he may relocate a few thousand employees out of the u.k., how the countries divorce statements hurts banks. >> the market says forget 2016, we will lead does look ahead to tomorrow's u.s. jobs report. -- we will look ahead to tomorrow's u.s. jobs report. ♪ jon: from london, a warm welcome, i am jonathan ferro. david weston and alix steel in new york. for the first time in europe, stocks rallying in europe, every single industry group on the stoxx 600 advancing today. joined byaddition, some very strong guests including sir martin sorrell, the ceo of the bbb. >> we will talk to a portfolio

manager at pimco, bill gross said the sovereign bond rally is too risky but the u.k. is selling bonds at its lowest level ever. jon: on 10 year yield, record low yields, fascinating the demand is still so strong. let's get to our reports around the world and check in with our team with in-depth coverage of our top stories. more u.k. property funds freezing. on the adp data ahead of the jobs report. hillary clinton avoids criminal charges. beginning in london, it guy johnson joins us. another property fund freezes, not a shocker, more to come. rational thing to do but different strategies, aberdeen saying they will have a 24 hour

gaging of the fund but we will mark that fund down by 17%, allow you that 24 hours to figure out whether you want to exit with the 17%, others are taking a different strategy, saying we will take the funds for north of 20 days until the situation comes down. a lot of people in london saying we already knew this trend was in place, already knew people were looking to exit these funds but what we have seen brexit do is accelerate that process. jon: you hear panic a lot. we caught up with bill gross on whether we should be concerned about this. casualty isfirst u.k. property funds, six have been forced to close, to close the door on withdrawals, reminiscent of bear stearns subprime funds before the lehman brothers debacle. about ais talking

canary in the coal mine, people in london are saying, if you look at what is happening in the space, the yields being driven down, property still has a positive carry, that spread still exists and is getting better. that is what you need to focus on it for jamie dimon stuff, he is talking about the -- he may have to move thousands of jobs out of the u.k., that would accelerate the process, he employs a lot of people. david: that would be a two-year process, now we have to spend more time talking about the composition of these funds, you talk about different strategies, aberdeen sold property into the referendum, msg with a good property portfolio in london, the centcom a more regional, can you discriminate at this point or is it too early, just gate of the funds and think about things? >> i think it is too early by you will be discrimination would come into the market, do i want to be in a fund that as long warehouses, that has more explosion in the export import

side. less likely to attract maybe money out of the -- interesting to see how the mix would break down. the funds are different once you look at the composition and i think people may look at that until we know -- until we know what data looks like, difficult to discern which kind of fun you want to be in. david: take a long time to get that data. much more from you in the program. we arewe are -- david: all looking for economic data. talking to susan martin, our bond reporter. we had fed minutes out yesterday, they reflected before brexit but what could we glean from these minutes about where the fed is headed? >> concerned about a growth slowdown, concerned not just about a slow to run how much of a slowdown are we going to see? you get a lot of people thinking that the fed will focus on the

next jobs report which comes out tomorrow. they will be looking for that to tell us where do we go from here. if the fed does raise rates of the next 12 months, highly in doubt, how high can they raise rates, how much room do they have to raise rates if they do decide to do that? david: it seemed the main theme was uncertainty, uncertainty on the part of the fed and about last concerned about the jobs report, uncertainty about china and brexit which had not happened yet. as you look at the range of uncertainty, can you get any sense of how which is weighted? >> they are focused on jobs, then the focus on breakfast -- brexit, then global financial stability and concerned about the high levels of debt in china and overall put together, what does this mean for growth going forward, not just in the u.s. and around the world, then they

would decide how do they go about raising rates if in fact they do go about raising rates at all. david: thank you. , the addabout jobs numbers out in one hour in 10 minutes. ofx: you had the bank ,apan speaking in tokyo russell, what was the biggest take away of what kuroda said? spoke to branch managers at their quarterly meeting this morning. he did not reveal very much, and address that covered the same ground. he gave his cpi saying that it will stay negative, the economy -- theyering and their will have more stimulus is needed.

the report that was issued on the regional economy, they cut it into of nine regions in japan but not drastic enough to indicate any m&a stimulus at the end of the month. a few branch managers say they were concerned about the yen, quite resilient to their gains but worried that it will stay strong and eat into corporate profits for the reasons. the dollarhappens if yen goes to 100? no indication. >> that is right, no clues on definitely a101, low number, almost where some analysts think the minister of regulatory officials will meet tomorrow morning to

discuss the global financial system. there will be a chance for them to speak to reporters after the meeting about intervention on the matter. alix: thank you aaron -- thank you. a lot of uncertainty in u.s. politics also. david: the presidential election coming up, we turn to our news senior executive editor. big news. legal news out of the justice department. does this stop the story or turn it into a political one? off the hook legally but not in the court of public opinion, she will not be charged criminally but that will not stop donald trump and republicans from attacking her in every venue possible. david: one of the venues may be capitol hill, today we have director call me from the fbi who will be testifying at 10:00 eastern. what do you expect at those hearings? interesting, jim

komi is a well-respected republican who conducted a year-long investigation, if you see some of the republicans go after him aggressively, that will be interesting. i expect him to stand up to that kind of skirt and pretty well. he is well regarded. david: we had the speaker of the house say that hillary clinton may not should have security click -- security clearance that the rest of the presidential candidates get, is that going anywhere? >> no indication, let's get them nominated and see what kind of security fares they get, she gets good news, we are reporting that she had bernie sanders people are talking about a bernie sanders endorsement probably next week. david: thank you to our senior executive editor of global economics and government in

washington, d.c. welcome yout to with the first word news. >> the race to succeed david cameron now down to two candidates, theresa may and andrea leadsome are the favorite, conservative party lawmakers will vote in a second round, the two contenders with the most votes and they faced the parties water membership with the new leader being selected by september night. germany's chancellor said there can be no sustainable security in europe without russia, but she says germany and its nato partners agreed that an attempt at dialogue will not undermine cash the german chancellor alternations lawmakers that she will boost defense spending $2 billion next year. america's rush to buy guns after the orlando massacre last month, in the weeks following the shooting, florida gunshot obligations of background checks hit an all-time high, meanwhile,

nationwide, june was the third highest month on record for background checks, gun sales frequently rise after mass shootings in the u.s. aggressively. there will be new gun control laws. global news 24 hours to do powered by more than 2600 journalists in more than 120 countries, this is bloomberg. jon: thank you. coming up, panic withdrawal freezing 23 billion dollars in assets in u.k. property funds but our next guest says brexit is looking unlikely. the morgan creek capital management ceo and where he is seeing opportunity i had from london and new york, this is bloomberg. ♪

jon: from london and new york,

this is bloomberg. let's get you up to speed on the markets, futures looking a little bit softer in the united states. where thepicks up u.s. close yesterday. in europe, the dax up 9/10 of 1%. every single industry group on the stoxx 600 including the banks advancing today. snapping a three-day losing streak. cable rate, we bounce from a 31 year low through $1.30. story in the fx market. -- a global bond index with a yield south of 1%, yields a little bit higher at 1.3%. let's let the lid on some of the indexes and get to the movers. >> a lot happening around the world, starting in the u.s.,

pepsico, the snack and beverage giant reported its second-quarter report, shares are up nicely in the premarket after the company the earnings and sales estimates. still a penny below consensus, bloomberg intelligence analyst saying move the needle, pepsico may want to consider a large blockbuster acquisition. europe, the french space company that is well known for younger has -- yogurt says it will buy white wave best known for soap brand soy makes for $60 per share, a 19% premium. white wave up sharply, the ceo of danone says it double the u.s. business. london, with europe, ,he u.k. retailer is plunging

not plunging as much as it was before, down modestly after the company reported its worst closing sales in eight years, falling 8.9% in the fiscal first quarter. this is -- there ceo employing a new strategy to fight a four-year slump in sales. london, sports direct hire by 4% after the beat full-year revenue estimates as they move toward a large format sale, up-to-date but down 50% year to date, could be one reason they are thinking about employing a stock buyback, their first since 2009-2010. samsung in asian trading, up by 2% after the galaxy smartphone maker beat estimates, the best profits in two years, taking advantage of slumping iphones and some pockets of the smartphone market are thriving.

david: thank you. our next guest warns against overreacting to the u.k. leaving eight, but for more you property funds are frozen with ross as investors dump real estate holdings because of brexit. -- they thread suspended trading of billions of funds and aberdeen managers cut the value by 70%. joining us to discuss this is mark yusko. let's start with the u.k. real estate situation, is this an overreaction to brexit in your view or a sensible response? mark: a big overreaction. the referendum is not binding. with everybody involved in the referendum now gone, very unlikely with a pro-remain parliament that they believe.

