matt: good afternoon. covering: we are tories from los angeles london. stocks rallying. the dow touching its highest level after u.s. job growth accelerated. does this mean a fed rate hike is back on the table? matt: the world's largest talent management gives a perspective on hiring trends, including the borderless multi-general -- borderless, multigenerational workforce.

we are halfway through the trading day. let's go to the markets desk. we are at session highs following the stellar jobs report we got at 8:30 a.m.. the dow is at 1809. 7. the dow is adding 200 points on track for its highest close since this past april. in terms of the s&p intraday, we at 21, 23 -- 2123. we are only about seven points away from the all-time record for the s&p.

let's take a look at what is happening in terms of some of the biggest movers. these are the biggest percentage gainers. jpmorgan up 2.2% across the board. 1.25 for bank of america. let's look at stocks not doing well in the pharmaceutical sector. juneau therapeutics is down 32%. this is touching lows of the day. the reason for this is three patients died in a clinical study for an aggressive cancer therapy. analysts are saying there is nothing related with what is happening with pharma and juneau. -- juno.

some interesting downs there. for most of the market, green across the market -- green across the board. see at 8:30, this spike up in yield to pass the 1.44%. that was short-lived. where we started the day at 1.38%. ofant to show you in terms the work function. this is the fed future probability. foree these numbers rise 4% july. -- the take away is through september of next year, the probability is less than 50%. shery ahn: thank you. let's head to the news headlines

with taylor riggs. she has more. taylor: we are getting more information of the killing of five police officers in dallas. officers were wounded when snipers opened fire. police exchanged gunfire with a suspect hold up in a parking garage. said he was upset about black lives matter. he said he was upset about the recent police shootings. he said he was upset at white people. stated he wanted to kill white people, especially white officers. the suspect died after a robot carrying explosives detonated a device next to him. president obama discussed the attack while offending -- while attending a conference in warsaw. nos. obama: there is

justification for these attacks. the fbi is in touch with the dallas police and anyone involved in these senseless murders will be held fully accountable. justice will be done. attackshe called the of, calculated, despicable. paul ryan is calling on americans to come together after the tragedy. he noted it has been a long week, but urged americans not to lose their decency. he said he should -- americans should not let such acts divide them. the shootings have led to a temporary halt in the presidential campaign. hillary clinton has canceled an event scheduled in scranton, pennsylvania. she will still speak at a convention -- at a church. cameron will make the

argument that britain should -- to his allies on the continent. some troops will be deployed in eastern europe and others will be used as a liquid reaction force. -- as a quick reaction force. this is bloomberg. matt: let's focus on the latest jobs report. huge bounce back on employment in june after a massively disappointing number in may. payroll rose 280,000 last month, more than forecast. reportjobsts was an anomaly. what does this mean for the u.s. economic outlook? want to bring an scott brown.

he joins us live from his office in the petersburg, florida. , what does- scott this mean? numbers are based on statistical estimates. there is a lot of seasonal adjustment issues. it is rare to see the swing we saw from may to june. these things happefrom time to time. you would expect to see them occasionally. anomaly.number was an so was the june number. you need to look at the trends. you can average the two months together, look at the three-month average. you see a slower trend in job growth. that is not entirely unexpected. we expect that as the job market tightens. there may be hesitation on the part of large firms to hire workers. the nervousness ahead of the brexit though. we are still seeing a lot of

strength in hiring. look at the underlying trend, it is ok. the economy is growing not too fast, not too slow. ofry ahn: we have the trend the three-month average. take away the noise about the payroll data and you can see this white line compared to the three-month average. it is trailing the three-month average. what does this mean for the fed when it comes to hiking rates? the question that is key is why has job growth slowed down this year, particularly in the second quarter. tightness in labor supply. probably a little bit of two things. of whereto set policy

the economy is going to be 12 months from now. they are going to be in tightening mode. they are still not going to be in a hurry here. there is too much going on with the rest of the world. too much in terms of unsettled financial conditions. ride it out.g to september may be on the table, but not likely. december is a possibility. in a situation like this, one number does not a trend make. we did have rise slightly in wage inflation. we had a rise in participation. when do you think those numbers get to a level that start to put pressure? fed'soes it force the hand a little bit? that has been the mystery. we have had outstanding job growth the last couple of years.

we haven't seen a huge increase. 2% in a earnings up about 2013, 2014, up to 2.5%. little aboveg a that. we would normally look for 3.5%, 4%. we still have ways to go. you will get increase in minimum wage. those are coming in california. that may help push overall wages higher. the big question is, can firms cast -- passos labor costs along. job growth will be slowing down. shery ahn: you mentioned corporate profits. aring times of recession,

chart we have highlighted in profitssee corporate and payroll data tends to drag on. we have corporate profits down more severely than before. the laborhis affect market going forward? firms are going to hire people if they have to hire them based on the goods and services demand. in general, the economy has to slow down to some extent. we are seeing a slower pace of growth in the population. we expect labor supply to increase on the average around half a percent for the next 10 years. 1960, to 2000, it was increasing because more women were coming into the workforce. we ares of gdp growth, likely to see 2% as a base case

rather than the 3.5%, 4% we remember. be a challenging environment for firms. we expect things to be positive. we expect growth slower than what we have been used to. shery ahn: thank you for talking to us. up next, our mystery stock of the day. y" about nothing "fish our mystery pic. high demand for help against unseen enemies. this is bloomberg. ♪

matt: welcome back.

are watching loretta lynch giving a press conference. delivering statement here on the shootings that killed five police officers and wounded many others at a demonstration in dallas last night. you can stream her comments on using liberg terminal ato and our live channel bloomberg.com/live. the big reveal on the mystery stock. "fishy" aboutng our mystery pic, having its best day. our fearsome predator sought high demand for unseen enemies. shery ahn: the hint is fun, but i have no clue. hammerhead? almost there.

