from bloomberg world headquarters in new york, good afternoon. we're taking you from boston to london to washington. here's what we are watching. u.s. stocks fluctuating now. bonds are rising worldwide on speculation central banks will ask to limit any follow from the brexit vote. note, president of the bank of st. louis. talksrge chairman and ceo about new cancer treatments in the social contributions of drug treatments. in the doway of july briefly turning negative now so let's turn to the market now. >> the dow as well as the s&p 500 flipped into the negative

and there he potentially traders looking ahead to the long weekend. this is where we are right now. the dow and the s&p 500 up less than .01%. let's take a look at what is brexit.g in terms of brexit happening seven days ago and we have pretty much a recouped most of our losses since june 23 when we saw those first days of losses. $1.7 trillion wiped off the dow and a gradual return. to where we were post brexit. i want to show you the imap function. we are looking at six at of our 10 sectors in the green led by consumer discretionary and i will get back to that in a

second. ptolemy qe -- telecommunications up. utilities and consumer staples down by about .25 percent. let's talk out of stocks. the major u.s. players did, with their june auto sales and they as many in as well helped. their stock prices are rising today. general motors up one point 5%. gm said its sales fell 1.6% year on year but it is still up. the estimate was about 7%. the company sold -- .7%. let's take a look at what is happening in some other stocks. up because of the news it once to buy a supply chain company.

harley davidson up 14%, the in the consumer discretionary sector on the s&p 500. there is speculation that he might be interested in a takeover. jco.looking to buy they are expecting to add one month of that. vonnie: what about the losers? >> let's look at the bonds. the 30t often look at year treasury but we are today because it hit it's a record low. it is till down six races points still down six

basis points. becauseown nearly 6% merrill lynch says its outlook is negative. not new news to us because we have been talking about this the entire year. six of 13 directors have decided to call it quits because they failed to oust their ceo. ourie: mark crumpton is in newsroom. mark: a group as many of nine gunmen holding several people hostage inside a bangladesh restaurant. local tv says the attackers entered a bakery in the capital. the attackers who authorities exchangeoff explosives

fire with security. a state department spokesman says the u.s. embassy has accounted for 100% of american citizens under the authority of the diplomatic chief. new report shedding light on conditions facing refugees in libya which amnesty calls horrifying. the report documents accounts of exploitation and sexual abuse, including christians abducted by islamic state and forced into sexual slavery. the international rights group says sexual abuse is so widespread, some women take contraceptives before their sea crossing. donald trump says former president bill clinton's meeting with the red alleging has opened up a pandora's box. trump last of lynch for her private meeting with mr. clinton during the fbi investigation into hillary clinton's use of a while shemail account was secretary of state. at an event today in denver, he discussed openings on the

supreme court. >> we will appoint supreme court justices who you will be very happy with. these are justices that will uphold the constitution of the united states and fully uphold it. mark: indiana governor mike pence expected to meet with mr. trump over the holiday weekend and that is fueling speculation pence could be under speculation -- under consideration to be trumps the running mate. emergedristie also has as a close trump lie in recent months. democrats will oppose a gun bill next week put forth by house republicans. staged 25 hour sit in to demand votes on gun bills. it is said to believe the measure amounts to an nra written proposal. democrats want two amendments including a provision to keep suspected terrorists from buying firearms.

news 24 hours a day powered by more than 2600 journalists in more than 120 countries. this is bloomberg. vonnie: thank you. trading for the weekend, about 55 minutes now. what a week it was with britain's a stork vote to leave the european union. the decision through markets into chaos for a bit and appended british politics. >> we're waking up to a whole new reality. >> these guys have been here trading since 8:00 p.m. >> the british people have made a very clear decision to take a different path and as such, i think the country requires fresh leadership to take it in this direction. >> what we see here is the 10 year gilt moving below the 1% level. we haven't the nut of her before. >> we are meeting a few days decision of painful

great britain to leave the european union. we do respect this decision of course but it will have to be thought through and its consequences. >> if we don't come to a grown-up trade deal between the united kingdom and the eurozone, it will hurt the eurozone. post brexit losses. check this out. >> there will be no negotiations of any kind until the u.k. formally notifies its intentions to withdraw. >> seize this chance and make this our moment to stand tall in the world. that is the agenda for the next prime minister of this country. i have concluded that person cannot be me. toall of that in seven days