-- that they leave. , we saw thathappen with the referendum, similar to the greek referendum, you ask the people and they said we do not want more austerity and the governor does the government agrees to it. not in the best interest of the u.k. to leave. david: you have people that voted that way, wouldn't they be unhappy? mark: possible. jon: the difference between the greek referendum and the u.k. referendum is the greek one was a negotiating tactic come in the u.k., calling the referendum a negotiating tactic and what they got from europe was not enough, from your point of view, i have not heard a single candidate say they do not want to pull the tribal -- trigger on article 50, just a matter of time, what do you expect to help them go back? mark: a great point, the

candidates themselves are talking about leave because that is how they will get elected in the current environment where to 40%ple have said 52% they want to leave but once they get in, they then have to deal with parliament and we do not see they will be able to get that through. >> when you look at investment strategy, where there is a strategy, a huge global bond rally, gold is popping, what do you do? for: you had the acronym bugs. that, clearly,ut if you had a brexit, the only thing you want to own, maybe cash, if you start to move away from the brexit, you need this time to go bottom fishing, look at the european financials,

particularly the u.k. financials, deutsche bank has real problems and some of the u.k. financials have been overly punished. david: if people are overreacting on the downside, that must mean there are opportunities. what categories would you look at as being underpriced because of brexit? mark: clearly overreaction in the property market is likely to bring opportunities. european financials are starting to look interesting. you have to be careful, there are some banks, particularly in italy that have problems but the ones that have been unfairly punished with this idea that suddenly brexit will cut off trade, i do not see that happening, too much on the line for germany just like in the greece issue, too much on the line for germany to let this go too far. david: transportation has been hit hard. early, a euphemism for wrong, on my call, a year ago i said airlines were stupid and they rallied.

-- stupid cheap and they rallied. transportation could be an interesting sector. >> more with you, staying with us, his firm among the biggest pound bearers in the run-up to the breck is about. he had a currency rates it joins us in with the latest. ♪

alix: this is bloomberg , ising airline, mark yusko doing that, a downgrade from credit suisse, brutal, the airlines have peaked, that is the idea, what do you see in value? mark: we think the older airlines that have older planes, we think they have a huge advantage because they do not have depreciation charges so we

think their earnings was surprised to the upside, selling a single digit multiples and still growing, passenger miles are still rising. we think it is a little much a do about nothing. alix: another counterintuitive play, you like energy companies based in the permian basin, take a look at the bloomberg, this is production per rig in the permian basin, getting more for less rig and that is unique to this area of shale in the u.s., and incredible chart. mark: a dazzling experience, we have investments and two years ago it took 30 days to drill a well, we just have one completed in 11 days. and the costr rigs of drilling is going down, so the profits of companies of diamondback energy and other companies, this year you wanted to own fang diamondback and not

, amazon, google. alix: they trade at a premium because that is known. how much will you pay? mark: we do not think these will double like they have over the past six months but we do think they can compound 15% to 20% for the foreseeable future, there is basinil in it for me a than there are in saudi arabia, it was just locked away deep, now with technology, a technology place. david: one last counterintuitive is deal, big on steel. year we the end of the looked at what was beaten down and unloved, steel was one, when you talk about terrorists, good for -- tafriffs. how much is geopolitical

trade? comes down tong the reversal, brexit, the reversal from globalization and i hope it does not happen. i had a tweet storm about never settle last night, nobody wants the two candidates we have, let's go for it. alix: we have planes, steel, oil, pleasure to have you, morgan creek capital management ceo and cio. david: his firm posted some of the most terrorists sterling forecast ahead of the brexit vote, the head of currency research joins us next, this is bloomberg. ♪

hours, we call it somewhere.

-- the last 38 hours between june and july we callrisk on he. the dax is up seven. every single industry group is gaining. futures a little bit softer, down 1/10 of 1% on the s&p. yield, treasuries, that was yesterday's story. today, a little bit higher. 1.38% on treasuries. here's the situation outside the business world. >> the justice department has made it official, there will be no criminal charges against hillary clinton overuse of private e-mail while secretary of state.

meanwhile, james comey will testify before a congressional committee today. he had recommended that no charges be filed. in a few hours there will be left forcandidates prime minister. lawmakers are voting later today, the top two vote getters will go before the party is white or membership -- wider membership. new satellite data from nasa shows the toxic air threat that is choking the indian subcontinent. as much as 10 times more sunlight was blocked pollution than in the u.s.. new delhi has tried a number of measures, including taking half of the city's cars off the streets. this is bloomberg. david: what is the one thing you

must read today? we're joined by tom keene. has madeon of jpmorgan in on brexit and he has a very fascinating quote. reverse exit,even there are always solutions to problems as will as you had the right people in the room -- as long as you have the right people in the room. but the austrian finance minister as saying in five years there would be 28 countries. is this serious? it is not.ut i have never seen, ever, so many people talking like right now. let's remember, mr. jamie dimon they had stage with real momentum, and talked about the 18,000 jpmorgan employees of the united kingdom. happen,exit will not

but the other portion is the percentage that would migrate to europe. free-flowing with corporate offices right now. very free-flowing in people. >> i talked to a ceo of another major bank who gave me the numbers of dublin. >> there is some real truth to that, because a lot of cultural issues, everyone is looking east of the continent, and maybe dublin is the exit from the u.k. to make it more palatable. >> making the argument of no brexit, to get out of the year they have to have a parliament vote to repeal a statute. and the overwhelming majority are against brexit. so how do you get to that point? of domestic politics. we are nowhere near a resolution of that or any kind of intelligent discussion on the

right now. we have to get a new tory party. a new labour party. jon ferro is much better than us at this. they have to get it all sorted out before they can address this document or that document. i do not see it, for months or years. >> have you seen anyone suggest within the u.k. political establishment a way out of brexit? >> i have not. but the markets will force their hand when you see landau and the team at deutsche bank talk about a 115 sterling. nothing will change the urgency of this conversation like seeing sterling going down to 129, 130. >> it starts to hit the pocketbooks of the people on the high street. currency,l rule

michael rosenberg is rolling on this, a weaker currency is wealth reduction. particularly in mayfair. [laughter] david: thank you. for bloomberg surveillance with tom keene and mike mckee. jonathan, you should be talking about this. jon: possibly. thank you very much. looking forward to hearing more from tom keene throughout bloomberg go is the weeks progressed. the dollar dropping today from its one-week high, a jobs report tomorrow. the number one ranked fx forecaster is bullish. you on thet to have program. why are we not seeing the dollar strengthened the way you anticipated? when will we see it?

>> it all depends on the u.s. development. the information of the market stopped economic data. we expected it would be better, and not only better than the first half of this year, but also better than expected. this would be markets changed to the last 18 months, were u.s. data had always been disappointing. support for the u.s. dollar comes from expectation of what the fed will do. we had expectations following the brexit vote that the fed would cut rates. we think this speculation is overdone, and expectations of will creep-- hikes into the money market again and that will support the u.s. dollar. there is a demand for safe haven due to the uncertainty around brexit. it leads to international

currencies. typicallook at this candidates, the japanese yen, the u.s. dollar, the u.s. dollar is in the best position because by now it is owned. jon: you are call on the u.s. dollar, you have a table rate of 116. how dependable is that in the way you anticipate? >> a little bit only. you can see here our forecast for the euro-dollar, it is 108. strongern, we see a dollar, 206. is actuallye rate driven much more by development in the u.k.. there we see fundamental justified weakness for the pound

due to rebalancing. just in terms of the structural side of things, we talked about this record current account deficit in u.k., i keep hearing the word adjustment being used. adjustg will it take to to the structural reality that has existed in the u k for a long time? this can go quickly, particularly when the currency is actually overshooting, and the forecast we have at 150, 160 is definitely overshooting. the pound is giving one of the cheapest currencies of the world. this is forcing the adjustment to happen much faster than without a currency. europeanle, in countries which had to adjust without the currency, we think adjustment will start with this strong appreciation in the three to six months, and we will finish up at 12 months. of positioning

right now in the options market and the stock market, extremely short. i wonder if that is some way supported given the market positioning already going into the event and coming out of it as well. >> this could be from some contrarian types. but we think it's will be rather short-lived. usually short positions in the option market only help to forecast currencies and they persist for a long time. take for example, the end. we have long positions for half a year already. long positions after forecast contrarian bet. sure positioning in the pound is to recent -- too recent. jon: i want to get your thoughts on euro sterling. crossedne just bloomberg from the ecb. they noted market concern over bonds shortages.

