london, and 11:00 p.m. in hong kong. i am vonnie quinn quinn. welcome to bloomberg markets. we're going to take you from cleveland to washington, d c, and cover stories out of london. votempact of the brexit has become more apparent. we will get reaction from one of bloomberg's top-ranked economic forecasters. shery: home prices are hitting record highs in u.s. cities. what is going on in the real estate market, and are people buying? vonnie: and we're watching oil. after a steady rise, some dark cows are hurting its recovery. shery: we are one hour from the close of trading. let's head to the markets that's julie hyman is watching the market action. julie: we have a bit of a

pullback, but it feels like a mixed market because the dow has been flirting with gains, and right now it is a four point. it is not all red for the major averages, though the dow has trended lower for parts of the day. a sideways move here. we have volume lower as well. why is the dow doing better -- less like the big movers. mcdonald's is rising after mcdonald's japan started selling poking and toys. johnson & johnson is out with earnings that beat estimates, and the company raised its forecast for four-year earnings as well. trading higher making predictions about demand in india. those shares are gaining. this gain in the dow notwithstanding, the s&p 500 and the nasdaq are not holding up well. let's look at the movers there. netflix has been trading lower all session long after subscriber targets missed estimates.

microsoft reports after the bell. it has been lower all day in advance of that. phillip morris coming out with numbers that missed estimates as well, being under pressure from the stronger dollar and declining cigarette volume. that is the balancing act we see in the major averages. today, i should point out most of the groups in the s&p 500 are lower today as well. a down breath we are seeing today. shery: with the selloff in stocks we are still seeing money going to bonds. julie: we are indeed, and it was a bold call that said we could see 1.25% by the quarter of the year, than 1% for the 10-year yield for the first quarter of next year as he says gdp will be disappointing. right now the 10-year yield is at 1.56%. call by morgan stanley into perspective, take a look at the bloomberg here. this is simply what we have seen

from the yield of the 10-year note, and then you have this target here, 1%. what it isell below right now, and below the forecasters out there. this is an outlier. he has been right so far, so let's see what happens with this production going forward. vonnie: julie hyman, thank you. we will check in at the first word news desk. mark crumpton is in the newsroom. mark: donald trump is hours away from securing the republican presidential nomination. priebus toldreince a breakfast meeting the campaign now has a crucial task. reince priebus: if the campaign can get the private donald trump to be seen publicly, i think that he will when. mark: reince priebus also said he disagrees with the trump's

campaign criticism of ohio governor john kasich, who is not attending the convention, even though it is being held in his home state. it could be a rough commute for drivers that he is the tappan zee bridge north of new york city. a construction crane collapsed and fell across the span it is replacing. officials say no vehicles were struck when the crane fell. at least two injuries were reported. south korea is accusing north a "reckless provocation," following the test firing of ballistic missiles. two were presumed to be short range and landed in the sea of japan. jan josh japan launched a -- japan lodged a formal protest. in australia, turnbow's government will have a majority of just one seat in australia's house of representatives.

global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. imf lowering its out code -- outlook for growth this year by 1/10 of 1% because of the brexit vote. schenker, is jason president and chief economist of prestige economics. he is right by bloomberg as one of the top economic forecasters. jason, it is great to talk to you. tell us, how does the imf prediction filter into your views of the market? know,henker: yeah, you there are a few different ways this is filtered into what you are expecting. a couple of things we did expect -- a lowering today. the imf is notorious for being a little rich in their forecast. we have seen now, as i think was mentioned earlier in the last

show, four consecutive meetings where they have lowered their forecast, and the forecast that came out today, 3.1% for 2016. that is equal to last year's level, and the forecast was made before the turkish push happened. we have not considered what the impact of that could be for the global economy. we expect the numbers could be lowered further, the number could be 2.7% for the year when it is all said and done. vonnie: what are you anticipating for the u.s. -- most guests say the u.s. will look better, but how much better will it really looked? -- at the end of february i had a book out called "recession-proof vonnie: there you go. mr. schenker: that is right -- we think growth will come to a halt, and we think average growth will be 1.4 with a recession next year. we see slowing.

