-- anti-poverty programs. he plans to cut social programs for low-income americans, a crummy to a congressional aide and a white house document obtained by bloomberg news. democrats say the budget reveals president trump's true colors. the chairman of the oversight committee plans to speak today with a former fbi director james comey congressman jason chaffetz says he is going after any records of comey's meeting with president trump. officez plans to leave june 30. the nation's longest serving governor is on track to win confirmation as ambassador to china, according to the associated press, which says that the senate will vote today on iowa governor terry branstad's nomination to the key diplomatic post be he shares a decade-long relationship with chinese president xi jinping. he will be cast to work with chinese on north korea's

advancing nuclear weapons programs. in thailand, more than 20 people have been wounded in a bombing at a bangkok hospital. the blast took place at a military facility that is also open to civilians. a police official tells the ap that investigators found traces of batteries and wires at the scene. brazil's top court has stopped a scheduled ruling on president michel temer. resultegation made in represents a potentially emer,ficant blow for tm whose administration has gone from one crisis to another since he took office a year ago. his predecessor was impeached and removed for alleged corruption. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪

julia: live from bloomberg's world headquarters in new york, i am julia chatterley. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. we have 30 minutes from the close of trading in the u.s. julia: stocks rising for a 30 day compression 201-month high. joe: the question is, what you miss? scarlet: president donald trump meets with israeli prime minister benjamin netanyahu pursuing an agreement after a weekend of billion-dollar deals in riyadh. while president trump travels abroad, here at home, the white house preparing a formal budget request tomorrow. we analyzed spending cuts. and ford chairman bill ford replaces mark fields with jim hackett. we discussed were the automaker goes from here.

joe: let's look at where the major averages stand as we head towards the close. abigail doolittle is standing by. looking at solid gains for the major averages heading to the close. the outcome s&p 500, and nasdaq all nicely higher. look at the nasdaq, really being helped by strength in cap. -- techy. all three indices are higher for the third day in a row. we are in a bit of a bullish stretch. the responders on business deals announced in saudi arabia around president trump's trickett. one such stock is the blackstone group. shares on pace for the best day since early december, as the infrastructure fund and $40 billion, and they have plans for $100 billion of investment longer-term, but the idea that saudi arabia's public investment

fund has committed $20 billion, has upgraded shares on blackstone group, saying that this is "an impressive initiative." other brokers on saturday deals estimated, and new guinea dollars worth of deals out of the weekend -- we're looking at defense contractors, including lockheed martin, boeing, and raytheon, all nicely higher. an agreementnounce on defense and commercial. raytheon announced a partnership with the saudi military industry for technology initiatives, among other ideas. and not surprisingly, these stocks -- probably won't be surprised, at least -- are doing quite well since the election. .et's look at g #btv 8777 this is out of the election. the orange, dotted line, s&p 500. boeing, raytheon, and lockheed

martin outperforming in a big way. best overall sector since president trump was elected in november. technology up less than 20%. huge on there. they are higher than the inauguration. up on allhave the bump i the deals being announced. joe: thanks, abigail. julia: what'd you miss? let's get back to president trump's visit to israel. the president and prime minister benjamin netanyahu spoke earlier on the spoke about achieving a mideast peace arrangement. roy my travels, i've seen many hopeful signs that lead me to believe we can truly achieve a more peaceful future for this region and for people of all faiths and all beliefs, and, frankly, all over the world. will cross into

palestinian-held territory in bethlehem, where he will meet the palestinian authority president mahmoud abbas. let's get perspective from kevin cirilli, traveling with president trump. he is on the phone from jerusalem, and we have our white house reporter to lose olorunnipa. great lengthsto to contain expectations on the trip that president trump is making, perhaps in light of recent intelligence revelations. compare and contrast for us the mood between saudi arabia over the weekend and the reception president trump got in israel. yeah, julia, that is a great question, because in saudi arabia, you really got the feel that the royal family was anticipating president trump as he made his first stop, first international trip since he became president. with president trump came also his declaration against the iran

deal, something he has have frequently, and also something, quite frankly, julia, that the saudis and israelis have in common with president trump come all opposing the iran deal. but president trump went with business deals, 400 million dollars, including $10 million in a saudi arms deal. here in jerusalem, where i am located now, there is much more skepticism among israelis about what president trump will meet with restarting the middle east peace process. they view him as unpredictable. that is the word i keep hearing in my conversations with israelis in jerusalem. makealso, i would note, the point that this is a candidate who said that he wanted to move the u.s. embassy to jerusalem. we haven't heard that today. and seniorillerson white house officials are trying to lower the stakes and pitch this as a reset and we start for

what they hope will will eventually bring middle east peace. oluse, here at home the white house is at work putting the finishing touches on its budget proposal, which many people will say will look different by the time congress is on with it. these: that's right, president is overseas, but here at the white house there was a lot of work going on trying to get the budget ready and released tomorrow. it is already not receiving very good reviews in congress because of the large number of cuts to social programs, some popular programs that help the poor, things like medicaid, food stamps. the president's budget takes a deep cut to those programs all in an attempt to balance the budget within 10 years without touching very large programs, including social security and medicare. it is difficult balancing act for the president to balance the budget without touching those large spending programs.