i will give it to you. matt: walrus? >> that is not a fish, matt. let's reveal what this is. barracuda networks. it is down 3% year to date. happening today, it is up about 18%. that is its biggest jump since april. 18.3%. first-quarter sales beat estimates by about $3 million more. its second-quarter guidance was raised by a couple of cents to $.12 or so on that share. jaffray and piper saying good things about the stock. subscription-based products are going gang busters and they are seeing solid growth. let's see some of the effects

happening in the cyber security realm. citrix systems, up. palo alto as well. cyber ark software up to .7%. sinceseeing its highest october 2015. matt: i should've thought of barracuda. i and think of fire wonder if there is any affect on that. shery ahn: thank you for that. the biggest at business stories in the news. astrazeneca is facing off with regulators over cheaper copies of one of its biggest selling drugs. they filed a lawsuit to stop the fda to allow generic versions of crestor. astrazeneca argues it should have another seven years without generic competition. a sign thatt may be gap's long r-rated turnaround

has taken hold. they beat estimates. old navy brand led the results up 5%. matt: twitter is looking to expand its sports streaming profile. twitter is in talks with the nba and turner about streaming rights for live sports and events. twitter has a deal with the nfl to stream some thursday football night games. -- thursday night football games. of thehn: the ceo largest talent management firm gives us an insider's perspective on hiring trends, including the borderless, multigenerational workforce.

matt: this is bloomberg markets.

let's get back to our top stories. theing us to break down, employment is robust and salaries are strongest. thank you for joining us. give us some reaction on the employment situation and the employment data we got this morning. what did she think about the trends in hiring -- what did you think about the trends in hiring? you can summarize it in can i take your order and how are you feeling? you have this continuing trend on for years towards the service-based economy. matt: you are a talent management firm. what are you actually doing? are you an executive recruiter?

what is the meat of your business? gary: years ago, we did executive recruiting. today, it is about 35% of the firm. almost $2 billion. half comes around advisory. talent management is half the firm. is talenthalf acquisition. 35% of it is at the ec suite -- the c-suite. the other 25 is professional and knowledge workers. matt: you are not putting any fast food workers in drive-through windows. you are probably not doing a lot of medical professionals that

run hospitals. gary: we do a lot in the health care area, with this going through tremendous change. on retail, we do a lot of work around retail store managers, not only hiring them, but helping to develop them. our business does touch those aspects. shery ahn: the big talk of the day is the ceo from disney. do you know if they are hiring the search firm? we don't comment on clients. it is a tremendous brand with a great network. they had a plan with regards to succession and that has taken a little bit of a term.

matt: we saw 2.6% wage inflation. what are you seeing in the more well-paid jobs? capitalle doing preservation or are they happy to keep jobs or get jobs? gary: we estimated, based on compensation were, there would ea 2.5% increase globally in terms of wage pressure. that is what is turning out to be. areas that in those are high demand, applications, developers, software people, health care, those would tend to drive high wages. when you get to the other side, energy, over the last few months, you see decline. 11,000 jobs see

added in may? 287,000 jobs added in june. do you see that mirrored in your business? that huge volatility? we did. i look at things in trends, not just one month. if you look at a macro basis, there is no question the number of jobs added is less than what it was a year ago. were 300,000 jobs a month. right now, you are about 100 to deep thousand. with the events in europe that happened a couple of weeks ago, ceos will have a cautious outlook. how is changing technology affecting what companies are hiring and what talent is looking at? working longere now that people are living longer.

it is much more customary to see ofple working past the age 60, 65. .eople are really healthy they can contribute to the workforce force. they are working longer. that tends to make it tougher for people coming out of college. today you find people coming out -- ollege thank you for joining us. we appreciate your time. a quick great. when we come back, we will talk brexit. ♪ .

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?c+sv live from bloomberg world headquarters in new york, i am shery ahn. matt: and i matt miller. this is "bloomberg markets." we have the latest from taylor

riggs in our newsroom. taylor: president obama calls it a vicious, calculated attack. police in dallas call it an ambush. snipers opened fire journey downtown protest against recent police shootings. five officers were killed and seven wounded. so or two civilians. up in aect was holed parking garage and told them he wanted to kill white officers. police ended the stand up by sending in a robot equipped with a bomb. > chief brown: other options would have exposed our officers to great danger. the suspect is deceased. as a result of detonating a bomb. taylor: three other suspects have been arrested. dallas police say they are not sure they have caught everyone involved. after the shooting in dallas, police in the nation's r patrolling in pairs.

officerse chief said doubled up starting on the midnight shift and will stay that way until further notice. boston police say all patrols will be conducted by two-officer units. chicago police are also now working in pairs. the state department is reopening its internal investigation of possible mishandling of classified permission by then secretary of state hillary clinton. some of clinton's closest confidants could face punishment including loss of security clearances. president obama says the u.s. is sending an additional 1000 years troops to poland as part of the nato effort to reinforce its presence on the alliance's eastern flank. the battalion is one of four nato will begin rotating through the region. the move is meant to act as a deterrent to russia. dayal news 24 hours a powered by more than 2600 journalists and analysts in more

than 120 countries. i am taylor riggs. this is bloomberg. shery: thank you. it is e.t.f. friday. here to discuss the outlook and what the flows are saying is david and eric balchunas joining us from london. dave, let me start with you. u.s..'s in the attracting more than $60 billion in the first half. what does the second half look like? what we have seen a significant amount of money move into bond e.t.f.'s. s will continue. there is a significant amount of uncertainty and volatility. leading to investors looking for safety in the bond market and e.t.f.'s. matt: i wonder about the regional flow.

