>> we are taking you from london to new york to aspen colorado in the next half hour. here is what we are watching. global stocks rebounding for a second day and the dollar weakening on speculation that policymakers will try to prevent brexit from hampering local growth. the ftse has -- >> we sit down with larry fink in the hour. shery: i will be sitting down with sam eisley cofounder for his current pick in the pharma sector. we are halfway through the

trading day. julie hyman has the latest. we are still in the green. >> we are rising to the highs of the session right now. in the u.s., we have made up the losses of the last couple days but in the u.k., the ftse 100 closing up by three and a half percent today. the u.s. trading at highs, the nasdaq has been a consistently to vote. one in two thirds of 1%. we are looking at a broad average of stock here in the u.s.. we have a two-day gain of 3.2%. we did see stocks pullback by the neighborhood of 5% over the prior two sessions so we haven't yet made up the losses that it is a significant rebound. blue-collar reported the worst of the brexit induced selling in the united states is behind us. so what is driving the buying today? transportation stocks, we've got

a continued rebound up more than 2% as we had concerns previously about the effect of the u.k. vote would have on global travel, on currencies. now those concerns alleviating for the moment. delta and jetblue all trading higher. we want to check out how these groups have performed. here are some energy movers. they are the best performing group in today's session, oil prices on the rise. transocean gaining. banks is another group with have been watching because it has been so reactive to the u.k. vote. here the votes are negative. it is still down about 8/10 of 1%. it has been obviously quite a ride over the last few days. matt: how is that looking in the dollar? >> the dollar is going in the opposite direction as we see risk back on the market.

the dollar index is down 1% over the past few days after seeing a rally in the prior two sessions of what investors were looking to hide out for. the dollar now selling off. one of the reasons we are seeing oil trade higher today. shery: thank you so much. matt: let's check in on first word news. mark crumpton with more. >> turkey's prime minister is calling for global cooperation in battling terrorism following tuesday night's suicide bombings in istanbul. government officials blame the islamic state for the attack which left 41 people dead and more than 200 others wounded. islamic and kurdish militants have carried out bomb attacks in turkey but the violence having an impact on turkey's already struggling tourism industry. arrivals were down 35% from a year ago.

the united states is extending a credit facility to iraq in the ongoing fight against islamic state. the deal gives iraq a one-year grace. and eight in a half years -- eight and a half years to pay. a super pac supporting hillary clinton has reportedly accepted $200,000 in donations. suffolk construction made contributions to priorities usa. suffolk has multiple contracts with the federal government and is barred are making such donations under campaign-finance laws. donald trump's campaign aides are lining up a roster of sports figures to appear at the rnc in cleveland. the names include mike tyson mike ditka and bobby knight. that is according to bloomberg politics.

local news, 24 hours a day, powered by 2600 journalists and analysts in 120 countries. this is bloomberg. matt: we are expecting to hear from scotland's first minister in just moments. standing by in brussels, brian, nicola sturgeon is going to speak. i have to assume it is going to be a call for an independence referendum. >> they would say not just yet, but i just spoke with a member of the scottish national party who is also in the european parliament here and he has been in touch, speaking with nicola sturgeon today. they are saying they want to remain within the european union but not announce an independence referendum just yet. effectively, here to keep the dial on scotland overwhelmingly. matt: sorry, let me cut you off

because nicola sturgeon is about to speak. >> scotland spoke clearly and positively for the european union. we opted to remain members of the european union in the vote that scotland cast last week. since i've been here today i have found it enormous interest in the referendum result, as you would expect. i have also had a sympathetic response to the position scotland now finds itself in. being taken out of the european union against our will a position not that are making and not one that we wanted. i am not here today to reach any conclusion or to press anybody for any decisions or any commitments. i am here today to make sure that scotland's voice is being heard and that scotland's

position is understood. i am confident that is the key. i have found doors to be opened. i met the president on my arrival and i met the leader of several of the groups in the european parliament and scottish members of the european parliament and i have just come from a meeting with president yunker. we have received a very sympathetic response. in the discussions i had, as you would expect, i have deep concern about the impact of the referendum, not just on scotland or the u.k. but also on people in all of -- all countries and the european union itself. i have emphasized that scotland remained -- voted to remain part of the european union and i have a duty to give effect to the democratic will of scotland.

if there is a way for scotland to stay, i am determined to try and find that way. we are in uncharted territory and none of this is easy but my task is to try to bring some principles and equality to the situation and to speak to the people that i am elected to represent. we are very early in this process. the referendum is not yet a full week behind us and it has been a long week for all of us. at this stage, we want to ensure that once the uk's negotiation with the eu starts, all the options are on the table. i don't underestimate the challenges of that but i have found a willingness to listen. i feel that my job here has been effective and i look forward to continuing the weeks and months to come.

i am happy to take some questions. >> if you find that there was a change in tone today -- did you find that there was a change in tone today? >> yes, i think that is a fair assessment. not just with the people that i am meeting but the people i have been going around in the european condition -- commission, a lot of people expressed support for scotland's position and wished scotland good luck in its attempts. i have received a lot of sympathy and good wishes. that doesn't translate into an automatic easy pass for scotland through the situation we find ourselves in, which i stress is not a situation of our making but that does mean i leave brussels to travel back to edinburgh in good heart. optimistic.

>> the prime minister of spain has indicated that an independent scotland joining the european union -- what is your response to that? >> i don't think it is surprising to hear positions from a country like spain being expressed in the way they are. nothing has surprised me. i would say we are in the early stage of this. what i have from the active prime minister, relating to the fact that this is a u.k. negotiation with the eu, i absolutely respect that. what i am seeking to do once the uk's negotiation with the eu gets underway -- none of us know when that will be -- but when that gets underway, it happens that all the options are considered and that scotland's interests are represented.

for me, part of that process is to make sure that scotland's voice is heard within the u.k. process and all options are being considered at that stage. nothing today surprises me. the formal process is not underway and i would come back to the central point that have been making all along. i don't underestimate the challenges we face. this is a situation i did not choose to be in. but more than 60% of the population that voted voted to stay within the european union. i wouldn't be fit to be first minister if i was not speaking against the expression we made last thursday. >> -- [inaudible] do you think is appropriate?