to a is significant cuts number of the social safety net programs, and that is not being received so well on capitol hill. this budget is likely to be a first step, opening bid for the president, and congress is likely to have its way when all is said and done. joe: kevin, back to you. what was the deal went president trump seemingly out of nowhere out that he did not bring up israel in his conversation with the russians, and more importantly, how is that whole controversy comes scandal, playing in the background of this visit? kevin: our very own margaret talev actually asked trump what was going on and he answered and he said he did not mention israel with his conversations with the russians at the white house when he revealed highly classified intelligence information. that is within his legal right and what is part criticism from not only democrats -- but it

sparked criticism from not only democrats but some republicans felt like he was giving such information. prime minister netanyahu followed up and said that the nature of intelligence sharing between israel and the united states is "terrific." this is an administration that is trying to very carefully clamp down on any controversy that has dogged to them. preibusbannon, reince -- i caught up with the commerce secretary wilbur ross and put the question to him about whether or not he thought any of the controversy would overshadow the president's first international trip. he dodged. listen to what he had to save =-- say. julia: i want to keep on the subject of the russian investigation and the report suggesting that attorneys for michael flynn have sent a letter to the senate intelligence committee suggesting that they don't believe he will get some

kind of fair trial here. there is an escalating public frenzy against him -- i'm quoting -- and they made invoke the fifth amendment in terms of evidence he will not be willing to provide. can you bring us up to speed on that? toluse: yeah, this is not good news for the trump administration. michael flynn was national security adviser for about 24 days, and months after he was dismissed by president trump, he is continuing to cast a shadow over the administration. his lawyer said he was interested in getting an immunity deal, said he had a story to tell, and that is caused concern in the white house about what he might say. now we hear he is considering taking the fifth amendment, which is causing a lot of researchers to go back and look at what the president said on the campaign trail about people who take the fifth amendment saying it is basically an admission of guilt. he was then talking about some of the associates of hillary clinton and some of the members who were involved in the irs scandal under the obama

administration who took the fifth amendment. it is going to be difficult for the trump administration to answer questions about why the national security advisor is potentially going to take the fifth amendment. you have to remember that president trump said that michael flynn is a good man who was just the victim of a political witch hunt. nn did not said that fly anything wrong other than misleading the vice president about his contacts with the russians. now it is looking like this decision to potentially take the fifth amendment gets to the heart of the matter about what michael flynn discussed with the russians during the campaign and transition, and will likely see congress wrap up its investigation and get answers in the next few weeks. julia: thank you so much for giving us your insight. chief washington correspondent kevin's really and white house use olorunnipa.olo scarlet: coming up, why jamie

dimon is bullish about regulatory reform under president trump despite recent drama. this is bloomberg. ♪

scarlet: what'd you miss? jpmorgan ceo jamie dimon is optimistic about global growth. speaking in an exclusive interview with francine lacqua in riyadh this weekend, he says the prospects for regular tort reform under president trump -- regulatory reform under president trump are good. jamie: the world is going to double in size the next 12 to 15 years. there is plenty of opportunity. there are plenty of threats. but we spend a lot of money on technology, we know what we are doing. we help companies go around the world.

we are pretty comfortable about our future. francine: can you break down the units where you want to defend your market share and where you want to push it? jamie: i want to grow everywhere. clients want multiple vendors and suppliers. that is completely understandable. publicly, investment banking in certain areas can be harder to gain share, but that doesn't mean you can't gain in this country or that part of the world. we just know it will be a little harder. francine: a lot of competitors are trying to beef up that. jamie: well, yeah, we have a good show their. -- good share there. ink at what we can do better this country or that -- we have a lot of things we can do better run the world. -- around the world. competition is a good thing. i've never been worried about competition. you want a competitive world.

francine: of course, as long as you are better than them. jamie: welcome that is our goal. francine: we spoke in paris sometime ago about regulation. are you confident about growth for wall street? jamie: yeah. administration wants to do you regarding certain things and most of us in business think regulation has been holding back growth. not just jpmorgan -- very important to understand that. i'm optimistic we will get some regulatory reform. 30 years of regulations, it makes sense and even my democratic friends understand that it makes sense to look at what was done, what can be done better, what can simplify burden of businesses come what can help expand employment and grow the economy. no one is asking for a wholesale throwing out of regulations. just look at it in the light of day. francine: so glass-steagall, and talking about a modern

glass-steagall -- investors are confused as to what that would mean. jamie: glass-steagall wasn't part of the problem and no one i know things that was part of the problem. i think talking about glass-steagall, would you regulate smaller banks for bigger banks? that is understandable. let them sort that out. francine: would you be opposed to any foreign acquisitions? are you on the hunt to buy something? jamie: not right now but i wouldn't take it off the table down the road. francine: i don't know if it is a region you want or some specific operation. or j.p. morgan chase, there is no area we cannot grow organically. private bankers, investment bankers, corporate bankers, branches in the united states or overseas. there may be acquisitions in technology and countries that make a lot of sense. they have to make a lot of sense for us to do it. francine: something that --