if the ecb going to have problems buying enough bonds, or do you think they will find a way around that? a wayhink they find around it, although i do not know which one. it could be the lower the limit of 33%. but i think they are quite creative to find ways to circumvent that. there is a shortage of bonds, that is true, but they can still relax their roles to find enough bonds until march of 2017 and beyond. jon: great to have you on the program. our top forecaster in the bloomberg breaking ballot. >> coming up, you're going to the oil markets. have they priced in a brexit? markets of the energy research is out with his latest call, next. ♪

>> this is bloomberg go. later, toni kroos lindsay -- tony krzyzewski. your bloomberg business flash. risingof peptic out very -- pepsico are rising, and they raise their four-year forecast. they offset weaker results

overseas. the biggest acquisition in nine years with the french yogurt sell will buy \/ilk. againsthas reported guest operating profit in more than two years, earning top estimates thanks to the game some alex zynga 7 -- to the samsung galaxy seven. apple does not release its new device until next september. have oil extending their gains today. however, barclays recently revised crude price forecasts given and they have only experienced the tip of the iceberg of the exit the impact. michael: is here with us now.

they just lowered their global forecast 5.5% today. how do you account for that? >> we revised those gdp forecasts lower. part of what we expect to happen from the perspective of the eurozone and from the perspective of the possibility that there will be further contagion, we expect industrial demand for oil to falter in the remaining part of the year. there is going to be the possibility also that for china and emerging markets there will be some lowering of growth expectations for those places. we revised our oil demand 1.3cast as well from about down to 1.2. result, our forecast was revised down for 2017 with new

information that comes to the market. we have to take that into account. our 2017 forecast was revised down. >> here is a nice chart that shows this. it is not too early for some brent time spreads. the difference between oil right now and oil in 12 months. as it rises that means that the oil market is rallying. we are getting tighter in the market. when it falls, that means that prices are also falling. prices are weaker right now. libya, where is this in this time spreads? >> what you have here is both a and thee at the prompt landscape 12 months out. it got tighter and tighter of the course of the first six months of the year. then, what happened over the

course of the time from the last outh is to view 12 months it begins to deteriorate. economic growth became lower and lower. expectations for oil demand in 2017 started to collapse. as a result, not only did you have a fundamental driver making that spread to impress but she also had this issue that over the course of the last month started to widen again as a result of exit. >> we talk every day about the global blog market rally. what is the implication for energy companies? you just have to go to the high-heeled index for some cash. >> had inventories figure into these numbers? >> we do not think as much about the one in 12 months spread, wiest hard to think about spreads that are much closer in time. we check about one and three months or one and six months.

what happens right now as we demand falls, the demand for inventory in the to see a steeper decline. >> prices are cheaper now that they are in the future. over the course of the summer, demand increases. the demand for inventory holding starts to decrease. so the time spreads titans and the contango tends to lessen. >> and if we don't see that, gasoline falls off, and docs are building in the u.s.. there removes the fundamental support for the market. >> i remember at the beginning of the year they were at record levels and storing oil in freighters on the ocean and things like that. >> the excess inventory we have built over the last four or five quarters is equivalent to an

additional million barrels a day of demand. we are sitting in about 360 million barrels more in inventory than we were started this whole thing back in november 2014. it is going to take an additional million barrels a day just start to see that a tory start the curious. there will be pockets of strength and profits of tightness over the course of the next 12 to 18 months. that will lead to prices coming higher and going back lower. but point remains than we do have high-level inventory. in some moderate. of the world, like title. when you have a lot of assets in the high-energy market, does

that keep production alive when it shouldn't? over the lastseen 45 months is that during this price rally some of those high guilt companies started to hedge, and they hedged in a much more robust way than the had in past years. now they are hedged only about 25 percent for the year, but it definitely gave them the breath of life or breath of fresh air that they would not have had it higher prices not going higher. >> you are selling oil forward, so that is pushing pressure on longer-term prices. q3, lower 40 for prices for next year. what is the snap back potential after you lower your price forecasts? >> in terms of prices and output coming either way, we do see

signs that non-opec supply is declining. the client rate is accelerating in certain parts of the world. so with being cut we're going to need to see a higher price signal in order for shale just to stay level. over the course of the next 12 to 18 months, shale will be called upon to start to provide that incremental so live. it was essentially 90% of the growth in their supply over the next several years. and even though producers are talking about improved technology and how they have reduce their cost, even if prices go higher, it does not necessarily mean that every rental dollar goes to new capital expenditures. some of that will go to deleveraging. you're going to need to see a higher pricing will at some point.

57, 85, 80. thank you for being here. u.s. as we wait for the jobs data out tomorrow, cap this give him some clues about where really beheaded? ♪

>> from london and new york, this is bloomberg. let's get you up to speed on what is happening in global financial markets. here is the scorecard. future softer in the united states. equities stronger here in the u k. they are coming off of session highs. the dax up around a third of 1%. julius, a year and

target on the cable rate. a stronger pound today. yield of higher by two basis points. that.out the strongest demand since 2013. the yield a record lows, but the demand is still very much in play. >> great stuff. now it is time for off the charts. i'm looking at the federal reserve minutes from yesterday. they really focus on that neutral long-term rate. i want to look at inflation and jobs. this came from the footnotes of the minute. basically bpce projection. the bars are what they see in june. looks about 1.721.8 of the is there forecast. inflation picking up to about 2%. in march, it was quite a bit lower.

not a lot of members saw inflation. barely anyone saw inflation expectation picking up to 2%. the fed is looking for more inflation. on the jobs front there was another term i wanted to show which looks at nonfarm payrolls. non-manufacturing unemployment in may,und each other but now non-iso unemployment is moving higher. two charts that i'm watching today. , weighing in on brexit. this is bloomberg. ♪

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>> host brexit property pane. withdrawals on more than 15 billion pounds. >> the jpmorgan chief says he

may relocate employees from the the divorce from the eu hurts the bank. >> we will look ahead to tomorrow's u.s. jobs report. >> welcome to bloomberg go. we are focused on jobs numbers here in the united states. >> we will get the latest readings ahead of friday's report. " portfolio manager will be joining us on the impact of the fed's next rate hike, and where to put your cash. we mentioned that new warning from jamie dimon. we will also hear from the wpp

ceo joins us to weigh in on the follow from brexit. let's get you up to speed very quickly. we are about 19 minutes away from the cash open in new york city. here in london, strong session up by over one full percent. out the board very quickly, strongest demand for 10 year yield option since 2013. record low yield on the 10 year. you include treasuries for two basis points today. rate, we bounced up that 31 year low. >> i cannot get over the 10 year yield. let's go around the world and check in with our bloomberg team. reports, u.k.ment property funds, and david gura

in sun valley idaho. let's go to the 10 billion acquisition. it is the day before jobs friday. give us your forecast. >> it is out and about 15 ends, and people will be looking for a clue to tomorrow's number, because it is all about the -- may jobsdismal j report,. fed officials are trying to figure out why that was. if you take a look at job creation over the last five years, it has been pretty steady. we had around 200,000 for most of the last three years. it would go down, and then it would immediately go back up. is this the start of a new trend? priced in anything you could call a value price. they're looking for the same thing as the fed.

in june.obs created a reasonable average hourly earnings gain that would push the year-over-year level to a high of 217% to the markets and the fed think is my get better. see withell us -- numbers tell us in a few moments. >> the markets expecting slow improvement. we geton't get that, if a washout we will see a reaction . that, what weelow have seen is going to be magnified as people start to turn a slowdown here into what they are talking about the rest of the world. >> thank you. lots of things here in the u.s.. >> thank you. more funds gated. we expected that, didn't we?