it shows you the regional flow in and out of e.t.f.'s. what we have seen over the last three-month is a massive inflow for the u.s. and massive outflow in china and the eurozone. i get europe, right? why china? what is going on? >> there are lingering concerns about the economic growth situation in china and what impact it has on asia broadly and the entire global economy. something not as significant. now it is. when investors see uncertainty and volatility, they go back to what they know. that is the u.s. shery: i want to talk to eric because we are seeing the search for yields. has been trading as treasuries of gold as other safe havens have. junk debt trading like treasuries, the yen, and gold.

junk debt, junk e.t.f.'s what is the word? >> the day after brexit, that was shocking. you saw junk bond e.t.f.'s taking inflows. there is no more fear of the fed. the fact you have a stock market long in the tooth and people still looking for yields. it used to be would not going to junk bonds if you thought the fed was going to raise. when you see junk-bond flows now, it is people who want the yield and don't fear the fed for the time being. matt: i always worry or wonder matchhow e.t.f. managers what they are holding with people flowing in and out of the actual fund. is it harder in this volatility? dave: one of the benefits of e.t.f.'s they have structure

which is unique to other investments, particularly mutual funds. it allows managers to manage ats efficiently during volatility. that is what we have seen of late. matt: how are they doing this? you cannot just every day at the end of each market session pull in that much physical gold, right? benefits of the largest in the world is it only old-school bouillon. in a vault in london, there are gold bars being moved to allocate versus other accounts. , since the day of brexit brexit, 2.7 billion of inflows alone. that was done with gold bouillon. gold, given the rally in are we seeing an upside in gold e.t.f.'s? dave: because uncertainty in the market, the brexit direction was wrong. no one expected brexit.

think about the outlook. it is our own election here. the rhetoric has been hot. i think it will get hotter heading into the summer. that will lead to more political uncertainty, more economic uncertainty. to somethingestors like old, particularly when you have $11 trillion of negative field in debt. matt: and possibly more dislocations. let me ask you, eric, because you are in london. what are you seeing as far as the massive dislocations? relocation was hit first and hardest. is that still where the action is? eric: here you have got people, if you look at european region e.t.f.'s, they have seen $13 billion in outflows this year. i don't think brexit is that big of a deal. the bigger deal is that central bank trades are not working anymore. you have a stock market rally that is seven years old return to 100%. most people get is that nothing

goes up forever. i think in certain times when you would have come back in, there is a little but it does not have the depth you have seen in past eras. that is why you see gold continuing to take in money every day as well as its peers. you have 15 precious metals e.t.f.'s that have taken inflows this year. that tells you how people are looking for a crisis hedge. shery: thank you so much for your thoughts, joining us from london, eric balchunas. thank you, dave, head of e.t.f. investment strategy at state street global advisors. raisesoming up, uber another $1.15 billion in cash using a method usually reserved for more established companies. we will tell you what it is. this is bloomberg. ♪

you are watching bloomberg. i am mark barton. vonnie: and i am vonnie quinn. italy's banks are getting desperate and the governor says intervention may be necessary. congress is putting

pressure on boeing. lawmakers want to scuttle the company's sale of jets to iran. are the u.s.nie: and russia entering a new cold war? we look at the signs. we begin in italy where the bank is as it is working intensely with authorities on a solution for its bad loans. it is said to be the subject of bailout talks that have led to a deadlock between italy and other e.u. nations. the central bank has ordered the bank to offload 40% of nonperforming loans by 2018. the bank of italy governor says state intervention to support his bank may be needed. earlier, the citigroup chief said the banking problem in italy goes beyond the balance sheet. politics in italy are is threatening today is u.k. politics were a six months or a year ago. existential uncertainty.

i am more worried about the politics than the banks per se. mark: the obama administration has imposed tough new rules for oil companies wanting to drilling arctic waters. slashers would have to equipment nearby and take costly steps designed to prevent oil spill's. the industry says the rules will discourage development. members of congress are putting pressure on going over the historic agreement to sell planes to iran's national airline. opponents are concerned the revolution guard will use the plains. the boeing deal would be the biggest business transaction between the u.s. and iran since the 1979 revolution. the obama administration has said it will veto any legislation that undermines the nuclear agreement with iran. has closed a deal for a

high leveraged loan according to a person familiar with the matter. it has rained more than $50 million in equity and debt. creditors will receive about a 5% yield on the loan. bloombergme for our quick take where we provide context and background on issues of interest. is the cold war between the united states and russia back? henry kissinger has said it is possible. medvedev says it is happening. russian troops have been fighting with an arming pro-russian separatists since 2014. congress voted to supply more lethal weapons to the ukraine army. for now, a cease-fire is in place. in syria, russia's air campaign has been conducted in close proximity to where u.s. aircraft are pursuing their own campaign against islamic state. the u.s. also came under pressure from hours to arm sunni rebels with antiaircraft rebels so they could defend themselves against russian airstrikes.

that would have put u.s. weapons in the position to kill russian soldiers, just as american arms did in afghanistan in the 1980's and as soviet arms killed u.s. troops in vietnam. here is the background. the cold war began in 1947 when president truman asked congress to help stop the soviet union from projecting its power. soviet diplomats sold the policy as imperial aggression from an american elite claiming the right to lead the world. it was not until 1969 the sides sought a kind of truce with measures to reduce the chance of war. some analysts argued that cold war cannot repeat because russia has no ideology as alluring as communism. thatounterargument is while today might be a different cold war, it should be treated similarly because russia retains a vast nuclear arsenal as well as the will and military means to be a regional superpower. president vladimir putin's

russia may not have communism to offer the world, but he house takers -- has found takers for managed democracy and conservative values. it could be long and costly to both sides. that is your global business report. . for more stories, visit bloomberg.com. ♪

shery: this is "bloomberg markets." i am shery ahn. matt: and i am matt miller. 287,000 jobs were created in june. gross spoke, bill to tom keene and might he -- mike mckee. they talked about investors taking too much of a risk jumping into the corporate bond market as they search for yield. take a look. >> i think it is obvious when interest rates are zero or negative in everything is tied together.

