>> welcome to bloomberg markets. worldm bloomberg headquarters in new york, good afternoon. i am vonnie quinn. >> and i am david gura. here is what we are watching this hour. what might happen to treasury yields if donald trump wins the presidency. >> investors are hungry for mobile messaging. a founder androm ceo. david: and we will hear what mark carney is thinking. bonnie: -- theie: we are one hour from close of trading. >> we are near all-time highs, extending gains.

take a look at the charts right now. dow jones extending gains, up .7%. the s&p 500 also up .5%. we are seeing the dow and as an p5 hundred gaining for a fifth consecutive session. nasdaq reversing yesterday's losses. investors got data this morning that showed that jobless claims in the u.s. held at the lowest level since mid april. but going into the bloomberg and taking a look at the sectors that are gaining on the s&p 500, you can see financials clearly leading those gains, a .9 percent. of course, we have positive ,arnings out of jpmorgan beating expectations. seven days of gains already, the longest winning streak since november, 20 14. energy shares are also up .3%. oil up from a two-month low. analysts saying it was time for

a hard sell off the only sector in the negative is utilities at the moment. take a look at transportation right now. it is soaring. the transportation index of more than 1%. earnings from csx are pushing the index higher a sixthow gaining for day. take a look at the fx market. we are seeing big movement there. the yen falling again, down .9%. for its biggest weekly drop since 1999. the clearer gainer is the pound,

gaining 1.4%. >> and solidly risk on. what is happening in the debt world? japan, we., the u.k., are seeing the prospect of more stimulus. in japan, for example, we are hearing talk of how to cut the money. we are seeing debt falling and yield rising a little bit at the moment. david: thanks so much. to bloomberg get first word news with mark crumpton. mark: conflicting reports today about donald trump's selection of a running mate. "the new york times" and cbs news say trump has selected indiana governor mike pence, but the times also reported that trump could change his mind and the campaign manager says no selection has been made.

meanwhile, the indianapolis star says pence has dropped his reelection bid for governor. the trump campaign is planning on an announcement tomorrow morning in new york. we will bring that to you live on bloomberg. security officials say they are worried about possible violence at the republican convention in cleveland and the democratic convention in philadelphia. ,mong those expressing unease homeland security secretary jeh johnson. secretary johnson: i am concerned about the prospect of getting out of hand. i am concerned about the possibility of violence. we have within dhs some 3000 personnel that will be dedicated to the security of the republican national convention and the democratic national convention each. mark: secretary johnson said he will inspect a cleveland site -- the cleveland site tomorrow and travel to philadelphia next week.

badere court justice ruth ginsburg says she regrets making ill-advised comments about donald trump. she was frank in recent interviews, even calling him a faker. she promised more discretion in the future. secretary jack lew met with his british counterpart today. after the meeting, he said he is looking forward to a highly integrated relationship between the u.k. and the eu. chinese passenger planes made int flights to new airports one of the places in question in the south china seas. an international tribunal has ruled that china has no claim on the south china sea, ruling china probably rejected. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 150 countries.

u.s. stocks rising for a fifth day, extending all-time highs. investors question whether the recent run-up has gone too far, .oo fast joining us now is in the strategist. i will put that question to you. too far, too fast? >> given our target is 2100 by years end and we are a tad above yes. a lot of people did not anticipate this rally. people did not position themselves more aggressively. is there a correction coming? that.could see what we have seen consistently is investors not believe in this market. money flows out of u.s. mutual

equity funds continues. we have had the worst year this includingy year, 2001-2 thousand two and 2008-2009. you never get a cataclysmic crescendo of capitulation. bull markets and bear markets either end with a whimper or without any sound whatsoever. david: we have asked you about your worst fears. de-equity deflation -- equitization. how likely is that? can borroworporate's cheaply, why wouldn't they take advantage of that opportunity? few companies have shrunk their share accounts. buyback prevents dilution of incremental shares growth. there is always this kind of share creep, if it is stock

options or stock acquisitions. what they have really done is prevent that from happening. it has not really at a to earnings, it has just reduced the dilution aspect. does the sense of dividend growers in utility continue to be where we look for growth? will the leadership change? >> we think leadership will change. ask about it.ts moreover, because they say rates are low and negative yields around the world push down u.s. rates, as a result, can you have higher multiples? the problem is, take utilities, for example, when it's trading at a 25 year high, you're not going to get 30% earnings rose out of utilities. does earnings growth out of utilities. you and i are going -- earnings growth out of utilities.

