♪ >> from bloomberg world headquarters in new york, good afternoon theater i'm vonnie quinn. julie: and i am julie hyman. here is what we're watching very vonnie: bill gross joins us in just moments and says central bankers need to take a lesson -- may be coming soon. julie: the minutes of a june meeting reveal janet yellen and policymakers have interest rate holds because of a slowdown in the jobs market. vonnie: before the timing of higher interest rate. let's has straight to the markets desk were shery ahn a has been keeping and i and things. out anad the fed minutes hour ago and also have the showing expansion engine

more than forecast single -- signaling a healthy economy. gaining a half a percent or the nasdaq meeting those gains up 7%. the fed minutes did not do much to change this. however in the morning session, we had the report we mentioned, that report was out around 10:00 a.m. showeda right there that the nonmanufacturing composite. the highest reading since november. back in may but also going further and gaining 256 point. >> we saw it had not only in stocks but also in hans and other asked that classes. also it seems the fed not really changing trajectory. thank you. we appreciate it. risk back a little bit.

vonnie: will handed over to michael mckee. an interview with janus capital's bill gross. that will be playing on bloomberg television and radio. michael: thank you. we're talking with bill gross worldwide on bloomberg television and bloomberg radio. good afternoon to you. the fed wasested uncertain about where the economy was going but beyond that, did you learn anything today? >> not much. uncertaintyoyment and we will know more on friday. the exituse of uncertainty, that was the very cautious approach and i think beingriate in terms of cautious. brexit is beginning to have some honest certainly in the

u.s. but the u.k. and the property market. >> we will be talking on bloomberg surveillance friday for the jobs report. fed officials were confused fellows going on the labor market. some thought it was statistical noise. employers just cannot find workers. where did you come down? ? 30,000 foot cigna -- synopsis, janet yellen looks at the labor market, looks at unemployment, and from those statistics, inferred deflation is on the way. host of people. that when we have a

lot of structural elements in terms of mobilization and demographics and high debt it is a falsek idol they are focused on. i would not be as concerned whatever the numbers on at a. >> they were concerned about inflation expectations being low. a lot of it may be liquidity or preferences made by overseas investors on higher yield debt. >> to some extent. not just the u.s. market, that the u.k. market, a highly inflationmarket, expectations are very low. i would suggest too low because expectation30 years

, that is a low inflation rate. i would suspect because of our liabilities going toward because of medicare and medicaid, 1.6 will be a low standard and not hard to breach a some point. >> they did not talk much about -- howbut it is starting concerned are you about what financial markets might mean for the economy in the world world wide. is ado not think this subprime situation. u.k. property funds, six of which has been forced to close the door on withdrawals, it is reminiscent of subprime funds. 25 fund sector totals

billion. this is an indication of illiquidity in the system. save alld counter and that you want to put the system basically does not allow liquidity to flow in proper places, especially here in these property funds. one indication, perhaps there will be others to follow. i think it is something to worry about. >> do you worry about it in the sense of problems going forward or is this largely just a reports that media the property prices will be worth less? >> i think primarily the latter. we know the structure is substantially different than it was in 2008 and 2009. i do not go that far but i do suggest yes, and property funds

and the u.k. and mutual funds in that they'reys, treated in money market funds. they look at them as they can have their money the next day. ifthis particular case, property cannot be sold, within a 1, 2, or three day time frame, they do not have enough cash the may have liquidity problems. i do not think that is the same situation with neutral funds that there are situations where high-yield funds were private equity runs where investors i think weas an atm, should be careful and i think regulators should look at those types of situations. michael: we are talking with bill gross. in your investment news out today, maybe you do not want to look at inflation but you want to look at credit inflation as a key metric. you are worried about it

slowing. it does not seem to be the view dayed officials, where this households seem to be moving right along and financial conditions nonfinancial firms, .n their words were improving how do you square with what you see with what fed officials are seeing? >> fed officials can pass on whatever good number they like. total credit is $62 trillion and there is the household sector and government hall in combination. the household sector includes credit cards and mortgages combined. you know the private household sector pay greater than 2% or 3%. 8%dit cards are growing at and it is a very low number and

from theough government sector to produce credit growth that is necessary for even a subpar economy such as in the united states. >> corporate credit seems to be rallying around the world your a lot of investors seem to be using it as a proxy for saffron the days. is that wise or are people just fooling themselves about credit quality? >> to some extent, all prices are artificially high. we observed that with sovereign credit where it just rates are at zero or less all the way up four years, as an example. corporations are next. today,ed the situation which is the insurance regulator of united and suggesting downgrading regulating for corporate credit allowing insurance companies to buy