concerned about the linchpin for all those being very critical for the u.s. economy. see that slowing. oil prices, we see moving lower, falling forward during the shoulder period. those are critical. oil prices going over could be good for an economy, to some extent. how do you see compression when we have job growth month over month? mr. schenker: if we look back to last year, november 5, the fed, the fbi oc, issued a warning, and at that point it was a letter to the banks from the fed and other regulators saying don't loan any money to oil and fed,arelessly, love the essentially. that is because oil and gas bad debt had gone up almost 400% in the course of the year, and the day they issued the warning, the $23.04. wti was

we are close to that price right now. they madea point regulators very nervous last year from a credit standpoint, and i think there is plenty of reason to be nervous. plenty of reason to expect more layoffs, defaults, bankruptcy. goingl see more of them forward, and that could affect the credit cycle. shery: jason, of course, affecting oil the price of where the dollar is heading, which today touched a six-week high again. if you go to my terminal, you can see it surpassed the 200-day moving average, and it is an over-bought territory, not anymore, but it is at the bottom -- bottom panel of the terminal. where do you see the dollar going, especially after the imf's renewed predictions? ourschenker: we said in report this past sunday we saw the dollar going higher as a result of the lower imf forecast, but going forward we

see the dollar moving lower because we believe credit concerns around oil and gas, subprime auto loan pressures, slowing auto sales from high police fleets -- these will cause slowing in sectors of the economy, so by the end of the year we will see a weaker dollar as the fed shifts gears to add accommodation to the economy. vonnie: jason, how serious will this be -- will we see bankruptcies en masse, and where will the price of oil and up? mr. schenker: it depends on what region you are in. i am concerned about oil and gas where you cem he, oilfield services moving forward through the end of the year and next year. mixher thing to add to the is our on the election -- i have a book "electing recession" coming up next month, and if you look, 13 of the 14th last recession cap started within 13 -- 13 of the last 14 recessions

have started within the first 13 months of a presidency. see spillisk you can over into other sectors as you see credit constricted, and you see other risks gradually increase from where we are in the cycle. shery: jason, what is interesting is we have seen gold -- also you are a top forecast --forecaster for gold, too we have seen it rally since the beginning of the year, and investors we saw pulling more than 700 million dollars out of etf's backed by gold. why is that happening -- is it a stronger outlook for the economy, and where is gold headed? mr. schenker: the price of gold fell. we did expect it would pull back. it has pulled back. a few different things are driving that. strong,arkets have been except for the nasdaq, which has not hit new highs and has not broken a trend of lower highs

that we have been in for over a year. we think that it's a signal there are still problems in the equity market, and you can see the price of gold be higher. we expect the price of gold to be between $1400 and $1500 an ounce. vonnie: jason, you got another plug-in for a book that has not come out yet, "electing recession" -- i want to ask, doesn't matter who gets elected? mr. schenker: in some ways, not really for where we are in the cycle, things are baked in. come has also historically, since keeping track of the records, there has never been a time where you have had three consecutive presidential terms without a new recession starting. now, the last recession started at the end of bush's second term, did not have one for the first term of obama or the second one so far, so we will probably get one near the end of the term, or at the beginning of

whoever gets to be president. vonnie: thank you, jason schenker, from boston. real estate markets are hitting records in some major u.s. cities, but are we back in bubble territory? shery: then in the options and said, our trade is paypal. the company will report earnings on thursday with the stock up about 9% this year. ♪ and wti crude has fallen below $40 a barrel after climbing above $50. we look at what is behind the pullback. this is bloomberg. ♪

vonnie: and the sun has come out there in midtown manhattan. bloomberg markets. i am vonnie quinn. shery: i am shery ahn -- time for the bloomberg business business flash. the justice department may try to prevent to takeover bids in the health insurance space according to a person familiar with the matter who says antitrust of issues are looking to file lawsuits to block anthem's takeover of rival health insurance -- insurer cigna. a final decision could come this weekend will be made by the end of this month. vonnie: european stocks fell from a three-week high lead by minors after rio tinto posted week iran or figures. -- iron ore figures. the worstle, is among performers in em currencies.