-- seven days. we have to bring in mike on this. more on market reaction and the huge turnaround we have seen. just watching all of that brings shivers back from the week's trading. really unreal what happened all week. the rebels were tremendous. just can -- ripples were tremendous. the week started friday, monday. it was the biggest drop since last august. not is reason to compare just because of the magnitude of the loss. run strategist -- one strategist of systematicbits trading strategies and how they react to increases in volatility

and a holistic approach to how money flows in and out of stocks in the market. that today dip was similar to august. the rebound was also similar. after tworp rebound or three days kind of like we are seeing here. he said don't be surprised to the another dip. the vicks could spike higher and risk could come back in. once you introduce this type of volatility into the market, it has a lasting effect. a lot of these trading strategies react to big changes in volatility and it might take a couple days, weeks to really work itself out. if you remember in august, we did have a sharp rebound but it didn't last and there was a lot of up and down. vonnie: surely that is built into all of these strategies and trading environments.

stabilize, can't they recognize that immediately? guest: it's hard to say what is built in and what is not and how the entire ecosystem reacts altogether and what the net result is. there are a lot of differences between the situations. we have earnings coming up. that will be a catalyst that will override these technical of variousits strategies. it is something to think about. to me, it's surprising we had such a sharp rebound. we are back at these levels. and the leadership of the market right now is very defensive. it's ok to say this is a risk on rally sentiment but if you look at a leadership of the market, your traditional defense

industries -- telecom, health care, utilities. have become yields an endangered species. the 10 year treasury yield today 1.38 comes low as all-time low on the 10 year treasury yield. it's hard to extract exactly how much of that is concern about the economic outlook and how much a speculation of monetary policy. regardless, it's clear these low yields are pushing people into these defensive stocks. it's an unusual situation to try to push to a new record. vonnie: you are saying something strange in the neighborhood and it's not just the central bank. how long will it make for us to know what the full impact has been in for the environment to go back to normal? guest: when is it ever normal? i think it's a good sign today that the market is up. a lot of concern that some of

the strength toward the end of the month was either windowdressing, people wanting to have good portfolios to show at the end of the quarter. back of thelot of mind worry that part of the rally was that sort of thing. to see the first-day avenue quarter, a new month, it at least -- the first day of a new quarter come a new month. it is an of scary thing that these academics do where they comb through newspapers and try to quantify how much uncertainty there is in the market. very elevated in the u.s.. obviously uncertainty is a catalyst in and of itself. going into a new quarter so who knows what lies ahead but you will be taking us

through it. check out his most recent column as well. he talks about british comedy so it's worth a check out. from drug pricing to research, what is the outlook for merck? hisken fraser gives us that's. then st. louis and president says he's he's little impact from the brexit could vote on u.s. economy. and a look at the 10 year yield. so far, following to a record this year. this is bloomberg. ♪

vonnie: it is focused on pharma week. we spoke with ken frazier about the latest advances in treating cancer. communal oncology has been something people have dreamed about for many years and these agents allow the body's own defense is to actually attack and defeat tumors. we have been studying across 30 different tumor types in more than 300 studies. it's one of the first agents that has the promise of being a broad-spectrum agent across many different kinds of cancers. >> does this have the replacement to -- the capacity to replace chemotherapy? >> it does. we studied it in an important subset of lung cancer patients against chemotherapy, which is the standard of care. chemotherapy has tremendous side

effects. what the study showed is if you compared a population, chemotherapy -- this medication did better in progression of cancer and importantly, overall survival. now you have a drug that has fewer side effects and that is much more effective for the important subset of cancer patients. >> give us a sense of the arc of a drug like this. you said it's 30 different tumors you are testing on. when did you start this and how far along are you in a process? .> we have gotten to market the thing about this medicine is we can immediately see it impact on tumors so we are rushing to try to get this drug to was many people because we have to study it tumor by toomer. >> which tumors have you gotten clearance for? non-lanoma and second line

small lung cancer. we are looking at first line one cancer and head and that can come -- head and neck, hodgkin's lymphoma, a number of different important cancer types. we will have many filings over the next year. >> how big could this be in the terms of numbers of people who could be affected? >> it's hard to say how high the ceiling is because in many ways, we are trying to figure out which tumors it doesn't work on right now. we are excited about the possibility that this could be a broad spectrum agent. >> give us a rough sense of the investment required. with all the signs you do, how much do you invest in order to get to market? >> every year, we spent about $7 billion worth of research across all categories and out-of-pocket, $2 billion this year.

on this drug alone, that is quite an investment. >> it is. we have to have a very serious conversation in this country about the health care system. >> how much would a dosage cost? how much does it cost a patient or their health insurance company? melanoma, the list price is about $125,000 a year. >> $125,000 a year. >> if you have it administered in a hospital, it will cost you more because it has to be infused but that is the list price. then there are rebates negotiated by the providers we work with. >> how can our society deal with that issue because it sounds like a promising, wonderful drug that can change lives. on the other hand, we have 7% of our gdp as a country going to health care.

