concern about conflicting versions of events involving the fired fbi director james comey. jeff sessions is reing federal prosecutors to pursue the most serious charges possible against the vast majority of suspects. a reversal of obama era policies that will likely result in more people going to prison and for much longer terms. the attorney general called the policy "moral and just." jeff seio: we see an increase in violent crime in boston, chicago, memphis, and milwaukee. st. louis and manotrs. a murder rate has surged 10% nationwide. the largest increase in murder since 1968. know that drugs and crime go hand-in-hand. the director can seems there will be cases when good judgment will warn to prosecutor to veer from mandatory minimum sentences.

theresa may says a cyber attack that is crippled some u.k. hospitals is part of a wider international attack. may said there is no evidence patient data has been compromised. hospitals have been hit by a so-called ran somewhere attack that shuts wards and closes emergency rooms, bringing treatment to a halt. demanding payment for the data to be released. similar attacks were thwarted in spain and in other countries. alking about expanding the laptop ban on planes headed to america. that restriction is ready in place for travel from some middle eastern and african airports. they could be used to hide bombs. a new outbreak of ebola has been

declared in the democratic republic of congo. they see ebola is suspected in the deaths of three people. there are nine possible cases of the disease. that sweptutbreak through in 2014 killed more than 11,000 peopl mobile news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. julia: liverobloomberg world headquarters in new york, i'm julia chatterley. scarlet: i'm scarlet fu. joe cole and we are 30 minutes from the close of trading in the u.s.. julia: the dollar fell and crude slipped back before -- under $48 a barrel. joe: the question is, what'd you

miss? a herculeancalls it a compliment. and the latest reading on u.s. inflation. chicago fed president charles evidence sees it as the possible data point that could slow down fed rate hikes. retail department stores are in focus as we wrap up the week in equities. let's take a look at the .ajor averages abigail doolittle is standing by. abigail: another close where we don't have all that much action happening for the major averages. the dow, s&p 500, and nasdaq down in very small ways. for the week, they are on pace for their first weekly decline in four weeks. the nasdaq is on pace for a fourth week higher. let's take a look at boeing. breaking news in the week on wednesday.

the company suspending some of the 737 max flights due to engine troue. one analyst said it would be a temporary disruption. and then the company just said that some of those flights have been resumed and we start to see a little bit of an uptick there. overall, boeing on the week down about 1%. investors trying to sort that out still. some of the biggest losers on the week. nordstrom in particular. downs, nordstrom, kohl's after all these department stores miss store sales for the first quarter. for nordstrom, it was the smallest. it really does seem to reflect the shift on the part of consumers toward online away from the brick and mortar. -- and analyst says there is no light at the end of the tunnel.

it wasesin class and coal is down 9% on the week. march and april was more encouraging. perhaps it will come through. calling a retail evolution -- revolution. amd,a, electronic arts, they reported very strong quarters. the strength this time is from the data center. beating earnings by 13% they think the guidance there is conservative. bit of a lift from nvidia. and we have matteo renzi saying the turnaround on track. a risk on or risk off week? it is a bit of a risk off week.

the s&p 500 down in the wk. the vix down slightly and have been higher. take a look at bonds. the first time that has happened in four weeks. off tone for the week. miss?hat'd you the u.s. economy is showing steady growth but inflation weakened a bit. joining us now wthharts you have to see on today's economic data, bloomberg economics with g #btvhey met 8561. excluding communication services. excluding cell phone bills. guesswed a big drop and i you are trying to exclude the effects of that. walk us through this. >> the big surprise of the inflation data is that core

inflation came lower than expected. a lot of that has to do with this one off drop in cell phone contract prices that we saw last month as well. that officials were kind of saying that we're going to ignore that. people still think it's probably going to turn around. thatellow line here shows if you take that out, core inflation is slowing a little bit. exactly. the yellow line is the weakest since july of last year. if you take shelter out of that yellow line, the picture is actually a lot worse. a lot of the gains are being driven by shelter. we see a bit of a broad-based step down in core inflation right now. it may give officials a little bit of laws. for rate hikes later this year. scarlet: there is more to come

from the beginning of may. and i told a lot of other people about it. julia: multiply. scarlet: exactly. julia: expectations are back in line. a new chart here. it g #btv 8560. as i can see, expectations are pretty much in line. onwe also got data expectations today. actual inflation trends and the university of michigan consumer survey, a record low this month. inflation that we have the data on today. kind of like the core inflation. the blue end of the bottom shows the differences between the two. ou can see what they believe expectations are so important.