>> scotland is part of the united kingdom and this vote affects scotland, so i think it is appropriate. i welcome intervention on our behalf. i spoke to the british irish's counsel and both of us were hoping the result would go the other way, but i also expressed it had been my concern to scotland ceasing and exit against their will. i was told i would need to speak to him and seek his support in making scotland's voice heard. i spoke on the telephone yesterday and asked them to make scotland's position. by all accounts, he has done it very effectively and i am very grateful to him for that. scotland has been down many generations. the irish president in glasgow on monday, we were reflecting on

the long-standing relationship between our countries and i look forward to going in the future. >> how would you practice that? would you automatically stay inside or would you apply to be a member state? >> the option is on the table. matt: that is scottish first minister nicola sturgeon addressing the press at brussels with all 27 eu leaders. she is not calling yet for a new referendum for scotland to leave the u.k., but she is saying she will do whatever she can to keep scotland in the eu. if the u.k. leaves the eu, that would mean cleaving off from the united kingdom. talking as well about what is going on in ireland, of course

northern ireland and scotland were two of the four countries in the u.k. that voted to stay in the eu. the english and the welsh both voted to leave. we have heard talk as well about the possibility of something happening with northern ireland. possibly even reuniting, of course it would be a very difficult task but that is the kind of talk we have been hearing since this brexit vote. obviously an incredibly volatile week. you see the pound down right now about 9% from the vote on thursday. u.k. stocks, on the other hand have made up all of their losses since that surprise vote on thursday and they are now gaining. you can watch nicola sturgeon's speech on the live goat channel just type in life go. -- lives go -- live go.

she isn't being terribly aggressive out of the gate but she is saying she is going to do what she can to keep scotland in the eu and the only way to do that is to break off with the united kingdom. >> that is perhaps right. she was very cautious. she didn't talk about the idea of a referendum let alone the idea of seceding from the united kingdom. which you might have thought she would do, but clearly, they see a danger in talking about that. clearly, there are a lot of people in brussels back in the u.k. that will see the fact that she was meeting with the president of the european commission, the head of the executive arm of the eu, there to carry out the collective will of the member states, they will see the fact that she is the head of the regional government

within a still member of the european union the fact that they are sitting down, a lot of people will say that is provocative. that is not helpful in this situation. i think she played her hand very very carefully. pointing out that this is really early, that she is exploring options, that whatever scotland does, it will be very complicated. don't forget, there is a political vacuum right now in westminster. i think she feels this is a way to win support for the idea of the u.k. remaining in the european union or at least the u.k. having a close relationship with the european union when we are not getting any real political strength from the conservative party with a lame-duck prime minister. we are not getting much out of labor with jeremy corbyn threatened by no-confidence

votes. i think the scottish national party, which sits with the conservatives, with labor, sees an opportunity to promote their interest as scott's. -- as scots. matt: what have you heard from david cameron seeming very apologetic when he was there in brussels? apologizing for not winning the fight to stay in the eu. did he make any comments about the united kingdom remaining united? with northern ireland and scotland voting to remain in england and wales -- and england and wales voting to leave, that delineates the u.k. right through the middle. >> he was very careful not to get international issues. he used all of his time to talk about how he regretted the situation but that it would be down to his successor to chart

the path forward. all he could say was that if the european union wants a close economic relationship with the u.k., they are going to need to think about migration. he says it is what cost him the referendum and his job. matt: in brussels covering this breaking news for us out of scotland. really, this situation continuing to develop even since last there's days vote for the u.k. to leave the eu. we will be back with more.

>> this is bloomberg markets. due to a quick little market check here, kind of seeing a progression in equities. a pretty interesting movement because down about 12%, 2.2

points. interesting trend down the past couple of days. we saw a big jump in that going into the brexit vote despite odds still going up. i also want to point out of 5% move in goldman sachs to potentially track the performance of the companies that are the most -- hated, if you will. energy doing pretty well especially after a strong eia report. let's go to bloomberg's abigail doolittle. abigail, what is going on? >> it is hard to think about the nasdaq without thinking about i/o tech with the 14% weighting in the nasdaq to health care. biotech has been on an absolute tear up 6%. today, we had huge rumors, this

includes the sorrow up -- this isn't a penny stock either. it is a cap company in the biotech sector, higher on the news that the company's cancer drug succeeded its final stage set the -- stage study. also on this news, competitor clover. oliver? >> good to keep an eye on the farmers as we've got bloomberg formerly here. i'm going to turn it over to sherry. shery: bloomberg focusing on farmer this month to discuss the industry with the u.s. spending 17% of its gdp on health care. joining us now is ceo -- the world's largest independent health care and management.

thank you so much for talking to us today. it hasn't been really great for stocks recently, especially for biotech. was the slump overdone and when are we going to bottom out? >> the slump has been overdone. we see some signs going back to approximately july 2015. there was a lot of debate at the time. were we in a biotech bubble and in fact, the stock market actually posted that and said we were. we have come down a lot. some went down as much as 50%. i think we have bottomed and we have it way back up from here. shery: are we seeing some cheap stocks out there? >> there are a couple of problems with evaluation. most of the companies do not have profit but there are half a dozen or so that do.

regeneron gilead. he's got profit. but the others don't. it is hard to say, are they cheap, but they are 50% less than the used to be. shery: when you are looking at these companies, are you taking a look at valuations or some break or therapies? -- breakthrough therapies? >> indeed, the fda has a classification for breakthrough therapy in terms of new products. the technologies are very important and the speed of technological advance now is faster than i have ever seen in my career. things are really moving. new drugs new technologies are arriving. with that run pitfalls and when they don't work, stocks go down but when they do they go up.

you are seeing the emergence of immutable oncology to treat cancer. they worked off some original work in japan. mark is in there as well. the patent cliff has receded and the resurgence of research productivity has made a big difference. shery: that peak you mentioned, we are seeing not just stocks coming down but also the flowing market for ipo. the slowdown is just correspondent to what is happening in the health care sector. where to you see the market for ipo's going this year especially for a nascent biotech company? >> keep in mind, last year, although it got slower towards the end, companies stocked up on cash. there are a lot of companies with a lot of cash. those that were not able to get there are just emerging now and needing cash and are going to have a much tougher time.

venture companies going public will havoc -- have a tougher time. they will be funded because their technologies are exciting. shery: are there specific names you are looking at? >> we looked at some in bloomberg, i geos, a couple that have come out. we are attentive to them. there will be more coming along. shery: stay with us because we want to come back to you after this short break. we are talking to the ceo of focus on farmer week here in bloomberg television. stay with us. this is .

