♪ alix: coming up on "bloomberg best" the stories that shaped the week in business around the world. political tensions that the world on edge. implications for trade, currency and global stability. >> transatlantic relations are as poor as they have been in a long time. >> president trump knees to understand who is talking to here. amid the noise, economic data sins ambiguous signals. >> don't obsess on anyone number. alix: leaders add insight to a complex picture. >> north korea's conduct is reckless, dangerous, and

becoming more so. >> you believe this is a new cold war? >> absolutely. alix: and with the fed meeting coming up soon, three top officials share their outlook. >> we don't want to let this expansion run too hot for too long. >> everyone is watching the consumer. the consumer is the primary driver of growth. >> i think that we are not very far from appropriate rates for the u.s. economy. alix: that is all straight ahead on "bloomberg best." ♪ alix: hello, and welcome. i'm alix steel. and this is "bloomberg best." your weekly review of the most important business news, analysis from bloomberg television around the world. last week concluded with the g-7 summit in sicily. this week began with clear evidence of strain in the g-7 alliance.

german chancellor angela merkel has given her strongest indication yet europe and the united states are drifting apart. speaking at a munich campaign rally at the g-7 summit, she said reliable relations forged at the end of world war ii are coming to an end. [applause] angela merkel there are times in : which we can count on the u.s. are somewhat over. why i can only say, we europeans must rely and take , our destiny into our own hands. >> anyway, she is only stating the obvious. it has been quite visible for a period of time that the interests of the united states and europe are moving further apart than together. this may actually turn out to be a blessing in disguise because what usually happens when the world outside of europe looks more unpredictable, europeans

may actually move closer together, and address what has been missing for so long, namely institutional reform and a way forward for the european union , and the eurozone, and particular. -- in particular. vonnie president donald trump is : blasting germany over trade again, ratcheting up his dispute with chancellor angela merkel. saying we havee team - a massive trade deficit. they pay less than they should. very bad for the u.s.. this will change. the tweet came after merkel met with prime minister modine and signed new agreements. >> she called india a reliable partner and addressed this once again saying there are other relationships. >> transatlantic relations are as poor as they have been in a long time. you have to remember, it is not just free trade. she is heavily invested personally in the success of the

paris climate accord, for example. it doesn't sound like she said anything from donald trump that reassured her there. >> europe is our largest trade partner. it is our largest investor. it is our largest accumulation of allies in the world. so, i think president trump needs to understand who he is talking to here. he needs to understand how to motivate them. he's right on some issues. he just hasn't figured out a way to deal with them effectively. >> with eight days to go until the u.k. election, the pound has dropped against all of its peers after a poll showed theresa may's party could fail to secure a majority. shows conservatives may lose 20 seats in next week's election. what the opposition labor party gaining seats. eight the polling model allows for a large margin of error. >> this is in a poll. it is a projection. it's a new way of projecting results.

the government says it is a very wide range. the number we have, 310 is the midpoint. they have spoken 7000 people and conducted interviews every day. they tested this model with brexit and they got it right. >> how much weaker can it get? eight days to go until the election. >> mobile drive the pound lower is considerable brexit -- what will drive the pound lower is considerable brexit. not so much the polls. to the extent that we saw a surge in the pound before the election was announced. the pound went up. you could see the pound go down to 126 or something against the dollar. when we get into the brexit negotiations, who knows where we go from there? >> it is decision day for the paris climate accord. president donald trump tweeted, quote -- "i will be announcing my decision thursday at 3:00 p.m. --k america great again."

make america great again." pres. trump: the united states will withdraw from the paris climate accord. >> the jist of his message was that we are getting out of the paris accord, but we will start to negotiate a deal that is fair. >> if you look at that speech, it was a very dishonest statement that either we can have jobs, or we can protect our environment and have a healthy future. that is a contrast and a distinction that has been laid to rest long ago. >> is businesspeople, we have to pick ourselves up on a global basis, and get on and sort the problem out ourselves. david elon musk tweeted i am : departing presidential council. climate change is real. leaving paris is not good for america or for the world. disney ceo bob iger followed soon after saying, quote -- i have resigned from the president's council over the paris agreement with drawl. the head of goldman sachs decided to send his first wheat ever saying today's decision is

a setback for the environment and the u.s. leadership position in the world. jonathan leaders gathered in : brussels to sign their first ever joint agreement on trade displaying a united front over the need to fight climate change. >> you say that we must do this for businesses, and businesses say you mustn't do this. it is not just a disconnect between continents. it seems to be a disconnect between leadership and business. >> the numbers you need to look out for, the estimate, 182,000 on payroll. the previous 211,000. the payrolls report drops now. >> 138,000. much lower than estimates. unemployment, down to 4.3%. that is the lowest in 16 years. but not for a good reason. labor force participation down. 62.7%. that is the lowest this year. jonathan does this inject some : doubt?

