u.s. stocks closing higher this friday with s&p 500 near a record high. but the question is -- would you miss -- what did you miss? june blowsults for others out of the water. does it show a drifting economy? joe: and life after brexit. taking a look at the state of european banking. matt: and whether the tesla stock is actually worth the money. our guest says it is is easier -- it is easier to justify their value than amazon. matt: looking at the market minute, i am looking at the dow jones industrial average. i want to know if it is at a closing high. i believe it is. the s&p 500, we know -- joe: just short.

-- 2030.82, and it could trade for a couple more minutes. who knows? joe: nevertheless, s&p 500 added highest level -- at its highest level since 2013. matt: and gains all across. i want to start with a look at stocks. i have a chart of the s&p. the chart a lot of people use to look at the different industry groups. on a day like today, it is all green. which, you could click on these high pieces -- pie pieces, it is very cool. but it is very broad. all asset classes. telecoms and utilities, all gain in the most. -- gaining the most. but, look at the volume of the industry groups compared to the

20 day moving average. you can see that almost every group, with the exception of materials, is trading below the 20 day moving average. not a lot being traded. it feels like a holiday weekend. joe: just as extraordinary as the gains we saw the equity market, because the yields are lower again. even with the rally, this is an intraday chart of the 30 year yields. the spike was at 830 when we saw the jobs report. going down, immediately gave it all up. you can see the 30 year yields going out on the low. and here is a similar looking chart of the spread, which continues to flatten. it is the two-point 10 spread, still some ways to go. -- many people concerned about the recession. and flattening continuing again. so even with good news for the

economy, you cannot get higher rates with the spread. before -- theying last three days have been the busiest for people calling in to buy treasuries. and they wanted the long end. they are pushing the yield down on days when it should not be going down. i was making, i made a bet earlier and i chose this screen, for currencies. i was hoping to see something happen that has not happened all year. it happened at the very end of the trade. this is the expanding currencies basket, against the dollar. and it one currency is doing worse than the argentine peso, against the dollar. it is the british pound, now the biggest loser of all the expanded major currency partners against the u.s. dollar. even outdoing the argentine peso. joe: look at how well the

reality -- is doing. a quick look at oil, that is one asset that has not been rallying. it is down almost 12% over the last month. we got inventory data this week that shows it is weakening. some very weekdays -- weak days. it was around 50, but now down around 12% for the month. matt: those are the market minutes. now taken a dive into the bloomberg terminal. you can find all of the following charts, looking at the function of the bottom of the screen. most of them in the bloomberg library. joe? joe: i want to go back to what it -- what i was talking about. this is a one month chart. the purple line is west texas intermediate crude. not surprisingly, for most of the last several days, the two lines have tracked each other pretty well.

in the second half of the week, we saw a sharp separation between the two. obviously, equities exploding to the upside, getting close to the all-time highs. and oil really getting low. inventory data showing that they are piling up. and a very interesting story, not affecting short-term prices, but about some of these megaprojects that are late again for the first time in 1-2 years. signs that production will soon come online. i will keep watching it. it will be interesting to see if equities and oil continue to go their separate ways. matt: i thought, it was impossible that it could continue forever, but then i ined it out putting the cash there. it has been going away for a long time. i am looking at a chart, i do not know who put this together. i was shown this earlier. one thing is not like the other.

the red line is the u.s. yen cross rate. and then you have gold. and the blue line is the 30 year yield. all of these going down means that people are buying them, because they want a safe haven from all of the global unrest. the white line is the u.s. high-yield corporate bond index. people are piling into that. you would think that high-yield is a place that he would leave. joe: and everybody wants the risky stuff, the high-yield, the amazons, the s&p, and the anti-risk stuff -- yen, gold, tenured -- 10 year treasuries. matt: that is a blast from the past, barbell. you can see all these charts on twitter. for more, we will bring in oliver renick.