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know what your pets are up to with xfinity home. xfinity. the future of awesome. see the secret life of pets in theaters july 8th. get ready for the rio olympic games by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. shery: this is "bloomberg markets." i am shery and along with all of her run it and matt miller --

with all of heroliver renick and matt miller. i have to talk about brexit. how does this impact pharmaceutical companies? samuel: we look and see how much business companies have in the u.k. -- maybe 10% for the high side but also how much business is doing it all europe. there can be currency and tax and economic advance impacts. with respect to the market and the general market indices, they upcoming gone. shery: what about regulations with the u.k. exit of the european union? don't you see double approval needed for all these pharma companies? samuel: it could need a double approval. brussels at the moment approves

a new drug across the eu including the u.k.. it is conceivable that the u.k. will have to set up their own medicine agency again and you'll have to get an approval in brussels and and and approval in london. shery: a lot of controversy over pricing in the u.s. where do you come down on it? samuel: pricing is a bit overstressed. surely there have been issues but when you look at realized prices, they are not advancing as fast as list prices. the companies are increasing their discounts. the published data is probably showing greats rates of growth that are probably too high. shery: when will we see a complete rebound of the sector? samuel: getting back to new highs? that could take a while and i doubt that happens in the course of this year. shery: thank you so much for staying with us. that is samuel isaly.

you can find more on bloomberg.com/pharma. oliver: we are to go now to aspen colorado where erik schatzker is interviewing larry fink. erik, take it away. erik: the sun is shining in aspen, colorado. great to see you. we woke up five days ago to see that almost 52% of britain had decided to leave the european union. what have the last five days been like for you at black rock? larry: i learned about it late thursday night so it was not a good sleep. what it means for black rock and everyone else is greater uncertainty. there's a lot at stake at what it ultimately means, but there is a lot of uncertainty. i think this uncertainty is just leading towards more behaviors

such as hoarding cash, less willingness to invest in the long term. erik: is that what investors have been doing for the past five days? larry: you saw a huge amount of selling's and that is why we have the markets that. step back. i think the marketing of the european union is going to be important. whether the brexit happens or not because it is still debatable whether it will happen or not i believe this is a warning over the bow for the europeans. i was not practically bullish on europe over the long horizon because you see just aberration within the differences of the countries. there is going to have to be greater restructuring in some of the nations. this could help fortify europe and may make the european leaders talk about how to make sure the cohesion of the eurozone remains. what it means is prime minister hallollande has to be more

european. that means the chancellor of germany -- erik: angela merkel. larry: has to be more european. erik: does that mean that germans are going to demand less austerity out of the spanish, less austerity out of the italians? larry: for it made -- or it may mean no continuous austerity but they may do a massive fiscal policy. they have a huge stimulus and can stimulate europe themselves by creating a huge fiscal policy stimulus. that is my frustration. germany has not taken the leadership role. these problems can be mitigated through more fiscal policy especially in germany. i think it is hard to understand how it will play out, but it was very certain yesterday that the market being began to stabilize when the chancellor actually spoke as a european. i assume the rally is still

carrying on because i'm not paid attention in the last hour. as we saw this morning, it looks at a markets are continuing to stabilize. we had big inflows from clients putting money into high-yield as it wiped out on friday. we will wait and see. we have $55 trillion of money globally sitting in cash. that money will be put to work someday somehow. erik: when the age of uncertainty is over, what is that going to be? larry: the problem we have is that we have rolling elections and no focus on the spanish elections on sunday. that was a very serious election. rajoy received more of the votes, but can he create a coalition? for three months, essentially spain has not had a government. the anger you are seeing in the brexit vote is happening in spain. we have a french election early next year and a u.s. election in november. the anger and this populism is real. it will have to be addressed.

whoever the leadership is in the u.k. is going to have to address that. it is not about brexit. it is about how do we make our financial futures better? people are identifying immigrants or some other facet or lack of control as a mechanism for why brexit happened. the real issue is middle-class wages have been snagged it stagnant throughout the developed world. rising cost of food, education, health care -- these are some of the fundamental reasons of the sphere. this is why i have been strongly advocating for governments to focus on fiscal policy. eight years now of low interest rates and now we have $12 trillion in negative interest rates worldwide. i think these policies have reached the point of no return. in fact, i have said pretty loudly that low interest rates is harmful. erik: in the statements that you have heard from hollande an

merkel and other leaders, do you see evidence of this becoming more european, for lack of a better term, or is the jury still out? could we be witnessing the beginning of the end of the european experiment? larry: it could be the beginning of the end. i think the chancellor was more calming and talking as a european and tried to make sure we fortify europe and make it bigger. i would say the last few days we have seen voices of stability. can voices of stability prevail? i don't know. i can say with certainty that we will have uncertainty. erik: on brexit in particular there are many ways that this could shake out, but three main scenarios. one is that it does not happen. two is that the europeans and the britons find a way to muddle through in true european fashion and the end result is moderately negative.

the third is a brutal outcome -- a depressive impact on the economy, destabilization politically, and maybe the unraveling of the eu. which of those three would you bet on right now? larry: it would not be the falling out of the european economy. it will be some mechanism if these leaders are going to lead properly of re-stabilizing europe. erik: do you think britain leaves? larry: we will have to see who is the next prime minister. of 52%-40 8% vote in my mind -- a 52%-408% vote in my mind is not an important facet of whether they levered only. the u.k. government has article

50 and two years to file before they can leave. they have two years to find a solution that is less harmful for the european countries but if they cannot find an agreement, we have to go to the edge again. it just means greater uncertainty and more hoarding of cash. erik: you have a view of sorts. what do you think is priced into markets right now? which of those outcomes is being pressed in? larry: i think the markets are pricing in a weaker global economy, whether it is 25 or 50 basis points. it is very clear to me that corporations are going to be investing less of the future right now because they don't know what the future is. they don't know how they should be investing for the future. i would say overall this is not a good outcome. what financial markets need what investors need is certainty. what we have learned on friday morning -- erik: we are going to get at least two more years of uncertainty.

larry: i think that is correct. it is going to be a negative element to the global market. however, we have a new prime minister in the u.k. who focuses on growth as a result of this anger. and the united states, when we have a new president, they focus on fiscal policy and growth initiatives. if we have more parts of europe focusing on growth initiatives which will allow central banks to take their foot off the pedal, to start seeing a rise in interest rates again, which would then help savers and investors, then we will not have that stability. if we see no outcomes from governments, that they are still twiddling their thumbs and advocating responsibility to central bankers, than i do believe we have a real problem ahead of us. erik: larry, very few people can see the fed or any other central bank in the developed world raising interest rates. let's return to that point and

the application of government. we are live from aspen, colorado. we will be back in a couple short minutes. ♪

erik: i'm erik schatzker live in aspen, colorado, with the cofounder of the world's largest asset management company blackrock, larry fink. we been talking about brexit and how it has plunged an uncertain world further into uncertainty and for how long precisely -- we don't know. it puts further pressure on central bankers. it puts further pressure on janet yellen, mark carney governor kuroda. let's talk about the fed. can you see a rate hike this year or possibly next year? larry: i will say with certainty that we will not see a rate hike

in july and we probably will not see a rate hike september. c how thelet us see how the world progresses. there's a modest part of possibility they could do a 25 basis point tightening in september. we will have to wait and see. i actually believe the brexit will lead to more uncertainty. it will lead to modestly slower growth. i am of the opinion that it is highly probable they are not going to do anymore tightening this year. erik: janet yellen and her colleagues at the fomc have faced a lot of criticism over that data dependency point. people argued that the data were there and the fed should've raised interest rates at some point over the course of the first two quarters. now that we have seen the brexit and furthermore the financial market volatility through mid february, can we look back and say they were right to keep the feet on the gas pedal and to keep monetary policy as loose as