bonds and negative interest bonds are tied together in some way. the high-yield bond area is artificially priced and at risk under certain circumstances. i would not buy them. i am short them. ofe: across all categories corporate or just high-yield? are cdx, whichre is an index of high-yield bonds x, which is an index of investment grade bonds. those are derivatives easily traded. high-yield trades at about 425. protection as opposed to sell protection,

which i have done, the same as shorting, you are giving up the carry. but you are looking for a widening of spreads. i think that is what happens in both markets. mike: with the cost of money for banks trading at 37 basis points, our corporate bonds the channel for monetary policy now? they certainly are beginning to be with the e.c.b., are they not? stocks are the asset class of the day with the swiss national bank we just found out. they have $500 billion worth of stocks around the world, including apple, and johnson & johnson. to me, that is staggering. we have known the japanese buy stocks but we never knew this was national bank bought stocks. it is almost like a sovereign wealth fund. distortede market is by cash flows that never have

been. tom: i look at the swiss franc and think of bob who has been looking at sterling swiss as a proxy for safe haven versus what is going on in the united kingdom. i think all of our world would you werenow what thinking in the drama of the brexit vote. what were you thinking as you saw the united kingdom shift to leave versus the presumed remaining? bill gross: i was watching that overnight. what i was watching was i had some options on u.s. treasuries, calls and puts. initially, the u.s. treasuries were declining in price, and too much. but all of a sudden as brexit was winning, treasuries went up and were going up too much. you you see volatility,

don't want to sell as much as happened on that night. it was a long night for me. it turned out very well. that is the problem with a sudden change. there are so many positions. there is so much leverage currency-wise. as you point out, almost every five minutes. tom, on your program your currency-related. i think that is good. there are huge currency positions that have to be unwound and rebalanced. there are huge positions in terms of credit and treasuries. there are huge positions across jgb's and u.s. treasuries. when something happens, it induces lots of volatility and a lot of loss-taking on one side and profit-taking on the other. it is not the way capitalism should be run. opposed to ao as midwestern farm. gross thiswas bill

morning. the radio portion was "bloomberg surveillance." a quick check on your stocks. benchmarks near session highs. you can see the nasdaq is moving higher than the s&p and dow. let's go down to abigail doolittle live at the nasdaq looking at how it has recovered since the brexit vote that tom and bill were talking about. abigail: we have the nasdaq in full rally mode, more so than 500 and down.s&p the nasdaq has erased all brexit losses. we have lots of strength. two of the biggest winners are tesla and whole foods. they fared the volatility the best. deliveries it guided down and had issues around autopilot. pretty amazing.

whole foods on take-out speculation. one stock more uncertain, and american airlines. this is bounced off the bottom nicely, up 19% from the bottom after falling 18%. it shows investors were initially concerned about the brexit fallout on the travel industry, airlines in particular. and now, not so much, until again they are. we have a way of returning to issues. it will be interesting to see how that plays out. matt: thanks, abigail. treasury officials tell lawmakers they will relax restrictions on some intra-company banking activities. it could ease cash flo pooling. i want to bring in our tax reporter. what is cash pooling? >> it is almost an in-company bank. a company with multiple affiliates that have extra cash

can put their extra cash into a single account and other affiliates that might be short of cash can draw down from that. it is in effect an in-company lending operation. shery: what is the treasury trying to do? >> there is the issue we know about called inversions. the problem with that is also related to intra-company lending. a lot of u.s. profits can be repaid to foreign affiliates through repaid debt to the foreign parent. treasury department would like to shut down the avenue. the problem is the rule as proposed appears to also capture this cash pooling technique which is pretty common. does not necessarily have to do directly with inversion. and a lot of companies are nervous their cash management technique could get jeopardized by this broad sweep. ist: so treasury

effectively trying to put a stop to cash inversions, companies trying to avoid paying high corporate u.s. taxes and have snared some innocents in their wake. >> that is what the business community is telling the treasury department and lawmakers. it seems like the message might be resonating. that is what treasury told lawmakers this week. shery: what is congress doing in response to this proposal? >> i think the big message from leading members of the tax committees in congress is slow down. they have been asking the treasury department to slow down. there is a meeting next week. the treasury department says it does not plan to slow its space. the word they used the other day is "act swiftly." nevertheless, they seem to suggest they are cognizant of these concerns and want to work on the issue. matt: a little curveball here. does it occur to people on capitol hill that if we had a

theycompetitive tax regime may be able to completely avoid the issues? >> that is one of the reasons members on the hill are asking for a positive they say we have better ideas to address this. let's bring down tax rates and do other things that make the idea of inversion not necessary anymore. matt: less attractive. excellent. that is all we have time for. i appreciate you stopping by. aaron lorenzo. hour, we are next getting you ready for the busy week ahead. we have a preview of next week's bank earnings. this is bloomberg. ♪

shery: it is 1:00 in new york, 6:00 in london, and 1:00 a.m. in hong kong. matt: welcome to "bloomberg markets."