what have you got to add to the bro fest? this,were talking about yet again we have another day where the bonds with the 10 year yield going down, the s&p at an all-time high. basically, if you look at that, we are in uncharted territory where we never before had the 10 year yields at an all-time low, where the s&p is at an all-time high. matt: never happened before. >> we have not closed at that yet. but basically. then you have to ask the budget, with one will make -- with one will break first? this chart shows you, right below that redline where we were last year, this line shows that the level at that time had already been being. -- beaten. we have to think about which one

of these will go first? the bond market or the stock market. basically, you have all this movement into this, you guys talking about the sector that guys have been buying out from a long time. a lot of those are pretty flexible. so, if yields find a floor and move back up and potentially the impact on stocks will be big, given that people have been buying those yield sensitive stocks. joe: you ask which one will go first, but they could technically go at the first time that at the same time -- go at the same time. you could have a scenario in which these two asset classes that people use to hedge out against each other, could go at the same time. >> you could also make a positive argument for this. joe: right. it is likely, almost. >> people jumping into treasuries because they are worried about the economic

outlook for the u.s. and they want protection. it has been more of the low interest rates around the world and as long as the economic continueso the u.s. him ultimately on a day like today when you get a blowout number on the economics front, you feel good about holding the stock. joe: and on the bottom side, you cannot forget the -- action. matt: you want to buy high, sell low. even with bonds. you think that yields are going to turn around and sore, you want to get out of those bonds you are sitting on right now. >> absolutely. the further down you go in yields, you need to think about what kind of return you will get on that. but it is pretty much, this sort of environment that not many people are used to. it makes people nervous, but at the same time stocks have done very well. it is incredible. joe: we are coming close to this record high. we have talked about this 2100

level. once again, we are over it. if we break through the oh -- the all-time high, the charts, do they say we could go higher? >> that is the mindset, if you have a level that has been so steadfast, keeping stocks on one end or the other, this case the higher end, that could show a meaningful breakthrough, it could obviously free people up. we are in a regime where instead of moving into a bear market, you have a bear market with particular stocks and sectors over the past year, this is a longtime of a bull market where we have gone this far without a high. joe: -- matt: about 286 days without hitting that high. >> it does not happen often. presumably, if we are in a bull market, which we will find out eventually.

obviously, that is different. i think there is a case to be made that if we break through that level and we started the continued rotation, then potentially people will make the argument that a bull market happened under the radar, where a lot of these sectors moved far below, not 20% below the highs, but we have had a lot of meaningful corrections in the market. joe: one thing people say is, we need to be fundamentals -- we need to see fundamentals improve the chart is that improve. the chart is stretched. what do people think about the actual fundamental earnings and the economy and how it will power market? >> i have learned one thing, any quarter, any sector, people find a way to be bullish. whatever is losing. in reality, we are in an important where a lot of the market has a great that the third quarter of 2016 will be a

turning point where we going to positive earnings -- that energy, the difference in s&p is getting smaller by the quarter. you obviously have a good bit of the market projecting negative earnings. as we get into the third and fourth quarter this year, that could potentially become bullish on the fundamentals. joe: ok, thank you. matt: i want to point out that we have breaking news. cbs radio is filing an ipo. it is an interesting time to go public. this is an initial registration for $100 million. something that all over will be running back to his desk and getting some work done on. and over 200 days since we hit a new high. the last time we went this long was 1961. we could go another 80 days just sliding sideways. >> eight alone does not end it

-- age alone does not enable market. matt: coming up, facing the fallout from the brexit vote. we will have inside. this is bloomberg. ♪

♪ taylor: time for the first word news. the mother of all in sterling's responding to violence, violence is not the answer. alton sterling was a black man fatally shot days ago by police in baton rouge. and diamond reynolds, his boyfriend had a fatal encounter with a police officer during a traffic stop in st. paul, minnesota, says the dallas killings were not called --

cause by his death alone and she wants justice for everyone. the attorney general is calling for peace and calm after the dallas shootings. agents of the fbi and atf are in taxes working with local investigators. the attorney general says this is a heartbreaking loss. you, all americans, i ask i implore you, do not let this week precipitate a new normal. i ask you to turn to each other, not against each other, as we move forward. let us support one another. let us help heal one another. and i urge you to remember, 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. meanwhile, president obama has ordered flags at half staff to honor the fallen officers.

