joe: u.s. markets closing higher this afternoon, the s&p 500 and the dow hitting new record highs. but the question is, "what'd you miss?" global stocks, briggs it losses, what do recovering equities mean for global, central banks? plus, should the u.k. copy germany when it comes to the economy? we have the charts you cannot miss. matt: and what amazon prime days are doing to boost sales. we look at how amazon is closing the online traffic gap with walmart. let's kick it off with market minutes. new recordking highs, the s&p 500 continues to make new records. we see it now with a 2150 handle. we will settle in right now, it looks like 21.52 is the new level.

it takes sometimes a couple minutes after the bell for these numbers to settle. vix takes even longer. joe: also, energy material financials, if we could just break the record, we would be off to the races. >> and we know you think about technical analysis. still dodging the question. a lot that is interesting and that would he market today, we had a couple of big moves in the u.s.. let's start off elsewhere. we talked about italy yesterday. a pretty solid day, up 2.8%. that is the fourth biggest gains in italian stocks. we were talking about this yesterday on the show about their banks, what will happen, how solid will they be if those things start to go bad.

situation is not good, but may be not as bad as they said. moving on, we are talking about the vix. staples, telecoms down today. not to be negative, but these are areas that have been doing pretty well. a big jump in yields today, this could potentially be a sign of things to come. and let's bring it back to the volatility index. the stocks had a pretty good rally, that happened about 20% of the time. not a huge deal, but something to keep note of, but it -- because it was happening pre--brexit. joe: we are seeing higher rates, which is extraordinary. over 1.5% on the 10 year. you can see those last two days, quite the move it is pretty remarkable we got a selloff. but we did not get a selloff in equities.

well quickly, as a sign of just how much people love government bonds, look at the ukrainian euro bond, below 8% for the first time since january 2014. anything yield or government bonds is big. that is pretty impressive. >> we saw a map to sell in the france two-year. fiverench two-year jumped today. any these black boxes you see on these six squares indicates more than three standard deviation moves. i like to screen for those and look for currencies, i pull up wcrf. today.reversal check out these currencies against the dollar, you have the british pound gaining 2% against the dollar. down here at the very bottom you have the japanese yen losing 2% against the dollar.

it is our that we see that kind of shift and switch because wo are on these t other side of the screen. joe: let's look at commodity moves, oil catching a bit. it had been disconnecting from equity -- equities. near $47 a barrel. and let's look at cotton, improving supply and demand balance is at 4.4%. >> also, a three standard deviation move. today market minutes. let's take a deep dive into the bloomberg. you can see all of these charts with the function noted at the bottom of your screen as i call them out. you can see them in red at the bottom of the screen. who is taking it off? joe: i am, and i am looking at the government bond moves. about selloff is notable. i am looking at the etf the

of governmentta bonds, 20 years and further. at the red line is the performance. you can see a surge and a little selloff lately. the white line is the daily percentage move. if we move in, we can see the biggest decline on that since march 1. this was a pretty -- we have not had a selloff like this in a while. and the barely significant selloff yesterday. that is a pretty big today move and reversal for something that had been a major bull market. and this is interesting, that we have this selloff in government bonds, the equity market holding up fine. >> it is straight up long bonds. >> i have an economic workbench pullmike mcdonagh help me up. i wanted to see a change in global rates. mike from bloomberg intelligence put together this index, which is in the white line you see on the screen.

it is u.s., u.k., euro area, swiss, canadian rates, all average together. we do not put japanese rates in there because it would not make much of a difference, the index only started in 2009. the graph line in pink which is in blue, index, and the gdp, there was a discrepancy. we thought the gdp was growing faster than stocks, but not you have stocks going faster than gdp. that is because we think there was an expectation of investors that this white line was going to come down significantly or get more qe or tools used outside of it. >> that pink line climbing and climbing, the story of bull equities around the world. speaking of bull markets, i will pull in to my terminal. this is an interesting thing that does not happen often, but wall street strategist being correct. that is a little harsh.