bonds across europe also declined. shery: a brazilian judge has blocked nationwide access to whatsapp national third blackout for service in the nation. the move comes after the application failed to hand over information requested in a criminal investigation. aatsapp is also facing $15,300 a day fine until it complies with a judicial order. and that is your business -- your business flash update. vonnie: with home prices hitting record highs in some u.s. cities, it raises the question, are we in a rising bubble. patrick clark has been looking into that. are we headed down the same road as 10 years ago? patrick: certainly, it is not the same road as you look at the

conditions present in the lead up to the last house -- loose credit, lots and lots of construction of new homes, cheap homes -- we don't have those things happening today. so -- shery: but the last time we said that it probably was not a bubble, it was a bubble, and it burst. patrick: right, sure. it is uncomfortable writing a story saying it is not a bubble because i am aware 10 years ago people wrote those stories and looked stupid a couple years later. vonnie: let's forget about the word "bubble," because you never know until it is over whether it is or isn't, but our home prices austin? in places like patrick: theypatrick: may be too high, but the high prices are being fueled by a lack of inventory of homes, and not by really easy credit, and probably not by home flippers speculating

that prices will continue to rise. there is some of that going on, but nothing like 10 years ago. second, third, and forth homebuying. patrick: not as far as we can tell. shery: will we see new homes coming on the market? patrick: at some point, sure -- housing becomes too expensive, even for people coming really good salaries in really good job markets. give up.le may we have seen there is some amount of tech companies, for instance, looking to move people to cheaper markets. that might mean going to austin from san francisco, denver, portland, or seattle -- other cities where housing is still relatively expensive, but at the same time still much cheaper than it is in the bay area. --nie: it is fascinating jonathan miller sends out housing notes and looks at manhattan real estate once a month, and found that renters

are getting a little power back from landlords because there really was -- rent just got too high, and there is more available now. hery'ss it is akin to s question -- will this correct itself? patrick: there is not enough housing to buy and enough for people to rent in some cities. short of an economic slowdown, where there is less household where there is less demand and some of these places -- who knows? vonnie: that is a good answer and we don't use that enough because most of the time, who knows? shery: thank you for joining us, bloomberg's real estate reporter, patrick clark. still ahead, we will keep our ion global markets. down onehe s&p 500 is

quarter of a percent. shery: money flowing to the bond market as we see treasuries railing again. -- rallying again. there is how we are trading, 1.56%. declining yield of three basis points. we see the bond market also holding near its highest levels of the session. vonnie: next on bloomberg markets, our options inside report. we will take you to a particular stock and asking how can you cash in? this is bloomberg. ♪

this is bloomberg markets. i am vonnie quinn. shery: i am shery ahn. vonnie: time for options inside with julie hyman. in joiningk you, and me is kevin kelly, chief investment officer at recon capital. we have this draft after reaching records last week for

the major averages -- a lot of earnings coming out. -- and i wonder if this is difficult during earnings season -- the use of an uptick in activity on individual stock options, and being down take on --options -- is that something that happens? what is interesting about earnings season if you go back to 20 15 two now, you see compressed volatility. right now we have a 12 handle on vix. the market is focused on guidance and earnings. they are dictating every move that happen in the market. everyone is parsing the data. 30-day indicator. what you see happen before significant, out is you see hedges, out. if we go back to last week, we traded.00 put contracts

we talk about this giant run-up in defense ofs, and -- defensives, and that was at the 58 .51 strikes. that is what is helping this market stay right here, aside from the fact that we are at record-low-interest rate and the cost of capital is so cheap. earnings are worth more. that is what people are not worried about valuation. julie: interesting, and utilities tend to be a later wave of earnings, people looking to see if we will have this outperformance by that group. speaking of earnings, you are looking out to paypal earnings. we have just started to get the trickle of earnings in tech specifically. it seems expectations are not superhigh going into the paypal report. you are hitting the nail on the head -- they were spun off three quarters ago.