over the last several years and we've been dealing with such low inflation. fed beingf the worried about runaway inflation and that sort of thing, you can see that is really not a big concern. we are right in line with expectations right now. actual inflation never really has not gone above expectations. not a reason to be hiking rates in june. the direct and here is wrong and a bit of a concern. >> naturally, the probability of a june rate hike aim down a little bit today. investor still think that is pretty much a lock. where you saw a bigger difference was in that probability of getting that second or third rate hike. it came down a bit more. it is looking like it is more in doubt. third: you brought us

chart. a very eccentric chart. i'm not sure i understand it. it's about inflation tightening. the red line is the u.s. real short-term rate. >> right. this goes to the idea of what the fed is trying to do right now. they are trying to stimulate the economy and they have this estimate of what the neutral interest rate would be. that is the yellow line. this is the fed estimate that they publish on a quarterly basis. it is around zero, adjusted for inflation. if you adjust the actual current interest rate for inflation, given that inflation went down today, it pushes that real federal funds rate up. we can see that gap is closing more quickly now than just through the fed raising rates. it is closing because inflation is coming down a bit. raisingneed to start rates to get to neutral, it may

be closing a little faster than they thought. scarlet: the gap close around here in 2010 and and widened backup afterwards. >> fed officials were struggling to stimulate the economy. we are obviously not there today. argument for why they need to be raising rates right now is kind of taking care of itself already. joe: bloomberg economics reporter, matt basel are -- moesler. julia: wilbur rs lls us why the agreement is so them form it -- important for the future of the u.s. economy. the interview on bloomberg daybreak: americas. this is bloomberg. ♪

julia: the u.s. and china reach a trade agreement that provides access to natural gas. wilbur ross spoke with bloomberg daybreak: americas team this morning. wilbur ross: as you pointed out in your introduction, trade arranged for this is normally denominated in multiple years. days. been intensive there is a huge difference in how rapidly we got something done. second, these are quite specific transactions. with quite specific dates. essentially, all of these things are scheduled to start on july 16. in the world of trade, july 16 is a wink and a blink. the third reason is that we have

a lot more issues to deal with with the people's republic of china. we have these long-standing aggravations out of the way so quickly. for the pattern going forward. we have many more issues. the next task is figuring out a one-year plan. and some data pointsn tween, some deliverables in between. and once we get through the plan with success, let's work into a longer term plan. >> give us a peek at the one-year plan. should we expect a series of these sorts of deals coming out over the next year? or is it a different approach? wilbur ross: we hope to have deliverables. with trade, it has become a long-term debating society rather than something that is the result -- that is results-oriented.

and wenese government have become very results-oriented. if we keep that going, we will get a lot done. >> the things you addressed are things simmering for some time. and you have resolved them, it appears. what is next on your list? ross: the methodology is the same one we will use here. the chinese admitted their wish list, we submitted our wish list. we decided which of those items were achievable. that is what we focused on. the question is, what timeframe do we put on the issues we didn't yet address? >> they'regoing to say look, you have a 340 $7 billion trade deficit with china. exporting more isn't going to close the gap.

what will be on the agenda that will? >> it is a variety of things. ga gap is not just a ofis made up of hundreds items. there will not be one silver bullet. 300 odd billion to zero. that's not how it will rk >> are you trying to get it to zero? wilbur ross: we will try to get it as far as we can. the important thing is, as we are copper steer, we want to do it by increasing total trade and by increasing the ability of our companies to export. that is what will create more jobs here. number two is the trade deficit itself. that is the way we want to help solve that, with the beef. beef is a $2.5 billion market

that we have been effectively precluded from. your guess is as good as mine as to what market share we will get, but symbolically, beef has been a big year intent for the agriculture community here that has been going around for way morth a decade. >> it is quite clear, they want to make trade fairer. i wonder how you guys can come to a win-win arrangement. at the moment, it is win-win for china and lose-lose for the united states. wilbur ross: you can take things in isolation. but the fact is, none of the trade deficit comes from china exporting automobiles to the u.s.. there is an issue about the parts coming in and parts coming in from elsewhere soon after and

through other loopholes. the chinese do not actually sell cars here. that is not the problem. where our card deficit comes -- car deficit comes is europe. >> does this indicate a differt proach that takes off the table the cuen manipulation question? >> the currency manipulation quesonor the moment, at least, has been resolved. a function of the treasury department, not commerce. commerce has laid out very specific criteria as to what constitutes currency manipulation. the chinese, by that definition, are not currency manipulators at this point in time. julia: on bloomberg daybreak:

americ this morning. that pink tie, we approve. scarlet: some of the stories in the news right now. and the moment appeal a ruling that cigna can walk away from a deal. a judge blocked anth's takeover this year. he delivered a termination notice and will pursue a damage remedy. wells fargo's bogus accounts now number 3.5 million after the bank expanded settlement dates as far back as may 2002. will's fargo had reached a deal back in march to set up 2 million fake deposit and credit card accounts. spotify is taking a step towards going public by hiring byng to help it list on the new york stock exchange. they hired morgan stanley and more to help with the process. decided to not yet seek a direct listing or a more traditional public offering.