>> this is the coolest chart we've seen all day today. at can see these, i look these all day long. then i realize that all of her made it. >> we are talking about it together. this is pretty cool. it has not been since 2014 that the s&p has risen to the level expected by wall street strategist. 18 to 20 people on wall street -- s&p how high with smb be at the end of the year? midday,about this normally we are at that level, the question now, will they push those expectations higher, or is the market going to trend. >> more bullish, right? >> yes. >> very cool stuff, let's get some more market insights. has been following the

divergence of markets, bond markets, stock markets. chris come easy a big warning sign in that, do you not? do, that today is kind of the exception. if you look at a chart of the long bonds versus the market, they are together as they should theme a yield will go down, orange line is the bond yields. and the white line is the s&p. and they stay together to the crash of february and start to rise together in march. and now it is completely separated. that that divergence will not last. the yield john because the market is jumping, and that bond yields commodity back up and meet the market. but we think the opposite will happen. we think the market will run into some trouble. is -- has a market slowdown. >> you think the equity is retail money?

the question is, if we take that chart back further, challenging conventional wisdom, stocks and bonds are couple memory from a risk profile standpoint from one another, that is true. they ultimately do not work inversely. joe: i have this chart on my terminal if someone wants to bring it up. it does not go for decades. there will be times -- but usually, falling markets mean we are scared of economic weakness and yield are dropping at the same time. conversely, rising markets, yields should rise, too. i guess from your standpoint, people are buying bonds and treasuries. there are scared about the outlook to read japanese, german, swiss yields are negative. what is that telling us? there are a lot of scared investors out there. the market is telling you the exact opposite, the stock market. while growth is on the way, and we see these signs of

conflicting, we see there has to be some resolution. on this alternate take is that both markets are telling us the exact same thing, that policy is causing a rush into anything that is not actual dollars, whether that is government bonds, or equities. seen through that lens, it would seem to make sense that both could rally at the same time. and, not necessarily be indicative of how long. guest: and the converse argument is that low rates mean growth ahead. but we had low -- growth rates for a long time, and i do not think we are closer to buying bonds in japan than negative yields. nobody is forecasting serious growth. >> the question is, if that is the case, if the federal banks across the world are printing money and everyone can grab it and put it somewhere else besides his or her mattress, how long can at last? guest: and i am not saying there

is an apocalypse ahead, you love to invest in the tail wind, but this is one of those times. we have concerns about future growth. we're looking to put money in the stock market, places that can grow in spite of that. we are concerned about consumer trying tobut we are find stocks that have one off stories that can survive a choppy market. joe: let's go back to this growth question, a jobs report much better than expected last week, research sales data has not been that bad, we are starting to see signs of jamie dimon came out today, said they would give wage hikes to their lowest paid people. is the u.s. growth situation really that bad? guest: i do not think it is that bad, i think it exceeded since breads it was announced. but that is a short-term negative for the market, there

will be separations. but the market is blowing that off, and marching ahead. i think we are somewhat whistling by the graveyard in the sense of, there is a lot of dry kindling out there, a lot of expectations. a piece of good news like the job report will set up a rally the next couple days. ,> regarding where to put money areas that are highly bid up, where do you go in terms of looking for the best places? energy for example, has had its bear market. we like chevron and others. allergan will -- i think that is a strong example of a stock that can outperform in a choppy market. joe: thank you very much. coming up, the fed shows little appetite in raising interest rates. quickly, if at all, what is weighing on their minds. we are decoding the fed-speak

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mark: president obama says the shooting of five dallas police officers in the last week would appear to have exposed what he calls the deepest fault line of our democracy, that americans must reject such despair. the president was in dallas today where he met with the families of the white officers killed in ambush by an african-american man. at the memorial service, the president talked about the recent success of the dallas police force. president obama: we are reminded that the dallas police department has been in the forefront of improving relations between police and the community. the murder rate here has fallen,

complaints of excessive force .ave been cut by 64% the dallas police department has been doing it the right way. mark: while en route to the dallas, josh earnest told reporters the president called to the families of alton sterling and for lando casteel, -- philando castile. he also consider the five officers' deaths in dallas a racially motivated hate crime. bernie sanders today, formally endorsed hillary clinton for president. he made the announcement in fort smith, new hampshire. >> she will be the democratic nominee for president. and i intend to do everything i

can to make certain she will be the next president of the united states. donald trump's senior policy adviser criticized sanders saying the candidate who ran against special interests, is endorsing a candidate who embodies it. -- ash carter is meeting with afghan officials. he says the u.s. will continue to train and advise the country's forces. european finance ministers have a message from britain's next prime minister, speed up your exit from the european union. in economic affairs commissioner says the uk's conservative party may toing to get theresa take over. that should speed up the brag the process. news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark renton, this is bloomberg.