>> it was absolutely inevitable. once the first one goes, the rest follow. , they marked the portfolio down. they gave people 24 hours to cool off, and then exit the fund with a 17% haircut. different compositions is something we need to think about as well. what does this tell us about what is happening in the wider market? this could be a canary in the coal mine. -- first's cap casualty has been u.k. property funds, six which have had to close their doors on withdrawals . this is a very big aspect, and we have very different aspects to it to compare with some of the financial stories we dealing

with in 2007, 2008. your comparison is maybe a little bit different, but nevertheless, i think there may be some panic creeping in. different bricks and mortar in each individual different fund. i also find the composition of the funds very interesting as well. ? >> some more invested in retail, in office space. billion, that fund. mix in terms of the that look like composition of that fund to see

how it will trade here. now we need the data to find out what is happening in the wider economy. threatensamie dimon to withdraw people from london, it is something you need to think about as well. >> thank you very much. >> i will tell you one thing they are not worried about property prices, it is sun valley, idaho. we are going to go there with david gura who has the best assignment of covering's annual conference. i heard rumors he stole the show? >> yes. was a wide-ranging conversation about canada, about his place in the world, and everyone we spoke to was really

taken by that conversation, what he had to say. he is taking the world by storm. a broad thing here is national .ecurity geopolitics is an overarching theme. i asked the degree to which people were talking about exit and he says he can think about very little else, and that reference is leaving him said. -- sad. >> i think it is disastrous for the u.k.. i do not think it can be , but one dreams a little bit. there is no time in europe to be alone. why they would want to be alone in a dangerous place is beyond my understanding.

a is now at the bbc with nondirective, but he feels particularly sad for the young people in the u.k. and what it means for their future. >> he served in the military the in the united states, let's turn to another drama that is playing out here. background. are they all their? >> it is very interesting. i saw him talking with the former president of sony, and his system they were old he laughed racially and said he hopes everything works out. he has been highly visible. the person who is not present this conference is to leave it

alone. everyone insisting that he's going to be here but it is not something we have seen. looking for some indication of what is happening with that relationship, what would it be like if they ran into each other. >> thank you. >> now turning to a big deal the markets today, we are looking at the $10 billion of white wave foods are we have all the action. europe,u mentioned, in the french-based company that is ,est know for dannon yogurt they are buying the silk brand soymilk for $56 per share. 19% premium, shares her sharply higher. this purchase does double the company's u.s. business, it also makes them the global leader in darien health brands. turning to the u.s. we did have lineo report top and

bottom line shares. bloomberg challenges analyst says that an acquisition could help in the future. 2%sung shares closed up by after the galaxy smartphone maker did beat second-quarter estimates. profit for the best in two years. some pocketsthat of the spot smartphone markets remain quite strong. >> thank you. now for what is making is outside the world business. we have first word news. >> thank you. questionublicans will fbi director james comey today. they want to know why he decided not to press charges against hillary clinton for her handling of classified me e-mails while she was secretary of state.

as the investigation is over. in a few hours there will be only two candidates in the race to succeed david cameron. they will go before the party wider membership and the leader will be declared september 9. put prices around the world rose by almost the most in four years. the united nations food price soaredhowed while sugar last month, grains, dairy and meat were higher. global news, 24 hours a day. i am in the chandra, this is bloomberg. >> thank you. breaking 80 p numbers, and the federal reserve hope is holding off on that june rate hike.

when he sees the fed making their next move. markets a firmer to her with them snapping a three-day losing streak.

>> from london and new york this is bloomberg. andnd $20 billion of assets real estate funds have been frozen in the last couple of days. an update from aberdeen in the last couple of minutes on their particular fund. they say they are providing extra time to investors, giving them until monday to decide on

redemption. a little bit of extra time until monday to decide. throughout the program. snapping a three-game losing streak in europe and equity firm yields a little bit higher in a stronger pound. that data is here now. jobs,ing in at 172,000 the estimates were for 160,000 jobs. in line with what we saw in may. 172,000 private jobs added in june. any sort of equity reaction, not seeing that much. we are still down by about 1/10 of 1% in terms of the u.s. 10 year yield. .59%. not a lot of movement in the markets. forecast anylt to job gains. ms. number was revised slightly

lower. is the chiefuest economist who has been there for 14 years. also having a new book out. what is your initial reaction to these numbers? almost the same 80 p for many, and look what happened in private payrolls in may. they were up 25,000. nation get much market reaction to this because the last time the adp was a real flop in telling what payrolls were going to do. i happen to think that the payroll number picks up on friday and we are forecasting 170,000. but adp is a guide to that. i would not put much weight on it right now. >> would you expect a revision to the last payroll number? >> i would not be surprised to

see the last one revised up. so inconsistent with everything else we see in the labor market in terms of the reports, the unemployment claim, i think it would be revised up. >> to see some real signs of strength in the economy when it comes to jobs. take us through what you're looking at in your dashboard to give you those indications. >> it was reported just yesterday when we got the isn nonmanufacturing survey for the month of june. it was at the highest level that it had been in seven months. thatmployment component of survey improved. >> i was just talking about that

in the last hour. the blue line is a nonfarm payroll number, and you can see it was lower in may. the white line is the nonmanufacturing employment index. chart you're looking at is the rise that we saw. >> it looks like they are overall correlated. but sometimes one trails the other. >> remember, the adp is supposed to be a coincidence indicator. it is a not supposed to be a leading indicator of what happens next month. it is leading indicator of what happens on friday for the same month. >> that was the isn manufacturing employment index you have pointed out. it has the potential to lead that drop number on friday. toit does have the potential lead employment numbers on

friday, especially so in the manufacturing sector. >> this is all about the number what is important, we are told by the fed, is wages. what are you looking for in the numbers tomorrow? >> another point to resent of 1% -- another 2/10 of 1%. for those governors that are looking for wages to start to pick up, it is happening right now. by the way, inflation also is picking up, although the fed seems slow to acknowledge that. market is the risk of a that is pricing in a dovish fed and the relatively stronger jobs number tomorrow? what is the risk to that expectation? risk, i woulde thosethe arts around payroll numbers are reasonably symmetric rather than asymmetric. if we get another week payroll

number, good for bonds, bad for stock. >> what you looking for in terms of growth and gdp as we go into the second half of this year? >> i think the second-quarter growth really picked up. look at the data that has been reported so far for the second quarter, that would be consistent with close to 3% growth rate. the second half of year you're going to have 2.5% next year. >> something that was the takeaway was how low fed is doing our expectations. lower for longer. what changed in the last three to six months that has made that rate go so much lower? >> i do not think a great deal has changed. fomcnk the doves on the were uncomfortable with the

interest, that neutral interest rate that had been applied. frankly, the main job numbers are not a very good excuse to bring down the longer-term goal for the federal funds rate. what they cited was slow growth.hic growth, slow but come on, you can sign those reasons for months ago. is that people were not uncomfortable will where they were, and they jumped on the payroll numbers as an excuse. >> thank you very much.

coming up, wpp ceo weighs in on the u.k. economy. this is bloomberg. ♪

>> from london and new york, this is longer. just one hour away from the cash open in new york city. markets are down a 10th of 1%. equities snapping a three-game losing streak here in london. up 2.51%.00 the front foot after being on the back foot big time yesterday. that is the action in the market, here is the action on the bloomberg. a look at the top stories that tell you what is going on.

at his a i am looking brexit panic. post brexit panic in the real estate market freezing $23 billion worth of property funds. that things have happened elsewhere. is this a different approach in , sayingagement initially you have 24 hours to think about this. the approach from everyone is the panic from the retail sales investors side is panic selling the real essence -- asset. >> that is the thing we have to look at. do the prices come down in actual real estate? aberdeen struck me as clever as saying the cash out now, but there is a 17% haircut.

or you might want to stay in, and you might get that money back. >> that is exactly what they want people to do. but initially, it was 24 hour. it was until a new today. -- ithave until lending wasn't until noon today, and now you have until monday. people want their money back, whether it is 24 hours, a week or a month and they change their mind. >> the critical question, is it actually real estate? >coming up, the initial jobless claims numbers out in moment, and u.k. lawmakers are narrowing the yield to replace prime minister david cameron. ceo's take on this means. this is bloomberg. ♪ 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. >> from london and new york this is bloomberg. in europe, a three-day losing streak.