you and i are going to pay our gas bills and our electric hills, and they are not going to explode higher. , and they arells not going to explode higher. financials are doing better. industrials are cooling-off. about i want to ask you the election in the next big risk you see on the horizon. how are you positioning yourself ahead of that? you raised the specter of what he donald trump presidency could mean. what, potentially, could it mean for the equity markets? >> there are a lot of split opinions. this point, i always raise my canadian flag and say i don't vote in this country. i kind of avoid that. but it's interesting. there are some people who think donald trump would be an outright disaster.

i have clients who believe he is dangerous. but there is political partisanship that comes out. if you look at it more objectively, he has said he will beed dodd-frank, which would good for financials. he is anti-regulation, which is positive for the energy sector. he wants to generate growth and slash taxes and invest in infrastructure, which is something hillary clinton also talks about. he wants to spend more on borrowed money, something he has never really had a problem with. vonnie: if you have a 2150 target, are you going to change that now that we have bypassed that? are certain legal restrictions that would prevent me from doing that and i kind of

like my freedom. the,e: tobias lack of citigroup chief u.s. equity strategist. , shares are rising ipoy for the biggest tech of the year. we hear from the founder of the japanese messaging company. david: plus, bank of england's holding interest rates steady. we will hear from a member of the policy committee. bank earnings continue. wells fargo reports tomorrow. we have a preview of what to watch for. this is bloomberg. ♪

david: this is bloomberg markets. vonnie: time for a look at some of the biggest business stories in the news. france is warning the european commission head not to take a consulting job at goldman sachs following the brexit, some are considering it an act of the trail to the eu ministers are free to take new roles after -- 18 months after leaving. job,pes to take the despite having left his post only 20 months ago. the country's central bank confirmed by phone that zimbabwe has not paid a dime of what they oh the imf, the world bank, or the african development bank. mediating asec is

feud between service providers and broadcasters which has been outages ongram and paid tv. the fcc says they will not rewrite rules to accommodate either party. hireders are looking for charges to offset rising revenue costs and sluggish -- rising programming costs and sluggish ad revenue. shares in the investment company line are soaring in their debut today. we sat down with the company founder and ceo. what did this company say about how it intends to grow? >> you would think the u.s. would be one of their target markets, and it may be. one of the cofounders today said they think it is their dream to be in the united states. but when you look at growth markets, it's still back in

asia, but it is outside japan. taiwan, thailand, indonesia, that's where they are seeing growth rates of 80%-90%, and so that is where they will put most of their energy and their billion dollars. it was certainly a cheerful day for them. >> first of all, obviously, we are very happy with the initial response from investors. most of all, we are going to focus on investing in services. are the numbers man. tell us exactly where that investment is going to go. >> we will be focusing on key countries, japan, thailand,

taiwan, and indonesia. we will be using any profits for investment opportunities. at investmentking opportunities for technology companies. betty: what might that look like ? investment, more what kind of investments are we talking about? acquisitions? organic growth? what are we talking about? >> we are making partnerships, we can make acquisitions or minor investments. betty: how important is the u.s. market going to be? it's still an important part of your business. ,if we complete our service

we expect to expand to the u.s. market. the u.s., you say market is a dream for line to enter. there are quite a few already well established. facebook messenger, what that, we chat in asia, in your home base. asia,tsapp, we chat in your home base. how do you plan on competing with them? >> from the perspective of competing, we think messenger competition is over. one-stopcused on service. .ou can enjoy music and gaming we call it a one-stop service.

so, if we complete our service , i think we have the most advanced company in this area, so they will give us an opportunity. eddie: more opportunities for them. we were there when they rang the bell. they were very excited. they had a lot of digital sticker characters. that's not hello kitty. shares did rise 27%. were they concerned there was money left on the table? betty: i am not sure that did concern them. they were much happier that the shares did rise and that they got the amount of demand.

