over the last couple of years. let's start with brags it. what does it mean for the pharmaceutical and biotech industries, if anything? jamie: it doesn't really mean anything. [laughter] --ol: isn't there nervous is nervousness over r&d spending? no, this tree is still a safe haven. people still get sick. the only impact is foreign-exchange translations. most pharmaceutical companies

are multinationals that when we translate weaker, a stronger dollar backing a stronger dollar, that will hurt, but in terms of economic operational , really don't see any. one of the big stories has been the collapse of valeant and about marketing as opposed to research and development and the creation of new drugs. it seems like there's pressure on the industry to refocus on creating new drugs. is that a profitable, viable model? r&d productivity is the lifeblood of the industry. there's always pressure to replenish drugs that go off patent. that's what we do -- that's what they do for a living. break through new drugs on the market, everything falls nicely to the bottom line.

what's the prospect for that? -- joe: what's the prospect for that? jami: we are going to a positive cycle of r&d productivity. we've really seen it take a turn for the better with new product launches, exciting new product cycles. health-care stocks, this year has not been great for health care, but over the past five years it's been the best performing sector for the past five years in a row, german primarily by r&d productivity and exciting innovation. matt, are you coming in? we will go on. who is most interesting in the states right now? for a while we watched the big names and then moved on to the biotech names, and i feel like it's going back. good point. a and it's true. the industries are converging. it really is one industry. the one stock that i think is the most interesting is

bristol-myers. 10 years ago they were a boring, big conglomerate health care company. today it's a pure play company and they are in the lead in one of the most exciting new developments, immuno oncology, a new form of cancer treatment. drugare in the lead with a called octave oh that has completely transformed the company over the next five years. how do you assess political risk in the industry? hillary clinton has talked about prices being too high, with concerns in the short term about medicare and clamping down on pricing. what the breath of opportunity? jami: the industry has always faced political risk with respect to drug pricing. drug pricing has always been a hot issue for as long as i have covered the sector. a long time. especially now, as the industry has come off a time of spectacular performance with

loads of new product launches. as a result, drug pricing is at the center. again, a lot of political rhetoric and focus on how to clamp down on drug prices. but it's interesting, we think there has always been pressure coming from the private sector. we have seen that they have already taken a haircut on some ofwith respect to the hep c drugs from last year and the year before. this year with a new category of drugs. the private sector has already been taken care of that. we see some of the biggest companies on the stock 600 are drugmakers. , two of the most heavily weighted. glaxosmithkline, santa fee as well. does it help to be in a non-eu country? those are both in switzerland.

glaxosmithkline will soon be in an eu domicile as well. does it matter? jami: i don't think it matters. people get sick all over the world. the u.k., switzerland, france. sure, but you will pay more. i spent the last month in germany and i paid almost nothing when i went to the store to get some pills, and the u.s. i pay hundreds of dollars. where you get sick doesn't matter, but it's how much you will pay. jami: it is true that they are more expensive because of the different systems. company like at a pfizer, which still has its hands in everything. you have been talking about a breakup of pfizer for sometime. what are your expectations for this company? jami: perfect timing, they said they made -- they have said that they would make a decision by the end of the year.

they have been in the process of trying to slim down and get back to its innovative core. theirars ago they sold nutritional business and am in -- animal health business. they try to do a couple of big mergers and have now said that they will decide whether or not they will break up separate companies. carol: if they don't, is that a bad thing? much it all depends how value is there to unlock. but i do think that investors would like to see this company getting smaller. smaller, more focused companies have been much better performers been big conglomerate type companies. joe: thank you so much for joining us. jami: thank you. ourl: you can find more of focus on pharma coverage on the bloomberg and bloomberg.com \pharma. brexit forcing chinese policymakers to rethink their

strategy this year. this is bloomberg. ♪

carol: time for the business flash. after thenike falling company said that futures orders missed estimates. renewing concerns that the world's largest sports brand has entered a time of slowing growth. nike facing challenges on multiple fronts, including a strong u.s. dollar hurting overseas sales but heightened competition from the likes of under armour. lift may be hitting a wall. the company telling investors in a memo from bloomberg that they

expect the number of rides they handle to be flat or down in the month of june. they said that they are making seasonal headwinds as college students leave for summer. the 27 index has exchange traded funds in the company says they want to track more money with passive strategies. move will save current investors $20 million per year. those changes taking effective july 1. that is your bloomberg is this flash on this tuesday. joe: "what'd you miss?" brexit upending the chinese policy after the shock vote from beijing, facing a slumping euro hurting the eu and the stronger dollar with risk on capital outflow. for more on the downward pressure, betty liu joins us now. this is kind of a not talked about follow-up, isn't it?