positive by about 70 points. in the united states, futures down by a 10th of 1%. switch of the board very quickly. .ields pushing higher 1.39% is your yield on the 10 year. alex? to 200 50aims falling 4000, 200 54,000 individuals filed for claims. however, the week before, they were slightly higher at 270,000 workers. initial away is that jobless claims are continuing to stay in a range, continuing to come down so that doesn't really jive with the main jobs report which was so disappointing. reactions, inrket

terms of adp number, one at 72,000 private sector jobs added in may. s&p futures down by 1/10 of 1%. yields, we are still seeing yields at about 2.59%. not a lot of movement, really waiting for tomorrow's number. david: it doesn't tell you what the number is going to be tomorrow but it doesn't give you a reason it is going to be as low as it was last time. marketcan't blame the for thinking things might be ok and the fed will stay on hold. jon: it's a remarkable situation. domestic u.s. data has been terrible. we've had one ugly nst print. saying 000 rate hikes. that disconnect between the fed and the market has been there

for a while and we know how it reconciles. it usually reconciles with the fed coming down to the market. markerdata dependent or -- or market dependent. we will be speaking with bill gross of janus capital. he said the bonds are too risky so what is his call if we get a better job number from the u.s.? for more on what is making news outside of the world of business, amorous andra is here with -- emma chandra is here with first word news. >> according to a person familiar with them, there could be an event in new hampshire. clinton clinched the nomination weeks ago but sanders has never conceded defeat. americans rushed to buy guns after the euro and a massacre last month. in the weeks following the shooting, gun shop applications for background checks hit an all-time high.

nationwide, june was the third highest month on record for background checks. gun sales frequently rise after mass shootings because of the fear of new gun-control laws. it may be another sign of an economic slowdown in europe. industrial production in germany -- the report underscores the challenges facing german manufacturers. the president of germany's central bank says the brexit could hurt the german economy. global news, 24 hours a day, powered by 2,400 journalists in 150 news bureaus around the world. this is bloomberg. david: all those media moguls are gathering right now in sun valley idaho, this is the annual conference. we have reporter david garr out --re and >> great to have you with us.

let me ask you, we spoke with you right after the referendum. since then we have had political fallout and i want to get your reaction. what is your sense? inform me. me, in terms of political fallout, what you make of it all. >> i think from a government point of view it is going to take a long time. from a business point of view, we want certainty and the enemy of growth is uncertainty so there is an inherent contradiction there between what ,usiness wants which is clarity whereas the governments are going to continue to negotiate. --one level you have to there has to be an act of parliament in order to trigger it. there are some challenges out there, legal challenges.

andhave the negotiation what people forget is the 20 eu nations have to approve the final agreement. whoever is prime minister, -- teresa has said she won't trigger article 50 until 2017 so until 2019,ew long by which time we could have another general election. they may not have a general election which triggers another five years, but ordinarily we carry on to 2020. you could conceive a situation the prime minister, whoever he or she is, calls for another referendum on the terms that have been finally negotiated and says to the country, do you really want this? >> you just announced the acquisition of a french data company. tell me a bit about the

strategic motivations here. >> are strategy remains the same. maybe enhanced emphasis and accelerated emphasis. isolationvote of getting our people to work together will be clumsy, but in addition the unintended consequences is that we will put more emphasis on germany, france, italy and spain. two and a halfa trillion dollar economy each. is about $14 trillion which compares very favorably with $16 trillion or 17 in america or $11 trillion with china. brussels,mportance of and whatever you think about the administration in brussels, they are important.

worry about is losing influence because we voted to come out to the will of the people. so we have to place more emphasis -- in a way, our growth in these big eu markets will be enhanced. and even some of the peripheral markets become more important. we will go down the brexit root -- brexit route becoming more and more important but we will do it with the law of unintended consequences. >> you have extended into iran as well. >> we have signed an affiliation agreement. the sanctions have been lifted in principle but there are lots of practical details. they make it very difficult. and see investors coming prices have risen but the on

those discussions, there are the practical difficulties of getting into it. it is 80 million people, highly literate. this is a market which is the most significant to come into the global orbit since vietnam. ofthere is a lot conversation about the way the content is migrating to new platforms. talk about that in the context of ad revenue. what is making it? >> digital is already 40% of our business. it has been around talent. that will continue to be the case. we invest $12 million or $20 billion of revenue in people. 100 13 countries around the world, but there are three things that become much more important. technology, so the investments , data in companies like,

ore becauseke comsc of the differences in the way also --re consuming and what we are doing is investigating content that appeals to new audiences. it could be millennials, centennial's, the snapchat generation. the oneces, such as here which is one of the best in end your, and in the calendar, stress content increasingly. the upfronts have been very strong. we will remind you that pricing is up about eight or 9%. the traditional measurement criteria, they don't measure effectively accurately and the

.ricing is pricing that in something to do with supply and demand. it is also due to a concern by some clients. we had it at arcand festival -- at our cannes festival. a few clients were worried about lack of data but you've got to have data -- you can't have somebody refereeing and playing the game at the same time. you have to have a referee that has the data, that is verifiable, take a three second you -- three second view. that measure effectively gains to 15 second, 45 second tv commercials. i think some of the strengths for the upfronts getting to the real point is a reflection of the move back at the margin, not fundamental but at the margin

from video, from facebook, from google, from youtube and others. ,ack to more traditional because pricing might come back in the right way but also those audiences are stronger in traditional media. >> last question about brexit. jamie dimon announcing jpmorgan may have to move thousands of workers out of london. to be fair, that was signaled by the banks. goldman, jpmorgan, and others signal the possibility of people moving. in our case, it will result in the reduction of the number of people. a question about whether the u.k. is going into a recession is part of brexit. the irony is we will grow faster in terms of headcount expansion on the assumption that continental europe continues to donetoo then we would have

pre-brexit. expansion will be faster in germany, france, italy, spain, and places like brussels. what i am concerned about is losing influence in those markets and those markets are very important. wpp did not vote for brexit. >> that is so martin sorrell, ceo of wpp. hillary clinton most face won't facearges -- criminal charges in her e-mail scandal. this is bloomberg.

>> this is bloomberg go. the hewlett-packard enterprise

greenroom. coming up, the portfolio manager will discuss jobs, fed, and much more. this is bloomberg go, i am david westin. everyday we have another story in the side of that has been the e-mails of hillary clinton. yesterday it was the attorney general saying they won't prosecute her and today is james comey appearing before congress. donald trump not giving up on this. he is pressing harder and harder despite the fact that she is not getting indicted. is there a chance this could backfire? definitely, not only in the trump campaign but on the republican party writ large. comey up on the hill and remember, james comey is a registered republican. he is a tough nut.

he has done this plenty don't times before -- plenty of times before. what could happen here is that you see something similar to what happened with hillary clinton in her long benghazi hearing where if he does rather well in deflecting these questions, defending these decisions to recommend not to bring criminal charges to hillary clinton, this could leave republicans with egg on their face. get him onans can the defense on why he didn't pursue criminal charges when so much of what was revealed in his statement earlier this week was worse than people thought about what actually went on, they are going to win some points today. david: i am curious about the "now initiative." to pull her security clearance because of this carelessness. is that likely to go anywhere? >> that is unlikely to go

anywhere but it was a stunning declaration from paul ryan, the speaker of the house who is trying to forge a moderate path when you have a presumptive nominee in donald trump who is known for saying the outlandish. been careful to steer the middle ground, knowing how much is at stake not only at the presidential level but at the senate and the house level. to hear him say, i don't think hillary clinton should begin , that there actually was classified information, being transmitted not only by her but among our staff, that was a really seismic moment. we will see how the republicans try to make hay out of that. how donaldan see trump is dealing with this, saying behold system is rate -- the whole system is rigged. >> the really interesting thing

to watch is how this comes through in the polls. hillary clinton had high unfavorable. she has a problem with trustworthiness and i think many people have been surprised that instead of coming out with a this,ublic mea culpa on she is in a very strong stretch of her campaign. she campaigned with the president this week. she thinks she is winning the message, the demographics game, and donald trump's ability to self implode. if we see voters have a strong reaction to this, and the polls move closer, and people are identifying this as a significant hurdle, i think we will see her change her tune. david: that is megan murphy. you, director james comey will be testifying at 10:00 a.m. eastern time. jon: two races for the top jobs in politics, one in the u.s. and