the new leader of the philippines is blaming u.s. intervention for the bloody conflict in iraq and other middle eastern countries. the president of the philippines suggested today that intrusive policy was to blame for terror attacks on u.s. soil. insays the invasion of iraq 2003, caused the nation to defend into -- to send into strife. and nato says the deployment of troops and eastern european countries is an open ended commitment that will last as long as necessary. they have tripled the size of the response force to 40,000. canada, germany, with the when you, the u.s. and: my and estonia. global news, 24 hours a day, powered by 2600 journalists in one of 20 countries. matt: thank you. what did you miss?

some calm in the brexit storm. policymakers eager to control the damage from the fallout, amid a fallen town, fluid leadership and a post brexit equity route that could be a harbinger for a credit crunch. our next guest says it is not all doom and gloom. at well management, joining us on the phone from geneva, has advised. -- advice. what should the eu be doing right now to stem the fallout? >> may be nothing. i would be honest, and that i am less worried man i was a week worriedonest, i am less than a week ago. when you look at the data, it is a bit early to say whether that

the eu will have confidence. in terms of the broader political landscape, so far we have seen some encouraging news in terms of perhaps the response from eu leaders, or lack there of, that would be consistent with more political integration in europe. when you look at the u.k. from while youe, from -- see a difficult situation, you can put it this way in terms of the financial and political mess in the u.k., i am not sure it is something that will create political appetites to follow the u.k.. the best answer right now is to wait and see for the economic impact in the data. joe: frederick, we showed the chart in the intro of the european banking stocks. they have been destroyed and there is a correlation, we have

the chart up again, showing the euro stock banks and lending, tracking each other pretty well. what should the ecb take away from this relentless selloff in the european banks? we have seen it continue in italy, also with deutsche bank. how concerned should they be over it? a direck: that is not consequence of brexit, that is an issue that has been going on, because of the weakest link in the euro area. italy, a case in point. i hope it will force a preemptive action from european institutions, from the government, the european commission and ecb. it is a tipping point. if there is no such action in the coming months, then it will

jeopardize the world recovery, not only in italy but for other regions. the ecb, what they have to do, is more complicated than what the european commission is facing because they have been doing a lot already in terms of liquidity provisions for banks. they are setting policy for the region, but also they are the single regulator for the banks. the best outcome to vote for -- hope for, the stress test at the end of the month, that the ecb will stress tests and provide all of those institutions with justification to act. -- it is forecast, but it is a hope. they are not perfectly aligned. matt: i wonder about the euro.

we have had people on the $1.05, orrecasting even below. does that go a little bit of the way to help improve the recovery that we see so desperately needed, for example yesterday, we saw greek unemployment although it has improved, it is horrendous. also in spain, it is different than the rest of the currency. does the weaker euro help those peripheral economies get better at a faster pace? frederick: yes. in terms of inflation, yes. again, in the next couple of months, it is not about the euro. unless it goes crazy. the ecb will be ok, they want that rate the cause of reaction in the -- market. they will not cut rates either way. it is in terms of broader

financial conditions, the euro is part of it. the fed has a role to play. so does china. in terms of threats -- in terms sector,ies, the banking the signal that we get from the european banking stock market, that is something we must take seriously. italianng back to the bank situation and you talk about policy makers meeting to recognize after the stress tests that something will need to be done. there is a standoff. how would you expect this to be resolved? europe,k: usually in the text but situation would be to inject fresh capital into the bank. those numbers around 40 billion euros, something reasonable, something that is manageable

despite public debt. it is not a big problem and i do not think that the bull market would react to that. you need to deal with the nonperforming loans, something that the italian government for 4-5 years has not been able to do. and the bank of england, what they have been doing to relax the capital requirements, that is something that europe has enabled to do. even though -- it is a bit of a situation, a dilemma. joe: we have to run. , frederick.ry much matt: coming up, the report you cannot miss. this is bloomberg. ♪

♪ joe: i am joe weisenthal. what did you miss? let's go into the bloomberg and talk about data from this morning's job report. everybody knows the unemployment rate on the table. matt: not everybody knows. joe: it is at 4.9%. matt: u3 is the headline number. workers.couraged joe: it is a broader capture. between thespread two of them. it is important because when it was very large, it indicated that the headline unemployment rate was not telling the picture. it is shrinking and it is a sign that things are getting better. matt: things are getting better. coming up, we have fallout from brexit.