jamie: could be payment-related, customer service that you just add on to. we announced we are having online self investing an online account opening. right now, with treasuries you can buy or sell -- $40 million trade on your mobile phone. just adding a lot of services -- buy or build, as long as the client is happy. francine: how much do you think business will be transacted on that? jamie: a line. if you look at the consumer side, it has usually moved to mobile. bill paying will be moving there. corporate -- you will see some equities. when we say it mobile, online, all the same to me. it is how you want to access the services of j.p. morgan chase. francine: overall, how are the animal spirits in the united states and the world economy? jamie: pretty good. japan is growing more than it

has grown in 15 years. europe is doing pretty well, all things considered. that is all pretty good. even the imf, always warning about stuff, is saying that the world will grow faster than expected. ceolet: that was jpmorgan jamie dimon speaking exclusively with our francine lacqua this weekend in riyadh. julia: now time for the biggest business stories in the news right now. brazil's kbs is plunging today. president michel temer accused owners of insider trading following last week's bribery accusations. jb estimate the world's largest meat producer, is owned by a committee facing several billions of dollars in fines as part of a leniency deal. blackstone's group plans for $40 billion infrastructure business fund, getting the nod from analysts. going to people familiar with the matter, the blackstone initiative is anchored by $20

billion from saudi arabia's public investment fund, and could make it the largest infrastructure manager in the world. whichtructure investing, starts private money towards improving roads, bridges, and networks, has been highlighted by the trump administration. cbs has signed chairman and ceo les moonves to a new multiyear contract through 2021. he will continue receiving his $3.5 million annual salary, plus long-term performance-based incentives. once the contract expires from he asked the option to become a senior advisor as well as formal production company through the network. moon press is among the highest-paid u.s. executives, earning more than 60 -- $69 million in 2016. joe:, opec announced reduction 2016 but howember are investors hearing to those rules?

who is a team player and who is not. this is bloomberg. ♪

scarlet: what'd you miss? i'm scarlet fu, and we look at oil prices. some investors are not buying into the opec buzz. take a look at this chart. is the vti futures, white line is money-long positions. you can see how they diverge. where prices, the white line, recovered. the weaker dollar is another factor. the net loss position has fallen to the lowest level since november 8, right around the time of the election, but also three weeks before opec approved his first supply cut in eight years. a lot of concerns by investors were not quite buying the whole argument, specifically questioning opec's commitment to reduce production. there are also doubts about the

effectiveness of the deal they do start. joe: and it does not look like the divergence will last long. one of the 2 lines -- scarlet: which one is it? joe: they can talk about all the cuts they want, but to the numbers comply? one opec member is not complying , not doing a good job complying. this looks of the different countries and how they're doing relative to their goals. 2 countries stand out but the one that stands out for not being a good team player is iraq. they're producing 80,000 more barrels per day of oil than what they are going for. they have a major producer missing the goal by that much, indicates the whole premise of everyone agreeing to the -- it negates the whole premise of everyone agreeing to the supply cut. saudi arabia is doing a very good job. we want to look at that number because otherwise, the supply cuts may not be as much. julia: physically announced

deeper cuts. one word we have not mentioned is shale. there was a great quotation over the weekend by the saudi energy minister -- we want it to be at a moderate, healthy level. what does that mean in terms of count? that is the green line, you can see. of 2016, and you can see compared to where they have been the past, plenty of upside opportunity there. it feels like based on where we are trading now, oil prices, the yellow line room to run on this one. joe: i love my copies have new competitor space -- love one companies have new competitors cuts havetill ahead,

the desired effect? just what we were talking about. and the market closes next. take a look at the major indices before the close. this is bloomberg. ♪

>> u.s. stocks closing higher for a third day. its longestng winning streak since february. chatterley. scarlet: i'm scarlet fu. joe: and i'm joe weisenthal. if you're tuning in live on twitter, welcome to the closing day coverage every week from 4:00 to 5:00 p.m. monday, allthis three indexes for u.s. equities closing higher for the third 1.4% to day, up from 1.9% in the period, quite a runup. nasdaq, this marks the 11th gain in 13 days on the back really significant economic news or earnings. joe: not much news, not much with the news, even president abroad so a continuation of the drift higher. grr1 go i'm looking at on the bloomberg, you can see have flippedectors to the green in the last 10, 20 minutes.