and that is your bloomberg business flash. joe: up next, we will be looking at three different charts shedding light on the chinese economy. equities, yields, commodities. we will cover them all. this is bloomberg. ♪

scarlet: i'm scarlet fu. chinese stocks of the world worst performers over the last month. we know the chinese officials are cracking down on financial risk. they are investigating regulators, arresting officials, tightening rules, and writing new rules. this is the shanghai composite

index versus the all caps world index. as measured, chinese stocks has lost as much is 5.8% over the last month. global stocks have gained as much as 3%. the last leg down over there. what that means is, this dirgence between shanghai stos and global stocks is now the widest since the late 2014. they have not trailed global stocks by this much since late 2014. it seems like it is a collective shrug of the shoulders when it comes to global market reaction because everyone is like -- ok, no big deal. now.: dot dot dot, for i am also showing you what is going on as far as the asia and the shanghai composite is concerned. but what about hong kong? i'm really excited about this because this is what we were talking about monday and tuesday this week.

the possibility investors will say that we are concerned about what is going on the didn't -- in the domestic stock. at is what i am showing you here. -- itt purchases by the was $450 million on wednesday. and we have that green circle. that is the most since february 22. the leverage crackdown has widened the gulf between these two markets. -- 21 month high. the lowest level since october. kind of what we were talking about on monday. to lookays interesting at where the money is leaking t. i want to talk about something we hardly ever talk about with respect to china. yield spreads or the yield curve. usually don't talk about the chinese government bond market all that much.

this white lie here is the 10 five spread. when you see spread compression, it is a sign of slowing growth and tightening financial conditions. between the fives and the tens, i put another line on here. bloomberg commodities and industrial metals sub index. it's not like it aligns perfectly or anything like that but it is interesting the industrial metals did peak and start to turn down right as those spreads started flattening. there was a similar lineup last november where it moves along. t is kind of an interesting inicator of what is going on liquidation with commodities. it might tell you something. control couldhat be with the rest of the global markets. julia: the longer end of the curve as well, not just at the front-end. super interesting. we will continue to

keep our eye on those. as we move ahead to market close, he see the dow, the s&p, the nasdaq not much change. a fairly slow-moving week in terms of the indexes for the last five days. this is bloomberg. ♪ . .

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uirks "what'd you miss?" u.s. stocks closing lower. the nasdaq holding on to its fourth straight week of gains. just tuning in live on twitter, we want to welcome you to our closing bell coverage every weekday from 4:00 to 5:00 p.m. scarlet: we begin with market minutes. a kind of ho-hum day, even as we got a lot of economic data. retail sales are little bit lighter than expected. inflation not enough to get anyone excited about what happens next. joe: i think we basically saw these same numbers almost every day this week. scarlet: even so, the nasdaq has managed to climb for a fourth straight week. just to give you a sense of how we have been slowly melting up, it was the worst week since

april 14. let's look into thblmberg here. this is group ranked returns. on a weekly basis, let's hear what happened over the past five days because it is all more interesting here. on thels, big laggards heels of some big moves in industrial metals. on the other hand, tech up by better than 1%. energy also gaining .3 percent as energy prices seem to have stabilized for the moment. retail has been a big theme because they are reporting results right now. dick's sporting goods off by --5% after overstating ebit. ebitda. and when resorts, up by 2.5% as themays upgraded not just but also las vegas sands on the prospect of multi-your growth. also, quick mention of nordstrom is well on a two-day basis.

yesterday, the stock plunged before it announced results, and then it announced results, and you can see they are. the worst hit of-day drop since november 2000 eight. department stores just cannot get it right right now. look at theake a government bond market. pretty big movedo today, and a lot of that coming after 30-year yield up. if we look at an intraday chart, we can see what really happened with that inflation report. pretty mediocre anyway you cut it. no upward pressure, no teity for the fed to excel rate it's hiking, so big downward move across the curve. julie: that played out in financials today as well as weeks played out future rate hikes. we also saw an impact in currency. you can see the bloomberg dollar index lower by .3%, taking out

the 200-moving day average as well. ultimately impacted what we saw as far as euro-dollar is concerned, higher by .6% there. a bit of relief for the euro. ll-yen falls to a low of 113.23 in the session today. it really was, i'm sure, a dollar story as we have pared back expectations. i just wanted to point out some of the biggest gainers today in emerging markets. .5%getting excited about move there, but you take it while you get it. scarlet: absolutely. joe: finally on commodities, not much happening in oil or gold. green across the board. but cotton the big gainer today, at its highest level in three years on strong export numbers.

