francine: the g-20 takes on the globalization backlash. terror, how much will politics way on the boj and said this week? the dnc begins today as the head of the committee resigns over yet another e-mail leak. can clinton come through unscathed? verizon isverizon, said to be offering $4.8 billion for yahoo!.

londonancine lacqua in with tom keene in new york. one thing that surprised me this so -- ifo the east report out of germany and there is a huge brexit angle as it seems to have doubled -- affected german confidence. tom: the nuances of the market are very subtle. since you have been gone the one idea is euro rolling over to parity, one of our themes today. it is an odd monday. francine: it is going to be a very big week. let's get to the bloomberg first word news. authorities and germany are trying to figure out if a bomb explosion is linked to terrorism. a refugee blew himself up near a music festival and 12 people were wounded. he had been denied asylum last

year but was allowed to stay in refugee housing. meanwhile, police in munich are questioning a friend of a teenager who went on a shooting rampage. there is speculation the friend may have known plans of the attack. loner been described as a obsessed with playing video games. controversy overshadows the start of the dnc today. debbie wasserman schultz will resign at the end of the week over leaked e-mails. messages show that staffers favored hillary clinton and undermined bernie sanders. for months, sanders supporters have been collated for her that have been calling for her resignation. australia will not let its athletes stay in rio de janeiro. olympic officials say repairs will be completed this week.

global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. tom: let's do a monday data check. equities, bonds, currencies, commodities. 1.59%, a risk on feel. euro weaker as the major idea out of last week, 10 -- 1.0983. 46 toehow migrated from 43.92 four oil. the dollar fractionally strong. 43.94 in oil. the german 10 year back and forth into a negative and positive. francine, you messed nothing on your eight week -- maced -- missed nothing on your eight

week vacation. francine: european equities are resuming their rise. confidence data in germany is one of the strongest stories of the day. yen, when 06.31. governor kuroda has so much so manybecause -- problems because the market has priced in. the bloomberge on is where francine began her eight week vacation -- i am kidding, it is the euro. 2014, 2013. the parity watch. did not happen. we were supposed to follow the yellow line and go down to somewhere. weaker euro. it did not happen. we have had a turning, stronger euro but with the recent you lookin currencies,

at currency flows as well as relative interest rate, part of our theme today. we have the gentleman from citigroup coming up. francine: you are right, the big focus is on yen and all of these currency moves and whether we will see the start of a dollar rally. .his is my terminal i picked out verizon, the blue line, and yahoo!. if you bring it back to the beginning of 2000 before the dot first, yahoo! was valued more than verizon. end this fightto with a 4.8 billion dollar deal. for more on yahoo! and verizon and the market in general, let's get to james bevan. great to speak to you. james: great to be here. francine: it seems that central

banks will definitely give an indication, the fed and boj, on whether it is time to buy. james: i think neither will take any action this week, both will leave rates unchanged, and the boj will -- francine: ken governor kuroda afford to disappoint the markets? james: he should not go further into negative interest rate. that has already proven to be a disaster. the amount in japanese government bonds that are available for purchase as now small. the idea that he might ramp up the purchase rate with a near absence of fresh supply, and actually that would be taken badly by the markets. tom: i do want to ask you about equities. on the foreign exchange world, when i look at euro rollover, does it signal anything or is it just good old hot summer noise?

james: i think there is a lot of hot summer noise but equally we should not underestimate the actions of the european central bank, a substantial amount of money mr. draghi is spending, or europe debt. out, weumbers coming anticipate around 5%. that would be a great show of result but the longer he goes on buying germinated -- euro denominated assets, -- tom: i want to bring up paris. this is a chart of sterling versus swiss. it looks like euro but a lot more accentuated as the swiss franc as strong. the brexit drop over there on the right side.

where does this go? does the safe haven play continue through the late summer? james: i certainly think it does. one of the things about the international picture, global investors look at the u.k. and do not want any part of his assets. i think international investors who want to buy was frank assets in the government market -- swiss franc assets in the government market are bonkers. however, it is very clear that people would rather have a confident swiss franc. francine: why are they pushed to hold negative? is it cheap money or does it mean we are not pricing things right? james: we stopped pricing things right a long time ago. even before the global financial crisis, risk was poorly priced.

undertaking new and more ingenious methods trying to get the market moving, of which negative interest rates are just one park -- part. francine: should we be a marine -- more worried about inflation in the u.k.? we have poor economic data, that could be quite hard, and then you have this inflation that is starting to get worse. francine: -- james: i think we absolutely will face a combination of stagnation and rising inflation. goods and services have been around the rate of two percentage points but they have been held down because the cpi in global trade has been in deep deflation. in global terms, that deflation persists but if you adjust for the currency we will get a big deflationary purge and i think we will see rising inflation.

