david: from bloomberg inquiries in new york i'm david gura. >> their worries whether gains are stable. david: we have an exclusive interview. gonie: in the game pokémon adds billions to nintendo's market value. move over, mario. howard: let's head --david: let's head to the market desk. talking aboutust a record close, we are talking about an intraday high. the s&p 500 at 2140, a new record up .5%. the dow jones at the highest level since 2013.

the nasdaq head of the highest close this year. take a look at the s&p 500 intraday chart. we are at a record high. 2140, that's passed the record close of 2131 and the record intraday high of 2134. we have the functional on the bloomberg showing the most sectors are now in positive territory, except for utilities, is the defensive play on this risk on environment. we also have a rate -- interest rate risk if the fed tightens. gainers.percentage take a look at these, there's a copper miner. this is up 5% coming of candor morgan up 4%. you have candor morgan up 5%. look at these percentage

losers as well. you have transocean that has been downgraded to a cell. vonnie: what's happening? shery: treasuries now following, we of this risk on appetite and u.s. government bonds are pulling back 10 year treasuries after reaching record lows. yen a look at the japanese falling against the dollar 2.3% after they announced the stimulus plans and japan. it's falling the most since october 31 of 2014, a halloween that plunge the end, when we were seeing the biggest fall since then. improvement,an thank you. david: let's get a check of the bloomberg first word news, mark

crumpton has more. mark: david cameron will offer his resignation to queen elizabeth after a final session of prime minister's questions in the house of commons. the next from mr. will be home secretary theresa may. -- arrival withdrew from the her rival withdrew from the conservative party's race. >> it is clear that theresa may has overwhelming support of the conservative parliamentary process. i'm also delighted that theresa may will be the next prime minister. , ands strong and competent more than able to provide the leadership that our country is going to need in the years ahead. she will have my full support. seconday will be the female prime minister, margaret thatcher was the first. donald trump will supportively select his running mate by the end of the session supposedly select his running mate by the end of the week. he is leaving towards a vice

president with the political rather than military background. he has narrowed his election to five, others is still in the running, newt gingrich and mike pence, chris christie, and mary fallin. a powerful label union than previously supported bernie is now backing hillary clinton for president. indication workers of america mrs. clintonrsed today. the union represents 700,000 communications and technology members. the girlfriend of a minnesota man fatally shot by a police officer during a traffic stop is urging against violence at protests. her livestream of the aftermath of the philando castile shooting sparked outrage in protests nationwide. she said she is baffled to see protesters responding to police brutality with more violence. hundreds of protesters have been arrested across the nation. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.

i am mark crumpton, this is bloomberg. david, back to you. david: a strong day for equities, european stocks rose for a third day, british stocks showed gains at the same time. u.k. will have a new primus or by wednesday night, adding some certainty to an uncertain brexit . we see these international spreads widening, while the blue line u.s. yield curve is flattening. joining us from austin is kathleen gaffney. i know you are in tune with the tightening. what is the bond market telling you about the state of the u.s. economy? kathleen: we are seeing yields back up today off their lows. tells you there is strength in some recovery going on in the u.s. the challenge is that we are the high-yield or around the growth -- around the globe, which brings in demand for u.s.

treasury. vonnie: esther george says she is not opposed to having another rate increase. she is a hawk, but might that be something that would bring the possibility of rate hikes sooner? kathleen: i think sooner is really off the table, given that we still have some uncertainties and risks looming ahead for the market, even that we rebounded strongly since the brexit shock before the end of the first quarter. next up will be the italian bank crisis, analyze in november will be on the u.s. david: you mentioned the brexit vote, let me ask you what you told your client ahead of that and after that vote was decided? kathleen: it was a shock. i was surprised by the vote. although we had made a decision to reduce a little bit of risk ahead of that vote, i still think it makes sense to have a little bit of dry powder because

of the uncertainties that continue to weigh on the market. i think that is going to keep the fed on hold for quite some time, although i do think they also have signs of accelerating inflation behind the bond market as well. so some interesting trends likely to impact the market sometime in the fall. vonnie: what do you anticipate happening? are the lows in for yields and to treasury yields rise even if they stay negative in most of europe? kathleen: it is going to be tough for them to rise a lot with negative interest rates in 13 trillion developed sovereign world bonds right now. that is really keeping a lid on how high interest rates can go. it's not only pushing money into treasuries as high-yield isk assetsther r