demand is strong for cotton al around the world. and those are today's market minutes. scarlet: let's take a deep dive into the bloomberg. tech wasu earlier how the best performing sector of the week. we have seen a tech heavy nasdaq in the s&p 500 set new records, and this chart shows how that strong performance has boosted technology's waiting in the s&p 500. as compared to the financial white in the s&p 500, the line. tech h bn steadily gaining influence and is now almost 23% of the s&p 500. , but oflong way off course, tech is more heavily .eighted in financials were this is around late 2006. financials made up 20 2.3% of the s&p 500 and now make up about 14% tied with health care

as the second-most most heavily weighted sector in the s&p 500. joe: incredible regime shift from the east coast to the west coast. scarlet: i like that. julia: nice. tech a critical part of our next story as well. "what'd you miss?" retail in the spotlight this week as major stores reported earngs brick and mortar continues to lose share to online retailers. i want to bring in the chief equity strategist for bloomberg intelligence. great to have you on. happy friday. gina: thank you. julia: this chart, i love. one of my favorite of the week. you can explain what is going on the, but internet and e-commerce the word. for multilineweek retail. department stores either missed on sales or earnings, one or the other, sort of across the board. broader look at th

retail space, department stores are no longer representative of retail. it really is more and more what is happening with the internet retail group consisting of amazon, priceline, netflix, and the like, and specialty retailers, which come next week. next week will be a critical moment in time because specialty retail is a big part of retail. if specialty retail performs better than multiline retail, we could see ourselves dig out of this little hole we have developed week we've had slightly weaker data, concerns about the retail sector. gina: i think you make a good point, and this ties back to the chart scarlet was showing. you have lost a little faith the fed is going to increase rates. that has impacted financials. you have lost a lot of faith that metal prices are going to recover any time soon, and that has taken up materials and

industrials. what has been left is technology from a cyclic sndpoint. it is the only sector that is sheltered from a lot of those macro concerns that have bubbled up. if tech can continue to rise and sort of continue with that momentum, the market can remain relatively at ease. scarlet: you mentioned specialty retailers. are those growth companies? when you look at retail overall, those are value companies. gina: when you look at retail valuation, you have this incredible divergence. internet retail valuations are 56 times rngs as a group. could you possibly call that value? in comparison to that, any sector of retail is trading at some sort of normalized valuation. specialty, of course, looks like value in the face of that comparison. they are still generally growth companies if you look at your

standard definitions of what makes up a growth company versus a value company and you normalize that across the index. chart showingve a u.s. stocks growth premium is the highest in more than 10 years. the white line is the p/e ratio growth index. you can see at much higher than the blue line, which is the pcu ratio -- the p/e ratio of the value part. gina: that is the cseence of what has been happening the last several years. if you think about the biggest component for the value index, it is financials and energy. financials obviously have been in this secular struggle. we had a little boost post-election, but that is about it, and then you had energy, which meant -- which went through a massive recession. value stocks are pretty heavily lad wh some secular concerns. if you look at valuation, it

looks like a value company, and we are struggling with a little bit of thosdenitions. joe: we have a chart here titled valuation.on what is this telling us? gina: i think there's a couple of takeaways. the first is even though valuations are reaching new cycle has, we are back to about the level we are at in 1996. valuations areprty poor timing levels. the other thing to consider is the equity risk premium. if you look at the equity market and take the earnings deals, compare that to the bond market, are stillremiums very, very wide, which suggests to me that unless bond prices reset a lot higher jong investors back to the bond market, the equity market is still pretty attractive.

of people point out that valuations are not a very good measure for timing the market or anything like that. how does an investor use valuations if they do not work for knowing when we are at a top or bottom? how does an investor put that into their thinking? relativelook at valuations across the entire market. all stocks are approaching new valuation peaks, so what i'm looking for my best opportunity, i look at relative valuation is one of the factors of my analysis. that witho balance enings growth prospects, revision momentum, technicals, price momentum is incredibly important for short-term timing. a longtime when it comes to valuation can be anything more than a year. that is my definition. scarlet: sufficiently long time. when you look at the earnings coming out, beyond retailers,

beyond specialty retailers, what away? take gina: first quartewaso much better than anyone forecast. 70% of companies beat expectations. companies beat on the top line as well. part of it was the bar was low, but even so, we were expecting 9% earnings growth, which is the strongest growth base we have seen in a while, and we got 16%. w still a pretty strong growth rate. without a doubt, energy is the most volatile sector in the entire s&p right now, and it is producing something went double-digit earning growth because they had such terrible costs last year at this time, but even excluding energy, we are looking at 12% earnings growth, so looks good. we just happen to be either a slump or the consumer part is just the weakest part of the year. ul: we were saying future earnings productions were also really strong as we pushed