that the u.k. government bond market has been quite so relax? tom: why is it? puzzle, theresaw seems to be an underlying confidence that the u.k. will move forward. are you surprised? i am not surprised insofar as u.k. economy can continue forward. the government has only issued an sterling and we can afford a currency devaluation in a way would haveeconomies material problems if they go through a devaluation. of brexit the risks have been underestimated in hard economic terms but will take longer to play out. when i think about markets, i see central banks that are very supportive. i see very low rates of interest , meaning the companies will buy each other and indeed their own shares rather than allowing

prices to fall too far. francine: james bevan, thank you. he stays with us. a discussion with the beef o institute president -- ifo institute president. can they withstand brexit? ♪

francine: this is bloomberg "surveillance." i am francine lacqua in london, tom keene in new york. taylor: not long from now, yahoos long fight to survive as a standalone company will come to an end. verizon glanced to buy yahoo! for little more than 4.8 billion

dollars in the deal is expected to be announced before the market opens. it is likely an end of the reign of marissa mayer. ericsson is looking for a new ceo. hans vesper is quitting after six and a half years, his departure capping a turbulent period for ericsson. they will speed up cost cuts after disappointing results. vest berg has been questioned about corruption. by theof nintendo plunge maximum allowed, 18%. the financial impact from the worldwide pokemon go craze will be limited. that is your bloomberg business flash. tom: thank you so much. james bevan with us in london to get your monday started. fed meeting week. there is a lot going on.

bring over the bloomberg. this is the inflation adjusted compounding everybody up. james, i give you great credit for your many appearances saying you have got to stay within the market. as the market going up because of central-bank action or because everybody is missing earnings resiliency due to cost control? james: i would say it is a combination and a further factor which is the underlying economic numbers are genuinely better than many people have called. it does seem clear that the agenda is certainly market positive and we should not expect central banks to play the brakes to deliver recessionary big -- conditions. that is only because we are not seeing any real signs of overheating. on the second issue of companies

, it is clear they are taking advantage of low cash rate in order to be able to pay back their own shares and that is producing a groundswell of support for equities. risk premium are at elevated levels and it is hard to see why there would be a material selloff in the bond market anytime soon in the context of the low outlook and interest rates. and allook at this weekend, i got grilled on this by people. all weekend, this absolute disbelief in the market. is your framework a double-digit game from here? does it capture the dividend and hope they do not go down? what is the bull market framework? marketevaluations in the , u.s. equities can remain as they are. 5%ething on the order of compound growth over the next several years and i am anticipating u.s. equities can

rise about five percentage points this year and next year. certainly substantial in the context of low money rates and almost no inflation. francine: well european stocks , becaused, or earnings of currency swings and brexit, to make a decent amount of money? i see not a single market in any reasonable context. i see germany running a current account kerplunk -- serve blacks, not -- surplus. a black hole for the wealth of europe. i see plenty of opportunity for the residential real estate , continues tony do extremely well. if i had to pick a sector that would perform well, that would be it. i worry about the italian banking system.

at some of the great european companies outside of the euro system. playerss pharmaceutical , i think they are absolutely fine for the long haul. tom: james bevan will continue with us for the hour. in our next hour, we spoke to him last week. jim struve v this of tufts university, we will get an update on nato. i think we will speak to the admiral about philadelphia as well. from london, from new york, this is bloomberg. ♪

francine: this is bloomberg "surveillance." francine lacqua in london, tom keene in new york. i missed you so much i picked out something in u.s. politics in my morning must-read. times, writing about the u.s. presidential race, if this is a race between a career politician and a demagogue it should be no contest at all. the problem is a big swath of the u.s. electorate possibly a majority view mrs. clinton and mr. trump as equally flawed. followed from afar but i did follow the republican convention and it seems more of years than in previous

and i think we underestimated the fact that donald trump could become president. tom: that was out there. particularly reaffirming the past for mr. trump -- path for mr. trump to become our president, it is not implausible. notas been strong on underestimating the reality that mr. trump can do in the certain states. it sets up a more interesting philadelphia. all i know is that while you were gone i was on air every day going, i am your voice. i got no traction with that message. francine: one of the funnier things i heard this morning is let's see whether bill clinton replicates what melania drop -- trump does. on a serious point, i do not

know what the markets do with a donald trump presidency. doesn't mean we will see more fiscal spending? america or a diverse because of u.s. politics, the ship will be steady? james: i will get back to what mr. trump did and said. he was very selective in the data he brought to the table, the sources, and the time frames over which those data were cut. within them there were kernels of truth and he has put his finger on the pulse of the american people and said, you are not happy so you should vote for me. wall street is basically saying everything is all right. the american people do not feel that and i would suggest he is touching the same nerve that the brexiteers touched within the u.k.. big surprise about the brexit results, take surprise that trump was able to gain so much

traction in america with flawed data. when he is elected, he has a populist agenda. tom: the agenda has to do with our financial system. financial system and trade legislation, is that just pushed down the road? james: when i think about strategic reform that is required to keep the global economy going, i certainly believe mr. trump wants to negotiate very hard with sources of deflation. therefore having caused the american people some grief, so we do have to have the structural form to make sure so as ever,ade -- mr. trump has a kernel of truth in what he is saying. tom: the democratic news of the weekend with watterson scholz out overnight, really most

interesting as we go to philadelphia. james bevan will continue with us through this hour. looking forward to speaking about the equity markets, on philadelphia. i need a done will join us -- i dunn will jointa us in a bit. let me do a data check. i am looking at oil and the euro, they are very interesting as we begin this monday, a five-day work week and with a fed meeting on wednesday. a beautiful sunrise in new york. ♪

tom: good morning. we are thrilled that you are with us. let's hit to our first word news with kayla riggs. taylor: a story we are

monitoring in fort myers, florida. authorities say there are at least two dead it and another 17 wounded. a person of interest has been detained. the democratic convention begins today in philadelphia. hillary clinton has given a preview of how she will portray donald trump. >> i'm not going to engage in -fest that heinsult seems to thrive on. he iser he says about me, free to use up his own airtime and space to do. i'm going to talk about what he has done, how he has hurt people in business. nationalhe democratic committee chair has resigned over leaked e-mail -- leaked theils that shows democratic committee favored hillary clinton and undermined