joe, back to you. joe: "what'd you miss?" up, we heardmping from james bullard, he says the uk's vote to leave the eu would a close to 0% impact on the u.s. economy. here to discuss is a professor of practice and senior director of the oregon economics forum from the university of oregon. he joins me from eugene. support, weid job have not seen much financial votestion from the brexit . inflation data appears to be going the right way. what is the reason for the fed not to resume its hiking cycle? guest: you can look at a couple different factors, but there is still uncertainty as to how solid those inflation numbers will be going forward. there are concerns about the asymmetric rifts.

when we think about where we could go if there was a problem, we cannot go much lower on interest rates. those two things are significantly slowing any rate hikes. wantsould think the fed to hike rates whenever it can because they could have a little more dry powder, right? anytime you have unemployment under 5%, anytime you have positive inflation at all, and i know we are only looking at time toon't you take cut rates? guest: i think it is an erroneous argument. we should not be hiking rates now just to create room for cutting them later. that only aggravates the possibility of having a recession sooner that we really should expect. so my take is exactly the opposite. we should be holding off on rate

hikes until we are fairly certain that we can really lift off from the zero bound. i do not think we are seeing the kind of data that we should to expect that. and, long-term interest rates -- >> you see great problems of we did that? guest: i would be very concerned. was correct when he became concerned about where the yield was headed. the concern or be that if we kept tightening rates we would flatten out the yield curve, and that would cause a significant amount of financial destruction. economic policy uncertainty index, and it had a big spike the last month post-briggs it. the questions out there that could potentially be

keeping this measurement so elevated is that brexit will not introduce too much economic uncertainty. guest: there is still the issue of the timing of brexit, and the u.s. presidential election cycle, still coming up this year. those are factors that are certainly hanging over the uncertainty. thoseot sure if either of is a major mover for the economy, but it is certainly creating additional uncertainty. joe: let's go back to strictly the u.s. economy. itsrprise indicator hitting biggest level in a long time as more and more data comes in, better than what economists forecast. obviously, the fed wants to take a cautious approach, but at what point, what kind of data? monthsi think a few more of solid employment data -- i do not think we will see more than 287,000 gains.

reducing underemployment, a move target, andflation no financial disruptions. i think is you create those kinds of conditions, i think the fed will be more comfortable moving interest rates. and this would help more the case if longer-term interest rates are left. >> university of oregon professor, thank you so much for joining us. fascinating conversation. to: why theresa may is right copy germany. we have the charts that explain. this is bloomberg. ♪

matt: "what'd you miss?"

germany.copying we have the charts to explain why. let's take a look first off that productivity, and let me explain what i am talking about here. recent may, in her stump speech, said she would do a lot of things the way germany does, especially putting unions on corporate boards, so that she does not leave the success of the economy to the privileged few. the question is, does germany do things the right way to begin with? they do not work very long hours, in fact, they work the least of all the european actually have jobs, but i'm sure a lot of western european people work fewer hours. but they are the most productive. the germans are more productive eventhe french, americans, canadians and japanese people. so they get more done in those few hours that they work. >> nobody is more productive than americans. matt: thank you, i am sorry.

please do not write in hate mail. >> you can check out a full story here. gadfly. i am looking at an equity measure here, the number of buybacks versus research and development within companies in the u.k. versus germany. this is pretty interesting. obviously the percent, this is rmb, the percent of gdp where is as high as the u.k.. i am not sure if this is necessarily a good or bad thing. but there is an evolving debate on whether it should be used for buybacks. another great thing about germany, less inclination to do layouts. let's look at the unemployment rate of u.k. versus germany during the crisis. you can see germany did not ounce back after 2009 when the

unemployment rate was around the world, much different culture with regards to laying people off. finding other ways to cut costs, reducing hours for everybody for a more stable, cohesive economy. a good argument to do their label model -- labor model. havecause german unions such strong representation on board, they also do not want to screw the company. they took fewer hours for those at-- employees who remained work. and with a bounce back, they do not have to train entirely new people. they can just stop their hours, it makes for a much more resilient company. me.t makes sense to >> also, i would not want to get fired. joe: coming up, we hear from citigroup chief political analyst, she assesses the european political risk, and the brexit. this is bloomberg.