through betting season, how is th lking now? gina: that's the second take away. it has not been as good. that's where we lost a little bit of momentum. energy analysts have reduced expectations by the most among sectors. if you exclude energy, it is actually flat, but the trouble is we are not seeing a lotof upward momentum. that was all industrials and materials, and now that we have gone further in the earnings season, we have found a few weeks pot. a pleasure, as always. joe: coming up, cracks emerging in china that can further threaten the global growth narrative. this is bloomberg. ♪

for first time now word news. the associated press reports that russia's interior ministry says it has come under cyber attack. the news comes the same day as word of a large cyber attack that took over computer systems and hospitals across england today. appointments were canceled, phone lines were down and patients were turned away. according to a dutch cyber security company, malicious software affected more than five dozen computers 99 countries, most of them concentrated in russia, ukraine, and taiwan. deputy u.s. attorney general rod rosenstein will brief the full u.s. senate next week amid controversy amid president trump 's firing of fbi director james comey. senate minority leader chuck schumer's office confirmed

rosenstein had accepted the invitation. the time and date are not finalized. rosenstein wrote a memo critical that the white house initially cited as justification for the firing of the fbi director, but the story has since changed as mr. trump said he would have fired comey anyway. michelle obama is criticizing trump without even uttering his name. speaking at an annual health conference, the former first lady spoke out against the administration's decision to to makederal rules school lunches healthier. mrs. obama questioned why better food for kids is a partisan issue. as first lady, she led the fight toeduce childhood obesity. in china this weekend, president xi jinping will host 30 world leaders at the center of the country's soft power push. to forum is designed

solidifyismage as one of the world's leading advocates of globalization, and he is prepared to back it up i spending hundreds of millions of dollars onnfstructure projects around the world. pope francis is in portugal where he is to visit one of the world's most popular catholic pilgrimage sites. it is famous for being the place where three portuguese shepherd children said the virgin mary ,ppeared to them 100 years ago may 13, 1917. the pontiff will make two of them saints on saturday. officials say they expect around one million people to converge on the town. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. joe: "what'd you miss?" ofre are growing signs tightening out of china. industrial commodities have tumbled.

560 million dollars has been erased in chinese equity. how does this affect the rest of the world's markets? bloomberg macro strategist cameron price joins us now. let's dive right into it. you brought us a series of charts looking at the ripple effect china could have on the rest of the world, starting with this morgan stanley global trade leading indicators. cameron: my favorite one. this was put together by morgan stanley, which tracks global trade volumes, and it tends to lad emerging-market equity profits nicely. marked the downturn in 2008, the subsequent upturn. as you can see, is sort of heralded the upturn in portions of indian that has become widely discussed throughout the marketplace but has recently turned a bit lower, which may offer some degree of caution

that perhaps at least a tactical pause or pullback may be in the offing. scarlet: perhaps china is the driver of that. cameron: obviously, they are driving the bus, i think. scarlet: especially with the government cracking down on leverage. this has been something they have been talking about her months, maybe years, but it really kicked into high gear when xi jinping met with officials and discussed it in greater detail. we have another chart her showing how liquidity growth is slowing. shadow linning, basically credit and loans outside china's formal banking system. cameron: yeah. part ofbviously a big liquidity earlier in the decade and sometime around 2014, they really cracked down. this is the monthly percentage change and the outstanding amount of shadow banking lending. you can see earlier this year, and last year, really big uptick to the levels -- highest levels

we had seen in years, but i think the officials realized that maybe a little too much a little too quickly, so anecdotal and market evidence is that they have slammed on the brakes and that the impact of that increase the liquidity, speculation in equity markets and commodity markets, has come to a grinding halt, hence the downturn you have seen in both of those. nt to bring in my chart as well, which is looking at five-year chinese bond yields, and it kind of picks up with what joe was talking about earlier in the show and what we're seeing in terms of the selloff, not just in front terms as you would expect. the entire bond market has sold off pretty dramatically. i think on twitter, joe, you the chinese bond yield curve inverting, which i do not think that is any particular magic. the point is bond yields throughout the curve have moved

higher, and that is the white line on this chart, which is the five-year yield, chinese and thent bonds, turquoise lime there is the ratio of hong kong-listed chinese shares to shanghai-listed chinese shares. sort of a good measure of the impact liquidity conditions, and as you can see, the lower the turquoise line is, the more hong kong has outperformed, the more shanghai has underperformed. julia: that is basically money going from onshore to offshore. just want to make that clear. there was a great quote from may the eighth -- the market should not exaggerate any volatility in stock bond effects or property as a systematic risko deter regulaon and deleveraging. do you think the bond market, the equity markets here are complacent? cameron: in the west or in china? what: firstly, even with we are seeing in china, and then take it to the west.

cameron: china -- we have to understand they are not free markets as we know them. credit is allocated not necessarily by price but by administrative dictate. "the wall street journal" today is running a story that the authorities have said you're not a led to sell stocks, so they take a very top-down, if you will, policy viewpntn terms of financial stability and when they think things are getting a little too hot, a little too cold, they try to push things back to the middle. joe: when does the rest of the world care about china? we have seen incidents. the blue effects around the world. after the yuan devaluation, we saw a ripple affects around the world. why does that sometimes happen and sometimes not? none of this is having any effect. cameron: i would not say it is hango effect. joe: it does not seem to be a macro thing.