bernie sanders. full people were wounded at a music festival. the man had been denied asylum last year. they said he tried to kill himself twice the more. it was the fourth attack in germany in the last week. visits prime minister -- ireland today to discuss plans for leaving the european union. there is concern the border -- border patrol could be imposed. global news 24 hours a day. francine: german business sentiment deteriorated less than expected in july after the uk's vote to leave the european union. this signals the companies in --ope's largest economy have the shock of the brexit vote. great to have you on the

program, because i am a little surprised but it seems that german companies took it in stride. fromou expecting fallout brexit on german exports or german confidence coming at a later stage? i think this may well come at a later stage. the current business situation is stable, but expectations have weekend and export expectations have weakened, so there may be or to come. francine: do you expect mario draghi to add more stimulus? there may be more stimulus coming. if it comes from the ecb, it may drive down the exchange rates and that would make it easier for the export industry to recover, to at least avoid a

reduction. growinge side effects that might be negative. thatine: are you concerned there seems to be very little that upsets the markets, and a lot of the times, this is what households are looking debt. -- looking at. there a concern that a lot of households continue spending beyond their means, just because they are in a false sense of security? initial this may be an for other countries more than other countries like germany and france because most household to not hold a lot of shares. some do hold real estate, but there is little trading. this is more of a concern for the u.s. economy than the european economy.

house prices are being driven up by this monetary policy, and if this bubble bursts, that may be a concern. tom: i look in germany, i look at the euro rate, where is the appropriate euro valuation against the dollar for germany? clemens: it would certainly be higher than the current valuation, something around 1.25. the eurozone as a whole is weaker than the german economy. the euro is undervalued, but on an export dynamic basis, where do you want it to be? you have to keep the export sheen going. -- export machine going. constructions -- construction is booming, and there is a concern with this

very low euro exchange rate, the german economy is being distorted towards too much exporting. we have a huge export surplus. actively,ing pursued that it is a side effect of the low euro exchange rate. francine: thank you so much for joining us. facts --us on the affects -- fx. when you look at dollars, maintaining before the fed and boj, what you expecting those central banks to do? richard: the fed has to knowledge a better guesstimate -- domestic environment. it has been running at the top

end of the spectrum since 2013. they have to say the domestic improvement remains on track. it is the international concerns the market thinks will keep the fed from sounding too hawkish. we have seen the balance of a strong domestic environment operating its from europe, u.k., and japan, so we still go into a dollar positive. francine: will that end up being a dollar rally? in the short-term yes, but in the longer term, it will come down to do central banks remain on hold or do we see the doj expand policy and ultimately expectations for the ecb start to build again. taperingd a good job them at the last ecb meeting, and when it comes to this week, does the doj deliver enough and next week, does the bank of england deliver enough? when i look at where we are

in foreign exchange and i think -- think of your great work on cross rates, the interesting thing is sterling swissie. brexit going on in versus the might of switzerland. if you look at that pair, is that the greatest opportunity amid the tumult of the summer? richard: would look at the swiss and put out a report. we have seen a significant amount of eurozone concerns crop up. swiss has not really traded defensively. the point that out as one of the success rates of the policy, that that is -- has limited any that weswiss rally should normally be picking up in these environments. instead, that rally has been bleeding into the dollar and the japanese yen.

we see further downside on sterling. snb has really shown us, so far. tom: when you look at swiss versus the mess of europe, does it lead you to reinvigorate a parity call on the euro? thosed: euro has all surpluses, the same as japan does, so every time investors it in an really try to short the euro, you have to beat the current account consistently, not for one or two weeks, but for a month over month basis and to do that, you need to get more just basement out of european assets. we can eventually get there, but it is a very slow path as investors are confident that the

confidence needs to go up and ecb policy needs to change. francine: win over going to see investors take on riskier positions? overall, do we need a catalyst or something to happen for investors to feel a little bit better about the world? richard: when it comes to broadness and emerging markets, risk or things like that, you will need to see policy expanded. a lot of the positions that went on in the last two or three weeks when you saw that long e.m. was predicated on g5 liquidity. it is up to central banks to deliver on that and you will likely see more capital lows follow those central bank decisions. you have to be concerned there will be a little bit of a risk pairing over the short term.

when people begin to look at high data in emerging markets and riskier investments, you will need see a civilization in global trade volumes and that will have to begin to uptrend and people get more confident on growth, that is worthy risk rally comes from. right now, it is still based on liquidity and we would like to see it based more on fundamental growth. francine: thank you so much. up, after turkey's failed coup, we hear about the future of the country. the illicit purge is nearing its end. ♪

francine: welcome back to bloomberg surveillance. let's go now to part of the middle east, after turkey's failed coup attempt. the president spoke exclusively to turkey's prime minister. >> this has come and gone and the national will and the will of the citizens has destroyed the plotters. life is back to normal in turkey, and you can continue your long-term investment. we will eliminate obstacles before you, we are laying out the turquoise carpet in front of investors, we have all kinds of tax incentives, investment incentives, and we are giving priority to value-added investments. francine: we are joined from istanbul.