they were able to price shares at the higher end of the range. they got their story out as well. one of the executives said we worried about >> it, that that would spoil the trend, the momentum, and it didn't. interesting to note that the country is korean. they started after the sunol me -- tsunami. they developed the platform so that people could communicate while lines were down. focus now shifts to japan. they open in tokyo tomorrow. betty: that's right. that's where the ceo will be. david: thank you. still ahead, shares of intel are

up 10%. options insight is next. this is bloomberg. ♪

david: this is bloomberg markets. vonnie: time now for options insight. >> joining me for today's managerinsight is the of kkm financial. he joins me from chicago. dan, it's great to talk to you. so, the big surprise decision, the bank of england is keeping rates steady. how has that changed market dynamics for you? dan: they are moving to evaluate over the next couple of weeks before a possible move in

august. the markets appreciate that they were not just reactionary. earnings, particularly when you look at the financials being very positive, have propelled this market higher. we have move through this week with another big week on the markets. the bounce back from the lows continues. >> today, wells fargo listed intel as one of its top 20 picks on the s&p 500 with the most upside potential. what are your thoughts on that? dan: i thought that was overly bearish on intel. , it'sct of the matter is 16% of its lows from two weeks ago. expectations have been ratcheted up ahead of an earnings announcement. we have seen analysts raise expectations as well. look at the december

2014 hi, there is resistance there. like it has gotten a little ahead of itself. >> intel has been working aggressively to become a data center and thinks chip company. what are your thoughts on the firm itself? >> overall, longer-term, i think yes, the stock is going to continue to outperform the market. it certainly looks like it's in a good position moving forward. like i said, this is more of a short-term play. looking out over the next double of months, it feels like a stock has gotten ahead of itself. it has gotten some very positive guidance to maintain its valuations. i expect there will be a bit of a mean reversion in the next couple of months. intel could be dragged down as

well. >> thank you. david: thank you very much. insight.options coming up, reaction to the bank of england decision to hold interest rates steady. a formerwill hear from member of their external committee. vonnie: this is bloomberg. ♪ get ready for the rio olympic games

by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. matt: you are watching bloomberg markets. i'm matt miller.

joe: i'm joe weisenthal. matt: let's check in on the headlines. here's mark crumpton. ink: donald trump is closing on his running mate selection. reports are saying it will be indiana governor mike pence. a last-minute change of heart by mr. trump is still possible. a campaign spokesman says a decision isn't made yet but the campaign is planning an announcement here in new york city tomorrow morning. the indianapolis star reports that pence has dropped his reelection bid for governor. the trump campaign is planning that announcement tomorrow morning. we will bring it to you live right here on bloomberg. in other news, chris christie pleaded guilty to a federal charge of soliciting a bribe. officials say christie

threaten to withhold funding unless united made it easier for sansone to get to his vacation home. the united ceo also resigned after the investigation. hillary clinton attended a weekly luncheon of senate democrats on capitol hill and briefed them on her campaign. was joined by former colleagues as well as potential vice presidential choices, including tim kaine and elizabeth warren. mrs. clinton is scheduled to campaign with tim kaine in virginia today. secretary of state john kerry is in talks with vladimir putin on a potential deal that could prevent an escalation of fighting in serious civil war. -- syria has civil war. syria's civil war.

congress will release classified alleged saudi arabian government ties to the 9/11 hijackers as soon as cnn,row, according to citing multiple unidentified sources. the so-called "28 pages" were part of a congressional investigation of the terror attack. hours a day24 powered by 2400 journalists and 120 countries. >> markets close in under 30 minutes. before that, let's go live to the nasdaq with abigail doolittle. abigail: we are looking at another rally for the nasdaq. i say another because the nasdaq has been up 10 out of the last 12 sessions. it -- > briggs

brexit, the nasdaq is also positive on the year. some text and that did us -- some tech stands out to us today, including apple and intel. taiwan semiconductor has started making chipsets for the new apple iphone seven. clearly, that is a positive for , probably why it is up about 2% today. as for intel, intel did recently win a modem design for apple on that iphone. intel is up seven days in a row and supplies and materials are also higher seven days in arose. applied materials -- and applied materials are also higher seven

days in a row. oliver: you mentioned ebay as a standout mover in the textbased. what going on there? its best dayving since the beginning of april. a bloomberg intelligence analyst thought it could have to do with the fact that investors think it is more likely the bank of england is on cause as far as rate cuts. this could suggest the u.k. economy is not going to be as as earlierthe brexit thought. plus, recent checks are show weighing that hits to the company's website are better than expected, strong right now, so we do have some strength in ebay. oliver: thank you, abigail the nasdaq.t joel: the bank of england's move to keep interest rates unchanged caught some off guard.

our next guest says the bank of england will cut in august and start qe. joining us from new hampshire is a professor of economics at dartmouth college and former member of the policy committee at boe. he is also a bloomberg contributor noted her. thanks for joining us. what did you make of this -- contributing editor. thanks for joining us. what did you make of this? said, it's a surprise. when you have a surprise, you think perhaps they know something good that we don't know. that's not true. when you read it, it's the most apocalypse take language i -- apocalyptic language i have read since 2008. all of the surveys so consumer , investment inng jobs appears to be collapsing.