at half of thes regulatory penalty they had before. i worry about those types of things. high-yield bonds are 400 asus points on investment grade corporation 75 to 80. they are relatively low compared to historical examples. getting into a slowdown or a recession down the road, there those reds andth i would not buy them. yields in japan and germany, falling significantly, are you still willing to buy sovereign or at this point is it too risky? >> i think it is too risky. out in 20l the way years is negative. inclined to move

close to zero. japan all the way up at 40 years , these would have been unheard of or you must be joking type of examples four or five years ago. obvious investors cannot be concerned about return on its money because there is no return, he or she could be -- should be concerned of their money because they had high durations, which they have now with low interest rates. yield can reduce -- southern bonds are not up my alley. michael: thank you. we send it back to you in the studio. much to her you so michael mckee with bill gross on bloomberg television radio.

sovereign bonds not of his alley at the moment. let's get a check of the headlines this afternoon. pull finds imagery of voters disagree with the decision not to recommend criminal charges against hillary clinton according to a survey. 54% of voters say the fed should have filed criminal charges. that is compared with 37% who agree with the decision. house democrats are reportedly getting frustrated with bernie sanders timeline of endorsement of hillary vincent. the associated press reports closedrs -- behind doors, timeline. despite the pressure, the vermont senator has refused to provide a timeline for endorsement. donald trump raise $51 million through the end of june for the campaign and were looking party. has 26 my dollars for his

campaign and 25 million or the party. estimated 400,000 people made donations and 900,000 of those were for less than $200. the presidential and eight contributed nearly $4 million of his own money. the syrian military declared a unilateral treated piece of art -- cease-fire coinciding with the final days of the holy month of ramadan. u.s. secretary of state john kerry is welcoming talks say -- saying talks are underway with russia and other to expand it. -- analystsore than and 120 countries. expanding itst is new pay service, its mobile pay service. this is bloomberg. ♪

vonnie: this is bloomberg markets. julie: turning to retail, walmart has announced it is expanding its mobile payment services nationwide. called.pays what is the answer to apple pay in a way. in other words, you have a feature on the walmart app where you pay with your phone or your credit card is already loaded in their, you to not engage to bring a wallet with you. the idea is you hold your phone up and it charges it the a your phone and you receive an app. how many stores was it at

originally before the expansion? >> a quick expansion. they announced they were doing this in a handful of stores in this -- in september. the first of 2006 now. schedule.kept on walmart has 140 million shoppers the week. people willmillion shopping at these stores week. was this the place they should have been concentrating? it should bey significant. the big thing for walmart and the people in the tech industry think this is significant. it gives them the ability to connect what you do off-line, in life,rt in your off-line

what you buy there, how you behave in the store, so being able to connect that to what you do online. let's say you bought a bunch of detergent last month. they could send you messages one-on-one, facebook, text messages. it -- following influences online and vice versa. that is the big connection. we know when you are shopping online, -- retailers have not been able to do that off-line yet. that is where walmart is headed. >> amazon has an edge in that department. what is the divide between walmart and amazon on data mining and understanding customers? >> amazon because it knows your name and it knows a lot about you to make a lot of assessments about you of what types of search results you get. are third parties that

match your credit card number with who you are personally, but it is not accurate as it is time-consuming. this should help give them the ability to create a more tailored ability. eventually for you shopping in stores rather than just online. a great piece. thank you. time for a look at some of the biggest business stories in the news right now. cbs owner of the most-watched tv network plans to take -- public eye the end of next month. announcement was made -- cbs has been exploring options for its business. the ipo suggests the network cannot find a buyer willing to pay the right price. a favorite destination for banks out of london.

according to a boston consulting group, new york and dublin, 77% of respondents -- relocations within two years. london, about 80,000 jobs. global investors suspending its real estate fund over liquidity issues. following britain passes decision to leave the european union. that is your update. vonnie: still ahead, today's options insight. the open market committee meeting minutes. the dow is up about one third of 1%. about .4% and the nasdaq up about .6%. this is bloomberg. ♪

vonnie: this is bloomberg markets. julie: time now for options insight with sherry. is a momentumnow stock strategist who joins me in chicago. . thatc moore asked correlation. what are you focused on? >> it seems like all of a sudden you will get the risk off trade put on and we have to dig ourselves out of a hole in the morning. that is the same thing we saw happen today.