bottom line, there is a clear concern amongst investors that the president will tighten his grip on power, that this purge is just an excuse to grab more power. as he and the prime minister assured you that this so-called purge is coming to an end? he had a line where he said the state of emergency is not the state of emergency on the turkish population, but the turkish state to clean, to purge the turkish government institutions of follower of the -- followers of the preacher from the u.s. when it comes to people's individual rights, they will play it by the book, so policy is going to be taken

through parliament and through reforms they're trying to pursue, they will not use the state of emergency to accelerate that. basically he is saying the country is open for business, is that a -- if i am a big foreign investor, why should i believe him? it is a valid question. s&p downgraded on a basis of political uncertainty. the markets today are doing a bit better but last week, they did rather badly. there is uncertainty about the path forward and this is what the interview was about, this is why the prime minister came to us and talk to us about the way forward, to give investors that reassurance. tom: alike about how he spoke

about the turquoise carpet, i guess that is the turkish riviera. did you ask can get the detainees are sleeping on turquoise carpets? thousands update on of people, some of the photos have been horrific. the latestriad: numbers are about 13,000 people detained, upwards of 50,000 people removed from their jobs as a result of this purge. he has said that that should be coming to an end and most people havere linked to the coup been detained and we are seeing reports of some of the conscripts involved having been released. the judiciaryid is working on that and it is one of the reasons they have a state of the. -- state of emergency. worst ofted that the

it may be open -- over. tom: thank you so much. we continue to distill this. what i see is uncertainty and if i am a business officer and i see the difference tories, turkey on and on, i want to pull it in and be more cautious. james: i'm not sure cautious is necessary, i look at some great opportunities in asia-pacific. i look at taiwan semiconductor, on hypothesis -- precision, every chance of being able to take apple over the next decade, but as you look at the amount they spend on research, it is a reasonable idea. those opportunities may be regarded as risky, but if you want to make serious money of the next decade, trying to decide whether you should be in

your restaurant -- u.s. treasuries or government bonds, that is going to be the real sinkhole for losing money. tom: a good perspective, we will continue that dialogue. don't forget, we are sort of on the watch. verizon/yahoo!. west texas intermediate, 4391, always trying to find a bid. this is bloomberg. ♪

francine: it is bloomberg surveillance. let's get straight to the bloomberg business flash with taylor riggs. taylor: europe's biggest airline ones that brexit may force it to low-end -- lower its profits forecast. the airline predicts that fares will drop 8% in six months through september. -- after failing to turn around the fashion label.

the deal has an enterprise value of $650 million. the chief designer step down. -- stepped down. verizon will make it official, they are buying yahoos internet -- internet asset. the deal is expected to be announced before the opening bell. it is likely to mean the end of yahoos ceo. she tried to -- tried and failed to sell yahoo! as an independent company. francine: let's discuss the yahoo! deal with james bevan. this was a nice bloomberg's group, saying verizon is set to announce this deal. my first thought was us about time. james: there was never any

credibility in the idea that daily trust was going to be a buyer. to me, this was a story that was always going to end up with this sort of endgame, because we now know that the telecommunication company, content is king. the yahoo! customer base was not delivering on the value that it should represent to a more broad -- integration essentially requires the ceo to step down. on: it is a fed day, wednesday, and we need certitude. we willitude is that not adjust the birth rate of the united states of america. >> we have done our part, already. james: the problem is this is

the new normal for years to come. tom: my loneliness is the new normal? productivity, we have talked about labor growth -- labor force growth in the past. labor force project -- labor force participation, the white line is the -- it can -- it keeps growing but because the goal line is going down, you are having a smaller portion of the -- this is going to continue for quite some time, because you take a look at some new statistics out from the government, showing that the birth rate continues to fall. the number of babies born in the united states is about flat. can see the baby boomers, will themillennials -- that is number of babies being born, but the line below that is genuine

to decline. fewer women having fewer babies, and that means as a protected -- percentage of the economy, the number of workers available is going to be smaller. you fill that gap with immigration, politicians who want to limit immigration are this point playing with fire. francine: i'm playing with some of the bloomberg visual data, and it is showing us -- you can rate, soow fertility that an anything we have in europe. doesn't mean that you can make up for it with immigrants? thehat is what helped united states in the past, and what is hurting japan as they have a cultural bias against immigration. there is a threat to the u.s. right now. the u.k. has had a lot of immigration over the past two

years and does help raise the labor force, raises productivity and potential growth rate. now you're talking about limiting that in the u k as well. tom: is this a live or dead meeting? >> there is not going to be any kind of rate decision. tom: michael mckee and tom keene not helping the birth rate of the unit states -- united states. that is it for this hour. we will continue this discussion. we are joined from the bank of america u.s. trust. this is bloomberg. ♪

a

tom: this monday morning, will janet yellen hold a live set

meetingwednesday -- fed wednesday? kaine go to and philadelphia. this is bloomberg surveillance. i'm tom keene. francine lacqua is in london. cleveland to philadelphia. i don't believe i have seen a seismic shift like this before. francine: we have seen a seismic shift in bonds. overall we look at politics, markets and central banks as we await the boj and the fed. taylor riggs.king >> clinton and tim kaine

appeared on 60 minutes. >> i'm not going to engage in fest hed of insult seems to thrive on. whatever he says about me he is perfectly free to use his own airtime in his own space to do. i'm going to talk about how he has heard people. >> dnc chair debbie wasserman schultz will resign at the end of the week over leaked e-mails. the messages show committee staffers tried to undermine bernie sanders. there was an overnight shooting at a nightclub in fort myers, florida. as many as 17 people have been shot. three people were taken into custody. visits northern ireland to discuss plans for leaving the european union.