bloomberg's world headquarters in sweltering new york city, good afternoon. i am matt miller. shery: happy friday. i am shery ahn. arevery stories -- we covering stories from washington and beyond. a significant pickup in u.s. payroll sends stocks up ahead of u.s. corporate earnings which start next week. matt: know our earnings may be watched more closely than u.s. bank earnings after a dismal quarter last time. j.p. morgan and wells fargo set to report next week. we will have a preview. shery: it is a good time for gold bugs and the world's largest gold producer. we will have an exclusive interview with their president. matt: let's head live to the markets desk where ramy inocencio has the latest with equities. we are looking at session

highs over the last hour or two still at those levels. the dow is up more than 200 points. 212 points. near session highs. 1.2% up. s&p 500 up 1.25. 2124. 2120 was our earlier high for this year. we have surpassed that and are on track to potentially break the all-time record. we will have to see. the nasdaq is up by about 1.4% as well. let's look and see what has been happening ever since may 21. about .3%oned, only away from our record close in may of 2015. i want to show you the svs function for the s&p 500. this is the volume, trading volume, against a 20-day moving average.

you can see the bar is going this way are in the negative, about six out of 10. six of them are lessig is the 20-day moving average. only four higher, but minimally. financials are the biggest gainers in terms of us into groups, down by about 3%. trades, they are buy column.he microsoft up 1% 8%. almost its highest in a month. j.p. morgan highest in one week. we have two wells fargo. we will leave it. trading the same price. inry: we saw this milestone the debt world. ramy: generally, we have seen a spike in yields when the jobs numbers came in at 8:30. we also saw this fall.

what we are looking at now is for the 30-year, we are a record low in terms of yield. 2.11%. in the past year, it has fallen 87 basis points. interest rates are so low. i want to show you one last chart. based on interest rates right now, you cannot double your money unless you wait at least 100 years or several thousand years if you put your money in a one-year deposit account. you have to wait 107 years to double your money. germany, 1387 years. japan's yields are so low you have to wait 6000. only by yield. 6932. matt: i got you. price appreciation has been so amazing with bonds that even if they are yielding negative and people are piling in? shery: japan is yielding below zero for the first time. matt: thank you very much. ramy: happy friday.

shery: taylor riggs has more from the newsroom. the scene called an ambush, a carefully plotted attack on police in dallas that left i've officers and two others wondered. two civilians were also wounded. opened fire against the protest against recent police shootings. police exchanged shots with a suspect in the parking garage. chief brown: the suspect said he was upset about black lives matter. upset aboutas recent police shootings. the suspect said he was upset at white people. the suspect stated he wanted to kill white people, especially white officers. taylor: the suspect died after police detonated an explosive device attached to a robot. authorities say they are not sure if they cut everybody involved in the attack. loretta lynchal

is calling for peace after the dow shootings. department including agents with the f.b.i. and e.t.f. are in texas working with local investigators. this has been a week of profound grief and heartbreaking loss. loretta lynch: to all americans, i ask you, i implore you, do not let this week precipitate a new normal in this country. other,ou to turn to each not against each other, as we move forward. let us support one another. let us help heal one another. i urge you to remember today and every day that we are one nation. we are one people. and we stand together. taylor: she says her department will help investigators in dallas in any way necessary. orderedt obama has flags to be lowered to be half-staff today to honor the fallen officers. governor isppi

asking appeals court to let a state law take effect that would government to deny or delay services to same-sex couples. the move came after a lower court blocked the law from taking effect july 1. u.k. applications for the irish task force urged 20% on worries britain will leave the european union. the vote to leave raises concern u.k. citizens could lose the right to live and work in europe without estrogen spent an irish passport is seen as a way to retain access to those rights. day innews 24 hours a more than 120 countries. i am taylor riggs. this is bloomberg. shery: thank you. u.s. payrolls in june for the most in eight months, climbing by 287,000. to break down the numbers, revisions, and more, is julie hyman who broke the data this

morning. what a rebound. julie: what a rebound. and it was a surprise to those at the labor department as i am sure it was a surprise to you in the studio because the average estimate was 180,000. a rebound from the dismal performance in may, but not a rebound like we ended up getting a 287,000. in hiring is coming from leisure and hospitality hiring which was strong. strong hiring in health care and social assistance, things like child care and physical therapy. also in financial activities. all those areas were strong in june. at the same time, we did see an uptick in the unemployment rate to 4.9%. that is .1% higher than estimated. we saw more unemployed in the workforce. average hourly earnings was a disappointment. it was up 2.6% year over year but only .1% month over month.

that was lower than estimated. we did have this headline blockbuster number. at the same time, i want to point out there is overall still slowing in hiring. 147,000e-month averages -- average is 147,000. we have to mention what happened in may. may's jobs number was worse than it initially looked. it was revised lower to a gain of 11,000. all that coming from government hiring. private sector hiring in may was down by 6000. in part because of the verizon strike but also weakness in temp agency hiring inmate. shery: thank you for joining us in washington. matt: reactions the jobs report is mixed. not everyone sees the jobs market in the same light. here is what we heard on bloomberg today. >> things are not as hunky-dory as 287,000 might suggest.

normal is 150,000. it is nothing to get excited about. mike: does it get anyone interested in what janet yellen will do? does this change the calculation of when they might move? bill: i don't think so. to lookll have brexit into. they have problems with italian banks. the e.c.b. and e.u. do. problems with u.k. property, mutual funds. there is a sense of the liquidity in markets -- illiquidity in markets and the fed is concerned with markets to the extent there is discord around the world. i think the fed stays where it is. they have wanted to raise rates. they did it once. i think they want to have us believe they will raise several times and have a positive yield curve which will help banks and

insurance companies. but for the most part, i don't think this changes much. >> it looks like we have completely recovered. wage growth picked up a little bit. of near the4, kind high it gets at the top of a business cycle. everything looks right. one problem. that is employment rates are very low. that is a significant issue. >> how far are we from full employment? >> to my calculations, it suggests even if you correct for demographics, if you look at the current hiring rates, the unemployment rate rather than being 4.9% is probably in the high 5.0%'s. >> it generally puts the recovery back on the track we thought it was on. it is slowing from last year. the average the last three months has been less than the average for last year.