one survey said a quarter of all firms immediately said they will freeze hiring. what you have is a lot of evidence of why you should have , and i can't see any evidence of why you shouldn't. what they've talked about is a package of measures that's coming, and that's part of it, big errork it was a not to cut today. matt: we see a lot of surveys that look at consumer confidence and indicate that people won't spend as much money or companies want to invest as much, but we had similar outlooks after the sequester in the u.s., and they didn't ever come to pass. there any hard data you see that shows the u.k. economy tumbling?

rx those data are predicted extremely well, the great recession in the u.s. in 2008 and also in the u.k.. of 2008, allapril of these indicators had started to tumble. these were the exact indicators that started to turn. but there is essentially no chancellor of the exchequer, no government in place, so to have the package they've talked about, they will have to have permission from the chancellor of the exchequer, who has been in office 12 hours. that's why they've had to delay. but this language really feels like the, and it feels retaliation now.

oliver: does that limit with the bank of england can do it a don't want that to appreciate anymore? >> it's hard to argue they don't want it to depreciate anymore. i went, the pound was at two point 05. when i left, it was at 1.50. i think the obvious thing to worry about is what if you don't act but you should have? i think right now they will take the stimulus and see what happens. them, they won't see anything horrible between now and august, but i suspect they will, because the forecast has to be completely changed to brexit.

all of the forecast had been remain.conditioned on i think we will see the bank of england act. looking inside the thisberg, we can see that red line is the odds of a cut is pricing in slightly less than a 50% chance of a cut in august despite the signals of easing. do you think it's possible that all the action we see ends up being on the balance sheet side, more qe, as opposed to cutting rates? >> there is always a question of how far you can cut rates. i think the conversation will have to take place about whether they can go negative and how they do that and what the

consequences will be, but absolutely, there will be a conversation because the bank, first of all, has to get permission from the chancellor to do quantitative easing. that's the first half. then, what can we buy? chancellor's in the past have pushed by nonconventional assets. that conversation is going to take place. there are hints of it in the minutes. there are conversations between members about what a package might look like. but they are worried about the implications. matt: what you think, i mean, i atlooking at a survey we did the economist for 2017 gdp. it was assuming a cut today.

we didn't get the cut. you say it's 50%. you think about cdp? will there be a recession and when will there be a recovery? >> i think it's probably going to take nine months to really get hard data. we had the recession in 2008. we didn't see any hard data telling us that until december. tohink it will take a while see that. i think we will see q3 and q4 going negative. i think what we are really is no economic policy going on in the u.k. we have a change in government. the foreign secretary yesterday became a treasury secretary today. presumably, he will have to have a lot of briefing.

the government consciously made to work out what xit wouldquences of bre be and nobody at the treasury was working on what to do if there was that vote. so this is kind of winging it. certainly, the evidence, i think, is that firms are putting off investment decisions and the u.k. into recession, but we may not get the data until the end of the year. joel: thank you very much. oliver: coming up, jpmorgan started the wave of bank earnings set to come out in the next week. next, we got the numbers for wells fargo, the world's most valuable bank. this is bloomberg. ♪

matt: time for a look at some of the biggest business stories in the news right now. bp has been slammed with another massive fine. the oil and gas company expects an after-tax payment of about two point $5 billion. the additional charges the result of penalties incurred after the 2010 deepwater horizon accident and oil spill. totals to date to 44 billion dollars. nigeria is still africa's number one economy, but south africa is gaining fast. theirvaluation of

currency has wiped all most 150 billion dollars off their gdp. afterafrica is number two briefly overtaking egypt. it narrowed the gap in 2015. fresh off the roaring success of pokemon go, nintendo is resurrecting an old classic it hopes will real nostalgic gamers back in. the company will release a smaller version of the original nintendo entertainment system that brought us donkey kong and pac-man. it's a replica of the company's first consul from 1985. mercedes has unveiled a luxury golf cart. it was used at the british open this week. it comes complete with a refrigerator, bluetooth, speaker system, and rear spoiler to hold your clubs.