she will talk about the status of the border between northern ireland and the republic of ireland. about 30,000 people crossed the frontier every day. the frontier every day. tom: let me do a data check. futures, oil in search of a bid. the equity market, 12.65. remarkable. what do you have on your data board? francine: i'm looking at european stocks. i don't often look at european data but it has driven confidence and it has not really

been dented by brexit. falling with cold. central banks leading in the u.s. and japan this week. got the wrong chart up. we have been flying along this morning. there is the euro dollar chart. euro rolling over. you really wonder where parity will be. towards a trading range a weak euro. you wonder where that will become labor day in the united states. francine: i wanted to do some corporate news because it is

monday. we understand some of the detail. this is the picture for verizon. 1992.rings it back to yahoo! beating verizon for a couple months and now you can see the difference in price. tom: let's turn our attention to philadelphia. it has been cleveland cleveland cleveland. has shifted from the land of the indians to the land of the phillies. obviously it will be a starkly different convention. how do they jumpstart it day one? it's turning out to be the start of a convention varies in color to cleveland -- very similar to cleveland. debbie wasserman schultz had to resign over leaked e-mails.

the dnc was leaning into hillary clinton's candidacy and overtly favored her. the fact that she had to resign on the eve of the convention just shows that this party like the republican party is going to struggle to project a message of unity this week. that is something they were hoping to come into this convention getting over that hurdle. instead we find them just like the republicans struggling for a united message. tom: i would suggest most americans don't give a damm=n about the head of the republican party or the democratic party. what do they do day one to say we are different? they will come out with some speakers that will hopefully blow the roof off the house. they have bernie sanders and michelle obama this evening. michelle obama is a fantastic speaker.

they have a lineup this week with heavy hitters. phil clinton, barack obama, joe biden. -- bill clinton, barack obama, joe biden. they will talk about what a hillary clinton presidency could do for the country. francine: when can they put drama behind them? megan: i don't know if anyone will be able to put drama behind them this week. bernie sanders supporters are very passionate. they still feel in some respects this election was stolen from them. they will be protesting. this is a party that wants to say whatever you heard last week about disaffection, economic that, we are the party

brings you optimism. we have a vision for america. we want to put our imprint on the future going forward. that's what the democrats will be trying to sell this week in philadelphia. tom: megan murphy joining us this morning. ofding court over synthesis economic and investments is joseph quinlan. he has spent a few decades synthesizing where we are. is all this political mumbo-jumbo a wall of worry or is it just a distraction? >> i think it's a wall of worry. i'm watching foreign confidence in buying any securities. we are a big debtor nation. tom: does it get in the way of this bull market juggernaut? >> i don't think so.

numbers are getting better. we are the best game in town. china is stabilizing. the u.s. is leading the way in equity markets. francine: what should get in the way of these equity markets rallying? the world doesn't feel self in terms of investments and politics. there's nothing really that you say, this is great news. how do you marry that with the neck we market that continues going higher? >> it's the global search for yield. after brexit everyone threw in the towel and set the central banks will be printing money for all eternity. ec hedge funds going for the yield, equities dividend payers. -- you see hedge funds going for the yield, equities dividend payers. some of these trades are very crowded. we need rotation into cyclicals. that is starting to happen but

we are not there yet. francine: are earnings -- is it going to be a lot better only when central banks start hiking rates? underlying some consumer spending. the biggest thing is going to be capital expenditures. doldrumsill in the when it comes to capital investment. i want to see a shift towards more hiring and investment but i think that comes after the election, not before. tom: we have some headlines coming out. the swiss national bank you are talking about before is out with comments at the g-20 meeting. madam lagarde is there. it goes into the synthesis of all our economics and investment. the head of the swiss national bank says brexit is still not

clear. they don't need to adjust policy but he says they can cut interest rates lower necessary. want to thinktors centric. what is yahoo! going to do? what's the consumer discretionary going to do? it's a big wide world and these are all butterflies directly affecting us. >> i did not read anything concretely coming out of it. tom: thank you. i did not either. it was a photo op. >> you really have to look country by sector company to really dig out those returns. francine: this is very important. thomas jordan is saying for the first time that he is weighing options. -- if the ecb boe moves it directly impact

switzerland. will we see a move away from havens? or are we going to see much more money flowing into those kind of currencies? >> we could but if everyone is going to cut their rates and the united states is perhaps pushing higher or on hold a stronger dollar becomes a worry for the multinationals. could see a shift in currency markets that sets up problems in q3. we don't have the underlying demand when it comes to price. tom: joe quinlan with us. i couldn't believe over the weekend the equity questions i got from people. total disbelief where the stock market is. on international relations, on europe, on nato and the democratic convention. coming up in this hour. ♪

francine: this is bloomberg surveillance. i'm francine lacqua in london. tom keene is in new york. taylor: erickson is looking for a new chief executive. the ceo is quitting after 6.5 years. his departure cap to a turbulent period for erickson after reporting disappointing results. shares of nintendo plunged in tokyo by the maximum allowed, 18%. the company says the financial impact from the worldwide pokemon go craze will be

limited. yahoo!'s long fight to survive as a standalone company comes to an end. buy yahoos core internet assets $4.8 billion. it's likely to end the reign of yahoo! ceo marissa mayer who tried and failed to reinvent the company. that's your bloomberg business flash. lacqua, i'm sorry. was one of the street is talking ceos -- haveghtest talking ceos we talked to. francine: the problem is when you look at the share price, i don't know whether investors are expecting too much.