at one point do we need to say we cannot afford it? >> everyone who is looked at the system realizes there is a significant amount of waste. we had to figure out how to get the waste out of the system. this drug will do something nothing has ever done before that is to say it was a many lives in a particular way. the debate about health care today is polarized. society needs these drugs. the reality of the world is if we don't have a sufficient return on investment, we will not get the significant capital we need that we have to put up with significant risk for significant time in order to continue current and future research. vonnie: mark chairman and ken fraser earlier. we will be right back. this is bloomberg. ♪

>> joining me for today's option insight is momentum stock strategist at his ax.com and joints me from chicago. good to see you on this first trading day of the second half. we see a rally day after the it --> it vote -- post >> brexit mode. >> we're taking it in kind of erasing it off the map. if you fell asleep on thursday, you would think nothing happened when you woke up today. the only thing i see is the pound coming down today. i think that will linger but as far as equities go, we have a little more gas in the tainted but earnings coming around the corner so i think that will be the next catalyst steering us. >> speaking of earnings

forecast, they are not very good. -6% possible revenue growth. >> this is several quarters in a row we have been talking about this earnings recession and everybody has been writing it off because so much of it has an coming from the energy sector. --n you look at negative 62% 6.2%, we have had this kind of forgiveness the market has given but i don't think -- know how long that will continue. the flip side of the equation is as long as you have central bank canceling out this morning session, we continue to go higher. >> potentially talking about stimulus in china. let's get to your trade. you are going defensive i guess. alliance,greens boots

they think that this right a deal will end up getting done later on in the year and the stock has been coming down a bit. what i'm thinking is this might be a spot where people have kind stockgotten about this and maybe they can surprise with some great guidance the next couple quarters. spreading the 83 87 call . it will cost me $1.60 to put the trade on. >> more bloomberg markets next. ♪

vonnie: you are watching bloomberg markets. joe: i'm joe weisenthal. oliver: i'm oliver nick.

>> let's head over to mark crumpton. mark: president obama is issuing an executive order to make detecting civilians a more inter-world part of planning u.s. military operations. to 116 civilians have died in rome and other strikes in pakistan, libya, yemen, and north africa since he took office. police say nearly 15 people were shot in chicago every day in june, including a daily average of more than two deaths. than 315e more homicides in the first six month more thanr, over 100 last year. major relations between turkey and russia. foreign minister is from both to restore their anti-terror cooperation and

military contacts. ties were cut when a turkish jet down a russian warplane at the syrian border last november. to -- totaking steps clean up the air. cars at least 20 years old are being banned from the street that has many looking for alternatives. golfer tiger woods won't play in this year's british open in scotland. he's recovering from back surgery. woods hasn't played competitively since a tie for 10th place at the wyndham championship in august. back to you. close in just under 30 minutes. let's go live to the nasdaq.

>> a volatile week for the nasdaq with the index having a otherlloff monday with global equity indexes and having a nice four-day rally. this is a very volatile first half. the index down about 3% in the first half year to date. underperforming, the dow and s&p 500, both up modestly. the nasdaq is having its worst since 2008.ear before we take a look on what is dragging, one standout stock to tell you about. this stock open january 4 at $1.78. it is now a $30 stock.

as for what has drawn so much on the nasdaq, tech and biotech. probably more on the mind of , the second half. it's important to take a look at the technicals. i reached out to head of technical analysis at m km. says this is a longer-term sideways trend. this may be a good reason to take a look at the first half. first halfwas the driven by strong mobile advertising revenue expected to continue into the second half. roughly 103 billion dollars market. most analysts see a 20% upside

for the shares. joe: thank you. oliver: stocks were fighting today to stay higher. at one point this week, it was on pace for its best week since october 2014. our next guest sees any further gains as a great opportunity to sell. joining us from boston, matt bailey. thank you for joining. it's good to chat on their - on-air. what is going on here? the gains are impressive but it's kind of funny because we expected them and last weekend, we were talking about as rough as the selloff was on friday, we knew this wasn't one of those situations like a 9/11 where he came out of the blue. people knew the vote could pass. plans inplayers had