one in the u.k.. lawmakers have narrowed the field to replace david cameron. where are we at? who are the names and when we come down to choose? two hours from now we will hear from the 1922 committee of the conservative party. the names, theresa may, andre lisman, and michael go. very established well-known andreaand real asman -- westman -- don't rule out michael go either. there is some speculation that in the house of cards era that we are going to in british politics that he might find a way to sneak through. jon: the international investment community has never been more focused on a campaign to be the next prime minister for a long time. you can narrow it down to two

and it almost counts for nothing after that. talk me through the process of how you get that leader selected. down toe going to get two people this afternoon and we are facing a long vacuum between now and september. these names are put to membership of the conservative party. very tiny number of people who will elect a prime minister who will face the momentum -- mementos decisions and the demographic is quite old, mid-60's, 68 is the average age. , and, middle-class predominantly, pro brexit and anti-eu. it is a demographic that doesn't necessarily reflect the population. jon: we know that governor carney at the bank of england -- we might find out who the next

prime minister is going to be but then the chancellor. talk me through who is going to be the next chancellor. >> he is certainly one name in the hat and david cameron is moving off the stage that he would still like to stay around. him to stay ont as chancellor or perhaps the main foreign secretary. fluid state a very right now. one person actively lobbying for served out there with specific qualities about how he would bring the economy back but there has been so much flux in british politics that in terms of runners and riders, those names have not emerged. david: the leader of this country right now is canadian, governor mark carney. thank you for joining this program. coming up, monte dei paschi.

we take a look at the italian battle for the chart. this is bloomberg.

david: this is bloomberg go. it is time now for battle of the charts. alex will take on oliver renick of bloomberg news. this is quite a chart. >> it is modern art. it is about correlations and this is a fairly important thing for a lot of people today. this has been a chart we have been looking at for the past 48 hours and i am going to milk it for all it is worth. the correlation between the stock market and the s&p 500 and other asset classes on a 30 day rolling basis. we are talking about the day-to-day link between assets. the green line is the s&p and the japanese yen.

like blue is the dollar, greater grey isear bond, -- the 10 year bond, and that kind of happened as well as we got a selloff on the equity markets. then things slowly started to narrow and this was a big topic among strategists is when you , thingsser correlations are moving independently of each other. thisbrexit we are back to world as things are starting to expand and you have assets moving in the same direction. alex: it is a good chart. --m looking at my capacity bailout without hurting bondholders. this chart tells that story. over five line is years for subordinated debt's

and this blue line is for senior debt. look at this unbelievable divergence. in the subordinated debt you get a huge spike. these guys get paid last if there's a bankruptcy. the senior debt, not really moving that much. i love that divergence. david: i am voting for alex because i only know what to do with that. this is fascinating. alex: you bet you. i think the story is just kind of the flagship story of the struggles in italy right now economically and political we best politically. --

david: post brexit property gain, u.k. real estate funds freeze withdrawals. jon: the jpmorgan chief says he

may relocate a few thousand employees from the u.k. carol: signs of stability in the labor markets, jobless claims all in the u.s. we look ahead to tomorrow's job reports. ♪ david: a little less than 30 minutes away from the opening bell in new york, this is bloomberg go. our colleague is joining us from london. ofx: we have a great lineup guests for you. from the allen company conference -- will be joining us. we started this morning with a

little bit of a risk on rally. relatively flat. yesterday in a positive tone carried through to europe, salutes get straight to the boards and i will get you up to speed, so futures pretty flat ahead of the open. a firmer tone in europe for sure with the ftse up by one point or percent, the dax up 710. -- 7/10. mark barton will be talking you through that in just a moment. market, 1985 lows on cable, we trade at 130. 12. yields backup -- alyx: hard to believe we have a rally. let's go around the world and check in with stock reporters. julie hyman with a look at movers and abigail doolittle

looking at the nasdaq and mark barton in london with european stocks. let's begin with the big deal we heard of, overnight. >> it is all about the soymilk. enough people love it that it is a fast-growing sector. -- spun off several years ago which is a $10 million acquisition, about a 19% premium. while the overall foods industry is going in the single digits, organic and natural foods have been growing in the double-digit. is gaining soymilk, another alternative plant-based milk. if you look at those white wave shares and some analysts have said there may be a bidding war for the company.

they are rising by 20%. smaller, avgmuch technologies or $1.3 billion. avg is based in the -- in the netherlands and is privately held. >> lots of big movers for the nasdaq, starting with technology, western digital shares are soaring at the -- after the company announced a cfo transition plan that will start on september 1. this,fargo is positive on up with the stock down by 20% year to date. turning to biotech, shares are soaring on a report out of beta phil that european roche is considering a multibillion-dollar acquisition. lastly, second site shares are

searching on a new medicare, medicaid reimbursement plan and an entirely blind woman in italy has received the company's first bionic eye implant. she can now see. let's turn to europe with mark barton. >> appetite for risk has returned. stoxx 600 up by 1.4%. , atelow the levels we were the close on june 23. every industry group is gaining. asiness confidence sinking to foreign half year low in the days after britain's vote to leave the eu. is, we are nowhere near the lows we were at the height of the financial crisis. a big clothing retail reported its steepest drop in clothing sales.

-- chief executive steve with cheaper prices and fewer clearances. -- ovaltine, all sorts of stuff like clothing, raised an earnings forecast because of the post brexit tumble in the pound. biggest gainer in europe, biggest gain for the company since 2000. jon: tomorrow, all of the attention on one data point, tomorrow's jobs report. indicating perhaps whether a shockingly low number was a signal of a labor market slowdown. joining us now is toni kroos enzi -- great to have you with us on the program. i remember the days and we are expecting employment to slow down. i just don't think anyone sub 50's.ome 50's --

tony: it is true that job growth is likely to slow and the jobless rate has fallen and there aren't as many people on the sideline. -- he hopes that job growth tows over the next two years about one million. projects own model that job growth will slow to about 150,000 in the first half of the year and has slowed from the past two years to about 130 among to about 97,000 month, and of year. it is expected and is desirable. growthe fed wants is job to stay above labor force growth. as long as job growth stays above labor force growth, that

will indicate improvement in the labor market because it will mean that more people are being pulled off the sidelines and will reduce the jobless rate. the fed once the jobless rate to slow, fall of but less because otherwise, the expansion will move toward it end -- its end. jon: in many ways, the majority of the data coming through -- there were also looking for fall rate hikes. the market has priced that out through 16, through 17. as you look at market pricing, what do you make of that? tony: the short end of the yield curve has moved as far as it can go because it does not look likely the fed will move toward an easing and it will not call off the rate hikes it thinks it will eventually have to implement. the fed is still fills curve avid -- advocates.

what's tomorrow in the jobs report, the wage figure. it is expected to move to 2.7% year-over-year, which would mark the highest rate since 2009, the highest of the expansion. that would be an indication that the labor market is getting tighter, that resource utilization is moving up and inflation will eventually move up to where the red 2% objective -- toward the fed 2% objective. i wanted to talk about wages and the possibility of inflation. what are the markets pricing in, right now? see?are you -- seeing? talking about the cpi, it will stay in the low twos over the next year or so.

it does give us a sense that there is a higher level of resource utilization that will lead to higher levels of inflation going forward. we are not looking at higher levels, just -- high-level, just higher than the price point, currently. alyx: at what point do you see a jobs point continue to move higher will the fed be forced to act and the potential -- tony: if you look at the minutes of the most recent meeting, it seems they want to see an accumulation of data to know that everything is on track, meaning that growth will move as the fed is projecting, that it's outlook will be filled. it is possible that even if tomorrow's jobs report is decent, markets will continue to say the fed will stay on the sidelines. one would say that near 5% was

full employment. perhaps it is now in the low fours. there are various stages of this and viewership should look at the u six rate. it is much higher and looks like it could go a bit lower. they will crystallize the idea that we are or not at full employment. it will indicate that we are closer to it than not. alyx: we have a lot of uncertainty in the u.s., there is the brexit. i keep getting reports of one and a quarter percent target for the 10 year yield. how do you put money to work? tony: one of the most important things that bond investors sugar -- should remember is the benefits of bonds. that's like saying you do not

need insurance because you will not get into a crash. it is important to stay with bonds as a core position in portfolios. yields could potentially go but yields globally on a had bases for the japanese investor, the european investor, do not look at the track for the u.s. treasury, between here and near zero,arrowed to the japanese investor buys u.s. tenure and hedges it back into his or her currency, they get nothing, where as they could have gotten about a percentage point at the start of the year. unless they are betting on capital gains, there is not much to squeeze out. pressure,l stay under global policy rates are likely to stay the same through the end of the year.