shareholders thought he could have done more and wasn't focused enough. tom: i think it's a problem of impatience. joe quinlan of u.s. trust is with us. outlook sherman's brutal. look at the stock when she took over. look at where the stock is now. i don't care if she did it, you did it, i did it. i'm sorry. she should be taking a victory lap today. >> she has done a good job given the hand she was dealt with. it's very difficult for any ceo to navigate that. tom: bring up colegate. we are talking equity markets. there's yahoo! in purple. a noticeably brighter portfolio. are you kidding me? what do you do with this?

these monsters are trading at nifty 50 multiples. >> if you own it, hang on to it. this is a great example of a company that lived off globalization. some dollar risk. great managed company. if you own it, keep it. is very: colgate exposed to the emerging markets. unless they go up quickly you don't really see who they are going to sell their products to. >> the worst is over for some of these emerging markets. south africa, russia. the problems are known. they are reconciling supply and demand. are all good markets. the emerging markets story still involves. that will be their

bread-and-butter for something like procter & gamble. francine: it is tough on margins across the board. >> absolutely. nestle has the same problem. i think good companies with good footprints can't work that out -- can work that out. all that is coming for these companies. tom: is the expense reduction there to rationalize reduce nominal gdp? reduced revenue stream, revenue growth? no pricing power, world is coming to an end. or do they just expense cut their way to stability? >> it's a little bit of both. you have to really be diligent about managing your costs. i think nominal gdp growth globally a little bit higher in asia-pacific and some developing markets.

ofon't think it's the end the world when it comes to undermining consumer demand for consumer staples. tom: joe quinlan with us from the u.s. trust. francine: overall stocks climbing. business confidence in germany was not as bad as expected after brexit. economists are, feeling a little bit better because it is one of the first indicators. look at that. bonds falling with gold as the dollar gaining before central banks meet in the u.s. and japan this week. ♪

tom: good morning, everyone. francine lacqua in london. keene in new york. there have been shootings in fort myers. not much information out yet. as you were saying, everyone worldwide on edge. francine: we know at least two people were killed. anything that involves a shooting or any kind of bad news people want to know about. we will monitor the headlines and keep you updated. tom: it also goes to my morning must-read. i put this together not because of paul krugman or the new york times. it was in a easily accessible reality of our times. i say this with immense respect for our law enforcement. last year there were 352

murders in new york city, a bit higher than the year before. 2,245r below the murders of a long time ago. 58 million tourists wander by my front door in new york every year. the u.s. teen birth rate has fallen 60% since 1991." in the media up were we are versus other years. too,really believe that, tom. we always talk about the companies that fail. we are not talking about the new ones coming along. these social indicators are very important and they are forgotten. tom: i would take it even over to life expectancy. talking about how good we have it in terms of poverty and other

human data points. the fact is we are all living longer. i'm going to be here forever, frenzy. -- francine. francine: and somebody has to pay for that, tom. had,uge problem japan has you can talk about it as a haven but they are not having enough children that can spend for the pensions for the older folks. it just gets ever worse and becomes an economic nightmare. tom: i believe that. i'm sorry, it beats the alternative. we are in pretty good shape. attribute after attribute. that new york city murder decline is stunning. >> i have written a lot about what is right with america. you can just click down. we are talking ourselves under the couch of negativity here.

francine, do you know the phrase nattering nabobs? it is maryland-ish. spiro agnew, from another time. nabobs ofing negativity. that's what i am. now i have to have a nattering nabob tease. we are here with joe quinlan of bank of america u.s. trust. coming up, but an important conversation with james stavridis. this is bloomberg. ♪

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francine: this is "bloomberg surveillance." london, tom is in new york. here's taylor riggs. taylor: a new poll indicates

donald trump got a postconvention bounce. the cnn-orc network survey has him ahead of hillary clinton, 44 to 39. to 46% after the convention. in fort myers, florida, there was a shooting overnight at a nightspot. there are at least two debt and more than one dozen wounded. as many as 17 people may have been shot. three people have been taken into custody. in germany, a syrian refugee himself up -- blew at a music festival. he was allowed to stay in refugee housing last year. he had tried to kill himself twice before. it was the fourth attack in germany in the last week. the olympic village in rio de janeiro has flunked a stress test. australia will not let athletes stay there. toilets, leaky pipes,

and exposed wiring were found. global news 24 hours a day, powered by more than 2600 journalists and analysts in more i am taylorntries, riggs. this is bloomberg. tom? tom: james stavridis, 30 years in the navy, joining the navy when it was the last thing you wanted to do on the planet, he is now at tough to university. his book is "the accidental admiral." look at june of next year -- his in june of next year next book, "the accidental vice president." when i look at nato and the fragility of germany, how can our next president assist germany to the new germany that they need? james: first and foremost, you have to strengthen the transatlantic links. i put nato at the top of the list, taking potshots at an organization that has created

real stability in europe as well as contributed globally. we need to stand together with germany to say to our turkish friends and balancees, let's have and justice and reason. there are values and pragmatic things we need to do. tom: taylor riggs had in the news the idea of mr. trump doing better than good after the polls. a lot of people in america of all political persuasions look for checks and balances to adapt and adjust any president at all. does the pentagon have an appropriate check and balance? does the state department have an appropriate check and balance given any new president's aspirations? james: when we talk about checks and balances in the american system, what we mean is between executive branch legislative -- executive branch, legislative