as well. markets are getting a little stretched, which does put them at risk if we eventually do get an unwind in the treasury market. at some point, that is going to happen. david: you mentioned the risks the market faces going forward. when you look at global growth, are you optimistic we will see it kick started at any point in the future? beeneen: it has challenging. one of the things that is driving the market right now is the belief that there is a shift for monetary policy and quantitative easing -- once we get through some of these elections, particularly in the u.s., we're going to see a move towards greater fiscal spending. that is the thrust that will get the market moving eventually. i think that is what is behind some of the moves we are seeing in commodity prices. , and theking out there biggest risk i think you want to

avoid right now is rate risk. boardveryone jumping on with the yield grab, is going to be really tough to get out at just the right time. we are comfortable holding some cash as dry powder. i think having exposure to a lot of different areas, a little bit of everything, it makes sense right now. you want to be as diversified as possible. what are you recommending to clients in terms of corporate and junk bonds? as insurance? i am long only, so i don't short. i do think it's getting harder and harder to find value. one of the areas that i really like right now, because of its inflation sensitivity is metals and mining. names like american berrigan freeport -- american barrick and freeport have done well, they will hold up as rates rise. if you are selective about the

credit that you own, it is a good place to be. you just want as little interest rate sensitivity or duration risk in higher-quality bonds right now. david: kathleen gaffney of eden -- eaton vance joining us. vonnie: shares of nintendo surging following the reese -- the release of pokémon go. is this a game changer? and the mobile game industry, did it take the name from bloomberg? david: the market fever. this is bloomberg. ♪

david: this is bloomberg markets, i'm david gura. vonnie: i'm vonnie quinn. and now look at the biggest

business stories in the news. logarithm hired morgan stanley and j.p. morgan chase to help prepare to go public. the investors include siemens ag, access venture partners and piper jaffray. possible as early as next year. vonnie: the fourth round of job cuts this year, to more than 400. reductions are scheduled to happen between august 31 and december 29. traders and sales personnel. david: sergio ermotti's drive to cut costs includes a partial hiring freeze at his wealth management business. restrictingirms supplied only support functions and not client advisors. to trimeen pushing costs after first quarter profit dropped 60%. that is your business flash update. nintendo's newest game, pokémon go is sweeping the nation,

soaring to the top of download charts. it sent nintendo stocks joining us -- soaring as well. cory johnson, if i were to hold up my camera, i would see a jigglypuff on your shoulder. why is this so big? cory: it's one of the greatest technologies ever invented in terms of mobile processing power, artificial intelligence, and computer graphics capabilities. the same stuff that gives you a snapchat filter is the same thing that's giving this pokémon exterior that has people wandering all over the place, bumping into stuff. this thing has surged in popularity since its release last week to the top of the charts in terms of downloads for both android and apple ios. it has people excited about the long beaten-down shares of

nintendo, with the notion that this company has grabbed onto something. vonnie: we can't just ignore what's going on. it's very difficult to find the characters because the producers behind you haven't found one yet. work a little harder. it, ifallory is on anyone can find anything, she usually does. it's an interest in commendation of a couple of things. very strong brand identity around pokémon and nintendo. in the very top computing possibilities that mobile provides. you find these animations and being able to create these animations around visible andcts, you vector design understanding when object looks like, placing it on a map, and then allowing people to go out and make a game of things. it doesn't hurt that the weather has been nice across the country for the week this really -- this was released. david: why did it take nintendo so long to get into the space?

with hardware based gaming, they were there in the beginning. they have been lagging getting into mobile gaming. cory: portable and nintendo games go back as far as the gameplay. nintendo has always gone with a single system. they believe their games and their system is the way to play. these were all devices that held the nintendo games and the characters of zelda and pokémon and mario were always meant for nintendo devices exclusively. this really shows that nintendo's moving into other development platforms is taken hold. there's a big part of this notion that nintendo is finally getting with it and recognizing their other devices that could run their games and there could be money to be made. vonnie: what about augmented reality and things like oculus rift and 3-d? it reminds they went 3-d game into the movie theaters, people didn't really take to it because they were happy enough with 2-d.