it is? larry: they being the fed? erik: yes. larry: i do not agree that they should of titans. i tightened. i do not believe the data is there. we have modest inflation. we have a weakening economy. they revise the first quarter from one to one to one. we have weakening corporate profits. you add that up and i actually believe that it was appropriate for them to policy. pause. erik: what happens to the other banks? mario draghi, of course governments have been unwilling to act as far. as you pointed out, we have elections coming up. action is going to be months if not many quarters away. larry: there has been best criticism of ecb policies and i think that criticism is going to update. i think the brexit and all the

uncertainty will allow the ecb and mario draghi more freedom and flexibility if they need to be providing more stimulus. erik: sure, but we know now that -- look what happened in japan. it is not always deliver the desired outcome. larry: i'm under the view that negative interest rates produced negative outcomes. that should not be a surprise, especially in places like japan and europe. erik: it was a mistake in other words? larry: i personally believe negative interest rates are a mistake. you are actually seeing more lending and a modest increase in lending. the problem is i actually think it is depressive to consumer confidence. in japan and europe, the majority of society are saving in the form of bank deposits and bonds. when you have negative interest rates, you are harming the

savers. you are harming their ability to save and live in retirement. that means they have to save more and consume less. erik: what does that mean for the asset management industry? larry: it puts pressure on the asset management industry because you are seeing that there's $55 trillion in money in cash. that money will ultimately be put to work. there is a huge reservoir for the future, but it could take a while. erik: and in the meantime, returns are low. alpha appears to be nonexistent. asset management is failing. larry: not in all cases, but in many cases. we are seeing more movement toward indexation and etf's and ishares. we are seeing money being put to work. insurance companies, corporations, pension funds have to be putting money to work. they have to earn a return. it depends on what sector you are talking about. you are seeing a vast movement toward index, as you said.

you are seeing more money sitting in cash. all that presents real problems for many asset managers. erik: how would you describe the state of the industry right now? larry: the asset management industry? i would say it is weakening. i think we are seeing increased regulation. the sec came out with new proposed rules related to almost like a living will for asset managers. you have liquid of the rules coming out -- liquidity rules coming up. you have low interest rates and uncertainty with investors. you have underperformance which gravitates more toward index indexation. you have rising technology to navigate your risk and liquidity. it is very clear to me that you are going to see a vast consolidation of the asset management industry. it is the only industry and

financial services. erik: what have we not seen it yet? larry: since the financial crisis and from 2009-2013, you have seen rising markets. their assets raised in price, so they did not feel the pain. now in the last 18 months, we have had negative to flat markets. we had rising costs. you have massive outflows into index with a lot of the managers. we've not seen that at black rock. we have active inflows. it depends on the managers and what is going on, but it does mean that you're going to see a consolidation in industry. erik: does the massive shift that you have described not become a cannibalizing force at blackrock? larry: i think we are in the best position of any firm. erik: may be, but you run a very large asset management business. larry: the majority is in alternatives, where we continue to have an flow, and fixed income.

we have 200 plus billion dollars. we have $3.1 trillion in beta. we have a thriving risk management business that is actually accelerating and in growth. we are as well positioned as any asset management company in the world, and yet, we still face the same headwinds. i think we are very well positioned to handle much of the issues. we are still seeing really good inflows and alternatives. we have seen over $38 billion of inflows this year in ri share business -- and ishares business. erik: do you need to create new and different strategies to accommodate his world of growing uncertainty? larry: well, we have. we are focusing more on factors and factor-based investing. erik: smart beta, so to speak. larry: we believe that we are seeing more interest in yes g

esg investing. we are seeing a mix in behaviors and i do believe factors will become a larger component of the investing. i actually believe we have been positioning our firm since the financial crisis for these growth areas like factors, like esg beta, ishares. erik: one last question for you, larry. this $55 trillion of cash sitting in markets worldwide how long will it take before that gets put to work? how long will it take before the appetite for risk returns to the investment community? larry: when we see a reduction in the uncertainty. we see active government behaviors toward fiscal policy. erik: will it take long? larry: it may not take that long. we will have a new government in the u k in october.

the prime minister has in october election. we will have a new president in november. there is a lot of pessimism out there and the pessimism is about the fears of the future, but i see many opportunities that people should be putting money to work. erik: like what? larry: i believe investing in north america over a long horizon is going to be a great opportunity. that is a mix of canada, u.s., and mexico. i believe there are going to be strategies in fixed income that will continue to be a stable return type of products with low return relative to equities, but certainly better the negative interest rates. i've never been traveling more than i have.

i can tell globally investors worldwide are confused. they are looking for solutions. they do not want to keep their money in cash. they would like to find solutions. depending on the client and their geographic region, some people are putting more money to work now. other people are taking money and putting it into cash. i can speak for blackrock -- we have never been in a better position dealing with more clients globally than we are today. erik: on that note, i thank you so much. larry fink, ceo and cofounder of black rock. we are in aspen colorado. david rubenstein, the co-ceo of the carlyle group, will be taking larry's place in this chair in a few short minutes. for now, oliver, back to you in new york city. oliver: turning to renewable energy now, i want to bring in kevin walsh.

it holds a portfolio of equity and debt investments in more than 200 products with the capacity to generate more than 1400 gigawatts of power, primarily from the wind and sun. think a lot for joining. let's jump right into this conversation about the switch to renewable energy. you brought a great chart that shows wind and solar capacity on the rise. that wind line for solar is basically a financial. what does that mean for business? kevin: we invest in projects and that is great growth for us. we will continue to invest and we think it's an attractive investment. we enable ge equipment orders when we do that. we think that growth chart is good for us and good for ge on the industrial side and we will continue to do so. shery: we had this unexpected extension of federal tax credits for solar and wind. how has this recent the tax equity market -- reshaped the tax equity market? kevin: there's a demand for tax

equity and we are able to provide that. that is a needed part of the capital structure. and investor can use this text but since those tax benefits and we are providing that to the market and it's a welcome part of the capital structure. matt: how much longer do you think we are going to have to wait until the average suburban or rural customer no longer relies on the grid? how much longer until total energy independence for americans who do not live in cities? kevin: i think that is a ways off. i think the grids are very important as a backup mode, as a primary means of access to electricity. i have solar at my house, but i still rely on the grid when the sun is not out. i think that will continue for the for siebel future. -- for the foreseeable future. oliver: how does the news about ge setting the two big to fail label affect you and the company

overall? kevin: that was the plan and we are part of that smaller focused ge. we will continue to do what we do and support the industrial side. oliver: will there be any more shuttering of the financial business? kevin: i'm told there are no plans to do so. oliver: thanks, kevin walsh. kevin walsh, managing director of ge financial services renewable energy group, thanks for coming. shery: coming up in the next hour, do not miss bloomberg's interview with the ceo keith sharon, on the company winning its approval to shed the two big to fail label. this is bloomberg. ♪