betty: it is, and i was just here yesterday talking about how asia to be a buying opportunity. there are many signs to this -- many sides to this coin. is that yes,ere this could mean a slowdown in asia's exports. it could also mean more instability. we have got this great map from her intelligence. it shows which are the most vulnerable countries to the brexit volatility. these companies that are export oriented, right? whenones that have borders it comes to capital inflow and outflow. hong kong. vietnam, which of course has -- is very export driven to the eu.

they do have a lot of export exposure. they do have to worry about this force stability on the currency. at a time like this you kind of want to be in the philippines. up until a few weeks ago for your lack of regulations, so to speak, or forward-looking when it comes to capital across order mechanisms. this time it works in your advantage. i have a great map here on the bloomberg. if you type in china and the drop-down menu, i'm sure you have used this a lot, you can track chinese trade with a number dutch number of other companies around the globe. -- with a number of other countries around the globe. japan, south korea, germany, australia.

they only do $80 billion of trade per year with the u.k.. could we see that relationship pick up? could it do more with china? we were talking about that issue the other day. now that eu is out of the way, might there be more direct bilateral discussions? the map it just showed is right on. to be used by these asian countries, they are not exposed to the u.k. but they are to europe. about the currency? it's the last thing they want. betty: exactly. carol: chinese officials taking moves to shore it up. could we see moves coming

forward? betty: people are betting on it, right? absolutely, don't forget that it comes later this year. they are looking very much towards the imf and very much towards the basket of currencies that they want to be a part of. is even beyond that. it's beyond the ego. they need to have a stable currency and it is really frazzled right now. it can go one way or the other. the last thing that they need is some ridiculous outcome from europe. that that maybe what's going on in beijing. thank you very much, betty liu. tune in for "daybreak asia" with betty liu. ceong up, the carnival discusses how it's business is slowing here in europe. this is bloomberg. ♪

brexit effect is already hitting the cruise industry. carnival says it's cutting european capacity. the world's largest cruise operator plans to reduce capacity in europe i 5% in the fiscal year. miami, us with more from the carnival ceo and president. arnold, nice to have you here on bloomberg. let's talk about capacity in europe. taking it down by 5% steer, what went into that decision? >> our decision was made way before the exit vote.

that was just around the capacity, moving to china and other places in the world. part of it was the increase in capacity this year due to our new carnival ship, carnival vista, built over in europe. so, she is doing a european itinerary for a while. in china we see great growth. that was part of it. it really was prerequisite. -- pre-brexit. carol: is terrorism at play as well? there: we have had issues in boston, sydney. number one it's always safety for our guest, first and foremost. there was an incident today in turkey that didn't involve anything with us.

the reality is that those things are happening around the world and have been for a number of years. it's just a condition we have to deal with. we find that people still want to vacation and take holidays. they realize that accrues is a tremendous value in great vacation next.'s. people want to continue experiencing the good things in life. joe: how has this come back and prices affected your bottom arnold: the combination of currencies as a result of brexit and rising fuel prices with a drag on the earnings-per-share, we were able to offset that higher pricing for the rest of the year, along with some other things, cost savings and other

things. our guidance is the same midpoint as it was last march. but it's overcoming the 17% drag from currency commodities. poundet me ask about the -- matt: let me ask about the pound. i was speaking to a couple of women in london from miami opened it on your cruise ships, but the drop has made it expensive for them. looking at the dollar index, i see a five-year view. man, that must be tough. you have all of these currencies falling against the strong dollar. how'd you you do business like that in miami? arnold: for us it is actually pretty easy. we have brands all over the world. from a ticket price standpoint those are priced in british sterling. they want to go to miami on one of those, they can do that with their own currency and basically be unaffected.

not only in the ticket price, but also onboard revenue. similarly the lines in germany have a similar situation. in terms of demand creation for guest, if they are in a country of a different currency we often have lands that are priced in that currency. they are largely unaffected. in the end we have to translate it with a number of natural hedges. we buy a lot of things in euro. even though we might lose on the ticket sales, we gain on the cost side. it all shakes out but in the end it could be a dragon currency or a benefit in currencies, which as you know go up and down. carol: thank you so much, arnold donald, carnival president and ceo. breaking news, matt? matt: breaking news honeywell. david coty is leaving. the coo is going to become the

ceo on march 31 of 2017. he's going to continue on as chairman until 2018. a five year noncompete clause. that's important. remember i showed you the ges screen? he's done well with honeywell stock and doesn't get a much. appoint now going to arius danzig. i should point out that this guy from poland went to syracuse for his engineering masters into harvard for his mba. carol: do you have a romance on the sky, matt? you need toup, what know for tomorrow's trading day. ♪

matt: don't miss this. ?c+sv

♪ >> donald trump and hillary clinton lay out their plans for job growth and a cleveland convention sneak peek but first the breaking news out of turkey. 10 people were killed in more than 20 injured by terrorist attacks today at istanbul's main airport. detail still coming out early at this point. turkish officials say the attack involved two suicide bombers. i know you are struck as i was the other day, the l.a. times ran and of an credible these and talked