that is not surprising. this has been a very long recovery. we are at what most people would think of as full employment. >> it does not concern you the pace is slowing, yet we are not seeing meaningful increase in wage gains? >> it does concern me. that has been the bad news story. people have jobs but they are not earning as much as they should be. i think that is a signal we need to be investing in productivity enhancing things like improve our infrastructure, improve the skills of the workforce, invest in science and technology. those are the things that have been lagging over the last several years. >> this report is more like a goldilocks report for the market. they will welcome the strong job creation. they will welcome the uptick in the labor participation rate. but they will also note wage

growth remains sluggish. what you should see an are seeing his major movement at the short end of the yield curve. equities doing well because the goldilocks report suggests growth is ok and will not force the fed into hiking. importantly, beefing up sectors, particularly banking will get some short-term relief because of what is happening to the yield curve. vonnie: you talk about wages. we had no meaningful acceleration. the participation rate did increase, which was good. what will it mean for the federal reserve? can they put a rate hike on the table this year? assumeays to them don't we are talking sideline. but it does not mean they will move quickly. i think if we continue to get this type of jobs report, we may end up with one hike this year. expectationsst

that had sidelined the fed for the foreseeable future. coming up, it has been a rough year for bank stocks. investors are hoping strong earnings can reverse the trend. this is bloomberg. ♪

shery: you are watching "bloomberg markets." i am shery ahn. matt: and i am matt miller. thanks start reporting earnings next week. j.p. morgan reports on thursday followed by citigroup and wells fargo on friday. we are joined by jason goldberg from the new york trading floor. banks have had --

had a tough year. the last quarter was no prize. are we going to see a rebound and why? expect improvement in revenue growth. it shows the strongest growth in a quarters. if you look at second quarter , we look for mortgage revenues to be at double digits. we look for trading revenues and investment banking fees to increase from q1. strong quarter, but typically you see a 20% decline in q2 in trading. this corner, we think you will see an increase. shery: the too big to fail banks are in correction, when will we see a turnaround in stocks? >> stock seven highly correlated this year with interest rate stocks have been

highly correlated this year with interest rate expectations. when people think rates could go up, these stocks do well. a lot of it is in the fed's hands. you are at the point where valuations will provide some support. stocks are where they have been over the 25 years. earnings, banks will begin participating in their stress test capital return plans. we think coverage will return almost $100 billion of capital back to shareholders in the next 12 months which also provides support. matt: i happen to have price-to-book ratios up. ells fargo strong, almost 1.5 times book. j.p. morgan chase is trading even. igroup is tradingls cheaper.

>> valuation is one aspect of the story. r.o.e.'sh the higher trade at higher valuations. we like j.p. morgan and wells. citigroup for those willing to take on more risk it is also attractive at current levels. matt: thanks for joining us. appreciate your time. jason joining us. shery: a lot to look forward to next week. still ahead, the brexit vote creating uncertainty in europe. one investor sees it as a huge buying opportunity. he will tell us where to go next. this is bloomberg. ♪

matt: this is "bloomberg markets." i am matt miller. shery: i am shery ahn. stocks are rallying on the jobs report today. are the markets being driven

more by noise than fundamentals? one strategist says corporate pockets and record low bond yields support by the dip and sell the rally strategy. let's go to carol massar and cory johnson. >> thank you so much. welcome, everybody, to bloomberg radio. steve, you walked into the studio and our producer said what did you think of the jobs report. you thought it was good. >> robust. >> really? even though if you look at the three-month trend, it is not as strong as the trend of the first quarter? >> last month was revised down. this month strong and will probably be revised down. at a good number. it is ok. i don't think it will take the fed off their policy path. y: we got the

revisions for last month which made it look worse in some ways. are we to believe this number because last month was so weird with the verizon strike? >> there is a lot of volatility. the margin of error is plus or -100,000. that is why you look at the long-term numbers. i think the fed is looking at an economy that is doing ok. the labor market is improving. wages are improving. they are looking at a bias to raise rates. international events are preventing them from doing that. if there were such a thing as u.s. in isolation, they would be considering a more normal rate requirement. but international events conspire against that. still, things are ok in the u.s. i think the fed would evaluate this is an economy that could withstand and with slightly -- would justify slightly positive rates. from: economists were looking

for a number double that. not great for workers. is it a better thing for companies that don't have to pay out so much in wages and this is good for the margins? what this will sack into margins -->> this will seg into margins. as the volatility works its way through, earnings will probably rise to about the zero range by the end of this year. i think the lack of wage pressure. carol: earnings at zero is a good thing? >> that is an improvement. cory: earnings stink. >> earnings are not doing well now. they are improving. a lot of this is as energy story and dollar store. the time you get into 2017, earnings should be in the low single digits again. not recessionary not great. grade on earnings, the

economy. labor markets are doing ok. the united states, the outlook is not that bad. it is just what is happening with the european central bank, the bank of japan, the bond buying schemes internationally are holding rates down. carol: you're overweight equities. >> we look at cycle valuations. a cycle looks ok in the u.s. earnings and the economy. sentiment is ok. valuations in the u.s. look rich and have for some time. from our perspective, you want to underweight these rich evaluations and look elsewhere. sell the rallies in the u.s. to fund overweight in european equities. look globally where valuations are not a headwind. reportne thing the labor

brought into focus was the lack of wage growth. i think about things going on in technology. we see things happening at lower cost. we see cloud computing taking over from companies. we see startups starting at much lower cost as a result. i wonder if we are looking at an era where companies are not putting a lot of money to use because they don't have to. maybe that will have a more effectnt affect -- because companies do not need to spend as much but are not getting as much in topline growth. carol: 20 seconds. >> you are in technology which is a disinflationary industry. i think we are looking at a world of lower wage and lower returns. rates are negative in europe and japan. you have to be active. how can you reconstitute a total return strategy?