if this works, do we even need oculus? think the hardware platforms for augmented reality and artificial reality -- hardwareill be is of the place with a margin is found. -- where the margin is found. is it oculus or sony, which has over 30 million playstation's out there, and all you need to do is buy a headset to experience those games in artificial reality? we will see what happens with that. and if history is any guide, software is the winner, not hardware. nintendo is figuring that out. with the software that is the pokémon go game, their hardware has not provided in many years. david: cory johnson, thank you. i admire tom's restraint behind you.

johnson with bloomberg news we appreciate it. more "bloomberg markets," coming up. this is bloomberg. ♪

vonnie: staples has opened up a surprising new revenue stream, is one of the suppliers for the rio olympics. williams joins us now. what is stable supplying? -- staples supplying? evan: it's one of the two the livingor partners. anything you see in advertising that has the limbic rings on it, that is something that was made by staples. areoes beyond apparel, they doing hard goods, six foot surfboard's for employees. they are doing this whole

incredible behind-the-scenes things for the big items they are putting together just for the civic cycle alone. david: this is a company best known for office supplies. of this manyistory million-dollar industry. evan: the business-to-business part of staples has been growing significantly and categorized -- catalyzed in 2008 when they bought corporate express for $2.6 billion. as is 40% of staples business, this backend business providing. it does everything from 24 hour fitness as an example. staples does all uniforms for their employees. it handles all the cleaning supplies for their janitorial programs, do printer and ink. they even do the toys that you will see at the day care section

of the 24 hour fitness gym. they handle all of that, which is something i didn't realize before. vonnie: who did the last time? the companys one of that is one of these for mere products companies, they have the rights to doing all of this across the usoc partnerships. there's other smaller companies, but in the limbic world, it's really just these two. usually align yourself with whoever you work with on the actual business side. staples was working with these that before he was a living front of. it was a synergistic move for them to say we will work with you, staples because we work with you to four. -- before. narrow space, the staples see room for growth? evan: the main room for growth is the idea that they can add more clients overall on the business side as they continue to work with the usoc. i mentioned to 24 hour fitness,

they never worked with 24 hour fitness before the gym joined the usoc is a partner. they realize they might be a better fit for us to make all of our uniforms, to make the janitorial supplies, to do the toys for the daycare, all of that. i think the real business growth for the olympics is that this is a high-profile event. you look at the usoc partners, their big companies, big-name partners, any other business-to-business group would want to work with. this is an entrée into more of that business. vonnie: the staples use other companies? i'm not going to name names, but there is a middle man? evan: staples is in manufacturing all of their own surfboards. a lot of the stuff is stuff they are contracting out through third parties. in terms of the margins, some of it isn't huge. in other ways, they were with big companies as well, so you

will see staples items on nike clothing for the 11 x, for example. olympics, for example. when it comes to margins, and a lot of that depends on whether u.s. a group one nike apparel or you're satisfied with something that might be a little cheaper and low quality. david: that brings up a point -- they are not making the apparel that athletes will be wearing. evan: you will see athletes wearing it at events for these partners. i can't tell you how many of these events leading up to the olympics where athletes are decked out in hershey's olympic year or bridgestone olympic gear. when you get to the actual ground in rio, you won't see it anymore. nike and ralph lauren pay more to be the right to be the retail harder. that comes for the right to outfit olympians on the ground. david: evan novy-william. you can read his story in the latest edition of bloomberg businessweek. vonnie: other big business

stories in the room -- in the news right now. justice department will not pursue criminal charges against hsbc over money laundering. this is a house committee report reviewed by the "wall street journal." the report alleges eric holder misled congress against the decisions. a $1.9 billion settlement with the bank in 2012. david: jen steele has room -- resigned from the hershey trust, a charity that controls about 80% of the shares and the hershey chocolate company. she quit over the weekend and gave no reason for leaving. the move comes less than two weeks after her she rejected a takeover bid for monta lea's international. a fourthanice records consecutive month of positive growth. had $29 million last month, bring the funds total

assets to $1.5 billion. us returned nearly 2.5% growth over management in 2014. david: and that is your business flash update. vonnie: a quick look at the majors, we start with the british pound. it increased today, up .3%. it was a higher earlier when we got the more certainty around who is going to be the next prime minister by wednesday night. david: much more "bloomberg markets," coming up. we talk with portugal's finance minister coming up next. this is bloomberg. ♪