we tend to focus on the downside of surprises, there also could be upside surprises. as you look around the world at the demographic situation, the stalling growth, what is the prospect for really upside surprise? tony: the united states is still leading the world in economy. it is possible that after the election, there is some movement on immigration, corporate tax reform and infrastructure spending. it could boost capital spending which is a direct input to productivity. productivity has moved to a half percent per year as opposed to the usual 2%. if that moves up to 1%, that would boost growth a half point and what is the key missing ingredient, the bls.

if capital spending moves up, we get a better economy. that is realistic because both sides of the aisle want some form of corporate tax reform and infrastructure spending, so there could be a change and that could change the mood, next year. you mentioned capital gains, unless you want to go into the bond market. we are seeing more that because despite the low yield, the returns have been huge on that -- at the longer and -- at the long end. do you see the market becoming a withof a momentum trade associations with equity happening with the bond market? asia i just returned from where many investors there have been buying u.s. bonds for some time and have a lot of cash to invest and yields in the region. the same for european investors. they are all looking for a place to put their money, rather into

the 10 children -- 10 trillion of negative bonds that are global, most of them now in japan but a similar amount in europe. we would expect this trend to continue. it is not a momentum trend per se, but policy methods are likely to stay low throughout the rest of the year. investors don't have many alternatives, and they are not likely to envision alternatives on the horizon, given the outlook for policy rates in a less economic growth turns, unless there was a change in the tide, they would not expect that growth will improve enough and inflation rise enough to change the policy outlook, so they will continue to invest in u.s. ponds -- u.s. bonds. government bonds are looking with attractive, but the liquidity purposes, or safety, they will still be investing in government bonds as well. jon: we really appreciate your

time, thank you very much. pimco's portfolio manager. let's get to the news outside the business world. in just a few hours, there will only be two candidates succeedg in the race to you -- the uk prime minister. the new leader will be declared by september 9. republicans will question the fbi director wanting to know why he decided not to press charges against the in for improperly handling classified e-mails. the has accepted his recommendation not to charge clinton and says the investigation is over. bernie sanders could endorse hillary clinton's presidential bid before the democratic national convention kicks off 18 days from now.

a person familiar with the matter says an endorsement could happen in new hampshire within the next two weeks. this is bloomberg. coming up, pepsi announces earnings earlier this morning and shares are up in the free market after outperforming on the top line and bottom line. details are next. ♪

david: this is bloomberg. pepsico released earnings this morning that beat analyst estimates. the stock is trading up. we have a buy rating on exit --

pepsico. what is leading the growth? >> the frito-lay business. they make up over half of their business and has been continuing to drive growth. organic growth was up 4% relative to the 3% for the total portfolio. david: we think of this as a beverage company but it is much more than that. there is also the domestic versus the overseas. if the growth is coming based on the snacks, is that both domestic and overseas? >> it is, the domestic business has been strong this quarter and the implied expectation for the rest of the year, strong. it has been solid, overseas. beverages is more of a tale of two halves for the international beverage business has been resilient. the domestic business has been softer. part of that is market share losses by pepsi the coca-cola.

and part of that is the category being soft. we saw at first whether in may and april which did show up in the results. david: at the same time, they have cost-cutting measures under affect. how much are they being helped by that in terms of profitability? marginaw a good gross and the company has targeted and billion dollars in savings over the next five years and we have seen that help drive can is to argent improvement -- we have seen that help consistent margin improvement. david: what about merges in a position? they have a strong balance sheet and there is a possibility of acquisitions. >> they have been active in the

m&a market over their history. i expect that they will continue to look at deals. they have been more focused on smaller deals, so investors are asking a lot of questions about white wave and danone. we will see, but the company's stance has been smaller deals. theylike the portfolio have built over the past decade and the are more focused on refining as opposed to transforming. i expect them to be active, but not necessarily desperate. david: thank you, so much stephen hours. coming up, danone is adding soy milk and tail -- and kale. ♪

alyx: danone is adding soy milk and kale, buying white whale

foods. bloomberg just reporter ed .ammond is here with more the average for this kind of ember -- industry deal, it is unbelievable. ed: except that this sort of pivots towards health and wellness and we are seeing a lot of big food groups trying to do it. it does not come cheap. this is a company that has a huge amount of noise around it for the past couple of years. it is expensive, but it does make sense. danone, you can say you are doing this again, paying a lot of money for another asset. ed: it is not the first time, but it is a pivot away promote we think of this kind of unhealthy snacks and a lot of the traditional stuff that these companies are in, whether it is

the known or pepsi or general mills. -- it is danone or pepsi or general mills. they are trying to rebrand themselves as doing something slightly different than what we think of. alyx: the big question now is, what is next? i have the volume and deal counter for the third quarter. you have seen a slight rise in deal count, although it is still pretty low. does this set off a wave? i we looking at the first quarter of 2013 -- 2013? whether or not want delays comes back with something her she finds attractive -- monfils comes back with something

hershey finds attractive as it to be seen. for the biggest deals of the year, at the moment, the prevailing trend is certainly toward consolidation and part of this move toward wellness, but i do not think the fundamentals are suddenly shifting toward a huge weight in deals. alyx: thank you. opening bell is just moments away. take a look at futures, estimated futures off by about one point. a risk on rally all across the world. relatively flat in the u.s. u.s. 10 year, 1.4%. ♪ you guy's be good. i'll see you later

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party's on! 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. jon: from london and new york, this is bloomberg. minutes away from the opening bell in speed -- in new york city.

futures pretty much debt flat. the ftse of 1.5%. every single industry group on the stoxx 600 advancing, today. as you hear the sound of capitalism, switch of the board. i will with through the other throughasses -- whip the other asset classes. fantastic calls at the moment. yields on the 10 year creeping up higher, 1.41%. that is the situation across assets. let's cross over to julie hyman. julie: creeping higher is how you might explain or describe what is going on in u.s. stocks. it looks like keeping some drive how to for tomorrow when we get

the official jobs report. the eq showing drive growth in line with estimates for the overall number, but we have had a lot of emphasis put on that report, particularly in the wake of the federal reserve minutes from this last-minute -- meeting that showed the expressed some concern about the last jobs report. tomorrow will give us some indication of that. let's take a look at what is going on with individual stocks. pepsi stock is up 2%. we were talking about those results in detail. this next few -- snack food business really pushing pepsi's gains. staying in food, we had that big deal, $10 billion, danone. white wave is the other one we are looking at. shares, like white wave

i'm seeing them up by about 19%, trading at $56.52 which is above what analysts had been estimating, which implies people are looking for a higher bid. breaking news concerning those export lee traders who were convicted of lying. basically, they are getting as much as six and a half years in prison. the other, jonathan matthew is going to get four years in that breaking case. those sentences over breaking live are finally coming down for

those export play -- ask our play -- ex-barclay traders. scott, you got a year and called for the s&p anywhere between 2190 and 2290, what you are looking at earnings growth barely getting positive. better gets us there is confidence and investor confidence that the growth in the u.s. is dependable. look at today's initial jobless claims. our two great numbers, some things are moving in the right direction and i think we need a little more confidence, and i would argue that the market -- the s&p 500 is where it is right now because people were not looking at the first quarter numbers, they are not going to be looking at the second quarter numbers, they are looking at third and fourth and more at 2017 and we certainly are, too.