branch, and judicial branch. i am confident those are in place. state, arement of part of the executive branch. speaking, both state and defense contribute to checks and balances. but at the end of the day it is executive branch against judicial branch, standing against legislative branch. those are the foundations of the republic. i am confident that they will weather any storm that is coming. francine: if donald trump wins, embolden russia and vladimir putin? james: i think it will. of whatest round happened at the dnc, in crime you have to say does motive meet opportunity? you have to be pretty suspicious of russian activity. it looks kind of supportive of

what is happening on the trump side of the campaign. that is all speculation, but it is worrisome. very concerning to a lot of foreign investors that the president of turkey, esther erdogan, is trying to neutralize his opponents -- mr. erdogan, isn -- mr. trying to neutralize his opponents because of the kiddo. student ofis a history. are like -- i think what is happening is a real walk-back of human rights. we have seen some horrific reports from amnesty international in the last 24 hours. we need to all of us be talking to our turkish colleagues and say this is not who you are as a modern nation. tom: we will not make light of the idea that you were considered to be a vice presidential candidate for secretary clinton, and maybe

there is a job for you if she attains the presidency. but i seriously want to suggest the idea of oceans as buffers for america. away for a long ways lot of americans. what is the next president do with the ancient american idea of oceans as buffers? know, i am as you sailor, spending will over three decades on the seas. my next book is about the world's oceans. it will be out next june. i think we need to factor in the buffer aspect but also the way these oceans connect us. the british always say, "the ocean is one," meaning we are all interconnected by them. this is the way we connect. we need to pay more attention geopolitically to what is happening on the oceans. may, but at the

same time we have more countries wanting to be more unilateral. what kind of world will we look at in three or four years from now? james: i think this is a fundamental deconstruction of globalization that we face. it would be an enormous mistake to walk back from that. while there are always frustrations in the interconnections of the world, the idea that we will build walls, be they on our border with mexico, oceans that will somehow buffer us, it will not work. we will see interconnected -- the question is, how do we bring private/publicy, connections together to facilitate working well? tom: i have to ask the appropriate news question. have you spoken with secretary clinton in the last few days? james: i would leave any conversation i have with any political actor in the category of private communication.

this election is about finding the right kind of candidate for the country in terms of experience, temperament, the team he or she is going to bring together. i will -- i am confident americans will make a great decision in november. tom: the colors of the fletcher school -- the same colors as the philadelphia flyers. greatly appreciate it. as the democrats moved to philadelphia, we will continue to look at some of these nuances. forget about the talking heads. anita dunn is not one. -- for the white house committee case is director, she is a breath of fresh air. this is bloomberg. ♪

francine: this is "bloomberg surveillance." i am francine lacqua and london. tom keene is in new york. nicolagetting news from sturgeon from scotland, where she is addressing consequences of the u.k. vote to leave the eu. she says there are early signs the u.k. is heading for a hard and soft brexit. keep -- shes to says they should have an explanation of what a leave vote is an practice for scotland. we know that theresa may is visiting northern ireland to discuss the irish border after brexit. .o brexit will continue this is the main message we are getting from both parties.

to the "bloomberg business flash" with taylor riggs. taylor: the biggest discount airline says that it may have to lower its fiscal 2017 profit forecast. predicts it will drop a percent through september. -- 8% through september. the buyer is g3 and the deal has a $653 million price. donna karen stepped down from her tom: i love to speak to a needed done? why is that? -- i love to speak to a needed done -- to anita dunn. not only does she have great skills in the democratic party but also just the general

industry of getting the message out. wonderful to have you with us. you have said that in terms of any convention, it is getting to the acceptance speech. let's back up. what did you think of the opposition's acceptance speech the other night? anita: the opposition's acceptance speech was totally consistent with the opposition. it did not present a very positive view of america, which is what people want. they want to know how we get to the next place and it is a better place. mednax, dark, dystopian whatever you want to call -- mad max, whatever you call it. tom: what i find fascinating is, you get to go next. you have this huge advantage in philadelphia of coming after cleveland. have you seen that advantage greater to be the follow-on? advantage i think the

in being able to present a contrast of ideas to unite the country and move it forward. what hillary's campaign is about is in or must review will see it -- is enormous. tom: what is the message you would advise for secretary clinton? what would be the surprise new wants she tries to move to the middle and get undecided and disaffected republicans? anita: i do not think there is a surprise message out there. what she needs to do and what i believe the convention will do is tell her story in a way that is relative to the plights of everyday people. the fights of her life are the fights of everyone's life, and to do that connective tissue in a way. she does not always do a great job of doing for herself, but this week the convention and the speech can do it for her. francine: the democrats are

kicking off the convention and trying to trade themselves as a butmore progressive party, the democrats face a unity problem just like the republicans. anita: i think the unity problem is the republican party exponentially greater than in the democratic party. senator sanders has endorsed hillary clinton and says he will campaign for her, and he believes donald trump, keeping him out of the white house is the most important thing, and helping to elect hillary clinton is what he will help to do. that is very different than what we saw in cleveland last week. the release of 20,000 e-mails friends to lay waste to the months of the clinton campaign. anita: as the convention begins today and as we go through the week, we will see a democratic party that is united around our values and the importance of electing hillary clinton and