materials little changed but it the down sectors. and energy stocks, the lone .2%.rds, off by tech and utilities are the best performers. in terms of individual movers, a couple of different companies with their own stories, all connected to president trump. lockheed martin signing an mlu with saudi arabia, planning to $20 billion of orders from that kingdom. down butalthcare faring better than other healthcare companies. medicare provider and the environment seems more medicaree for providers. blackstone will be setting up a infrastructure. fund. than 3%.. down by more advanced micro devices made no mention of its licensing deal

intel and citi remains bearish on the stock. replacing mark fields as c.e.o. with jim hackett, a turnaround specialist. our reporter says this was a swift change at the top. directors met friday and mark fields shortly thereafter spoke with bill agreed to resign. joe: a look at government bonds, action.n of no change on two-year yields and the 10-year.up on julia: looking at currency because there's always something going on in currency land. the euro high. 1.1260 at one point earlier today so it retraced some of the gains. merkel commented from the euro was too weak. trading at 6 1/2 month high, the november 9 peak for

is at 113 so something to watch. to sterling, a bit of weakness. host of polls coming out over the weekend. the research survey cutting back, former prime minister theresa may's lead ahead of this to 13 points so it was 15 a week ago, 20 when we started. look at commodity currencies, oil higher so those guys benefiting, too, and i just show you dollar brazil. dollar-- we did see theil higher earlier in session and then the brazilian real retracing losses after the in brazilurt suspending their decision due on decision on the current president so more investigations to continue there. world, the commodities last block we were talking about month highto a one after saudi arabia said that all

the countries that agreed to cuts agreed to sunday them into 2018. silver having a really good day, up over 2%. silver has characteristics as a alsoous metal and industrial metal, having a good day. up a little under .4%. and those are today's market minutes. julia: let's take a look, deeper dive into the bloomberg and you chartsd the following using the function at the bottom of the screen. ge one i'm looking at now is #btv8775, looking at bloomberg's dollar spot index and we're just bottom of thee band there that it's trading -- as you can see, multiple years. we're flirting with that level. 1200 that we hit and bounced off back in 2016. andrew shiancoe said he believes

in the dollar is behind this. one of the key questions for thestors is where does dollar go from here. scarlet: i love this chart because we think the dollar strengthened so much after the election but it was all within this expected band that's been yearson for a number of so it puts it into perspective, doesn't it? julia: yeah, it does. love a death to cross. what did you miss? let's get analysis on u.s. arket risk and what flattening yield curve is telling us about stock performance. cameron crise joins us now. is there any lesson to take away that day last week? what was that day we had that disappeared?nd it cameron: wednesday. joe: there are any lessons from it or is it a blip and gone to the dust bin of history? cameron: dust win of history is the right way to frame it. it feels like we're gladiators in the market. trump gave us bread and circuses sent a few equity

bulls to the lions but now -- joe: vivid imagery. cameron: but like the movie, gladiators come good in the end. julia: we don't even remember it happened. scarlet: are you not entertained? joe: i am entertained. one of the interesting things looking at is the significance of a flattening yield curve and however you look it, there has been quite a in of flattening so far right.2 spread down to 97 now. what does this mean for risk assets? thaton: there's a thought a flat yield curve implies tight slowing policy and economy which feeds into recession but the level obviously matters quite a bit. i've done a bit of work today feeding through off of some work colleague in singapore did about what the level and changes

curve imply for the performance of the s&p 500. as it turns out, you can't there's anyhat great threat over the next few to equities given what the fixed income market has been doing. charts there -- or not. scarlet: we should have the the yieldillustrate curve means that stocks should flatten it. dictate cent minister -- sentiment in the market. cameron: the subsequent six-month change in the s&p 500 so a flattening on the left and steepening on the right. on the margin, it looks like a the curve is associated with stronger equity gainsthan weaker equity so i think it's inappropriate to say the curve is flattening and aroundggests recession corner and we need to worry about the equity market and

particularly the case given that 97 basis points is inverted.ar to me, interest rates are still very low. the fed, yes, they're probably going to go next month but still cautious. i think it's hard to be too scared. scarlet: the fed minutes will come out on wednesday after an uneventful fed meeting in may. what do you expect to hear from the fed minutes that might give us some sense of where stocks go here? joe talked about the sub 11vix regime. could the fed minutes change that? cameron: could, yes. will? not.bly i think they're going to play their cards relatively close to the chest. be morell probably discussion on the balance sheet without resolution. in the previous set of minutes, there was discussion about the level of equities possibly being a concern, maybe that's reiterated but i find it difficult to believe that the fed will make itself an arbiter

the correct valuation for the stock market given that they particularly be sure what the correct valuation of the bond market is, a market over which they have quite a bit more control. julia: i want to get back to what joe was saying to you at the beginning of the market and markets feel like right now. you did write an article about calling tops and judging the of risks here. we've talked about interest rate sentiment, as well. what about earnings? you make a really interesting point. with everybody -- we have been doing it ourselves talking about how great the u.s. earnings toson has been relative prior courses but you're saying real earnings are less of a stocks thany they've been in a while. cameron: i was on here a few months ago talking about it. and the fact is, is that the s&p 500,yield of the essentially just the inverse of the e.p. so it's how many you get per unit of the index and i like to deflate that