lucky for us, they came back a little bit as the pound started to rally. we see the correlations just like we saw back in the year with oil. it does not make a lot of sense economically why it is happening but in terms of the risk on risk off, it makes perfect sense. with this trade now, someone call angela because i am waiting to brexhale. i am starting to get sick of it here at i think the rest of the market is. i'm looking at junior gold miners and i am selling the 4850 the 4950i am buying call. i am basically waiting for this thing to come creeping on down. i'm taking $.45 and putting it in my pocket. willasically hoping things

-- we will start focusing on our earnings and the jobs number coming up on friday. >> gold is on a two-year high. ubs, starting to see a new bull run for the metal what is your take on that? >> i think it is a little bit overcooked right now. start june and now we are about 48. a 50% run in gold miners, tied and correlated to gold. that is all part of that risk off in part of the strengthening yen we are also seeing. it is all correlated right now. i will fade to trade heading into the weekend. >> it was great talking to you. thank you so much. back to you guys. thank you for that. you can count on david to have a catch phrase.

brexhale. to it looks like the market is waiting to do something. overall, if you look at bonds, or stocks, we not seeing huge changes across the board. glass you would have thought perhaps there would be a little more roundabout this week following the brexit trade. >> we will see. still ahead, michael froman joins us from sun valley. to discuss tpp, brexit, and the fight over fair trade. this is bloomberg. ♪

a you are watching bloomberg markets. joe: let's check on the

headlines. we're joined from the newsroom. ramy: senator bob corker has taken himself out of the situation to be a running mate. a contender who could have added experience and gravitas to the ticket. corker, chairman of the relations committee, has been among trump's top choices. he informed trembled his decision yesterday. president obama says he will slow the call of troops from afghanistan. mr. obama said he would leave in 400 military and at the end of the year, the original number, one to 6500. president obama: continued progress in afghanistan. as well as the flexibility of the threat of terrorism as it involves -- evolves. >> they continue to focus

efforts on training afghan forces as well as counterterrorism missions. the u.s. is opposing sanctions for kim jong-il and for human rights abuses. he and 10 other senior officials are responsible for abuses that make syria one of the most oppressive in the world. banningets and transactions with u.s. citizens. a court has convicted seven men who returned from several weeks in syria, including the brother of a suicide attacker who targeted paris last year. to defendants were sentenced prison terms ranging from six years to nine years. former fox news anchor gretchen carlson is suing chief roger ailes after her firing last month. she alleges roger ailes retaliated against her because she refused his sexual advances and then complained about it.

also accusing former cohosts steve ducey of harassing her. allegedly called her a man hit her when she complained about steve ducey. global news 24 hours a day, more than 2600 journalists and analysts. joe: markets close in under 30 minutes. let's go live to the nasdaq with abigail doolittle. abigail: we had trading lowered by 8/10 of 1%, now .6% in a nice recovery there. the nasdaq turned green ahead of the dow and s&p 500. the gains are larger and as is often the case, the outperformance or underperformance, sensitivity, it really reflects the technology. about 2% at this point.

dean and as one company that did sign a confidentiality agreement with the high-growth biotech, a signal that they may be interested in hostile takeover there. rush or-awaited movement toward m&a maybe the head of the sector. a pretty interesting story. netflix shares down 4% today. about 15% on downside for shares of netflix, saying he thinks domestic subscriber growth could be flatter than what is expected. bloomberg intelligence analyst paul sweeney did point out we saw another downgrade. citing the possibility of international cyber debt

subscriber growth. extracting weakens ahead for netflix. >> it seems to fit with the stock down 18%. what else? see one year chart, we volatility up and down. this stock has had a rough go of it. it largely has to do with the fact that in a foot says outperformed so much for so many years. expectations are high. they now have bearish calls out of two analyst suggesting more of the same ahead, and estimates were justcond quarter brought down by about 8% over the last cointreau weeks. >> between the fallout of the brexit vote and the partnership trade agreement, a key global issue this year.

in sun valley, david is sitting down with the u.s. trader, michael. david? david: thank you. not an idle manpower what brings you here and what are the conversations you are having? >> it is a good opportunity to talk about the impact of the transpacific partnership particularly on the economy and the contents of the media industry. it is a rare agreement where we have support both from the industry and the technology and internet communities. property rights enforcement one hand but also to make sure the internet remains open and read -- open and free, that other countries will not tax digital products, that they will not force companies to move in order to serve those markets and was transferred of technology. those to -- disciplines are in there for the first time. -- the canadian prime