if so, how? >> yes it does, but it does not take june off the table. let me explain why. this is a weak to mixed report. weak relative to expectations in terms of job creation. but mixed in terms of where you would expect the labor market to be overall at this stage. we are still creating 130,000 jobs, which is above the steady rate. and wage growth is not great but it is ok. jonathan the participation rate : is lower. is that a big disappointment? look,k, don't obsess -- any one number. we revise them from month-to-month. the overall trend is good. since inauguration day, it's down 1%. we brought back close to 200,000 people that were dissatisfied or underemployed in the u.s. workforce.

that, to us, is a really amazing trend. >> the may jobs number goes into the calculations as the june meeting approaches. bloomberg spoke with three fed presidents this week. those conversations are coming up. plus, the australian prime minister says he still trusts donald trump, but up next, it is more political flashpoints from the weak's headlines, including the first face-to-face meeting between the french president and vladimir putin. >> you have to remember, this is not the candidate that moscow wanted. alix: this is bloomberg. ♪

♪ alix: this is "bloomberg best." i'm at still. let's continue our roundup of -- i'm alix steel. let's continue our roundup of stories that moved markets this week. we return to the theme of geopolitics as a north korean

missile launch jolted the international community. >> north korea has fired another missile. its ninth this year, seemingly in response to the u.s. beating up forces in the region. it we have seen the frequency of -- we have seen the frequency of these missiles ramp up quite a bit. do you expect this to prompt any action from south korea, china , or even the u.s.? >> we have been seeing statements condemning the missile launch. these are pretty typical. i mean, they happen every time. this was a short-range missile. king has been doing this over and over again. what would really ramp up tensions is if he fired a intercontinental ballistic missile. that would be able to hit north america. that is what the u.s. is concerned about now. >> this is a ratcheting up of tensions. but, it really comes at a very sensitive and challenging time for the new south korean president. >> yes. yes, the newly elected

president, one of his campaign pledges was to engage north korea, have a more conciliatory approach to north korea. these missile tests, while not as significant as a nuclear test, or an intercontinental ballistic missile test, it is still concerning. it is a challenge for the administration as to how to engage north korea. >> i want to move to south africa. the embattled president jacob zuma is staying put for now. he is survived a bit by some to remove him from office. is he safe for the moment? >> he is certainly. he is keeping control of the country. the vote of no-confidence is something that he said he never wanted to hear of again. the constitutional court is currently debating whether or not to allow a secret ballot on

a no-confidence vote in parliament later this year. whether that will happen or not is certainly to be seen, but it does deal a blow to that move. >> fresh off of nato and the group of seven summit, emmanuel macron welcomed vladimir putin to paris for their first one-on-one meeting. the two leaders found common ground over fighting terrorism, but that may be where the agreement -- but that is where the agreement may have ended. they traded barbs over sanctions. the ukraine, where macron accused putin of invasion. how is this being played out in russian media? what is their take on this budding relationship? >> the interpretation is that putin and macron did not really managed to establish a rapport. you have to remember this is not the candidate moscow wanted.

their favorite was of course defeated in the first round of the presidential election. nevertheless, this was an attempt to build fences with macron. the reality is the differences remain so deep between france and russia on key issues that this was always going to be a difficult meeting. >> mario draghi has become the latest high-profile figure to tell the u.s. it might be headed down the wrong path on trade. the ecb president touted the euro area's four-year recovery , and said the key risks are now from external factors, in theicular, what he called u.s.'s neo-protectionist stance. draghi repeated his view that the eurozone needs expensive monetary stimulus to restore stable inflation. what does that actually mean? >> it means very clearly that interest rates have got to stay low. they also said at the end of the year qe is not just going to , disappear. we'll probably get an extension later on. i think what the market is

focusing on a lot, what does it mean for their forward guidance? i think everything we've heard is that the key path of the forward guidance, the sequencing of interest rates and qe is likely going to stay there. frankly i think it is the right , approach. >> vietnam's prime minister is coming stateside. becoming the first southeast asian leader to meet president trump. the main point of the discussion -- trade. >> we want to make sure we can convince him that this is a mutually beneficial relationship for both sides, and american consumers benefit and prefer the products that vietnam exports. pres. trump: we are already in discussions including trade. we have a major trade deficit with vietnam, which will hopefully balance out in a short time. >> brazil's president vows they