♪ from bloomberg world headquarters in new york, this is bloomberg market -- "bloomberg markets." vonnie: enough keen interest in

a after citigroup said that it is especially bullish on commodities for 2017. city has been saying that oil is treading water right now, but the price of oil has overshot and is to the downside earlier this year. stagey it is setting the for a bullish end to the decade. the downward pull is stronger and it is now down one point or percent. citi may be bullish, but take a look at the year to date chart, gaining this year. but we still have analysts saying that crude may see a prolonged decline towards a long-term moving average at $40.90.

this is because of a breakdown below that key 45-80 support area range. take a look at what brent is doing. reversing friday's gains, down 1%. year to date we are seeing it trading like this, up 24%. now saying that it is expected in theage $52 per barrel second half before rising to $60 on average in 2017. vonnie: pretty phenomenal, that selloff. what did you say we were looking dollars and? we are actually underneath 45 now. and that will increase for next year, a big upside. checking on the

headlines, mark crumpton has more from the newsroom. mark: david brown says that 11 officers fired weapons and ambushed the suspect in dallas, micah johnson. johnson killed five officers, wounding seven others in a shooting rampage last week. killed by a bomb delivered by a remote control robot. the chief says that authorities are downloading 170 hours of camera footage and countless hours of dashcam video. most americans disapprove of the f ei decision not to pursue charges -- fbi decision not to pursue charges against hillary clinton. 66% say that she should have been charged for her handling of classified e-mails while secretary of state. 60% of voters say that the issue will not influence their vote in november. donald trump is back on the campaign trail whilst winning political events because of attacks on police officers in dallas.

mr. trump called for the end of violence against the nation's law horseman. trump: we must maintain law and order at the highest level or we will cease to have a country. 100%, we will cease to have a country. i am the law and order candidate. mr. trump also declared himself the candidate of compassion. he said the recent that's of african-american men at the hands of police officers in minnesota and louisiana shows that "a lot of work needed to." north korea -- needed." north korea talking about harsher punishment inside of its borders. sanctions targeting leader kim john kuhn and others over alleged human rights abuses. earlier today the pr gang state media said that -- pyongyang

state media said that they would terminate the channel that allowed diplomats communicate. -- to communicate. global news powered by 24 over best 2400 journalists -- global news powered by 2400 journalists. back to you. david: euro area finance analysts targeting budgets, banks, and makes it -- brexit, of course. ryan? ryan: that's right. one of the things on the agenda today has been discussing spain and portugal and their inability to meet their budget deficit targets. the eu finance ministers have been discussing whether to punish or sanction those countries to discuss what they have agree on, but they haven't agree on. we have the finance minister here. the goal is to get the budget deficit to below 3%. they were not able to do that last year.

i understand you are talking to the commission about a new target for this year and a target for 2017. realistic? >> last year we missed the target without runoff i very little. for this year the target is to reach 2.2%. something that we are of course trying very hard. for the budget execution, for the first half of the year, those are very good numbers. we have a very good chance to do it. we are totally committed on that. 2.2 for this year, and for next year? mario: we are considering a deficit of 1.4. that is the target for next year. now, in the press, when we

talk about getting punished we are lumping together portugal and spain. give us your sense. does the eu have one approach for the both of you? or are there different approaches for you and for spain? mario: i think that the approaches are similar. me tell you, we see these as something that belongs to an incentive package for countries to stay below the 30% target. challengingo very consolidation processes. we are committed to that. i think that the way that we are asked to take this is precisely on this positive way. we are committed. important for our growth prospect. we will do it, so that's the message. -- and we will do it, so that's the message. .t is a long process