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mark: president obama trying to offer hope and peace today in dallas. the president met with the families of the white -- five white police officers killed in the ambush by an african-american gun man. the president spoke at a memorial service for the slain officers. president obama: dallas, i am here to say we must reject such despair. i am here to insist that we are not as divided as we think. and i know that because i know america. i know how far we have come against impossible odds. mark: earlier today, josh

earnest said the president called the families of alton sterling and philando castile, mentwo african-american killed last week. it has been a month since a mass shooting an orlando nightclub that left 49 people dead. earlier today, 49 crosses representing the victims were transferred from a hospital to a museum, which will be removing items from various temporary memorial sites. meanwhile, out of the 53 injured during the attack, four remain hospitalized. being vetted as a potential running mate for hillary clinton, that is according to the new york times. nato allieder commander. the clinton campaign has declined comment. mrs. clinton the struggling to attract younger voters who supported bernie sanders. that is according to a new poll

that focuses on young voters of color. just 26% of young whites, and 40 6% of young hispanics have a positive opinion of the likely democratic presidential nominee. her support is strongest among young blacks and young asians. earlier today, bernie sanders gave mrs. clinton his formal endorsement in new hampshire. 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. a recap of get today's market action. on the equities side, we had brand-new records for the s&p 500, and dow jones industrial average. even see the dow, breaking through. s&p 500 at 21.52, an all-time high. -- 2152.

gains, buthave big the all-time high is not all the way across the board. >> its high was back in september. joe: "what'd you miss?" skepticism that will stick around with or without greg's it. and analyst talks about the rising political risk. >> i think the most important point that market is looking for -- how professional this cabinet is. one of the consequences of what i call post-factual politics, and we see this in the u.s., is a lot of concern from the private sector about who is going to be running the show. probably more sensible, less bombastic than other conservative party candidates. reassuring markets.

and choosing from those who backed her formally, unless she votes in the end. i would be surprised if she goes for some of the more sensible brexiteers. that will be her number one priority. >> sensibility is something we keep peering about, she sounds eminently practical and reasonable. what did she do in addition to forming a cabinet, to give herself leverage to successfully negotiate an exit? >> she has said that leave it means that leave. prior to that, a lot of investors look to the fact that she was -- had a softer demeanor, and thought it might not happen. but she has been quite clear that brings it will happen. your previous commentator talked about invoking article 50. i disagree on the timing. she is coming nine weeks earlier than what is expected. she has her time to work on the negotiating strategy and perhaps

invoke article 50 a bit sooner, which would reduce uncertainty in some ways. >> who would you consider having as the chief negotiator in brexit discussions? we know a cabinet position will be created. does it have to be a brexiteer? >> i'm not sure it does, actually. the u.k. inople in the civil service who know the mechanics of brussels very well. i think you want someone who is perceived as writing a hard bargain. but what will be critical is how it works. it is a highly -- >> the old works don't seem to apply anymore. policy workers are seeing that there is a loss of trust in the elite. how do they respond to that? >> i am afraid that they have not invented a new playbook yet. that is why the priority will be

healing the party and focusing on party discipline. secondarily, to reassure markets that things are under control. taking the country through these negotiations will require a lot of compromise and consensus-building. one of the weaknesses in the way that she came to power, not through an election, is it is hard to do that when you have not got that explicit sort of mandate. >> you need the two thirds of mp's. trust, which leads me to the upcoming u.s. election. to what extent is the brexit outcome spilling over into the election in the united states? is there evidence of a doing so, or not? >> i have been quite cautious about drawing explicit parallels. fact of the brexit happened

makes it more likely you could have a non-mainstream outcome in the u.s.. i think it is part of the zeitgeist, certainly. the lack of trust in the political and business elites and media have translated into more willingness to experiment with political alternatives. in fact, historically, the rapidly declining lack of trust leads to revolution. we not getting revolutions in but the ballot boxes. trumps support remaining high, falling a little, but higher of those in the republican party. despite him breaking the rules, and the fact that the election-forecasting models do not work the way they used to. >> it is been a surprise for us, as well. in the u.s., the middle income, no longer the majority. no matter who was elected in november, how might that play out in the terms -- in terms of

policy that cannot be delivered on? --this is the catch 20 could catch-22. we have known about the declining middle class for a while. deflation, wages had been stagnant for 20 years. make about this anti-globalization sentiment that captures overall is a sense of momentum. americans are still very wealthy , and have social safety nets of a sort. but it is that lack of progress that i think is most strongly correlated with a sense of malaise. the chinese have a few attitudes toward globalization, are still most satisfied with the national conditions. they are not the best jobs, but life is improving, and that sense for human beings of progress seems to be very

closely linked with satisfaction. and that, in electoral politics, is important. chiefhat was citigroup's political analyst. coming up, what was amazon's prime day, more bust than buzz? this is bloomberg. ♪