place. it didn't surprise me they were adding liquidity into the marketplace. then you combine that with windowdressing and things like that and it has helped this market bounceback falls to the brexit vote adds two more uncertainties and i think it's the straw that broke the camel's back as we move past the holiday weekend. joe: one sector in the u.s. and the u.k. that looks dismal is the financial. no one wants to touch anything related to finance right now. should this concern investors overall that this one set or looks so ill? lexus always a concern for the the banks have had a nice bounce back this week but not as much as the s&p 500. etf and thate bank

is still down 18% from its 2015 hi. in europe, it's even worse. , theuropean stock index bloombergs european financial stock index is down over 40%. the thing is it's tough for the financial markets to rally a bigly if you have such lag in the financial stocks. this has got to be a can turn for everybody and we have in the bond market, yields have not bounced back. people are still putting this into the bond market and the bond market is historically where the smart money is. carol: what changed in the past week coming off of the brexit vote? , some the brexit vote

people say it turned out to be nothing. i don't agree with that. this is not y2k. the vast majority of anything that will result from this is in front of us and it will take a while for this to play out. although it could have a lot of economic impact, it is really a and those things take longer to play out. forrtainties are never good the market. some people say it's a crowded trade but i've never known uncertainty to be an indicator like some others are. when you have all these other uncertainties, things have leveled off but they haven't improved a lot. our earnings going to get better or not? the dollar is down but not a lot .

we have all sorts of uncertainty out there that existed before the vote came out. now we know with brexit come all people are lowering their forecast for gdp. if that was the only thing going on, it wouldn't be a big deal. but we know things will slow down a little bit to a global economy that was already quite mediocre and it causes problems. mention how you characterize fixed income is where the smart money is. the rally in bonds have been nothing short of breathtaking risk come had in back. do you think we are heading toward some sort of blowoff top where there is so much momentum and bullishness that it will have to crack? guest: that is a concern. literally last week when the

bond market was already rallying , youields were dropping traders in thee treasury market were doing. 95% poll.up in the everybody was bullish. , this week as the market continues to rally, bullishness has gone down. last night's reading was 79%. it's kind of weird. it's starting to tell me there are a few nonbelievers and it could go further. i think you are exactly right. when you get too many people on one side of the boat, at one point there is a sharp reaction. oliver: right now in the interim, you are leading bearish. where does that call and? at one point -- what point do

you see things looking better? you have now got zero interest rate hike. look atpoint do you those long-term pictures and say it looks attractive? guest: the s&p 500 could he a little upside. just think the one thing with these earnings, people are expecting the second half to be a lot better and the dollar is lower than it was six months ago but it has bounced a little bit and it's still a lot higher than it was. why didn't they take energy out when it was doing really well? i'm not as bullish on the earnings outlook. second-quarter earnings will come out. what is the guidance going to be? i think we could pullback and i'm thinking we will pull back to where the lows were earlier

this year. i think that's a probability and there's a possibility we could go even further. lesser out of that happening. a 5% correction is nothing. , again 12% correction scary. carol: what do you do as an investor in this environment? guest: because some of these defensive groups have gotten so expensive like the utilities and consumer staples, you really want to take someone who will put it in cash and have it therefore the next so you can put it to work. i think you want that on the sidelines to take advantage. joe: thank you for joining us. carol: coming up, is it one and done for the fed on the rate hikes? jim willard will give us his forecast coming up next.

this is bloomberg. ♪

carroll: it's time for the bloomberg business flash for a look at some of the biggest business stories. bmw teaming up with mobilized to bring self driving cars to the rug by 2021. the companies he first major automaker to set a date for a fully autonomous vehicle. british discount airline easyjet will require operating rights of another european union state after last weeks vote. to move is an attempt

guarantee unfettered access to eu markets even after the u.k. leaves. cbs says it will pay the federal government $3.5 million to settle claims out of stores in and massachusetts. settlement isthe one of the largest involving prescription drugs in massachusetts. that is your business flash update on this friday. joe: investors are still assessing whether last week's brexit vote marked the beginning of a domino effect. this morning, james bullard talked about whether or not we should expect a longer time of lower growth. guest: i have got it at 2%. the growth rate for the whole

post 2007, 2009 recession has been about 2.1% in the u.s. any cyclical dynamics are probably worked out of the system will probably continue to grow at 2%. i don't consider that pessimistic exactly. i think you could transition to a higher growth rate but you will need higher productivity growth. zika data brexit -- >> did brexit alter your outlook? brexit will not have a big impact on the u.s. there is some flight to the dollar. the dollar is a little stronger but not enough to have a big impact and yields are lower. that is usually considered a bullish factor for the u.s. those are the kinds of analyses i'm seeing so far for that there is the issue -- so far.