it has a range of 50 miles and a top speed of 19 miles per hour. that's your business flash update. >> wells fargo is next in line for bank earnings. jpmorgan reported profit and revenue that beat analysts estimates. this is today's numbers don't lie. the sixth biggest u.s. banks were predicted to fall in this quarter. is expectedprofit to fall 5.2 billion, a 4% drop from a year ago. the bank leads the u.s. in mortgage origination making that number especially important to them. low interest rates have weighed on that since the great

recession. analysts see mortgage lending as a bright spot for the bank. here, wells fargo's lead on the rest of the market amount.tty substantial the bank has 875 employees in london and about 1100 throughout the middle east, and africa. you can see its exposure, along with the rest of the major thes, to britain, which is largest contributor from the european union to their profits. just the british exit and low rates that wells fargo needs to worry about. it's all their top oil and gas tanker. quarter, the firm set aside more than $1 billion for bad lie, a 79% increase from the previous year.

we will be tracking these numbers when wells fargo reports earnings before friday's opening bell. joel: here with us now to discuss wells fargo and jpmorgan is allison williams. start with jpmorgan. what stood out to you? the sort of unexpected surprise after the last week of june. we had strong trading volume. that's good for citigroup, who reports tomorrow. volume and forex rates were strong for citigroup's. -- citigroup. jpmorgan kept their outlook stable. they declined to talk about the fromstep as far as britain an operating standpoint. that's all you can expect from them at this point. they have to wait until things evolve and maybe at the point of saying that whatever happens,

they hope businesses are given .ears to adjust from an economic standpoint, we have the u.k. and european gdp expectations likely to come down. but again, jpmorgan points to the strength of their model. >> wells fargo's domestic retail banking business is probably about 54% of revenue. their that affecting outlook if rates are going to continue to stay low? >> with jpmorgan has talked about in terms of rates is that they do get a very good number from the first rate increase. there was an area where we saw a strength. >> more than $100 billion. >> right. part of that is because they are

originating mortgages and may be holding more of that on their balance sheet. they are also seeing strengths in commercial real estate, which is an area investors had been worried about. of wellsignals ahead fargo are related to auto and mortgage, very important businesses for wells fargo. jpmorgan talking about the auto lending environment, stressing that they are holding the line on quality. they have beenng talking about for months now. they have seen a lot of good growth in auto. they have been one of the leaders in the auto lending business. on the other side of things, artgage banking, which was little softer for jpmorgan this quarter, but again, it's the outlook that matters. they said they expect healthy mortgage by an striven by higher

refi and that improved mortgage outlook is good for them and for wells fargo. interesting stuff. we will leave it there. allison williams talking about wells fargo d other banks. remember, you can catch all of these reports on the bloomberg terminal. >> central banks overseeing 3/5 of the world's economy are practically giving away money. we just got the chart to show you just how cheap money is getting, next on bloomberg. ♪

matt: let's take a look at some charts that illustrate today's market news, including cheap, cheap money. oliver: cheap everywhere. we talk about low rates. this is a great chart on bloomberg today. a sickly, what we are looking at

here is the breakdown of -- looking at a are breakdown of economies around the world with rates below a certain level. $24 trillion of gdp countries that have a 0%-1% interest rate policy. obviously, the sliver is smaller the higher the rates get. section, 5%-10%, represents $5 trillion. almost everywhere around the world is at least 1%-5%. joel: something that strikes me is how policy rates are not just low, but borrowing rates around the world. are notre you look, you only seeing the policy rates go low, but people piling into government bonds. matt: i actually swiped a chart from bloomberg intelligence that shows corporate profits in

yellow. corporaten see investment, domestic investment. this is the problem, right? as you get to the very end of the chart, it goes all the way back to the 1980's. we know corporate profit is falling. corporate investment is coming down even more. >> government has to spend. that's why markets have reacted so excitedly to the japan news acause it looks like strategy. >> absolutely. that's it for bloomberg markets. what did you miss and the market next. up next -- is up this is bloomberg. ♪

joe: we are moments away from the closing bell. i'm joe weisenthal. matt: i matt miller. i am oliver ran it.

scarlet fu his on assignment. matt: u.s. stocks hitting a record high. the dow gaining 133 points. missedstion is, what you -- what'd you miss? we have a big rally in equities. jpmorgan beating estimates and the banks is healthy u.s. consumers. joe: you take prime minister theresa may's moving on from the camera era. our guest says she will be a tough negotiator. oliver: could receiver battle bonds -- could we see perpetual ones in japan? former fed chief ben bernanke floats idea to one of the shinzo abe's aides. matt: let's kick it off with our market minutes. we're looking at a number of differas