oliver: it is 1:00 and new york and 1:00 a.m. in hong kong. matt: i am matt miller. oliver: i'm oliver renick in new york. shery: i am shery ahn and this

is "bloomberg markets." ♪ matt: we are going to new york to aspen in the next hour. here's what we are watching at the moment. u.k. stocks rebounded, gaining back all of their losses since last week's right to brexit vote. we will look at how markets are faring on this risk on day. oliver: carlyle group cofounder david rubenstein joins us later for an exclusive interview on the thought on brexit and the u.s. election and what it means for the market. shery: it is focus on farm a week here at bloomberg and we have an exclusive interview with the ceo of pharmaceuticals. oliver: let us start off by heading to the markets desk

where julie hyman has the latest. give us the scoop. what is going on? julie: we continue to see stocks rally today and remain on the highs of the session. we have three major averages gaining with the nasdaq up 1.6% and leading the overall rally we are seeing. if you take a look at the bloomberg and the imap, energy shares have been performing the best today as we have seen a gain in oil prices. however on the flipside, utility shares are now in the red by a little bit in today's session. that is not typical of what we have seen over the past several days. they were one of the loan groups to rise during the two-day plunge that we saw and stocks. looking at the best performance today, we have a mix of tech and oil. microsoft, exxon mobil, and chevron among the best performing stocks by weight. also speaking of weighty stocks, general electric is on the list of big movers today as well. that is after it won approval

to drop its designation as a too big to fail financial institution. it has one down and shrunk ge capital. though shares are trading higher by about 3% today. oliver: there are a couple of deals announced today. what is going on in the m&a space? julie: apollo is buying diamond resorts so those shares are treading higher. it is a $2.2 billion deal. marriott vacations and lyndon worldwide are also gaining along with it. we also have a deal in the banking industry. cibc of canada is acquiring a chicago-based commercial bank. that company is up 23%. this is a $3.8 billion deal and you can see those cibc shares are down about 2.2%. shery: julie, thank you so much for that. we have breaking news for you at the moment. let us check in first on the

breaking news that we have out of ubs. we are seeing a shakeup at the top of ubs through management there. we are hearing the global cohead of equities and corporate solutions are standing down in a securities overhaul. we are talking about ubs. there has been a big shakeup in the top of management at ubs. let us check in on the bloomberg first word news this afternoon. mark crumpton has more from the newsroom. mark: no one is claiming responsible be for that deadly attack at the airport in a is stable, but turkish a authorities are blaming the islamic state. at least 41 people were killed and more than 200 wounded. in the last year, turkey has been the target of attacks by both islamicistsists a kurdish

terrorists. malan has rescued the ship that crashed in one of the worst in the migrant crisis. hillary clinton and president obama are set to hit the campaign trail together for the first time. they will head to charlotte, north carolina on tuesday. the president and his former schedule terri a secretary of state were scheduled to appear in green bay earlier this month, but that was canceled after the shooting at the orlando nightclub. lebron james is a free agent after declining his player option with the nba champion cleveland cavaliers. he said last week that he intends to remain with cleveland. the 31-year-old star has been a free agent the past three summers, collecting each time to sign one-year contracts with a player option. james was scheduled to make $24 million next season. global news 24 hours a day, powered by more than 2600

journalists and analysts in more than 120 countries, i am mark crumpton. back to you. shery: we are now talking about markets that are seeing a rebound today. the dow and s&p 500 all coming back into positive territory for the. year. oliver: not a bad little rebound. i want to bring up something about european stocks that are pretty interesting. if you look at the ftse 100 versus euro stocks if you look at the ftse, you say everything looks pretty good here. there is a little bit of a different story with a lot of multinational companies in that index. that softer pound does help those companies. the euro stocks 50 on the other hand hurting a little bit more. shery: we are seeing the pound rebounded. thank you for that. general electric financing unit is setting its status as a too big to fail lender. ge capital winning regulatory approval to drop its designation

as a systematically important financial institution. for moore david gura is standing by with the chairman and ceo of ge capital. david: thank you for being here. what are the immediate applications of these sheds. what does that mean for you as a company in the near term? >> we are no longer supervised by the federal reserve. we had agreements with the federal reserve and had a lot of requirements from the federal reserve those will fall away. we have enhanced standards for capital levels and liquidity. what we have been shedding is 14%, i ge capital and we going to reevaluate now based on the risks that we have in the portfolio. we will bring that down. as a result of that we are not going to have to do as much regulatory oversight work in the firm, so we will start to downsize. we will start accelerated dividend returns. we have a capital plan this year

to return a $2 billion in dividends to the parent. we will pay more in the second quarter and accelerate through the second half as we bring the risk-weighted assets down. david: they have been asking for you to take on more debt at ge, your vice chairman there. with regulators not scrutinizing you as much, will that happen soon? keith: it is really up to the board and when they want to see an opportunity where leverage would make sense. what this does today come a without the federal reserve oversight, it removes that as a barrier to lever up depending on opportunities that come. we're not going to be in the way if that were an opportunity that came for ge. it is good flexibility and it should be positive. david: talk about this process. i understand conversations started in 2015 and you filed formally for the business to be taken away in march. this happened very quickly. what was the dialogue like? keith: we announced our plan to strategically downsize ge

capital back in april last year. we went to the financial stability oversight council and explain the plan of what we're going to do. the cap the dialogue to give -- we kept a dialogue to get them updates on the plan, but in march, we received our letter where they review the status and they said we would like to have that process kicked off. we refiled our application to get d'sedesignated. a lot of details about the transformation. we went down and met with the staff and there are 10 federal agencies that come together. the senior leaders of those agencies are the one who vote but there are workers in each of those agencies that are f-stop people. we met with them and gave a lot of back-and-forth on the questions and answers they had with us. we have had a very constructive and open discussion. i think it is remarkable that within 90 days of filing that to be designated is a great outcome for us. we are appreciative of the speed

that they operated under. david: credits of dodd-frank have criticized this process for not being transparent. do you feel that way? keith: for each enterprise it's really a specific situation as far as i can tell. we were designated in 2013. we receive documentation about why we're designated. it was quite extensive. we agreed. we had large roles as the financial crisis unfolded. we were under stress and we agreed that we had too much short-term wholesale funding. for us, the designation was not something we really contested. what we didn't spent was try to work on the factors that made a systemically important, reduce their risk, and over the last several years, we have achieved that. in the last 15 months, we really accelerated that. david: in those conversations, did you have to make any promises about the future of ge

capital and what you would be doing? keith: we talked about what the future of ge capital is, but there are no conditions on the withdrawal of this tag. we have pivoted now and we are really focused on things that just support ge industrial. our future is to support the industrial businesses and their customers, a large aviation presence and energy presence. they know what we are working on and know our funding structure. we are no longer systemically important, which is great. david: i noticed an echo in your statement and what jack lew said as well that ge is smaller and safer. do you agree with that? keith: of course we do and that was our whole objective of entering into the strategic change last year. we change our funding model. we are no longer reliant on wholesale deposits. we do not have any exposure to that. we really transform the place,