they have had a great analyst stay in may. they have digital asset properties that are irreplaceable. apple cannot throw them off. before they were spun off by ebay, they bought zoom, a great international pay process taking on western union directly. it has been surprising they have been flat since their spinoff. they have one of the best digital properties in the social media payment aspect. one of the things we like about paypal is they are so underappreciated, and it is, kind of, like what happened with armed holdings. they were underappreciated. they had great golf. one of those names that looks pretty good. julie: interesting to what is the trade -- mr. kelly: you can go out -- interesting. so, what is the trade? mr. kelly: you go out 10 days, sell the $37.50 put, put at that

price, and generate about .5%. if the stock does come down on earnings, which is the 21st, you can buy it at a cheaper price. it is similar to buying a covered call -- right the stock or by calls against it, and one of the reasons they moved up earnings day, visa. julie: you would be a buyer if it goes down. mr. kelly: correct, and if you -- if it goes up, you would gain in 10 days. julie: thank you, kevin kelly. girls, that to you. shery: we are about 30 minutes from the close. this is bloomberg. ♪

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are watching bloomberg markets. i am scarlet fu. shery: i am shery ahn. many punditshat once thought was impossible -- donald trump is better to secure the nomination for president of the united states. you'll be in attendance at the party's convention in cleveland, ohio, as two of his children take the podium -- 22 euro tiffany, and his eldest the -- son, donald trump junior. also addressing the audience, senate majority leader mitch mcconnell, and house speaker paul ryan. hillary clinton says donald trump is not trying to unite americans and the proof can be found in his own words. the likely democratic presidential nominee spoke with bloomberg tv's charlie rose. ms. clinton: he appears to the fears, the anxieties, and yes, the anger -- i was stunned when

he was inciting violence at his rallies over the past year. he has it is very clear staked his political identity, and his future as a presidential candidate on dividing us. mark: you can watch the entire interview with hillary clinton on "charlie rose," at 7:00 p.m. eastern time right here on your -- bloomberg television. all lanes of the tappan zee bridge are closed until further notice after construction bridge -- crane sell onto the old stand. no cars were hit. no word on what caused the collapse. turkey has stepped up its response to last week's failed coup and the government has fired almost 24,000 teachers and interior ministry employees. they were said to have ties to plotters.d coup almost 1600 university deans were told to resign.

toldews host megyn kelly reporters that network president roger ailes made unwanted advances toward her about 10 years ago. the harassment is said to have occurred when kelly was a young correspondent at the network. 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. shery: mark, thank you very much. markets close in under 30 minutes. nasdaq withthe abigail doolittle. ,bigail: we see some pressure but from a macro standpoint, something very subtle but very important stands out. although less six or seven training sessions we have seen the index consolidated in a tight trading range.

the last time we saw this trading action was back in april into the first quarter earnings , then, and again in june fomc decision, and then of course the brexit vote. when you look at a chart of that action, both areas of consolidation and that in big moves down. the last two areas of consolidation suggest that could, in fact, the sum bearish action ahead for the nasdaq. shery, is the big story. basins 2014 after second-quarter subscriber growth on international front and domestic front missed estimates. amazingly, last year's top nasdaq stock is one of the worst the nasdaq 100, down about 25% this year. as for another story on the day -- yahoo! shares are higher at this point. they were actually lower earlier