it is always a long process, discussing issues. we are very much concerned that includecess does not the state process. it is a state owned bank that must deal very carefully with the european commission. we want this process to be seen by the market as an investment decision. it was of course an investment decision for portugal. we want to get it down and proper. ryan: and how big of a shortfall shortfall does-- the bank have? mario: this is a difficult discussion. we need the process to be screened very carefully. both for parts of the government and for parts of the european commission. it is very important for us to

put the bank in a commission where it -- position where it can play a role. we don't have much time and i have lost my connection with new york, but i wanted to ask you -- many countries, including portugal, have complained that her exit is one of -- that brexit is one of the reasons they cannot meet their targets. how big of an issue is the uncertainty and turmoil caused by britain saying they would leave the european union? mario: i think it is time for europe to face the different shock that we have. innovate them in the sense that -- no, it has nothing to do with our economic challenges and faculties. we need to convince ourselves aat, of course, the brexit is structural change. it is an important shock for our economy. we are not claiming that these

targets go the other way around. , init is important for us our policy agenda, and in the way that we construct europe. i don't really appreciate that much, that way of putting issues aside and saying that they are parts of our lives and we need to take care of them. ryan: where are the european finance ministers today? the entire group is discussing, among other things, portugal and its efforts to meet its budget apposite targets. coming up in the next 20 minutes? is on tohe countdown the gop convention in cleveland. is donald trump close to picking his running mate? david: we will hear from the boeing ceo about demand after the brexit vote.

vonnie: the nasdaq is on pace for the highest close this year. this is bloomberg. ♪

markets -- is "work bloomberg markets." it is coming down to the wire. donald trump will be in cleveland in 10 days. megan murphy, coming to us from the washington bureau. what about these reports that it will be a general? retired general flynn, likely to happen? megan: it's taken on a lot of

twist and turns and trump has run it in this gladiatorial contest way, people making appearances. fighting it out. we really hear that it's down to a three-person race between mike , and wehris christie hear that newt gingrich is still in the race. we shall see. i expect that appointment in the next few days. what difference does it make while campaigning? megan: they will play different roles. if you pick a chris christie or mike pence, that person is combative, an attack dog. goes after hillary clinton, her weaknesses. we expect them to shoulder the load of honing in on that message. that gives him a little bit of distance to appear more .residential

on the teleprompter, very measured. not really the trump of the full force that we have seen in the past. that is the way they will position them -- position this campaign as well. about before we talk bernie sanders, and there is a lot to talk about their as well, looking ahead to cleveland -- what do we know about the program? it seemed like at one point we would have trump every night. megan: we are promised something we have never seen before. make conventions great again, right? rock bands. to see people speaking. sort of celebrities. he's going to try to make it into something that people want to watch. these things are not the most compelling if you are not interested in politics. it will be a different scene in cleveland. bernie, before we get to him, what does trump mean by saying he is the law and order

candidate? megan: he has always pulled well among people who think you will make the country safer and more secure. tos is obviously a reference what happened in dallas and him the white,on working-class, poor voters. saying that he defends the cops, a law and order candidate, defending men and women in blue. that really resonates with his core audience absolutely but also with people -- look at what happened to hillary clinton and her e-mails last week. can i trust her? do i want her in this position? that is also where he is trying to dig in. addressing this underlying angst bubbling over in society in a way that we continue to see. david: tomorrow hillary clinton will be in portsmouth, new hampshire. bernie sanders will be there as well. what can we expect western mark for throated endorsement -- what

can we expect? full throated endorsement? david: he has had to work -- hard: he has had to work and edge closer every day. he used his leverage to extract favorable things out of the democratic plan on. we have seen hillary clinton moved to the left on health care. david: not trade, though. megan: that was a bit of a blow. he got some good stuff out. he's at the end of this tourney. -- journey. there is not a lot of warmth between them, personally. they are not close. what people want to know is, if he campaigns with her, how great will they be together on the stand -- on the stump? she did great with elizabeth warren. will she strike the same kind of electricity with bernie? conventions, or will appearances at conventions, be the ones that put some air