matt: a look at some of the

biggest's nest news. planes on the ground, the company said today they're cutting deliveries of biggest passenger planes to one of monthly starting in 2018. airbus is leaning heavily on one customer for sales. no u.s. carrier has purchased one of those jets. fresh off a massive default, hoping for another shot at the bond market. aqueduct was to issue debt through a new agencies for construction work. skeptical, is investors will have first claim on revenue collected from water and sewer bills. the eight real estate heyday in new york city has finally ended. the new york times says a four-year construction boom aimed at buyers willing to spend $10 million or more is flooding

the top of the market, factoring into the global market turmoil that has caused wealthy investors to pull back, and the u.s. government's efforts to scrutinize some all-cash transactions. and that is the bloomberg business flash. >> "what'd you miss?" amazon prime day sales in the u.s., unchanged from a year ago. amazon stocks fell on this report, the data might indicate early snags in ordering could dampen results for the company on their second annual promotion. shannon.iscuss, i am not a prime user. >> i did not think i was, then found out i was. seven americans live in a household where someone is a rhyme member. >> what happened? guest: this is gimmicky,

christmas in july thing that i think a lot of people roll their eyes at. their busieste of days of the year last year. these are the black friday last year, it helped bring in a lot of prime numbers, people paying $99 a year. they roll out a lot of sales, it is a way to sign up. most important, if they can get signed up for prime membership, they're coming after you. they want you for life, and you will spend a lot more on their site than you do now. joe: signed up for prime membership, they're coming after you. amazon shares fell a little, but if that is not the point, does it matter? isn't the point sign-ups? guest: and we will learn that with the next earning results. data onugh we got third-party people selling on the site, it was not that much different from last year. of last year was a big year sales.

and they were having technical glitches, which could be a sign somebody either messed up at amazon or traffic was so heavy that even amazon, this huge behemoth which sells a service web trafficle with had a problem themselves. this could be a boost, we will have to wait until they report their earnings. amazon is not famous for its margins.

>> it is decelerating. they have got to figure something out. walmart blames the slowdown in overseas sales, and they do not break it up by market, so we cannot really see what effect they have on the u.s.. anchor: thank you.

i am joe wiesenthal. what did you miss? suffering a blow, an international tribunal set its efforts to assert control over the south china sea, and joining us to discuss this issue is our co-anchor betty lou. betty: this is the worst case scenario. they basically sided with the philippines and said on all counts, the chinese do not have that majority control of the south china sea.

is disputed. it is not just the philippines but the others that have surrounded. for those who have long observed , this really was not a surprise. themselves, have no part of this tribunal. to address the philippines on this, and they have said no, they will not, so we asked hank greenberg about this, and this is what he said. it upsets many things in that part of the world.

there are some serious negotiations. what is the choice? the negotiations. what is the choice? betty quan they should and as you know, they have a strange relationship with china. away from it.ed they have avoided commenting on the situation. they do not want to fall. they do not want to get into hot water here either, so i think hank makes a great point. anchor: the philippines are going to go into bilateral negotiations with china question mark they will say, no, you cannot have it. and of negotiation. betty: and then you are back to square one. i thought if he had an idea to get singapore involved,

andected in the region, this is tbd/ this is a complicated issue. immediately, they came out and said the wrong decision, they do not abide by it. and this is what they have been saying for the last several and also, there should be some sort of cooling off period before they get back to this issue. and another issue that we will be watching and terms of the market, guys, as related to is for the month of

june. this is going to be coming out. we will be paying close attention to how much imports will have improved, and also given the slowdown in the global economy, there is a real question. , are we seeing the slowdown even further, so we will be watching this quickly. anchor: thank you. and we will be talking about that more. p.m.an catch betty at 7:00 for bloomberg daybreak asia, which you can also watch on your bloomberg. up, what you need to know to gear up for your trading day. this is bloomberg. ♪

matt: i am matt miller. what did you miss? tonight, betty is going to be talking about this. int: and we have got euros production coming out at 5:00 a.m. eastern time, and we definitely want to watch that as we see, and how productive they are in those factories over there. anchor: and tomorrow, we have a bank of canada rate decision. economists are forecasting no change to the bank benchmark interest rate, but obviously, he want to pay attention. matt: you want to see action and drama out of canada. all right, that is all for you d you miss -- "what'd

miss?" this is bloomberg. ♪

♪ anchor: hello again from downtown cleveland. republicans are gathering ahead of their convention next week. and we have a new bloomberg politics item with some surprising and important results about hillary clinton and donald trump and how they are doing a month college educated voters. news, a triptych of the stories print one, democratic unity in the north, and another, about the midwest, but we begin in the south, pacific league in alice, president