after the company reported what is likely to prove to be its last quarter as a publicly traded company. helping the stock higher -- sources are now saying the failed process could be moving toward an end. sources are saying verizon, factor, and quicken, are the top three bidders, and we could know who wins within a week. it looks like an era could be about to end. shery: abigail, all of this about her earnings right now, the microsoft is reporting after the close to what could the -- what could tomorrow look like for the company? abigail: this will be an important report penned the last report was disappointed, especially around the server business. critical to this report will be whether the server business grows or whether the growth declines again. investors will be watching the cloud business, along with comments on brexit. as for influence on the nasdaq, it is one of the top member

weightings. we look at the three-month chart -- we see a strong correlation. we see the stock dropped quite precipitously after the disappointing report in april. the nasdaq followed suit. just today, we had the shot -- stock down strongly into the corner. sometimes that is bearish. it suggests some people think the report or guidance could somehow disappoint. if that proves to be true, the consolidation guessing most recently in the nasdaq could, in fact, result in a move down. so, stay tuned. we will know shortly after the close. shery: abigail doolittle at the nasdaq. scarlett: you news -- the federal reserve has barred an act ubs trader, matthew gardner four-minute viewing benchmarks. he had used electronic chat rooms to facilitate the rigging of benchmark values. this is all according to the federal reserve in a statement today. the fed has brought enforcement

actions against ubs and barclays where past in 2015, gardener also worked. let's move on now to commodities. omentum,ly is losing and at blame, -- losing momentum, and at blame you can say is a persistent -- while it is still above the 12-year low, price of sloot to about $45 right now. the next guest sees dark clouds over the recovery. stuart.us now is jan set the scene for us here. steams the oil rally lost -- is it the supply story and the dollar strengthening? i think the rebalancing we have been talking about a lot is being done by supply trend in sideways.

demand is taking its time to come up to supply increase the deficit we all need. what we had anticipated was significant gasoline strength, and that was going to give us a lift in the summer. gasolinesee that strength, not because of demand, not because of oversupply. that means we don't get a different -- lift in the summer. inprobably get less of a dip the winter, but we do not know if there's anything fundamental to get us out of this range. shery: how has the demand side then complicated post brexit? mr. stuart: that is a really fun question because for two years we have been saying demand is fine -- demand is above trend, growing, especially in developed economies. brexit, in my view, and this is a very much in-my-view type of thing -- not a modeling exercise -- brexit, to me, is a tipping point, he pointed time at which keeping europe and europe's fragile recovery going is going

to be that much more difficult with greater disunity. that means we jeopardize the demand growth story -- the story we did not have to worry about four two years now to me feels more worrisome. scarlett: get up the same time, when people talk of the brexit vote, they are worried more about the prospect of the u.k. economy and broader year compared the imf cutting its global outlook, the u.k. will absorb most of that reduction. the u.s. does not get changed at all by the imf. mr. stuart: that is a fair point -- the u.k. oil economy is 1.4 million barrels a day out of 95 globally, but what we are saying is that things connect. the recovery in europe, of which the u.k. was an integral part, now, if not maybe in jeopardy, but it will be slower going. there are other things in europe going on -- really bad things, like nice, turkey next door, the austrian reelection or do over

-- whatever you want to call that. there are elections looming. therefore investor confidence is waning, and i can slow things down. thing,t: is a sentiment essentially. mr. stuart: yes. shery: we have seen emerging markets take a big chunk of the demand over the last two years and they have exceeded expectations when it comes to oil demand. when they be able to offset oil demand falling anywhere else question mark -- anywhere -- everywhere else? mr. stuart: why i am laughing is yes, they were exceeding expectations, but not our expectations. the emerging market growth pace is decelerating some, but the emerging markets throughout our fine. this above-trend episode has been developed-market driven. it is the developed markets as a tell went, not a headwind. we fear with brexit you will get into a headwind situation all over again -- below trend growth. that trend is slower, less