there are a lot of disinflationary pressures holding in the economy -- building in the economy. you have to stay on your toes. wood, thank you. . we will send it back to television. matt: thank you. high-frequency trading app that would make high-speed traders a threat to even the biggest hedge funds. we will discuss. this is bloomberg. ♪

from bloomberg world headquarters in new york, you are watching "bloomberg markets." i am shery ahn. matt: i am matt miller. let's get to the headlines.

taylor riggs is in the newsroom. taylor: president obama is calling it a calculated attack. police in dallas say it was an ambush. snipers opened fire during the protest. five officers were killed and seven others wounded. police exchanged shots with one one suspect was holed up in a parking garage. ending the standoff. >> other options would have exposed officers to great danger. deceased.t is of detonating a bomb. three other suspects are in custody but police are not sure they cut everyone who was involved. president obama has ordered flags lowered to half staff in honor of the fallen officers. members of the light caucus are

denouncing violence that occurred. we feel the pain, we feel the hurt. [indiscernible] minnesota, in dallas, and all across the country but whatever we do we must do it in an orderly, peaceful, nonviolent to have redeemed the soul of america and bring us martinr create what dr. luther king, junior called the beloved community because we all live in the same house. shery: paul ryan and nancy pelosi urged unity during speeches from the house for. theh korea is calling sanction on its leader a declaration of war. administration has imposed

sanctions for widespread human rights abuses. the sanctions make it harder for banks to move or hold his assets. in colombia the output of from material for making cocaine has soared with highest levels since 2007. marxist rebels have been encouraging farmers to stepped up planting coca. global news 24 hours a day powered by more than 2600 analysts in more than 120 countries. this is bloomberg. banks have been under pressure all week. all year, really. need a bailout. the troubleomist at is structural and political. >> it is not just the italian

banks, italian politics as well. at risks to the european economy are partly financial. italian banks are wonky. your area banks will never properly recapitalize. riskhere is a material that they might see a referendum and that is the last thing we need. effects how systemic will it be and when you -- our italian banks so frail they make you worry more than the lack of liquidity we saw in real estate funds? >> real estate funds is a completely necessary resolution, a response to the u.k. specific shot. country leavesa

trading arrangements and enters a time of uncertainty. in italy you have the three under --of a unresolved underlying drinking problem. too many small banks, too little capital, too much political unwillingness to take the steps necessary to recapitalize according to the rules laid down and by theission european central bank. politics in italy -- we are saying existential certainty but i am more worried about the politics that about the banks. the banks are, after all, solvable. if there is a lyrical will to recapitalize in a proper way. shery: renaissance technology is

that has an awesome new have -- app. it would make high-speed traders a threat to even the biggest hedge funds. so tell us how the system works. miles: what happens is when renaissance does a trade it is sent to a central server and then the central server sends it to a number of other servers that are located next to the servers that execute the exchanges trades. timeerver sends a precise that each trade is supposed to go out and they all go to the exchanges at the same time and that prevents the high-frequency

traders from saying a trade on one exchange and then trading of renaissance at a another slightly slower exchange. matt: they have their system hooked up to an atomic clock which sounds really cool. visit and anti-hft system or is it the ultimate hft system because they can execute trades in a billionth of a second, right? you think they would have been able to do that before hand. the key is having everything synchronized so that they go to every exchange of the same time and that allows renaissance to get the best prices and access the best liquidity on each exchange without having their orders exposed and therefore front run. matt: i thought of arbitrage

asset tradefferent for different exchanges. for 4910 buy something and sell it for 4911 on nyse. that is pretty profitable. what: i think that is renaissance has done some degree. by some people as a high-frequency trading firm. 's they'reso much hft trying to stop, it is with the call the predatory practices by some hft's that they are trying to guard against as are many other investors. renaissance is not the first firm to seek a patent. will they be able to get it and are there any risks associated with these patterns? takes the pattern process -- application process takes 24 months. the area of -- that they are applying in has taken a little

bit longer, it has been more difficult to get a patent. not you said they are not the first to get a pandan this area. matt: you still have to: kate your servers. our exchanges going to start charging serious rent for co- location because it seems a pretty good as this if it is necessary guest: they already charge a pretty good rent. it is asked offensive -- it is expensive to set this up. renaissance will not only maintain its end but they have the ability to license of the technology to other firms and that would help pay for the cost of setting this up. matt: it is very cool story. thanks for joining us. one of the most read stories yesterday. everyone likes to read about that. given the buzz it is

making hft's these days. and an exclusive interview. that is next. this is bloomberg. ♪

matt: this is number markets. i am matt miller. shery: i am shery ahn. air bag maker takata is reaching out.

-- have expressed interest. 13 deaths have been linked to defective airbag inflator's. off: astrazeneca is facing with regulators over cheaper copies of its best-selling drugs. they filed a lawsuit from copies ofhe sales of crestor. they argued that they should have another seven years without generic competition. shery: according to people familiar with the matter, vw is weighing partnerships with panasonic or lg. they are hoping to emerge from that scandal over diesel emissions. that is your business update.