>> you could argue it is not necessarily a macro thing even in china. a year in your change in the shanghai composite index and year on your change in retail sales, since the crisis, it is actually kind of negative. in china in particular, the stock market is not the economy. the economy is not e ock market. where it could potentially become systemic is it authorities slam on the brakes and things come to a grinding halt and they are not able to gear up. they punish the accelerator again and they are out of gas, in which case, you have a large decline in demand for the rest of the world and anyone who exports to china will be affected. joe: thank you very much. julia: we should have gotten the national congress. no matter what these guys do as far as policy is concerned, enough so that everything is for you and we get to congress.

scarlet: maybe that is what global investors are thinking. is ready tos japan take action. should traders prepare? this is bloomberg. ♪

julia: "what'd you miss?" have bond yields climbed too high for the bank of japan? you can find all the flowcharts using the function at the bottom of the screen. i love this story. earlier on in the week, it appears the governor of the bank of japan suggested that the run rate for their bond purchases was far less than expected, so they said they were going to buy ¥80 trillion this year, so the bond rate right now is ¥60

trillion. are we looking a self tapering? the reason why this matters is this is the 10-year, if you remember. we are steadily climbing towards that threshold, so the question is if they are effectively self tapering, do they allow yields to cross that threshold, or do hey/them back down again? we were having the conversation with carl in bloomberg markets, and he said they are targeting prices. do not worry about the quantity. it is all about the yield levels, so that threshold remains. if your commitment is strong enough, you don't actually have to spend the money . classic central-bank adage. scarlet: something about peter pan? remember that? central banks are powerful like peter pan? coming up, gardner denver gdi

making a trading debut today. this is bloomberg. ♪

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of the billboard music awards just by using your voice. the billboard music awards. sunday, may 21st eight seven central only on abc. mark: the white house denies that president trump as then director james comey for his loyalty during a white house dinner in january. press secretary sean spicer dismissed the account during today's daily briefing and said the president wants "loyalty to this country and to the rule of law." an associate of the fired fbi director confirmed today that president trump asked for the directors loyalty during that private dinner. the associate with knowledge of the conversation confirmed that account in "the new york times," saying that it is accurate. in a tweet us morning, the president had this warning for

mr. comey if he plans to go to the media in the wake of his firing -- following his tweets about mr. comey, the white house refused to say it mr. trump secretly records his conversations. 25 people dead and dozens wnd in a suicide bombing in pakistan. the apparent target was the deputy leader of pakistan's senate. he escaped minor injuries. islamic state has claimed responsibility for that attack. two u.s. astronauts made a milestone spacewalk today. the 200 such journeys outside the international space station, but a water leak in a tube of one of the astronaut's space suits shortened that walk. still, they were able to complete all but one of the scheduled tasks in that

four-hour operation. mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market action. joe: you said it was a ho-hum day. we have had a lot of ho-hum days. so much attention to the lack of volatility. i keep expecting to see it on the cover of a magazine because everyone is so obsessed with it. chart, but at this it looks like the left side of the chart is the vix versus the realized volatility. the right si i the htogram

distbuon. we are right in the middle. the vix basically could not be any more normal for what we have seen than what you could get. this is right in the center of the distribution. is right in the center of that bell curve versus how it relates to realized volatility. if you are interested in how quiet things are, iorthe vix and just look at the actual market and see how little it is moving. it is not some crazy sign of complacency or anything. julia: the minute you get comfortabl with panic anyone you're not surprised until you are surprised, the fact that expectations are in line with what actually happened. scarlet: so ring on the paranoia once again.

jul: actly. scarlet: shares of gardner denver climbed in its trading debut with shares gaining 6%. >> we did something very unique, and something very unique to with ans we share nte organization, 6100 employees, part of the equity. this was thanks to the idea and strategy about creating ownership in the company. 6100 owners in the company. every employee in the company is getting 40% of their base in equity.