underneath these candidates? megan: i think for donald trump, he can't wait for this convention to begin. it's either going to be a -- if he canuccess pull off a really good convention, get that message out there and surprise them to the upside, that will do great. the thing is for hillary clinton, she has already come up so far, the gap so large. it will be the issue of whether she stumbles or if she can pull off a coordinated campaign for a vp nominee as well. megan, thank you so much. vonnie: let's head to the markets desk. shery: i'm taking a look at twitter for the biggest movers. it has fallen the most in two weeks. also, analysts are asking, what is twitter? that question has not been answered. twitter has been downgraded

citing lack of confidence on the direction of the company. not to mention on their ability to make money on newer products. twitter, taking a hit today. a couple of downgrades from piper jaffray and rbc. days, look ato that. gaining 35%. of nietzsche news pharmaceutical saying that they are agreeing to buy a stage in it. we are just seeing the stock being boosted, despite downgrades at piper jaffray and rbc. a company working with bmw and intel to develop self driving cars. the stock is gaining more than 5% today after angela merkel said that german car makers should not be deterred from developing self driving technologies. that is the most dangerous factor here in driving are human

beings. i have to say that i highly agree with her. vonnie: i won't get into a car with you, then. [laughter] david: we will hear more from our interview at the air show, coming up next. ♪

david: this is "bloomberg

markets." i'm david gura. vonnie: and i'm vonnie quinn. boeing at the air show, with carriers from china, india. the manufacturer's workforce is single aisle jets. dennis muilenburg discussed of those deals and the post brexit vote earlier today. dennis: we have a very long-term perspective here area we have been in the u.k. for 75 years and we will continue to ramp up. we don't see plans changing. >> that hound continues to fall. is there a competitive currency story that we need to talk about? dennis: two it agree. we don't see it changing the behavior of our customers a lot. local currency doesn't tend to change decisions on the supply chain. but where we can drive

affordability, weekend to take advantage of it. -- we tend to take advantage of it. >> interest rates, does that offset the cheaper oil prices? they can run the planes longer, but they can buy new ones at low i think rate? dennis: it helps in the overall financial market movement around the world. i think it's advantageous. it also encourages additional investment infrastructure, which is i think a key enabler. >> you have had to deal with the export import tank. now we have to figure out if we can sell planes to iran -- export imports. now we have to the route if we can sell planes to iran. can you figure it out? -- now you have to figure out if we can sell planes iran. -- sell planes to iran. dennis: we still have some work to do. >> politics must be becoming an

increasing part of what you do. you have been here for a year, running the show for a year. you have spent a lot of time in congress. what is your sense as we work our way through? how much visibility do you have? dennis: the politics of our business continues to be really complex. it is a challenge in many of our businesses. working hand-in-hand with governments around the world, we have a model that is supported. the xm bank, for example, passed by super majorities for reauthorization in the house and senate in the u.s., today we still don't have a full quorum to i actually -- to actually operate the bank. with davidn speaking what our customers telling you about the desirability of that airplane? it will be great for the

marketplace. our customers are excited about that. if we need a stretch version of , it'sthe so-called 10x doable. it is an ongoing conversation with customers. they see the value proposition of the triple seven and the triple seven x. we can create additional derivatives, if we need that. this will be driven by customers. you are going to have to discount heavily or cut the production rate. what is it going to be? the value proposition is still holding up in the marketplace. is working in that class. about -- we need to sell 50 aircraft per year to close that bridge. it is an important risk area

that we are taking a look at. we still might be able to know that ridge and go down seven per month in the production rate during that transition. david: that was the boeing ceo, dennis muilenburg. much more ahead on "number markets." -- bloomberg markets." .he dow is down the s&p 500 is up half of 1%. the nasdaq, up 8/10 of 1%. markets," coming up here on bloomberg television. this is bloomberg. ♪

york,: it's 3 p.m. in new eight p.m. in london, 3:00 a.m. in hong kong. david: welcome to "bloomberg markets."

♪ vonnie: from bloomberg world headquarters in new york, good afternoon. i'm vonnie quinn. david: and i'm david gura. vonnie: markets are one hour from the close. a lot of thinking going on before jpmorgan reports thursday. we will show you what to watch. the future of one japanese company as a media platform? -- getsthe u.k. starts a new prime minister. we will have the latest there. david: we are one hour away from the close of trading. let's head to the markets desk. shery? the s&p 500 is now at an all-time high, 21 with 5/10 of 1%.