askedorning bloomberg's about priorities. what did he say? muchl: they have had some address in the last two years, they have an aggressively as you know shedding assets, selling. basil $3.1 billion of assets in the last couple of years and they have not there get down by $4 billion since the start of 2015. earlier they set a target for this year. they wanted to not get down by $2 billion which would bring the total up to a billion dollars but after that is where things start to get interesting. >> beyond the $2 billion total debt reduction this year we set a target of five following -- i billion dollar in debt in the near medium term. gold prices.nt on

but that is a target you should keep in mind that we want to achieve. >> in terms of how far out medium term represents for that 5 billion, what would you say would be a reasonable number to have in your head? guest: three years certainly is not unreasonable for that objective. crack she said philosophically would like to see the company at zero corporate debt at some point. is that something investors can expect within a decade? guest: within a decade, that is not unreasonable. it is gold price dependent and we have been clear over the long term. this is the only company within a rated balance sheet for the longest time to our intent is to be strong investment grade and direction we would like to be in a position where we have no corporate debt. ormay have some project debt things that are capital efficient on the balance sheet but over time we would like to

have more debt. that would be quite a trajectory. gotten old prices lending them a little bit of support. matt: how do they expect to get productiontwo higher tragic targets. what they are focused on is targets. there is pressure on miners to increase production. they do not see value coming from adding ounces as from continuing what they have been doing which is trimming costs and selling non-core assets. that is something we are watching closely. is one of theca assets we are keeping an eye on. they said they could sell the .ther half of the mine there is remaining stake in

papua, new guinea. what is interesting is the stalemate that is developing over one particular asset which is in australia. newmont owns half. newmont has repeatedly made clear they would like to buy their half. earlier this week i spoke to gary bald -- gary goldberg, the moveho said if we could forward with a transaction. guest: i am not surprised to hear kerry have an interest in the assets. it would fit naturally in their portfolio given that they own half of it. from our perspective it includes non-core so it has to be for the right value but beyond that there is not -- not much more i can say. >> given we have seen this incredible run-up in gold prices they have a little more power right now. guest: we are pleased with the running gold price but from our

perspective we have been clear in our strategy. time will be appointed when they do best area that played out very well for us in 2015 and we expect the same will happen this year and going forward. interesting conversation given their history. they attempted to merge earlier and those talks broke down. he had a lot more to say. the print interview is coming out on the wires right now and the entry will be running later on "breaking ground." matt: are there still liquidity problems in the junk bonds? high-yield markets. we will discuss. this is bloomberg. ♪

shery: this is bloomberg markets. you thing assets make up more than a quarter of the global fixed income market area we spoke with the managing on whether there is still liquidity or there are plenty problems in the junk bond high-yield market. guest: and markets in general, there is for the quiddity across asset classes. we saw liquidity in october of 2014 and so it is no exception. it avenue was unique. it avenue was a distressed fund acting and a daily liquidity vehicle and that is a pretty difficult environment to live in when you're managing stress assets and you can give daily quiddity to your investors. there are few funds that are like that out there in high-yield certainly if you get from retailoutflows

investors i think it can be a real album and you see the cap and usage big drops in prices. supply.ee less i look at this a lot and if you click on, you can grasp the number of bonds traded or the number of issues traded area this is the number of bonds .raded we've keep in 2016, the highest we've seen since 2008 but we come down significantly. do you see more supply coming online now because of brexit? guest: i do not think you will see a big fish -- pickup and issuance. if you look at issuance of triple c debt it is pretty much suggestive of a recessionary level. only 10% of all triple seizures have access primary market over the last 12 months. that slope down you saw from the february 11 highs in terms of

spreads is a function of higher commodity prices. huge partnergy was a of the distressed debt market and her things back. guest: we saw a big move and that continues to trend toward $35. you will see energy selloff >> we had the worst of the market people said we know energy is bad but the rest of the high-yield market not really that bad. how is looking at thegy moment and where do you see default rates going? rates defiant -- default -- there are no near-term liquidity issues but fundamentals have deteriorated quite a bit. if you look year-over-year their earnings growth in non-commodity high-yield is the worst ever in a non-recessionary period.

noncommodity's were the highest before 2008.since companies are writing down the value of their assets x commodities. you look at revenue growth and leverage is at an all-time high. if you take out telecom which is a highly leveraged actors. all-time highs and that will climb from here fear it -- from here. the first thing we have to do is pay back. that's people who want out. and the second thing they will do is write down assets because isis will fall and they have to turn around and do a fire sale. fix we will see a lot more of that. the other thing to think about is you are going to continue to have a decline in earnings. that will send leverage higher as well. now joining us is joe weisenthal.

interesting to hear that because we were talking earlier about junk debt trading like safe havens. what you have for us today? >> a lot of what determines what will affect the junk market, a lot of it is commodity and oil driven area thing that caught my eye is how equities are having listened edible they, searching close to an all-time record. raking down lately for the first time in a while. it has not done a lot of attention, not as much as oil. for a long time obviously we for a longt of it, time, equities and oil were moving together and there is a gap that has emerged in the last two days. matt: we both have the chart up so you can take either terminal. it is 1984. this is a look back. see how well they track each other up to the last two days and we had some

inventory data in the u.s. that have piled higher than expected. what is an interesting story is how some megaproject which have been on hold for the last year and a half or two years got the first rain light. you would not expect it to affect prices in the short term. are thosere uncompleted wells. thatere might be signs that might starting ashby starting to turn. it has been pretty strong. your member in february it cannot hold. one or two days, i get this because we have a jobs number that mohamed el-erian's head is the goldilocks number. it is good for the economy but not good enough to allow the fed to raise rates you the oil is maybe coming down because extra supply comes online and maybe we find some new wells but in the

long run. shery: earlier in the year we were talking about stocks and after brexit he started becoming tight again. >> absolutely right. counter, think about the 1990's when we had this incredible raging bull market. at that time oil did not do anything. it would not be unprecedented or iodeard-of to have a long per where the assets go their separate ways. matt: very exciting and it will be interesting to see. to -- definitely check it out at p.m. this is bloomberg. ♪

shery: from bloomberg world headquarters. julie: welcome to bloomberg markets.

this hour we are taking you from washington to los angeles. stocks surged higher on a stronger june juncture for it. today's gains restored the 1.42 [indiscernible] julie: is -- does this mean the rate hike is coming? we will discuss. and his oil trying to's lease the rain to and what has been a rough week for crude? it has had the worst week since every. >> let's head straight to the