as we have 6100 employees working who have a passion about improving what they do, we will have a very successful time ahead of us. >> you are an industrial company who makes compressors and pumps for energy industry, industrial industry. why get that gertie -- factory workers this equity? >> it is a great way to create ownership in the company. we say that you can stop one person or 10 people. you cannot stop 6100 associates always going toward a unique always competing for the areholders, so it is a very unique and exciting time for us. >> when you think about that mission, you have spent a lot of time under the auspices of kkr over the past few years and transformed the company. where do you look to go from here? where are your focus is in terms of investment going rwd? >> the transformation we did,

the way we like to say it is we are still in our second inning. this is just the beginning of a great long-term ow play. we have 35% we play in a more than $26 billion market highly fragmented. we have, thiscash tremendous room for us to grow. >> more than half your cash last year came from selling to industrial clients. we've heard a lot of banter from the u.s. administration about by a american, higher, boosting manufacturing here in the u.s. will this have an impact on gardner denver's business going forward? >> we have 37 manufacturing sites globally, so we are able

-- what we make in the u.s. primarily stays in the u.s.. what we make in europe stays in europe and also in china, so i think it will help tremendously. not only because of that, but the uniqueness of our products that are helping save energy consumption, and this is something a lot of our customers are really looking forward to. >> going down the chain then in terms of where you collect your revenue, about 1/3 comes from the er industry, which has been frankly battered over the past couple of years. what is the expectation for the health of the industry going forward. our profitability accelerated and grew even more dramatically than that. streaming energy business

is exposed to the best secular markets in the market today. not only that, but where we play , it's in the basin. is breakeven price for oil $25 to $30 and the breakeven price for gas is $2.50, so our customers continue to expand .roduction the most recent production facility you saw it is neither affecting our orders nor how our customers are producing. >> when i think about the industry you do play in, it is very fragmented. you do have cash now going to pay down debt from this offering, potentially freeing up debt.- where do you look to buy versus grow organically? >> we wanted to d lever -- delever. .ight now, we're at four times

we would like to reduce that to two times by 2018 or so. we ctie to see great momentum in our business. we see high fragmentation in the industrial segment, in the energy segment, in the medical segment we also serve. right now, we have put together the capital allocation policy, and we are looking at the market in a very aggressive way. scarlet: thiisloomberg. ♪

plan toresident trump's repeal and replace obamacare is put on hold as congress deals with the fallout from the firing of fbi director jam comey.

earlier this week, bloomberg international's economics editor with a mckee spoke former congressional budget office director discussing the next steps for the health bill and how he expects it to turn out. i think younate, are more likely to wind up with something like the cassidy lls plan, which really goes involves a lot of decision to the state through waiver autri. that is the lightest touch approach in which you can try to hold together this shaky coalition that senate republicans will have to use to move forward. >> paul ryan s en all about waivers, particularly for says, statesas he can experiment. what are they talking about when

they talk about states experimenting or having flexibility? >> there is plenty of room for making medicaid work better. the basic idea is medicaid has been around for a long time and it has bipartisan support. the thought that you could just wave your hand and take north of $800 billion out of medicaid, as the american health care act does, and think that you will not dramatically reduce coverage mean, it's noti planetary. the math does not work. mike: the other debate is what you do in general about health care, particularly cost. th is something you have been writing on and the subject of this conference. >> at is the great shame in terms of this ongoing turmoil over repeal and replace. for most americans, we lose sight of the fact that 155 million americans are covered by employer-sponsored insurance. the number of people on exchanges is 1/10 of that.

the exchange coverage debate has been getting all the attention, but for most americans, what will drive the cost is what we're doing on cost and value, and almost all of this debate ignores those issues. mike: technology -- is if the answer? >> it is one of the answers. we need to change the way we pay for health care, paying for service towards paying for value. that will be partially driven by changes we pay for in health care, and we need more people to take responsibility for their own health, so it is a conversation -- there is no one magic bullet. with one of the issues republicans voting on it without knowing what was in it, that there was no cbo score, but it will be tough to score a bill like that because reltdepend on how many states decide they want to opt out of these programs. how do you score something like

cbo, and can we trust numbers? >> cbo is a highly professional organization and does a terrific job. it has said it will be scoring the american health care act. the score will be out in something like 10 days or so. it is difficult to score something where you have the waiver authority and state option alley. in the past, was cbo has tried to do instead of going state-by-state and evaluating which state would do what, take an aggregate approach and say a quarter states will do text and evaluate from that perspective. do not expect the results to be in thecally different fairly disastrous score the cbo issued on the previous version of the house legislation before all the additional amendments. i would be shocked, for example, if we did not wind up with a cbo score that showed more than 20

million people lose insurance in 2024 because of this new legislation. julia: does not give one great confidence. the vice aiat the inaugural light forum in california. technology is in boston this week. we will check out a nonprofit information hub for robotics. this is bloomberg. ♪

joe: bloomberg tech has been in boston all week. it's home to more than 20 robotics companies that employ nearly 5000 people and generate one point $6 billion in revenue. here is a closer look at mass robotics, a nonprofit dedicated to fostering young, boston-base