asterisk trying to hammer out an agreement and a did not happen during the summit last week. >> he was giving a broader conversation with all the participants. we continue to have good with our counterparts in we made important progress. we still have a ways to go. we will continue that dialogue. >> is there a timetable for getting that approved? >> we will work to get it done as soon as possible. the statement we issued indicated we would like to get fall,e this fall by the before the time ends when companies can start suing each other again or bringing suits again against canada. done aswork to get it soon as possible we can. and what thatm means for the negotiations, the 14th, and brussels coming up

soon. >> we have been in almost constant negotiations with counterparts. my counterpart was in washington a few days after the vote. she is optimistic. we have conversations about continuing the excel repays of negotiations that we have been engaged in. another round is coming up next week in brussels. we will continue to try to reach an agreement. about how youk process that information by folks? you respect the decision of voters matter what happens but economically, it would make more sense to remain in the eu. once the referendum was passed, what happened afterward? >> right now, the focus is on the u.k. in the eu, working out with the process is going forward. london and brussels and ,lsewhere in the european union

we want to make sure we encourage them to move forward. >> there are those who say this just opens up the door for agreements. that the u.k. would begin of the line, negotiating a new trade you with the u.s. how difficult will it be to work out a deal with the u.k.? theye practical reality is are focused as they have to be on the negotiation with the eu itself. that will be consuming for some time. it is hard to think about negotiating a treaty agreement until you know the relationship with the eu will be. whether they will have sovereignty over regulation or tariffs or not. it depends on what model they pursue. we will want to do whatever we can to deepen the relationship with the u.k. and the eu and hopefully that could mean the eu -- joining when it is completed.

-- i heard people suggest they might want to join ttp, where they immediately have trade relations. it is an idea i've heard mentioned. it shows there are multiple ideas out there and we will have to can it -- continue to think about it and figure out what makes the most sense going forward. you about the bilateral trade agreement with china are they provided you with a negative list. now that you have time to look at it, is that acceptable to the u.s. >> china did ultimately provide us with a list a couple of weeks ago. thatows a serious effort they are working to difficult issues. it is a fair distance away from something that will be acceptable but we will continue to engage the chinese in underscore the steps necessary both in terms of the negative list and what kinds of disciplines they need to put into text.

last question, you have the endorsement of google and a number of companies. from a with folks variety of sectors. not enough time left, and is there's something -- there's something? >> we would like to get at denison as possible. leader mcdonald is clear they had not anticipated a vote before the election. working with election leadership. the finance committee, to make sure it is ready to go. >> thank you very much. the u.s. trade representative here in the valley. back to you. joe: thank you, david. up, fresh insight this afternoon from janet yellen and company. off on raisingng rates after the may jobs report and rising global uncertainty.

this is bloomberg. ♪

matt: this is bloomberg markets p or die matt miller. a bloomberg -- bloomberg business flash. capitalinal round from partners and wrong capital court and people with knowledge of the matter. private equity firms are --ected to hand in smartphones and cars. foreign homebuying in the u.s.

has been a three year low. $10 billion in the last year the nationals nation of realtors. affordable and of course, the stronger dollar cut into purchasing power for everyone from latin america to asia to europe. apple is losing ground in the battle for chinese smartphone buyers. made up for 11% of all of the phones sold in china in may. increased its lead, the chinese company house -- has a 70% market share. that is your business flash update. joe: the latest minutes are out here federal reserve officials left interest rates last month about -- about the liver market and financial stability threaten outlook. a founding partner and senior economist at our eq economic, he joins us now with his reaction. thank you for joining us.

anything jumping out at you? >> you used the word uncertainty and the extent to which they used that word, it is related to china and fiscal policy and the labor market outlook, the economy, a tremendous amount of tea along with the fed. vote.ith rakes it in that if we asked uncertainty the way a deer reacts to headlights. matt: begging for any excuse to be dovish. how important is friday's jobs report? >> i think it has been becauseantly reduced the fed is suggesting that they need to see several months of information to be convinced that all caps uncertainty is not in a diminished economic outlook. i do not think one report will do that for them. it will be solid that we will need to see a few before it is more comfortable.

is there a gap growing between what the policy would be this were not for all uncertainty, china, brexit, all of this uncertainty and everything else versus being based on what the economy is, which seems to be full unemployment and which for a wild was showing signs of wage inflation, starting to pick up? >> clearly that explains the diversions between where one think the fed would be and they think full employment is 4.8 versus inflation. likely closer to two but that does not ask wayne but it is a they let all of these other issues filter into the policy outlook. it is unfortunate. in their mind, they are keeping their options open here and i wonder how open their options are. it will probably not be twice but if they do want to again this year, they will have a different old problem convincing markets that is something they

will do. in addition to the last press conference janet yellen was talking about, long-term expectations keep coming down, so short-term uncertainty aside, people would say there is a shift going on where they are rethinking the entire framework. >> i do not think the fed can be the world's central-bank. that all ofe to say these uncertainties they think might influence some of those domestic objectives. years, alast few tremendous amount of uncertainty. use of back to 2011 and the european crisis, the debt ceiling issue in the u.s., back then, on employment was 9%. we have had a number of uncertainties and risks over that time. deflation has not materialized.