it inhe c.p.i. to put quote/unquote real terms and for many years after the crisis, which is5% or more, typically a level associated with very strong equity gains been -- it fell over the last year or so to temporarily below 2%. now it's a little above 2% but nowhere near the sort of backdrop we had a few years ago. it the red again, is signal to sell today? not necessarily. that thewe can say is market fundamentals are probably somewhat less supportive now been much of the last decade or so. joe: a throwback to what you were talking about in the beginning. the 210 spread between 1992 and 2000, which we associate with one of the greatest periods of stocks ever, declining, thecally non-stop for entire period so there's a lot of reason to not get too worked out. you can see it right there it inverted after the crash in the

recession. one of the things -- speaking of really- is that we've seen the sentiment shift on the long end and after the election, for muchxpectations higher rates. now people have really switched towards the long bonds camp again. the keyyou think is thing that flipped it over? is it the economic data? it reorientation of policy expectations? or is it just price? cameron: there's three planks to it. one is disappointment over the hasp agenda which clearly stuck in the mud at the moment for too many reasons to discuss here. a second point is the economic data, you know, the activity data has been disappointing and perhaps more importantly, the inflation data hasn't really come through. you can argue that the fed shouldn't be making policy based isverizon data plans which one of the big reasons why inflation has dipped lower but what it is and inflation isn't moving towards 2% which is

what the fed would like. and yeah, it would be silly not to acknowledge the role of price. are atception -- people heart momentum investors and when bonds are going down and up, peopleg generally want to be underweight and when prices are going up and going down, they tend to be overweight. scarlet: as you look ahead to will shake ust out of complacency, where will lead the way? cameron: that's a good question. am a big believer, on fundamental basis on the credit cycle. ultimately, credit dictates the which dictates the market cycle. littlehad some whisperings in the filaments of in terms of sub prime auto loans and news from credit qualityat maybe credit is deteriorating a little bit. tos probably way too early say we've hit a top in the credit cycle and it's all downhill from here.

being said, these things tend to deteriorate somewhat period of a year or two before hitting, if you will, critical mass and deteriorating quickly so i think we can probably say that the best is behind us in terms of credit cycle and that it probably is downhill from here slowt could be a very descent before we hit the rocky slope. joe: cameron crise, bloomberg's strategist, thank you very much. scarlet: ford announced it's replacing mark field as president and c.e.o. this is bloomberg. ♪

mark: i'm mark crumpton. president trump and israeli prime minister benjamin today reaffirmed what both men consider a long friendship as the president stopped in jerusalem. speaking to reporters, mr. trump said the u.s. has what he called an unbreakable bond with israel. president trump: i believe a new of partnership is possible and will happen. one that will bring greater this region, greater states, to the united and greater prosperity to the world. mark: prime minister netanyahu says he sees real hope for east and the middle thanked president trump fors it which thece on iran prime minister noted was a departure from previous u.s. policy. formers a report that u.s. national security adviser michael flynn will decline his senatea from the intelligence committee seeking documents. according to the associated

will invoke his fifth amendment right against incrimination. the supreme court today struck congressional districts in north carolina because race played too large a role in their creation. justices ruled that republicans who controlled the legislature and the governor's office in 2011 placed too many african americans in the two districts in, with the result of weakening african voting strength elsewhere in north carolina. voting rights advocates say will boosting challenges in other states. north korea says it's ready to medium rangea missile after a weekend test launch confirmed its combat readiness. it's called the missile capable of reaching japan and u.s. military bases there, a quote, answer to president trump's policies. flew over 300 miles

theay before plunging into pacific. north korea's media said more missiles will be launched in the future. day.l news 24 hours a i'm mark crumpton, this is bloomberg. scarlet: what did you miss? this morning, ford announced in a press briefing that president mark fields, who had served for three years, would be stepping down. hackett, former chairman of ford's autonomous vehicle take his place. timeve never seen such a in our industry where technology and competitors and everything is converging to drive real change. it's veryful at a time like that to have a leader who's very experienced in driving transformal change and in jimtely we have that hackett. scarlet: let's bring in bloomberg's keith naughton in

at that presss briefing. you've written a story to look was.w abrupt the change give us some background. mark fields, with ford's stock not doing all that well, had been under pressure, but this whole change took place in a of time.k amount keith: it sure did. lasts embattled the several weeks with the stock down 37% during his tenure as been. so that pressure's building. but it was only two weeks ago that the board called him on the carpet and asked him to defend strategy. the thing is that everything was drifting at ford. profits were falling. sales were falling, quality was falling, morale was falling and the ford board finally had had enough and on friday said it was time for mark to go and we'll turn to jim hackett who has led turnarounds at steel case and at the university of michigan's athletic department so he has a fixing problems. scarlet: you mentioned jim hackett came over to ford in

early 2016. exactly has he accomplished at the smart mobility unit so far? he's a turnaround specialist but he must have done at ford toncredible be named the next c.e.o. set it upbasically from scratch and what bill ford was saying today, there was no on the road rules for how to set up a separate unit that will create robot cars and ride hailing apps and other mobility solutions and he was didessed at how hackett that. he's also impressed with the built inns hackett has valley. he talked about going out there with ford's board and all the silicon valley stars knew jim hackett because they bought his thought heiture and was a valley. he talked about great thinker. julia: is there a signal about company will the be taking in this regard? as you said, he was running the self driving cars, riding share operations here. i look at some of the criticisms