keeping donald trump out of the white house than anything that divides us. the chair of the democratic party announcing she plans to step down at the end of the convention, that has done a lot to turn down the temperature. tom: i believe i saw a happy kaineary as she and mr. wandered out on stage. there was a change. insiderthe ultimate here. how happy did she look to do the ballet with mr. kaine on stage? anita: i agree with you, tom. she was relaxed and happy and natural and just really excited. the two of them have great chemistry, which -- we chatted about vice president a few weeks ago. single most important thing -- be qualified and have great chemistry with the candidates. you saw that and you could feel it. very different from the republican ticket. years.ke us back 4, 8

was it the same way with barack obama and joseph biden? anita: when it was unveiled, you saw the same kind of energy and excitement, and really a sense that something had come together in just the right way, and that a partnership had been born. this was exciting because tim kaine and hillary is exciting because you look at it and the man is in the second role, something we are not used to seeing here when it comes to presidential tickets. that is an exciting thing all of its own. francine: conventions are about pulling the party together. how does hillary clinton win independent voters? does she need to act differently than she has in the past six months? anita: i think what hillary clinton needs to do and what the convention needs to do, especially for independent voters, is to demonstrate that hillary clinton has the ideas, and to move this country forward

in a way that really does help everybody. not only that, but that she has the abilities to do that. what you will see in the convention this week will be both her ideas for moving the country forward, but also people will talk about her effectiveness in getting things done. those are two things the opposition does not have. tom: thank you so much. anita dunn. with senator obama, truly back when it was hope and audacity. coming up, mark halperin and john heilemann, "with all due respect," 5:00 p.m. this is bloomberg. ♪

tom: yahoo! forex report. let's get right to our foreign exchange report. yen weaker, euro churning. 1.3126. one, amc andiny

the movie theaters. francine, when was the last time you stepped in a movie theater? francine: it has been too long. this is what happens when you have small children. is, amc to buy carmike. francine: david is here. what do you have on the show do not think we have anything that tom does not know about. -- dave cody.me and another guess with very strong views about what stocks we should be getting. we will be talking to people about it on "bloomberg ." tom: our distinguished guest

right now is alex sherman of bloomberg news. seeas children who did not dad this weekend. pick up one of the charts here. we are going to look at yahoo! short-term, google, yahoo!, the big underperformance. not doing bad, and then they give it up recently versus google, alphabet. the attitude is "she never had a chance." i'm sorry, she should be taking a victory lap. i understand all the baggage. she created shareholder value, right? she was the ceo when yahoo! owned alibaba and when alibaba skyrocketed. that is where a lot of that comes from. can she be credited for that? i suppose, maybe.

she was not really brought in to be a holding company for alibaba, she was brought in to turn around the core business. tom: she has had to turn around a train wreck. they were at the 100 gige alien illions -- the 100 gaj dollars. the share price speaks, doesn't it? are: i agree that if you saying it is an impossible task to turn around, i agree. she probably has been given too much flak for the unbelievable job it would have taken to truly turn yahoo! around. you can look at the other examples of legacy web companies that have not turned around. those,s a litany of extremely view that have definitely turned around. tom: francine, they all tumbled. francine: i do not know if expectations were too high, but at the end of the day, what shareholders think is that

marissa mayer tried but that she failed to turn yahoo! into the begin that it was 10 years ago. will she have to go? alex: she is going to go where she has two or not. she will be compensated quite richly for leaving. all in all, you tally up the stocks, the options, the severance, she will be paid more than $200 million for her time at yahoo!, an unbelievable amount of money considering she has only been there a few years. whether or not she has to go is a different story. we have been reporting on the process since at least january. breaking 15 stories in the intermittent time because marissa mayer, from a lot of the people we spoke to, did not want to sell the company initially, and here we are today. francine: thank you so much for the update. alex sherman there. joe quinlan, when you look at verizon and yahoo!, it is a $4.8 billion deal. is that enough?

joe: i am not sure. i do not get into the numbers. but it is emblematic of m&a, stronger companies picking up growth. as for the deal itself, i cannot give specific numbers. in the technology space there are winners and losers pulling ahead. you will see specific core competencies. youa is doing it, and now see it with verizon and yahoo!. this is going to continue. tom: there are few winners in every field. joe: it is harder and harder and we have more competition. china is very strong in the internet space. tom: this is really about the success of google and facebook. joe: these are monster companies that continue to push forward. tom: the core issue i heard 18 times this weekend is, what do i do with the equity markets? time of quality assets, whether it is currencies, equities,

treasuries, corporate ons. remember, the election is coming, but on the other side of the election, we still have a decent economy and their is room for the economy to continue to grow. do not give up on u.s. corporate america. tom: joe quinlan with us, and we will continue on radio on "bloomberg surveillance." interestingat an day, going into the fed meeting on monday. francine: reversing some of the earlier gains. watch for central-bank action. tom: francine lacqua and tom keene. "bloomberg surveillance." "bloomberg " is next, with the transaction with verizon and a small tech startup. ♪

broadening verizon. david: globalization and risk. g-20 finance chiefs signal

increasing anxiety over global growth in a new era of populist politics. alix: controversy ahead of the election. the dnc begins today as the head of the committee resigns ahead of another e-mail leak. jon: and/or a warm -- a very warm welcome to "bloomberg ." we begin with some breaking news with yahoo! buyingerizon is yahoo!'s operating business for $4.83 billion in cash. you have verizon stock up by .3%. verizon is buying yahoo! operations for -- operating operations