david: earnings are not going up substantially, and yet you have the s&p 500 going up, does that mean that you think the price-earnings ratio will go up? scott: that is right. if you look in earnings from first call and the 30 year median is about 16.7 times, we are only a touch higher than that. our work would suggest that you are in that 18 and a half -- 18.8 ratio versus the long-term median, it is not much of a stretch and we are at a low interest rate environment. suggest, ifwould you use the correlation over the last 30 years, that the pe would be 29 which is not going to get there, but this market can push up higher. pe can expand a little bit with just a little more confidence in a little more feeling of dependability that the global economy is not going to fall apart. fear isur perhaps more

the global markets bond rally continues. we have a terminal that shows the s&p dividend yield and that is that white line and that blue line is a 30 year yield and you can see that they have kind of switched and now the dividend yield is higher than the 30 year yield. how does that play -- is this a chart that says go back -- go buy stocks? a lot of these, whether it is staples or utilities or telecom, though sectors are pretty expensive, but overall, i think you have a decent dividend andd on the overall s&p 500 you have some safe haven status. our growth was certainly slow in it isrst quarter, but pretty dependable, it is not going to change much this year is going to look a lot like last year and the your war and it is going to look a lot like 17, so people know that, the market knows that and that is why we are where we are with the s&p 500. david: consumer staples and

utilities are fully valued. where are the markets you are looking for? scott: the sectors -- we have been leaning cyclical and there has been some defensive outperformance in this back and forth market action, but we like industrials, they have outperformed since july 2015. we like technology, we like this -- the consumer discretionary sector which continues to be the best performer since the march 2009 lows. we also like health care. if we are looking at bargains from a valuation perspective, the health care perspective looks best to us. we are mainly leaning cyclical, but we do not want our clients being defensive and hiding in telecom utilities and staples. alyx: you were talking about pe. this chart looks of the s&p 500 pe value, price earnings estimate of ratio.

that is incredible. s&p is the white line, world index is the blue line. this shows how much more expensive u.s. stocks are. they will wind up paying out for those utilities. david: if you look for an alternative around the world, u.s. equities are a more attractive alternative even if they are not as attractive compared to negative rate in a lot of sovereigns. scott: i think so. i think the u.s. stock market is a safe haven, and it is going to continue to be a safe haven and our growth, our gdp number for this year is 1.9, so you are not shooting the lights out, but it is pretty to 10 -- pretty dependable and things are going to improve as we go down the road. david: last question, what is that that going to do this year? scott: nothing. we thought they were going to raise one time in december, but

after that may employment report and the brexit vote, we took that off table. thanks, so much. coming up, we go to the allen company conference in total -- idaho for interview with john malone. this is bloomberg. ♪

david: this is bloomberg go. is pimco chief, investment officer. from london and new york, this is bloomberg.

coming up later is bloomberg markets with mark barton. director -- fbi's director testifies before a house committee why he believed no reasonable prosecutor would bring a case against hillary -- emerging markets closed and mutual but european stocks? editor in this edition of the magazine is all about experiences, such as a trip tracking guerrilla -- guerrillas -- gorillas. 300 years of knowledge distilled into a course. jon: looking forward to this, thank you very much.

allen moments ago, at the company conference in idaho, one of our reporters spoke with john malone, liver -- liberty media's chairman. john: there was always m&a opportunity. they are always looking for opportunities. not always big ones. is it something you would do? john: cheap is a relative term. [inaudible]

i think there are going to be some banking, capitalization issues. they are both subscale, this gives them the opportunity to get bigger. aggressive.more we will see. [inaudible]

on the other hand, interest rates are remarkably low, so you have to look at the ability to serve that. you have to look at that post synergy cash flow stream. you want a lot of synergy in the deal, in my opinion. i would not have thought you would have gone to war the media business, are there areas you would go right now? can you retain the movie

business and i think that is part of it. [inaudible] i think you want to look at tax efficiency. in version is only one form of reconciliation. in this particular case, it is my understanding -- [inaudible]

there are substantial strategic players. picture any financial stress. can theyquestion is, keep the leverage up? room,k there is plenty of should the company need more. [inaudible]

that would not be where i would go with my decision. they have some great assets. they are substantially undervalued. >> viacom. john: right. >> if you were a betting man, would you expect a combination of cbs and viacom? john: they could do a terrific

job if they wanted to go that way. idea what they have in mind. i have no idea what kind of state or taxed all of they would face. i'm sure it is a complicated process. [inaudible]

david: that was john malone, the chair of liberty media speaking at the allen company conference in that -- in idaho. the audio was not up to our

standards, but it is important because he ran that -- rarely speaks publicly. he talked about the stars lions gate deal which he is in the middle of, explaining why that made sense for him because on the one hand, he had a movie production studio and had to balance it out with distribution and talked about viacom. he personally is not interested and -- g paramount, saying he would be a terrific choice and finally, he gave insight into the way he thinks about deals, and leveraging, tax efficiency, his reaction to a versions and he thinks the u.k. is increasingly an interesting place to invest, so they covered a lot of territory and it is fair to say he is a legendary investor in media. , a verygreat recap

fascinating few minutes. we are 20 minutes into the trading session and we want to head over to julie hyman for a look at the movers. julie: i am impressed with your hearing capacity. thank you for recapping. let's take a look at what is going on on the map because we are seeing commodity led rallies. it is a bit more risk on and we are seeing rotation out of the , utilitiesive names in telecom, industrials and financials gaining ground. in terms of oil, we are seeing a bounce in oil. we have the delayed oil inventories number. because of the holiday, we are getting in at 11 and it may show the seven day -- the seventh weekly decline. petroleum numbers seemed to indicate that when they came out, last night. we are seeing some of the oil producers, providers, service

companies rise as well. also want to look at the owner of victoria's secret. they rose by 6%. however, the company also said it's june merchandise margin rate was down significantly, year-over-year, below estimates. victoria's secret, this comments coming of the call and speaking of calls, we have two analyst calls. analysts say he is unconvinced there is still material outside the billing. corning was added to goldman sachs conviction by list on the recovery in glass point them, so those shares are up by 2%. jon: in the last 30 minutes, we learn that ex-barclay traders have been jailed for up to six in a half years. leader fromam

bloomberg joins us in london to speak on the news in the last half hour or so. "going through the individuals. various rankings over at barclays. from two years and nine months all the way up to six and a half years. he was considered the senior figure and all this and that is where you get the longest sentence. one of the bankers was a very jr. guy and talked about being bully on the trading -- lead on the trading floor and hit with a baseball bat when he did things wrong. he still got or years in jail because he was one of the key settlers in all of this, and the judge is saying that no matter what your personal circumstances are, you have to know what you were doing was wrong. jon: bloomberg was at the forefront of breaking this scandal, that feels like a lifetime ago. is this the conclusion of all of

this or is there more to come? >> it is exactly four years ago when the bank in the center of all this hate that initial 290 million pound fine. crazy period, and this brings it to a close, that it is not over. there will be more of these same kinds of rest -- revelations all over again. jon: what did we learn from these cases? there is a perception looking in that this is all about punishing very jr. people that did not really know any better. does the perception meet the reality? >> one thing we are seeing is all of these guys are being accused of rigging the benchmark and judges say we have a benchmark percent and that you cannot rig and they are going to go down hard on these people. the appeals court that lower the

sentence of tom hays a year ago, when they lowered his sentence, they still said all bankers should know these kinds of crimes are going to result in very serious punishment. jon: great to have you join us. alex, david, finally making some steps towards the conclusion of a story that feels like it has been around for years and years. alyx: in terms of here in the u.s., dow jones approaching $18,000 -- 18,000, the risk on rally grinding little higher. david, we are moments away from hearing from the fbi director. david: he will be giving his opening statement and we will be delivering it live on bloomberg tv. is coming under fire for his integrity, not just the decision he made in not recommending prosecution of hillary clinton, but his integrity, with donald trump accusing him of rigging

the system. a very respected law enforcement official who served under george w. bush and is able republican -- and is a vulcan -- and is a republican. ramifications for the presidential election. alyx: what kind of rhetoric will we hear, from hillary clinton as well as donald trump? jon: that is it from us. thank you very much. from london and new york, this is bloomberg. ♪

vonnie: it is 10:00 in new york, 3:00 p.m. in london. i'm vonnie quinn. .ark: i'm mark barton

this is "bloomberg markets." vonnie: we are live in new york and in london for the next hour, we are covering stories out of geneva and washington dc. comey is setjames to give testimony on capitol hill. food one of the biggest and beverage companies in europe taking a bite out of the u.s. planning to buy white way for $10 million. reboundingcks are from the lows of the week. can the markets and the week on a high note? 19 minutes to the close of trading in europe. this is the thursday session.