his role andin that was that he wasn't doing enough to develop and ensure the core business of the company in the same time they were lagging competitors in that field. do we deduce about the direction of the company here? have a key don't focus. keith: and that has been a persistent problem with ford. don't have a clear message. that's job one for jim hackett. to investorsxplain and employees what their plan is for the future and what their plan is for the present because they are chasing general motors. g.m. is doing much better because they're making more s.u.v.'s and on pickup trucks and ford has to find a solution to that in the near and they have to find a long-term solution and bill ford thats hackett can do because he is a big thinker but said. problem-solver, he joe: obviously ford stock has languished but it's not like g.m. has done all that great. it still hasn't recovered since

its 2013 peak. the state of the industry overall. sales have been really good, perhaps up until the last few have sputtered a little bit. is there an industrywide anxiety now? keith: there is and it affects automakers more than tesla, for example. but after seven years of growth and record sales, u.s. auto sales are turning down this year. collapsing. they're expected to be around $17 million, at the high end of normal. means profits are going to go down, revenues will go down and when that happens, tend to bail out of stocks. auto scarlet: bloomberg's keith naughton speaking to us from our detroit bureau. thank you so much. joe: coming up, in the wake of week's political turmoil and market collapse in brazil, how are investors country now?he some see silver linings.

we'll explore. this is bloomberg.

scarlet: i'm scarlet fu. we know political turmoil in the u.s. hasn't slowed investors down. the same dynamic applies to brazil. let's take a deep dive into the bloomberg. you can find our charts using the function at the bottom of the screen. this is looking at daily fund u.s.-listedwz, the tracks brazilian stocks. the president, michel temer, has down despiteep corruption allegations. inflowsgone without net

for a couple of weeks. week, especially thursday and friday, you could see a huge amount of money going ewz. ewz had done really well up until last week. it had gained about 60% since last june. plunge in the etf on thursday is what caused all the back in.go etf,million added to the the single-day biggest inflow since 2011. julia: some people are looking at it saying great, buy the dip. dip, international political crisis edition. here's another way of looking at brazil. i'm looking at one-month risk reversals. chart.a five-year they shot up to their highest five years last week.

they've come down a little bit since then but there's a lot of brazil the on in last couple of years. it's remarkable that this incident was the biggest but it how inexpected there was. there were many scandals before dull, ongoing roar people had time to prepare for but this came out of the blue so we saw massive anxiety going from zero to 60 in one day. are buyingnvestors etf's and dipping their toes into currency, currencies with dollarng up upside. scarlet: and the supreme hasn't an indication on how it will lean which means everything will be held up. julia: they suspended the decision, expected to come on indefinitely. now clearly more information required. we'll be talking this about the rising labor force participation rate and what that means for full employment.

is bloomberg. ♪ . .

i am mark crumpton. it's time for first word news. the trump administration and congress have told the appeals court that they have reached an agreement on disputed obamacare payments. the three-month tax will enable the trump administration and house leadership to resolve disputes. rish prime minister theresa may is backing down from one of the central ledges of her campaign. that is after polls show the our partyty -- the lab

gaining on conservatives. policy --nded their quoting here -- "a dementia tax." leader of the world health organization is calling herself, in her words, personally accountable, for agency failures during the 2014 ebola outbreak. target market -- dr. margaret chan gave her final address today in geneva. quick course corrections. we brought three outbreaks under control through teamwork and partnerships and gave the world is first ebola vaccine that confers essential protection. this happened on my watch. mark: dr. chan leaves after a decade on the job. despite thet

fumbled response to ebola, the agency remains relevant. global news 24 hours a day, powered by more than 2600 overalists and analysts in 120 countries. i am mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market action. a third straight day of gains. thegy and industrials led advance. president trump traveling to the middle east, netting some deals the likes of boeing and lockheed martin in particular. julia: crude making gains, , allng at $50 per barrel tying into the story we are seeing as for his currency land is concerned and asking the question what direction the dollar is going to take from here. and the euro is seen as the key beneficiary of that. scarlet: and as that our

producer just gave me, the dow is only 80 points lower than where it was during wednesday's selloff. quite the come back. as you said, headline risk is going to be there, but it takes a long time to sort through these concerns. what'd you miss? abeled -- labor party is patient gushes that further to go? what does that say about full unemployment? joe? joe: thanks, julia. i am here with an economist from moody's analytics and he has been doing research on the labor force per dissipation rate, what it says about where we are in the hunt for full employment. adam, thank you for joining us. this has been a nonstop debate. we have seen a huge decline in labor force participation that really accelerated with the this, how muchh is structural?