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taylor: let's get to the first word news. the suspected gunman that left 5 police officers that has been identified as micah johnson. the ap says he served in the army reserve as a masonry specialist and had a tour in afghanistan. he was killed by the explosive device strapped to a police robot after hours of negotiation. the new york times says he appears to be the lone gunmen. an. the police chief david brown says the attack was well-planned. he called last night shooting a well thought out strategy that

left the city in shock. paul ryan and nancy pelosi are calling on all americans to come together after the tragedy. ryan noted this was a long week for the country but urged americans not to lose their humanity. this not let such acts divide them and there has been too much death and heartbreak over the last few days. u.s. supreme court justice ruth bader ginsburg does not that think about donald trump winning the white house. she says the next president " whoever she will be, will have a few appointments for this agreement court." says she presumes hillary clinton will be the nation's next president. nato says it's the plumbing of troops in four eastern european countries is an open-ended commitment will last until

necessary. it has a force of 40,000. germany, lithuania, the u.s. and poland and the u.k. and estonia. day andews 24 hours a more than 120 countries. this is bloomberg. matt: thank you. a quick recap of today's market action. we hit basically, we didn't hit new highs on the s&p 500 but we came close. 2130.82. we are just off that. the dow jones at record levels. big gains. the nasdaq gaining the most, riskier stocks gained. the defensive stocks gained but not as much. >> record low in the 30 year yield. markets and more than a raise their post rex it a loss it's --

post brexit losses, but not panicking is easier said than done. what is left to do in a major unexpected shock? here to discuss investing during times of extreme dislocation is the professor of finance at the nyu school of business. let's go back to a couple -- week and a half ago, brexit -- extraordinary movements in the pound. as an investor, how do you deal? >> gain some perspective. each year there is a crisis that people say is the biggest ever. last year, four years ago in greece and russia. last year, the issue of china. what i think is this is now the rule rather than the exception. we live in a global environment where everybody is connected. you can almost predict each year will be a big crisis. people will say this is the end

of the world. ofme, the most ironic aspect brexit is this is perhaps the event that every political expert got wrong. the lesson i get out of this, do not trust the experts. what do we hear after brexit? economic and financial experts tell you what will happen. my expectation is everything about predictions is probably wrong. matt: why did they get it wrong? polling numbers have been adversely bad in england. what are they doing wrong? are they just talking to each other instead of the people that vote? >> two problems. one is the echo chamber. you talk to people that believe what you do and you want something to happen. you have confirmation bias. that is the first problem. the second is 2008 was a structural shift. for a long time, we have used historical data on predictions. both for instance, you get

closer to polling data. people aren't certain and will go with the status quo. you make a judgment. -- posthousand eight 2008, when i hear people talking about historical growth, my cautionary notice, all of the data comes from pre-2008 time period. be careful about the british and you make. >> let's go back on what to do in an event where we have a big selloff. rally,out this 2008 investors have been rewarded or not selling. in theory, that might not work in some point and people will attempt to be heroes and will lose money. when you see a big move like that, what is the framework you use to decide this is a time for caution versus an opportunity?

>> the first thing is it is already adjusted. the stockser brexit, dropped in value. the rest of my portfolio becomes a bigger percentage. is natural reaction the market is already making the adjustments. are inond is i think we a long-term environment of no risk with or without central banks. low risk rates. this is the way i think the world is evolving. large crises, big stock movements. large premiums. as investors, we have to recognize that is the reality. what will get us into trouble is looking for safety. that will go to places. matt: i was thinking about this as a swift yield and thinking -1.2% on two years.