pronounced rebalancing, if you will. scarlett: we also have to consider the unexpected supply disruptions that helped to lift oil this year. we cannot forecast more destruction, but that could play unit with little at these levels. yeah, because as a forecaster, you could also say you have to be kind of cowardly about disrupt -- disruptions. we are forecasting them to revert to normal in nigeria, venezuela -- other places. yes, on star that in the second half of the year, early next equally, perhaps even more supply disruptions. absolutely true. shery: thank you so much for your outlook. energyart, global analyst at credit suisse. scarlet: coming up, why the recent equity rally could just be a head fake. this is bloomberg. ♪

this is bloomberg markets. i am shery ahn. time now for the bloomberg business flash, a look at some of the biggest business stories in the move right now. stb miller board members will hold a board meeting this week to discuss roller -- growing pressure from investors asking for a higher takeover offer from investors. fund managers complain the acquisition is less attractive following the plunge in the pound. analysts agree the currency drop has given sab's two biggest investors a sweeter deal. the obama administration has

announced a new policy that allows homeowners to use property-assessed clean energy to pay for solar and energy efficient upgrades. the measure also allows them to pay back the loans over the time -- over time using property taxes. twitter's drive into pro sports just got deeper -- the social media website is teaming up with the nba on a deal to develop original content that will run on its platforms, including two weekly shows exclusively on twitter, replays and behind the scenes videos. which soldnfl, screen rights to thursday night games to twitter for about $10 million, the nba could not offer live games. and that is your business flash update. scarlet: is already the most unloved equity bull market, so it follows this could be a bull atp according to peter

cantor fitzgerald, who joins along with all of her running. -- oliver run it. oliver: it is good to have you on, and i know you guys have a longer-term view, and utah, your technical, shorter term view, and our people in the market that are bearish, but they are bearish permanently. he talked about the bull trap. does that still hold? we look at the ugly mark is to inform us about what will happen in riskier markets. u.s. equities are what most people care the most about. credit markets were strong in 14. we were bullish in 2014. a slow in 2015. we became neutral. this year, the signs were a foot that credit was tightening. high-yield has dried up.

schlitz is down 40% in high-you've markets. inre is a -- is down 40% high end markets. i know you watch distressed markets. we brought up this chart -- i noticed something that we brought up before -- the idea that investors are not behaving as similes as they did in previous depreciation of the chinese yuan. back in january, the chinese currency was getting weaker. now it is happening again, but no reaction in stocks. why? peter: china is important to the health and functioning of the global financial system, so in uanust, when we had a 4% y appreciation, it seems to indicate to markets that china was slowing and there was cause for concern. it happened earlier in the year. similarly, we have had a 4% or so appreciation and we have not

that response from u.s. equity markets. there are a number of reasons why that might be the case, but i think the data indicates we should be concerned about the appreciation, devaluation of the yuan. scarlet: one question is whether it reflects a stronger chinese economy pay the u.s. let's talk about a stronger dollar policy. shery: i am to raise about this continuing because we have seen a more clear if medication to the markets as well as -- communication to the markets, as well as hand they could hit the brakes . hints they could hit the brakes. peter: there are things from a week to a strong economy, gresham's law, if you will, and that what banks due to control that.

thehe end of the day, if fundamentals of china are such that capital is naturally leaving china, which it is, then it is going to be difficult for them to be quite as effective especially when, considering the first quarter, for example, about 10% of china's gdp was issued in the form of financing. 10% of gdp and stimulus -- first quarter gdp barely met the target. it seems to me on an incremental basis the stimulus being offered is doing less and less every time. oliver: i see, so a deteriorating value proposition of that stimulus. peter: correct. oliver: when you look at markets right now, why are we having this rally post-brexit -- a little weakness today, but we see it is small in magnitude. is it the central-bank driven thesis, or what is it? it is hard to know