it has been bouncing back. is there an upside to really recover that ground? what does your work suggest? so, i think we do have room to continue improving. you can't really look at labor force per dissipation by itself, but when you combine it with all of the other information we have and you look at the fact that it -- that the job market has started to strengthen, when you combine those factors together, it suggests we have room to improve. inflation and wage growth are not accelerating at an overly rapid pace. i think the ongoing for dissipation combined with other factors suggests we have more room to run. joe: we are looking at a chart -- you cannot see -- the overall labor force participation rate.

people presumably are not leaving the workforce because they are old retirees. prime age is really bouncing back nicely. what does that say? >> yeah, those are the people you would really look to to be coming back in. the overall participation rates loses a lot of seniors, so we can be misleading to look at that. prime age,s on really focuses on the people who should be working. these are the people, who at their peak years of labor forcing gauge meant. the fact that this rate is going up is good news. joe: one of the things you have done, and i think this is pretty clever, you have look at the states that have had labor force per dissipation declines and looked at the wage growth. generally they moved up into the right.

the more a state has seen wage growth, the more it sees the labor force per dissipation wage tight laboresting a force could bring people back into the workforce that it would seem had left the labor market? >> that's exactly what you would expect to see if you are looking at a cyclical story, that tight labor markets bring higher participation. if there's something else driving it like population growth or changes in demographics, tight labor market may not necessarily be coinciding with the higher participation rates at the state level. the market data looks pretty much what you would expect them to look like if the labor markets were slack. 5%, this is full employment. 4.7 percent, oh, this is bull employment. 4%, this is full employment. wrong.be we are all

could it go down to 3%? do we have any particular reason to think all of these calls of full employment are correct? got no reason to think it could not go below 4%. what we are seeing is really a replay of the 1990's. starting in me mid-1990's, forecasters thought the forecast rate was five point 5%, 5.6% and it kept falling. economists had to keep dropping expectations for what the full employment rate was. year after year, it fell. you're after year, they said, maybe we can go a little bit lower. maybe we can go a little bit lower. this happened for half a decade. i'm not saying we have a half a decade of full employment rate the kleins, but it should give a cautionary note to people who think we can precisely indicate the full unemployment rate and it should make people cautious

about calling full employment too soon, which i think many people may be doing. joe: what signals would you like to be seeing where you would think, ok, this is full employment, and more generally, how would you advise the fed to treat things from here on out? adam: you would look for faster wage growth than we have now. i isasy by is -- the ecp the best measure. that has improved, up to 3.5%. i think we got another percentage point there. you would look for core inflation, headline inflation rather thand target consistently below it for eight years in a row. you would look for these wage pressures. you would look for these price pressures. and you would look for strong job growth. it is strange to be calling for full employment when we are still adding 2 million jobs a year. if that is full employment, that

is a different definition of full employment family generally understand. -- full employment than we generally understand. joe: all right, adam, important work. economist at moody's analytics. thank you very much. scarlet: coming up, we have part of our exclusive interview with an energy minister coming up. this is bloomberg. ♪

scarlet: what'd yo miss? saudi arabia's energy minister

--s he has seen wide cuts why calls for production cuts. he spoke exclusively to francine lacqua. we have 9, 6alih: proposals. so, im fairly confident we will be able to get together with a full agreement for all the countries that were part of the december 2016 agreements. add inventories are coming down. we have seen that for successive week. but if you look at the inventory level, it is more pronounced. that can get offloaded into tanks and consumed. we are coming into high demand season with be second and third quarter upon us.

so, we are coming together with consensus among producers. you see the global economies, japan, europe, the u.s., all doing reasonably well economically. so, we are optimistic. francine: minister, what countries do you think our eggs -- are against the extension? minister al-falih: i have not spoken or heard from any country that is against the extension. everybody wants the extension because they realize that we have not achieved our objective. are you concerned that the market is already pricing the production cuts in? it will be hard to while the market. minister al-falih: i'm not looking to while the market. what we're looking for is in agreement and clarity for the market. study as we go. we are committed to that.

market bydship of the a large group of producers, opec , and then opec working together and i think that should encourage investment. my objective, clearly is clarity on where the market is going so people invest. pricesss concerned about and the markets over the next 12 months than i am the next three years or this decade when demands may be short, will be approaching 100 million barrels, and we have the annual decline that has taken place. unless we invest and overcome this decline with new, coming in, opacity we will face a shortage. and we do not want to be squeezed. i understand you are not targeting a price.