actually, maybe it is worth it for me to have my money in swiss francs. maybe i would pay 1% as long as i can keep it, right? >> we have been taught to make safe investments. 3%, 4%. i think that is a dangerous history. we have to get used to the fact that if you want to safety -- true safety, maybe we have to make negative returns. matt: do you get a sense investors are trying to have their cake and eat it too with their lowball strategies? attempts to make money but not have any downsides? >> what is new about that? investors have always wanted that. they always get in trouble because they overreach. i don't have a problem with any of these strategies. my cautions about history is still intact. i think people will always look for solid returns and no risk. in this market especially, i

think that can get you in trouble. >> you point out a lot of times we expect this will be other world. we went to a couple trading floors and all the kids were like this is worse than lehman brothers. i thought i heard that a few times. things get a little bit better of, even if we are down in the pound. do you think it will work out like that with the actual brexit as well? we think this will be horrible, locked out of a single market, no one will be able to go to the island of great britain without a passport or visa. will it be that bad, is it? >> i think lehman brothers was lumba problematic. with brexit, that will be my canary and coal mine. not just the stock prices are down, but having capital issues. i think you have to start worrying. those are not just the financial market, it is the real economy. that is my biggest concern. matt: all right, you are staying

with us for more. we will talk about tesla. is the company stock correctly valued? i say that almost jokingly. this is bloomberg. ♪

matt: time for the bloomberg business flash -- a look at the biggest business stories. just breaking -- cbs radio is going public. if i for an ipo with initial registration of $100 million. it is a sign that the owner cannot find a buyer willing to pay the right price. it is a shrinking business with ad revenue falling and the company running down the value of its station licenses last year.

univision is suing charter communications for shortchanging it on programming fees after acquiring time warner cable. the broadcaster contends it is entitled to pay lower rates on a contract that lasts six more years. charter intends to honor the contract. and consumers increase their borrowing inmate using credit cards to take out more student and auto loans. the federal reserve says total borrowing jumped to the most since the third in march and that was the biggest monthly increase on record. of $3.6gain to a record trillion. that is the bloomberg business flash. joe: what you missed -- the brexit vote garnered a lot of attention but you might have missed tesla has been the leading stock in the nasdaq 100 during the time. the rise comes amid a miss on

of theies and a crash tesla model suv. what gives? the professor of finance at nyu school of business, there are so many reasons people have to hate this stock, the company, to hate all the things that might be associated with it, but the stock has done pretty well. what is going on? >> when you think about brexit, why the leave won and the remain lost, the lead have the story that everybody might not have believed it but it was gripping. returning to the old-time u.k. stories beat numbers. tesla is the ultimate story. joe: i love elon musk and tesla. the cars are amazing and his ideas, the hyperloop, it is amazing. matt: why has the story been

damaged at all? there are a lot of reasons, people question the story but it does not seem to hurt it. >> two reasons. there is a plausible pathway. 250. in fact, i have an easier time justifying tesla's pathway. >> go on. amazon, hitting brand-new eyes. highs. >> it will not be easy. they need to treat the revenues. they have to sell about one million cars and have tempers and margin. can i get that? one is, i cannot think of another argument of a company that can announce an automotive that 335,000 people can sign up for it. they have a customer base. they have the worst competition. the automobile business has

badly managed, badly run companies. >> it any other auto company gets 12% margins, call me. in the u.s. becauseis the challenge for tesla to pull it off, you need heart executions. this is a company that does not have a history of execution. when i look at the company space, i am not comfortable with them staying on the path. >> they are basically -- they have to do everything right to justify where they are now. let's talk about amazon. you don't buy the amazon -- what would they have to do to justify? >> showing they can make money. they have done very good. everything they do is at cost. they are good at destroying other people's businesses, but every other company will be devastated. i'm more worried about

netflix because amazon is getting in their business. amazon is good at destroying other people's businesses but to make the revenues, to make profits, they have to show me they can make the kind of margins they would need to justify the price tag. >> why? as long as people are believing. >> that is the story part. big story. jeff bezos and elon musk at may big stories. the story can drive the price for an extended period. it might not match up. contradict thes story, the story cannot hold. it can happen really fast. these are special companies. amazon, netflix, tesla -- you can have stories that go for a long stretch because you don't have conclusive evidence. >> people get burned all the way

up because they are betting against them and have the valuations that do not go. it is easy to think the story does i go. >> you are asking. >> i have a chart here. it is an easy way to look at five year returns. tesla is the white line. amazon and netflix are the yellow and orange lines. max chart of amazon looks amazing like the dow. this five-year chart makes me think that tesla might be overvalued. >> it is different stages of their life cycle. in a sense, when you think about a lifecycle, there are no numbers. thehe company matures, story has to be tempered. i have been tracking amazon -- i have been valuing them since 2007.