exactly what the thesis is, but i do believe it is exactly that -- the idea that central banks have any potential shock under control. in fact, central banks, after the brexit bodo kurt came out very aggressively and said we will do everything -- brings it up herd came out and very aggressively said we will do everything we can to make sure this is not lead to a systemic shock. we are, to some extent, the best game in town right now. scarlet: why is it that high-yield is issuing -- signaling something else? peter: it is and it is not. high-yield credit, laughter, was actually cheap to equities. it is high yield spreads -- if you look at cbx high yields, it about-400, i think at 390. right now, i like neither. on a relative basis, i do not like high-yield very much, and i do not like u.s. equities very much. we much prefer being long u.s.

high yielding a yield-sparse environment. oliver: finally, do you want to be short or long volatility? peter: it is a tough call to make, but we came out strongly in our bull trap case and suggested that -- volatility of quite low, two standard deviations below its mean the past two years, and when you look at standard index protection, for example, the payout and the convexity is also an expensive. couple that with the fundamental view, we think it is a great time to own it. oliver: great stuff, peter. --rlet: much more coming up more details on the breaking news that former ubs trader er has been banned by the federal reserve. ♪

scarlet: this is bloomberg markets. i am scarlet fu. breaking news a few moments ago, former ubs currency trader fromew gardiner was banned the banking industry by the u.s. federal reserve -- the reason, manipulating currency benchmarks. we want to get more detail on the stork and we join bloomberg's david maclachlan who is in washington. is this an unusual step the fed is taking to bar someone from the banking industry? david: they do this occasionally. what is surprising here is that in this investigation, what has been going on for a number of years -- no one has been publicly charged by the justice department. the firsts really public action against any of the traders that have been involved -- misconduct in the u.s.. shery: give us background about this case -- apparently they use

electronic chat rooms to facilitate the rigging of the benchmark values. tell us about that. david: right. this is a group of fx traders that worked at a number of different banks. they were based in london, and over a number of years they were, essentially, allegedly, colluding with one another to , andrices in the fx market this was a story that bloomberg broke a number of years ago, and since the story broke, the justice department here in the has had a criminal investigation into the conduct, and that has been going on, like i said, for a number of years, but there has been no public charges against any individuals. has settled with a number of the banks. that occurred last may, may,

2015, and the banks paid roughly $26 million for misconduct. we have been waiting to see if charges will be filed against individual traders. scarlet: and as the doj's investigates this, one thing we should mention is matt gardiner played a role because he cooperated with the doj, right? david: right. we reported a few months ago that matt gardiner was cooperating in the investigation. he previously worked at ubs, the itself,nk, and ubs had, cooperated with the justice department. it was essentially the first bank to go to the justice department, to admit misconduct, and tell the authorities about the conduct that was going on in the market at the time, and as --t of that who operation, cooperation, gardiner was

helping the doj make their case. will thist president set for other cases being built against individuals? david: well, that remains to be seen. i think what we can assume, like in any criminal investigation, the justice department prosecutors need, typically in very complex cases, they need a cooperator to help them explain the conduct going on, so if it is true gardiner is cooperating, he will help them make that case for them. shery: david, thank you so much for joining us. scarlet: that does it for bloomberg news. "what you miss" in the market close is next. u.s. stocks are a little mixed -- ♪

scarlet: it is time for the closing bell. joe: i am joe weisenthal. >> i am all of her running. -- oliver rennick. ♪

scarlet: u.s. stocks closing at a record high for the dow industrial. the s&p 500 inching lower by four points. joe: the question is, what did you miss? scarlet: microsoft expanding cloud offerings. it could be cannibalizing the core software business. joe: what sicilian mortgages show was, how difficult it will be to rent from sicilian banks. day two of the republican national convention. we have a live update from cleveland about the agenda. we begin with the market minute. the dow industrial closing out a record high. the s&p 500 in the red. interest rates -- interest groups in spite of the decline. financials performing better than expected. materials and energy laggards toda