i understand you do not want to talk about a price. but the shale producers are now part of the equation. let's say your production cut extensions do not have the effect that you wanted longer-term. would you think of overpumping so the price goes down? minister al-falih: that has never been part of the calculus. we never over pumped to squeeze anybody out. i think supply and demand need to balance. we have said that saudi arabia has the spare capacity. opec will do what is necessary. structuree markets was off a few years ago between supply and demand and any opec action in 2014 would not have done the job. so, with the restructuring of project respected place over the last cheat of years, opec is now able to

accommodate supply with our great partners from outside to bring the supply/demand balance and give clarity for investment. francine: two questions. on opec, can you tell me if certainhinking if countries decide not to cut production, will saudi arabia take the brunt of it and cut production more? the focus isalih: collective responsibility. i am proud to say that, although there are deviations we are working on fixing, the numbers speak for themselves. they are well reported. we have historic levels of commitment that have been actually delivered by producers, not only from opec, but countries that have never been tot of such an initiative manage production. they have delivered well on the totality. the market responded

positively, as we have seen. therefore, saudi arabia is counting on that record, which seems to be improving over time. not accept that saudi arabia or any other country should pick up the slack from others. we did go the extra mile initially to set an example and be our own model, and i think of colleagues have appreciated that and have responded positively. scarlet: that was khalid al-falih, saudi arabia's energy minister. julia: coming up, brexit talks could face roadblocks before they even begin. from new york, this is bloomberg. ♪

twolet: shares of take interactive art tumbling. this is after the rockstar game publisher says it will release ined dead redemption 2" spring 2018 instead of the fall 2017 as expected. the delay of that sequel -- do you know this can? joe: no. i show my age. i am not familiar with "red dead redemption." i have heard the name. julia: i know the grand theft auto games are quite phenomenal. but i can't help you, sorry. a hard-line stance could lead to a breakdown in talks

between the parties in brexit. >> i think it is only fair that if you leave the club, you settle the accounts. that is what you do. this is part of the negotiation. everybody once to have a fair deal on this. i think it's only fair to say to the united kingdom, you have obligations. you entered into obligations over the years. club, want to leave the you settle the accounts with us. things like this need to not happen before the trade talks star. is that a redline as far as the eu is concerned? concerned,s we are the financial settlements, the border issue, and our citizens need to be settled before we can talk about our future relationship. i think this is only fair.

you first deal with the issues that need to be dealt with before you have the final separation and then you talk about the future relationship. about donaldg trump in the light of the last week in particular and the revelations made here in the united states? >> we think most european leaders who will meet president trump are very curious to get to know him and hear from him how he sees this relationship between europe, between nato, and also europe and the united states. i think most europeans believe our strategic interests coincide and they have been the same for the better part of 70 years, and not one political personality is going to change that, fundamentally. they are looking for ways to work in a positive way with the administration and they want to hear from president trump how he sees this. you compare ord view the relationship that was

apparent between theresa may when she met donald trump and what looked like a relatively cool relationship to train angela merkel and donald trump? >> i thought the meeting between chancellor merkel and donald trump was businesslike and constructive. she saw the opportunity for cooperation, and that's a good thing because we need each other in this world that is changing so fast, and competition between the united states and europe makes no sense whatsoever. if you go back to our citizens, they share the same values, they have the same outlook on the world. they want a world that is fair. they want trade that is fair. we have so much in common. we need to face this huge challenge of climate change together. this is pretty, pretty daunting. but if we are united, europe and the united states, there is no challenge we can't face. you think donald trump his position with the

international community and light of his relationship with israel he intelligence? policy, most of the messages we have gotten from the administration are in line with tj messages we have been getting from previous administrations. in that sense, many europeans thing, much of what we are hearing is something we can work with. what is happening in the united states, of course, people follow with great interest, but the main interest in europe is to see how the strategic relationship will develop. i'm very, very sure that all european leaders want to invest in this relationship. all european leaders understand this is very important for our relationship. how do we keep president putin at bay? how do we make sure there is a stable middle east? so much stronger and we cannot solve these issues on our own. that was my interview

with the first minister of the european commission. scarlet? scarlet: time now for a look at the bloomberg business flash. amgen and is partner -- is partner says its new drug will have to wait for u.s. approval. it was found that 2.5% of women faced serious cardiovascular side effects. in fda decision, which was expected in july, is now unlikely until next year. iconic and elliott have reached a packed in one of the most high profile proxy battles this year. elliott will nominate three arbers to our conic -- conic's toward -- board of directors this year. ad ge in talks to build supersonic jet.

20 of the aircraft have been ordered. general electric says it is excited to continue discussions. the firstould be nonmilitary jets since the concorde. joe: this is bloomberg. ♪

scarlet: u.s. stocks rounding up a third day of gains, 80 something points below where they were before the selloff on wednesday. president trump continues his overseas tour. he visits rome tomorrow. i will be looking at u.s. new home sales at 10 a.m. tomorrow. julia: and the white house will release its budget request tomorrow. scarlet: not many high hopes for that topic. that is all for "what'd you miss?"

alisa: i am alisa parenti in washington. president trump arrived in israel today the second stop on his first official overseas trip. mr. trump and the first lady

were accompanied by the netanyahus. he became the first sitting u.s. president to visit the western wall. michael flynn will decline a subpoena from the senate seeking documents, according to the a.p., which says he will invoke his fifth amendment right. the senate intelligence committee is investigating whether russell metal -- rush hour meddled in last year's election. the justices ruled state republicans placed too many african americans in two districts in 2011. voting rights advocates say the ruling will boost challenges in other states. is longest-serving governor on track to win confirmation as u.s. ambassador to china a.p.ding to the the senate votes today on the island governor' for the key post. he