it is a story, the company fascinates me. i have bought it for times and sold at four times. i think that will be true for tesla. two steps forward, two steps back. even in that five-year period, there have been testing moments. when it dropped back to 140, there have been testing moments. i don't think there will be conclusive evidence. professorright, the of finance at nyu, always a pleasure to talk you. coming up, we show you the three charts you may have missed. i'm serious. i missed them for sure and i have a looking at charts all day since the jobs report came out. this is bloomberg. ♪

matt: what if you miss? in the jobs report that tells the full story of the state of labor in the country. matt has been digging through today's release and joins me and joe right now. this morning i said we will see every chart today on the jobs report and they said no, we will bring charts you have not seen and they did. 25 to 44-year-olds. what is going on? >> this whole story of labor force participation, we are seeing younger people going into the workforce. these prime age workers. you can see people between the ages of 25 and 44, we have the most of them working since before the crisis.

we have not seen that yet since now. the one age group that has not caught up yet to where we were before was the 45 to 54-year-old demographic. these of the folks i got left behind in the crisis and the transition. they are not retraining and finding work again. the outlook is uncertain. it is not clear. >> the college kids just getting degrees,ith secondary they are doing just as poorly as old folks and now they are doing better. the 45 to 54-year-olds are getting worse. the older people are staying in longer, above 54. >> those people that are forcing enough to have jobs, those are highly skilled jobs, they are hanging onto them longer. that is something that we see in other parts of the report as well.

one of the reason why the labor force participation has been rising is not because more people are coming into the workforce necessarily, but because less people are leaving. >> the pace of retirement is slowing. >> i call it the retirement rate because they are workers that have jobs to leaving the labor force. you can kind of see that. they are not leaving as quickly as they were. basically, we are seeing a slowdown. it gives you this vibe that maybe there is some consumer uncertainty. people who could retire are deciding to, you know, put that offer now because they have jobs and they want to hold onto them. >> we look at this labor force participation rate number. there were some signs/year of improving, but it was of people not leaving as opposed to people

coming in. >> exactly. it is good we are dry more people back into the labor force. that is what we need to do. but the previous chart shows a lot of the 45 to 50-year-olds are not coming back. it is the people that have jobs are staying and that is why it is rising. matt: what is going on with new hires versus people that have jobs? >> that is interesting. thelly what happens is total employment growth looks the same for both new hires and people who marty have jobs. -- who already have jobs. but the rateteady, of new hires coming into the labor force has dropped dramatic d dramatically. not only are consumers feeling

uncertain but businesses are going to slow down there hiring. joe: is it that or because they cannot find people to hire because when i look at job theings, that i have here, data shows job openings are at a record high. they are not getting filled. >> this is a hot debate right now. nobody is sure why. we had a big disconnect between openings and hirings that we did not see prior to the crisis. we call this the beveridge curve. it shifted way up. it is not halloween these patterns -- following these patterns. there is still a lot of 25 to 44-year-olds out of work that could come back in. we have not really exhausted all of that labor market pull yet. that is a good question. >> there is improvement? >> we could get better.

>> thank you so much for joining us. matt: coming up, what you need to know to gear for next week. this is bloomberg. ♪

matt: what did you miss? do not miss this -- china cpa and pti saturday at 9:30 p.m. i do recommend you miss that. >> you do want to watch sunday, japanese elections, upper house. will be interesting to see how abe's party does. next thursday, the bank of

england raises the decision. matt: that will be awesome. that will be better than the bank earnings. we are

♪ good evening. mark and i are here in philadelphia, not far from where hillary clinton will speak. she will address the tragic shooting of police officers in dallas last night. the last hours have brought tragedy and despair, fueling tensions in the already emotional debate over police tactics, brutality and the state of race relations in america. videos of police shootings in louisiana and minnesota earlier