there is the issue about further contagion to europe but i don't see that either. we will definitely wait and see but so far, i don't a big impact on the u.s.. to each is a character federal reserve bank. our global audience doesn't know the research history of st. louis, the work of homer jones and others before you. you guys in lewis under the arch, you have never seen yields this low. can we have a normal banking industry with such compressed, nominal u.s. yields? guest: they certainly would like higher net interest margins, that's for sure. i think some of the model of feesng is changing, more and more other types of services being offered, other ways to earning come. profitability has been ok and has held up in recent years. >> agreed.

so i think like all businesses, they have to adapt and change. >> they have to adapt and change in many including william gross would suggest we are within a financial repression. do you need to find a new model to assist america in getting out of its financial repression to help savers and jumpstart business investment? guest: well, we have been trying to think about new ways to characterize what is going on in the u.s. economy and characterize the future of monetary policy. a betterf you want environment in the u.s., he's really need two things -- you need faster productivity growth and a median term growth agenda in the u.s. and i think the very large liquidity premium on

short-term and long-term government debt, those are suppressing yields in the u.s.. i wouldn't call it financial repression. i would call it liquidity premium. people love to hold government paper and that is way out of character with the way it has been in past decades but that is the reality of where we are today and i don't the at -- don't see it going away anytime done. doesn't brexit not put deflationary pressures around the world or certainly in europe that makes it more difficult or the fed to get a 2% target? brexit byon't think itself will influence a deflation around the world. the concern is something spreads in europe is in more trouble or somehow going forward. thatust not seeing happening right now. i don't see the idea that other countries will copy this move. that doesn't seem likely at this point. for now, this is a big issue for

the u.k.. country,is a great great human capital, outstanding infrastructure, great business tradition. a lot of good things can happen for the u.k. they have to plot, of course, for a new relationship with the continent. if they can get on a glide path -- it will take a long time to negotiate. canada took seven years. ifwill take a long time but you can get on that glide path, you can control the uncertainty around situation and get to a better outcome in the u.s. oliver: james bullard. coming up, the close of trading just minutes away. we are off our highs and lows of the session. financials losing ground. the worst performing group,

consumer discretionary. keep in mind, the s&p 500 up more than 3% for the week. we have the market close coming your way. ♪

carroll: as we kick off the third quarter heading into a long holiday weekend, let's take a look at some charts. oliver: a crazy week for the vicks. it had a crazy move down. decline in the gauge of volatility. the fear gauge but essentially this is coming on the heels of the u.k. decision, a week in which we had a big 49% jump last week and every single day this week, down. a couple things here. one is potentially the brexit issue is not a big it deal as we

thought -- as big a deal as we thought. rig movement into vicks funds and exchange products. article onfantastic bloomberg right now. if you like vicks, go in and read it. and make things very interesting. you take a look at september or so of last year, you see how much it has really wide in terms of volatility. lots of volatility. joe: i'm looking at the chart of the day, the chart of the month, of the year. bond yields keep going lower. going back to the 50's record low yields. some really interesting stuff that happened around 4:00 a.m. this morning. seemed like a loss of liquidity because yields were plummeting further. they recovered a little bit. this chart is just incredible.

it would be fun to count how many times people have read they cannot go lower -- have said they cannot go lower from here. carroll: you see yields kind of just staying. joe: so many people are still bullish. like you are pointing out the spread there between the 10 and longer-term yields as well. joe: all the spreads are going away. soybeanst's talk about because we saw farmers planting the third biggest crop and corn they sowed fewer acres of soybeans than forecasted. oil seed grain ratio, highest since august 2009. interesting to see that. not necessarily on our radar but what is cool, hillary clark of bloomberg does our amazing charts.

and take ae data look at the commodity sector only for the year. the number one performing commodity this year in 2016 -- joe: so a. have got to love that the way to corn ratio. that will do it for bloomberg markets. the market close coming your way in just a moment. take a look at the major averages less than four minutes from that closing bell. the nasdaq up about .5%. this is bloomberg. ♪

♪ we are moments away from the closing bell. i am joe weisenthal. "what'd you miss?" alix steel is off.

♪ u.s. stocks closing higher. joe: the question is "what'd you miss?" whiplashhe market analyst ist, why one paying attention to gold and silver. joe: emerging markets had a great first half, could brexit ata game changer? >> we look what the u.k. vote means for the federal reserve's timeline for interest rates. we began on this friday with our market minutes. , the bestet averages week for the s&p 500 since july 2015. we saw selling last week after that u.k. referendum, but a big bounce back this week. joe: to say the least.