not only from the business perspective from the funding model. the risk is dramatically simpler. david: let me ask you about your non-us operations that are still regulated out of u.k.. what is your plan going forward with those? keith: all of our non-us operations are regulated by the authority in the u.k.. they are the largest regulated and what we basically have is about $50 billion of assets still to sell internationally. we have reached agreement on $25 billion of that. what our plan is is that we have about seven bank licenses in the eu and our plan is to sell those one of the time. we reached -- we did an ipo in the czech republic and we will return that license. we are doing commercial operations in france and germany in the next two weeks. we have a license in france and reach an agreement with servers. the last license will be in the u.k.. we have a schedule and seven licenses to return. we will work very constructively

and we're going to exit those banks. as we exit the final bank in the eu, we will be out of the pra supervision. david: keith sherin joining us. back to you. oliver: coming up, we have marks was of interviews. david rubenstein co-ceo of carlyle group, talks business politics and much more. this is bloomberg. ♪

oliver: this is "bloomberg markets." i am all over renick with shery ahn and matt miller is with us. let us return to aspen, colorado. erik schatzker is back with another exclusive interview this time with david rubenstein.

take it away. erik: thank you very much. david, good to see you. david: pleasure to be here. erik: i imagine what you did is what every ceo around the world did and way scout -- wake up and ask himself or herself what does this mean for my firm what does this mean for my business, what does this mean for my business? what does it mean for carlisle? david: we are in good shape. we are not worried so much about our portfolio, but on the other hand nobody knows what the long-term consequences of this will be. for the new immediate future, we will be ok. could be worse than it is today. erik: why do you say ok? let's just go with the average. to averagethe average prediction says it will shave half a percentage point off the gdp. it appears to be negative for

the european economy. how can that be ok? david: when you have an event like this, you want to make sure your copies have adequate credit lines and other businesses are not going to fall apart, so we do not have those problems. we are in good shape. many of the companies that we have in england are based there but a lot of their businesses are actually outside of it. we might have copies that are headquartered there or in other parts of europe, but they are selling things around the world. it is not likely that you will have a company that does only business in the u.k.. is no doubt that the u.k. will slow down the economy and i'm not happy about that, but a do not think it is a calamity that will make all of our companies less than they otherwise would be. erik: what do you think happens? you're operating a something for the future britain? we do not know what will happen, but is britain going to stay in other words, not respect the mandate of the referendum? may be muddle through with europe or perhaps something more disorderly? david: my own view is that it is

unlikely that britain will actually exit. when it becomes clear that the terms of the eggs are so extensive, not only because the eu is demanding returns but the consequences are so significant, i think the next prime minister of england will not invoke article 50. this might take a year or two to play itself out come but the consequence would be too severe. if scotland has a vote to exit, scotland has oil and nuclear submarine bases. scotland is a very important part of the cap. u.k. it would not be a good thing for britain. erik: and northern ireland could follow suit. david: it would be little britain. democracy does not say that whenever you have a majority that that absolutely requires you to do something. in our constitution if you want to get the senate, it takes to two thirds. it is not exactly the case that

a 52-48 vote means you have to do something. this was not a binding vote. whether prime minister regrets it or not is another issue. the next prime minister of england will take a hard look at it and assess the terms. my own view, based on not inside information just on general knowledge, it is unlikely that britain will exit in one or two years. it may negotiate for a while, but i think the terms will be too expensive. erik: many people are hopeful that you are right. let's for argument sake say that you're wrong. david: i have been wrong in my life before yes. erik: with that make carlyle inclined to do less business in the u.k. or europe for that matter? david: the devil is always in the details. what are the terms of exit? we don't know. i think large makes my have to make changes in terms of what they did. i do not know what the terms of exit are, so i cannot say what we would do. i'm reasonably optimistic that britain will come to its senses

or government leaders will come to their senses and mechanized that brings it is not in anyone's -- brexit is not in anyone's interest. erik: how do you think financial predictions and every established leader in europe and elsewhere got it wrong on brexit? david: it is interesting that the polling firms and betting operations and leaders, nobody got it right. maybe that is because there was a shift at the last minute or last hour or two before the vote. may be because people actually did the voting. many people who voted against it were in parts of england that a lot of leaders do not spend a lot of time and. there were many factors. and makes me wonder about the polling system in england. we are we are in the most important thing is to not panic and say the world is falling apart. the world will survive this. this is not something that will

happen overnight and have a calamity. it will take a long time before we know what the consequences are. we have seen a rebound in the market. the markets are not back to where they were, but they're coming back as people realize it is a long-term operation before we know what is going on. erik: does it make you do anything differently as the co-ceo of carlisle or the firm doing anything differently because the uncertainty we are dealing with already now seems to be deeper and more prolonged? that can create challenges as an asset manager, but opportunities as well. david: there is no doubt that there will be a slowdown and the u.k. economy. we have to assume the economy is going to grow at a lower rate and make some difference in financing things. we should also look around the world. are there any other brexits that could happen? i think a geopolitical assessment of whether it is possible that brexits are around the world is a good thing to do. erik: where might that be? david: every part of the world

has issues. erik: we have elections in france. david: we have elections in the united states and issues about what is going on in the economy in japan and china. are there certain things that we would assume that may not be the case? erik: would you say that you are reassessing those? david: we are taking a look at whether are some gems are wrong about other things. right now we do not see another brexit on the horizon, but saying that does not mean you have a lot of comfort as we do not realize breads it was going to have -- brexit was going to happen. we should see if there are other types of events that could make a difference in their business. we do not see any, but you never know. erik: for the time being, there is financial market volatility. there's uncertainty that could have an impact on financing cost. does that mean dealmaking activity, either as sellers or buyers, shuts down? david: whenever there is uncertainty, sellers are probably not going to sell because they think the price

might not be what they should be. the buyer gets nervous because the economy is going down and they do not want a higher price. prices are not at a level we are comparable -- come people comfortable with. you will see a lot of uncertainty and told sorts itself out. in our own case, we have been very active in the second quarter. you been selling things at prices we're happy with. we are happy where we are at this quarter. the quarter is just about over and then we have the next quarter to deal with. erik: are the things that you hoped to sell that you may put off as a result of this? david: i do not know any specific thing because the end of the year is a long way away but the market for selling things is ok. we have been selling into that market. erik: you pointed out the prices in some places remain high. does that explain why carlyle and other alternative asset managers and for that matter people with capital have not