i think it will be much closer let allarget and they of these other issues influence the policy issues. i think it will be challenged at the end of the year when they have an unemployment rate probably below -- >> if we get unemployment that is 4.5%, don't we get -- wage growth? have started to see some pickup in wage growth. depending on what measure you look, it is higher than that. if you look at the measure of wages, it is close to 3.5. i do not think it is something the fed will become -- particularly worried about. we heard it from governor powell last week. ratewe get to an inflation

that is closer to the target, which unless we have a drop in oil prices, we will probably see it this year. there are issues in terms of saying what is doing best for the economy, it becomes a much more to the argument. obviously the may jobs report was a wake-up call and forced some members of the fed to be concerned about a slowing labor market. happen you think will and how to react? >> they said we should not overreact to one or two just report and then that is what they did. outpril, the minutes came at most thought they would raise rates in june. we got the one jobs report in the june hike was off the table. when it comes to the report on friday, i do not think it will influence people's expectation for the funds rate. i think we will need to see several jobs reports that show

was an aberration, which i think it was. also there is an issue with the fed hoping to see 200 thousand job increases as a trend. i do not think that is where it is right now it is right now. once you get an economy that is close to employment, you're bound to see this slow down. matt: you do not think the economy will rocket anytime soon but your sanguine about the prospects. what do you think when someone like bill gross comes out and says we need to get helicopter money? is that too much? growthink we are in a 2% market. the first quarter is weaker than that. 2% is the growth rate we have seen for the recovery thus far. the endear term through of the year, that is the growth we would expect. is that the kind of growth rate

into an economic expansion that justifies a rate of 37 basis points? i think the answer is no. >> founding partner and senior economist, thank you. has continued to decline even as earnings have declined since the second half of 2013. i will show you the try that lays it all out just as we approach earnings season. ♪

this is bloomberg market day and i and matt miller just a few minutes left in the trading day. here are the charts we're looking at after turnaround in equities today. i was looking at the price of equities and i have a chart, 1906 in the chart library that shows the s&p price -- price in blue and earnings in white. there is a clear decline since 2014 in the s&p earnings.

the price of the s&p index continues to rise. to come blue line need down or the white columns need to come up? classic have to wonder how much the ultra low yields we are seeing on bonds everywhere are helping to keep a floor under equities even as argue with some of the fundamentals. there are low yields outside of the u.s., but u.s. stocks are more extensive. this chart i thought was incredibly fascinating. dan came up with this. it shows you the dollars you pay for each stock, how many of those dollars produced one dollar in earnings. the s&pe line shows you 500, you're paying 1675 $41 of earnings 12 months ahead using bloomberg estimates. the blue line is the all country world index. you're paying 15 and a quarter

for the earnings. u.s. stocks by this measure -- >> i am looking at the yield curve, the spread between long-term and short-term bonds. curve.king at the yield let's take a look. there is a gap between the two year and 30 year benchmark down to 1.5% spread. it is the same story everywhere. faitho not have the full and credit of the u.s. federal government behind them but people do not care if it is yielding anything, people are there is spread left here. matt: 10 years minus three months, i often look at 230. is there a spread, the gold standard on wall street? >> it depends on what you're going for.

they are all saying the same thing. matt: they are. that is it aired what did you miss and the market close is up next. take a look as we go out. just about four minutes to go until the close after european stocks all went down more than 1%. and thenks open lower turn around. we are holding onto the rally into the bell. this is bloomberg. ♪

rosalind: we are moments away from the closing bell. matt: scarlet fu is off today. ♪

matt: look at that, u.s. stocks closing session highs as oil rises to percent. joe: the question is, what did you miss? matt: new lows, what does that mean for global equities? joe: and the power seems to impress the 31 year low today as the yen takes a big advance to more than 5%. matt: investors from asia town for 12% to the direct real estate investment in the u.k. we look at property values declining and what that means for asian investors. ♪ matt: but we begin with the market minute. let's take a look at u.s. stocks, up across the board after sides drop in europe. nestart up