robotic startups and keeping that talent in town. this autonomous drawing belongs to american robotics, one of the handful of startups based here. massachusetts.n >> the nonprofit started in 2014 and opened his .5,000-square-foot facility >> a start up escalator is a new concept. this model has been very but when it comes to hardware, there is no organization there to help take a validated prototype into a finished

product. >> products in the works include gear components and 3-d printers. according to the director, that number will grow. >> right now, we have six companies and two more companies moving in, and we can grow to about 30 companies in this space, and, hopefully, as we grow within the building, we will be able to house more than 100 companies. >> founded by leaders in the , startups can benefit from mentor ship and help with funding. >> we do not fund ourselves, but we work with a lot of the local --s -- a lot of the local bc a lot of the local vc's and know which ones are working in robotics. fundingy $1 billion of when two companies in california last year.

103 million dollars to companies in massachusetts, but the massachusetts company is growing, attracting sponsors and partners from massachusetts and outside the state. >> a lot of partners are looking for investment opportunities or , where thes innovators are focusing now. robotics, the technology is reaching new heights. >> joining us now from boston is bloomberg's caroline hyde. details of this massive international cyber attack today, ran somewhere -- ransomware at the center of the attack. can you explain to us what it is and the scale of the attack? i've read reports of more than 70 countrieinlved.

caroline: 74 is the latest i've heard. 74 countries, 45,000 attacks. ransoms as though malware is when the computer is basically locked. there are many reports this has gone through the microsoft operating system, which has not been substantiated by bloomberg, but overall, the computer is locked and you cannot access your data unless you pay money via bitcoin, which means you never know who your attacker was. of the300 being asked national health service of the united kingdom. hospitals being shut, those wanting chemotherapy unable to get it today, emergency wards under great stress, so it is affecting key infrastructure. in spain, there talking to telephone companies -- they are

talking to telephone companies affected. fedex coming out and saying it, too, has seen a slowdown because of a cyber attack. this is worldwide. effectgest brunt of the -- russia. it seems as though russia has come under significant stress from this particular attack, and interestingly, there were reports this all stems from a from the nsa, the u.s. security agency, and they thought much of their own malicious software developed by th h been stolen, put out on the internet, and now is being used. scarlett: this is spreading as well because of a microsoft flaw. presumably, microsoft has come out with a fix, no? caroline: the fix has been put in place, but this is infrastructure used by old, antiquated systems.

the biggest employer in the united kingdom has rather old technology at times, so if you have not got the latest update or the latest fixes, this has left you vulnerable, so we will keep you abreast of all of it throughout the show, but we will have to see how this uol. 74 countries at least, 45,000 wanted, and if they are $3000 r p, they will be making quite a lot of money it seems -- if they are wanting $3000 per pop. joe: this is real-world ramifications, affecting the organizations of possibility -- organizations' ability to deliver service. >> we've had prime minister theresa may coming out and trying to give people some calls for relief. your ownot believe personal patient data has been affected by this or compromised. out is purely locking you

of systems and demanding money to access your data, but of course, that stops hospitals serving patients as they showed, many a hospital coming out and saying lee's just come to us unless it is an emergency. this is really a threat and one that we have heard again and again when our very infrastructure is hit, when we rising, itecom really strikes at the core of society. julia: tell us what is going on in boston, give us a tease for what viewers should be looking .t caroline: if you see behind me, a few robots we will be i -- we will be eyeing. we will see how mass robotics is helping started to the area build more robots.

we will look at some key boston companies. trip advisor being one of them, and draft kings. they are speaking to the leaders of those businesses. julia: that robot looks vaguely threatening, or maybe is waving to us. all this week, bloomberg technology is live from the tech hub of austin with an in-depth look at regional innovators. tune in live on bloomberg television and radio from new york. this is bloomberg. ♪

scarlett: world leaders heading to beijing to a summit promoting the belt advert initiative. joe: on sunday, i'll be looking at the north rhine-westphalia -- germany's most populous state hlding midterm elections. julia: president trump hosts president erdoga

a lisa: i'm a alisa parenti from washington and you are watching "bloomberg technology." rector james comey

has declined to testify before the senate intelligence committee. the committee had hoped to hear from comey following his abrupt firing this week by president donald trump. deputy attorney general rod rosenstein will brief the full senate next week amid that controversial shakeup. then it minority leader chuck schumer's office said rosenstein has accepted the bipartisan invitation -- senate minority leader chuck schumer. canada's finance minister told the treasury secretary, steve mnuchin, that he rejects u.s. tariffs on imported canadian lumber. prime minister justin trudeau said he might consider retaliating with tariffs of his own. china's president will host 30 world leaders at the center of his country's soft power push. solidifyis designed to his