been active in buying energy assets? david: when you buy assets in the private equity world, you like to pay 7-10 times cash flow. you get nervous at 10-11 times cash flow. many deals are excited to be 14 times cash flow and that is to spencer for us. that is true of everybody in this world. we are witnessing multiples come down a bit before we actually buy a lot of things. erik: what do you do as a firm if this low rate uncertain environment persists for quarters or years longer? david: you have to make certain that the company's you buy that you can actually get the value. you want to be sure that you can add value. you do not have to invest money. you do not go to jail if you do not invest the money. is important to wait for the environment to be good. we tried to add value to the company, but there is no doubt there will be a slowdown if prices do not come down. prices will probably drip down a little bit. as prices slowdown, growth will

slow down and eu will slow down as well. erik: does it make you more or less inclined to revitalize your hedge fund business? david: that is an unrelated to our core business. we had some hedge funds. it has not been the core of our business, so it's not the main thing i'm focused on. i focused day today on a private equity business. we have a large real estate business as well. hedge funds are relatively small for us. erik: before we finish, there is one topic i know you have given a lot of thought to. what does the next president of the united states need to do to revitalize growth in this country and to bring about the kinds of things that some of you people want to see? wage inflation and inflation in the consumer price index. david: when i worked in the carter white house, we managed to get inflation at eight double-digit people made fun of us. we have been averaging inflation at 2%. 3% or 4% inflation is not a bad thing.

if you get inflation, it could be good for the economy. the next president has to say -- how can i break up this function that exists? how can i handle this dysfunction between congress and the executive branch? erik: that would be a good start. david: we need copperheads of tax reform and that has not been done for quite a while. third, we need something in the infrastructure. infrastructure in the united states is currently. i don't mean just bridges and roads and airports, but things like cell phone connections and things like that, water treatment plants. all these things need to be done. we also need to be sure that we have something in trade. we cannot put our head in the sand and say trade is about the. bad thing. their many of things that have not been dealt with, but the most important thing is the next president needs to sit down with congress and say, let's see how we can work together and get a more collaborative way of getting things done. erik: a mentormen to that.

david rubenstein, co-ceo of carlyle group. back to you in new york city. shery: thank you so much for that great discussion. still ahead, investors are hunting for ball bargains. are emerging markets the way to go? we will explore. this is bloomberg. ♪ ..

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>> you are watching "bloomberg markets." let's start with mark crumpton. mark: president obama has telephoned his condolences to the turkish president following tuesday's deadly suicide bombings. officials say three suicide bombers opened fire and blew themselves up near the airport's arrivals hall. the president spoke to reporters prior to his meeting with the leaders of canada and mexico. president obama: we stand with you people of turkey, and we intend to do what is necessary to make sure these kinds of terrible events are not happening. mark: turkey has been the target of attacks by islamist and kurdish militants. as for that meeting, it will be the first time canadian prime minister trudeau hosts president

obama and the mexican president. they will hold a news conference at 3:00 p.m. president obama also scheduled to address the canadian parliament. despite the brakes at vote, u.s. secretary of state john kerry says britain may never leave the european union. he told the aspen ideas festival that london is in no hurry to go. he also told "the guardian" newspaper that there are a number of ways the move could be "walked back." a new poll shows donald trump and hillary clinton can -- and that -- -- neck and neck. libertarian candidate gary johnson get 8% and green party candidate jill stein has 4%.

global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 26 countries. back to you. shery: in the wake of the british vogue, the outlook for another fed rate hike does not look promising, which seems to be good news for emerging markets -- in the wake of the british vote. our next guest sees much more upside ahead for emerging markets. she joins us now from miami. thank you so much for talking to us. what does rex it mean for emerging markets -- what does rex it -- what does rex it -- w hat does brexit mean for emerging markets? catherine: we used to say get your santa claus list ready because many assets are going to be like the baby thrown out with

the bathwater. i would point directly to the emerging markets space. i do not think this is a systemic risk in terms of what we saw in lehman brothers, for example. >> looking at capital markets so far this year, it has not been the most conducive environment to ipo's or m&a's. will this throw a further wrench into that situation, or are things poised to rebound in the second half of the year? >> it depends on the sector. i have been bullish on the energy sector in terms of utilities. i continue to think there is space. one of the views i held was if rex it were to happen was the collapse in oil prices but then a rebound. the bloomberg reported inventories tightening in the u.s., so i think oil prices will continue to move higher, consistent with fundamental

downsizing in a global supply, which is good as well for emerging markets. the fed is on hold in the dollar is likely to resume week is because the head is not going to move this year and likely not next year either. as well, you have investor positioning, so i think investors will look for yield. i think you see them in emerging markets. specifically them a fixed income space, and even more specifically, backed by the government. matt: do you think the fed is likely to cut? is that a possibility? mark: i think the fed will look at that option, but the most likely scenario is that the fed stays pat. i think they send a dovish signal and let the markets confirm they are not expecting any increase throughout 2007. i think with the fed can do at

this point is limited. let's say they going into negative interest rate policy? that would be counterproductive. ecb is going to come up with more. i think bank of japan comes next month and i think you will see stimulus on the front, which is why markets today are rebounding. matt: i want to expand on something oliver was talking about earlier, which is the rebound we have seen in u.k. stock. the white line is the ftse 100. we are now positive over the last four days, so if you were long thursday night, you have made back everything and then some, but you look at the ftse 250 which is the domestic stocks, those that do not get the boost from the weak pound stimulus. they are still down by a lot compared to where they were before. what do you think happens in the

u.k.? mark: uk's --kathryn: u.k. is the epicenter of all of this. i think you will see recession and u.k. -- in u.k., which is why i like to look elsewhere and see where value is sectors in countries that have fallen dramatically that are not related to u.k. in terms of economic ties. we could talk about financial contagion, but i think that is even limited. financial spreads over the past did of days has actually tightened. the market is not seeing this as a systemic global risk that could potentially take down the global economy. shery: let me talk about china because capital outflows could be a key concern. we are seeing chinese authorities stepping back in to support the change rate. could we see a repeat of august? kathryn: i think one of the

biggest risks is a chinese mega-devaluation. it would be in my view catastrophic. the mexican peso has the most to lose. i think it would be a last resort. what we have seen in terms of capital flows -- and you can get this data from the bloomberg very easily -- capital flows peaked in december, january, february. march, april, may have rebounded. that is the metric i am most closely looking at. >> last thing -- you mentioned earlier, just to follow up on utilities -- you are bullish on utilities. staples are above 23.

how much further do these groups have the run? kathryn: this is a call i have held since the end of last year. i think investors will continue to like the high yields in utilities, which is traditionally a sector -- just like telecom, materials, energy -- that does well in decelerate in economic cycles, even recession. there could be upside, we have seen very strong appreciation at this point. >> much appreciated. thanks for joining us. the head of global strategy at alltick -- at bulltick capital markets. ♪

shery: this is "bloomberg markets." this afternoon, the fed will release results of the second part of its annual bank stress test, and we will learn if banks will be able to distribute capital to their shareholders doing dividends. who has the most to gain from this today? >> it's a good question. we have looked at analyst estimates coming into today, and they are expecting wells fargo and jpmorgan to pay out the most through dividends and buybacks but that is sort of baked into expectation. the big question marks are bank

of america and citigroup, who have lagged their peers in terms of dividends they are paying and their stock. last year, they were sort of the darlings of investors who expected them to really be ramping up their distribution and they did not as much as people thought. coming into today, there is a real question of if we will see some meaningful increases from bank of america and citigroup in terms of what they are giving back to investors. all of her: what are the most important aspects of these stress tests -- oliver: what are the most important aspects of these stress tests? dakin: the big question is the payout, not only how much banks ask to pay out, but if they are allowed to. the fed puts them through a series of scenarios to make sure they have enough capital to

withstand a downturn. if they have enough capital then they pass one part of the test. another part is always a bit of a wild card, which is the qualitative portion. the fed can look at their stress test processes, how they value or how they calculate their revenue and loan losses, and the fed can say they do not think they are doing a good job of it. if they say that, the banks cannot pay out any capital over the next year, and investors are going to get really worried. shery: exactly. what does a fail mean this time around, and what does it mean now that we have a possible brags it -- a possible brexit? dakin: there was a question as

to if bricksexit was factored in. i believe, though i don't know that some of these decisions were made before brexit o ccurred, so i do not think that will have an impact on these results today. oliver: frankly speaking, how often do these stress tests surprise? has it been largely newsmaking, is it just a thing they have to go through to go through the motions, or is there a change to -- is there a potential to really change the outlook for some of these companies? dakin: we did see more surprises in prior years as the fed figured out what it wanted to do in these things and the banks figured out what the fed was trying to do. in the last few years,

communication between the fed and the banks has gotten better. the fed has done a better job of saying, "here's what we expect from you guys." the chances of surprised have been lessening but we could still have a surprise today at 4:30. if so it will be pretty exciting. shery: thank you so much for joining us. oliver: turning now to canada, president obama has landed in ottawa for the so-called three amigos summit. the leaders of canada, mexico, and the u.s. have already started issuing statements. pamela, what is the latest? pamela: the press conference is actually at 3:00 this afternoon but a new agreement to coordinate on antidumping for steel from the three amigos or

as a trading block -- this is thought to have power as a trading block to lobby china. it also addresses in a way some of the things donald trump has been talking about. donald trump has said that u.s. steel is all that can be used in u.s. projects, so it at least goes some way toward the block coming out with a single voice. the other thing they discussed -- and this is expected -- on green policy so more clear limits on greenhouse gas emissions saying that they want to make sure half of the continent's electricity is generated by clean energy by 2025. all of that somewhat expected. the steel part, an interesting and perhaps a veiled message. shery: what about the brexit vo te? how was that addressed?

pamela: if one trading block is coming apart, what about nafta? could it come apart, as donald trump suggested? you can believe the leaders of canada and mexico are very concerned about this. trump could change a few things at the margins. he could look at terra charges and change those in some way but it is really the realm of congress, so the president changing that could actually be sued by congress if he did that. another thing that could be looked at why a president if he wanted to change after is causes around the access to market -- clauses around the access to market. in that case, though, could be sued by the wto. oliver: we said yesterday that mexico and canada had a meeting. were there any other pre-meetings? do we know what came of those

discussions? pamela: we do. mexico in 2003 banned imports of canadian beef the cousin in canada, there was a mad cow disease scare akin 2003. for many years after that, it was all cleared and deemed safe. mexico still has not allowed those back in. mexico will start allowing those back in. so many mexico's -- 70 mexicans were coming -- so many mexicans were coming to canada under refugee status, so those visa restrictions are being lifted. shery: thank you for joining us. coming up, the ceo of region around -- regeneron pharmaceuticals speaks out on the criticism facing drug makers of late. this is "bloomberg markets." ♪

oliver: this is "bloomberg markets." this month, bloomberg continues

its focus on the world of pharma by gathering prominent leaders to discuss the industry. earlier today, we sat down with the ceo of regeneron pharmaceuticals and asked about the pricing pressures facing drug makers today. leonard: we have this conundrum. we have to have rising that makes people feel like they are getting value and that they can order the drug. it does not do us any good if all these drugs are invented and people cannot afford them. on the other hand, we do have to have prices that encourage investment in the industry. capital flows to where it can make money, and if it does not think it can make money in the pharmaceutical industry, it will not be there. therefore, these young entrepreneurs that want to create the cure for cancer or

alzheimer's, they will not have the funding. we have to have this balance of short-term people being able to afford it and sufficient incentives to make the industry grow. i love the quote that president lincoln said -- he said the patent system provides the fuel of interest to the fire of genius. it explains why in the united states, most of the drugs in the world are not invented, by the way, in britain. they are not a written -- they are not invented in the continent, in asia, in russia. they are invented in the good old united states. why is that? we have a system that encourages it. >> there is in practice an element of you being in the hands of the politicians.

if you look forward to the next presidency, what is the thing you most worry about? is there a particular thing to do with pricing you are particularly concerned about? leonard: there are elements you see ready to go after the evildoers in the pharmaceutical industry, and there are evildoers. we have seen people do some stupid things, and that becomes an easy way for people to pile on, make the enemy the biotechnology or biopharmaceutical industry when we really are not the enemy but the solution to so many health care problems. i do worry, in times when you try to close down on budgets in the near term, that we will lose the long-term incentive and the u.s. will no longer be the place that invents most of the drugs in the world. >> do you think the fda is being generally well run?

are you generally happy with the way it has gone? leonard: i love the fda. if you are a big powerful marketing company -- i will not use names, but some of them are in this town, not too far from here -- if you are a big, powerful marketing company, you want a low bar you can easily get over and put the marketing machine behind your products. if you are an innovative company like we think we are, you want a high bar because you want the fda to only let things that are safe and effective and well established and well proven so when you get over there, that is your protection because you do not have that marketing muscle. we have no problem with the fda, and when we interact with them they really have precisely the same goal as we do -- to have safe and effective drugs out there as quickly as possible and to keep drugs that are not safe or do not work from getting out there. shery: that was the ceo of

regeneron pharmaceuticals, leonard schleifer. for more information, go to bloomberg.com/pharma. oliver: puerto rico says it will default on its debt even with government help. ♪

david: it is 2:00 in new york, 7:00 in hong kong. shery: welcome to bloomberg markets. ♪

david: from bloomberg's world headquarters, i am david terry. vonnie: i am vonnie quinn, here is what we are watching. david: health care stocks resuming today. if the brexit delay officially over? vonnie: records will continue to slog for the sector? looking at energy and acquisitions, we speak with tom fanning, ceo of the southern company. david: and there is a key perl and passing the rescue package for puerto rico, but a senator from new jersey has serious renovations -- reservations. markets close in two hours stocks are hovering near shasta highs. ramy inocencio is sending by. ramy: session highs right now are three major indices. today, we reached about $260