will get to the end of 2017 with their house in order. he was speaking at an event earlier today. the finance minister back to backed him up saying he would conclude his term despite disturbances the economy is working normally and brazil is more resistant to shock. what do you make of his comments? >> the economy is more resilient than it was two years ago. given the level of reserves. the macro fundamentals are a lot stronger. we have to of knowledge it there was a shock to the political system. conditions may have been irreversible. the government is very engaged in steering the reform agenda the minister committed to -- agenda in the minister committed to approve the social security reform and tax reform in the second half of the year. but the question is about governor ability. the political capital. is it still possible to rebuild the broad coalition or is that coalition fractured because of

recent developments? >> we have a look at what is happening geopolitically with the united states putting pressure on north korea's trade partners. but they are saying is choose between pyongyang or washington. so, if you are not with us, you are against us. that is the message. >> it takes on new relevance when you see the secretary of state, rex tillerson going , around speaking to the united nations saying, we want to see those countries that have diplomatic relations with north download -- to downgrade those diplomatic relations and if they have , commercial relations with north korea, to cut them off. they are worried north korea is using diplomatic means to get funds to fund its nuclear program. >> it is a no-brainer, isn't it? >> you would be surprised how many countries have diplomatic relations with north korea. it is 164 countries. a lot of these were picked up in the 1950's and 1960's.

there were countries who recognized the north korean regime because they were a part movement.intervention certainly south east asia. the interesting thing is the early 2000's you so germany and the u.k. recognizing north korea. they haven't done anything to down scale those relations. the british have an embassy in pyongyang. >> fire fbi director james comey will testify june at -- june 8 next before the intelligence thursday committee and it will be an open testimony. >> i expect there to be some fireworks. an action-packed testimony. nothing with james comey has been tall. dull. been i don't expect this one to be either. we learned this week that a letter had been sent to a lot of the key members of the trump campaign asking them for information. jared kushner has volunteered to

testify in front of the committee. it is unclear if he received one of these letters. he was very instrumental in the campaign. so if there is an investigation , relating to the trump campaign, you can assume jared kushner who was instrumental in , that campaigned will be involved or questioned to some extent. jonathan back to the u.k., we : are less than a week away from the election. polls show the prime minister will likely fall short of a parliamentary majority. may's opponent attacking the prime minister for muted response to president trump pulling out of the paris climate deal. >> investors are starting to deteriorate. the volatility measures are starting to show that people are taking risks. >> you could have the tories just fall short of a majority. they might be able to convince a few other lawmakers to lend them

support they need to govern. labor would cobble together an arrangement where they borrowed votes from the libdems and greens, which is more likely than a formal coalition scenario. ♪

♪ alix: welcome back to "bloomberg best." i'm alix steel. this week bloomberg sat down for , a conversation with the austrian pregnancy, malcolm turnbull. their discussion focused on international security and diplomacy starting with china's role in reining in north korea. bul>> north korea's conduct is reckless, dangerous and becoming more so. china has the greatest leverage over north korea. with the greatest leverage comes the greatest responsibility.

part withl do our sanctions, of course, but we look to beijing to bring the pressure to bear on the regime in pyongyang. to bring it to its senses. >> the recent g7 said something of a seismic shift. -- shift when it comes to global alliances. angela merkel suggesting germany cannot rely on the u.s., on the u.k., but europeans must take charge of their own destiny. such alliances can be looking so fractured at the moment, what does that mean for australia? you say that the u.s. and australia have these shared by his and a special relationship, but do we really?

>> of course we do. our reliance is stronger than ever. it's more important than ever. as president trump and i demonstrated when we were together on the uss intrepid. only little while ago. our commitment, the commitment our two nations, based on our history, based on a shared values based on mutual interests, a stronger than ever. >> is there a concern that president trump has proven himself to be a rational at times, erratic when it comes to policy decisions? is that level of good faith something that can still be relied on? >> the relationship is in the very best of health. the relationship between the united states and australia is as strong as any relationship could be. it is based on history, shared values, come in interest, the closest possible engagement at every level.

defense, political, economic, business, people to people, family. it is the closest possible relationship. edit get stronger all the time. >> scotland yard was forced to temporarily suspend information sharing with the united states at the reports -- after the reports following manchester. has australia sought reassurances from the u.s. that any intelligence shared would remain confidential? >> well, the intelligence relationship, as you know, between us trillion and the united states, is also intensely close. we have every confidence in the confidentiality of the intelligence we share with our friends in the united states as , they do in the confidence we give to the intelligence they share with us. that want to say you to

intelligence is more important than ever. in particular in the battle , against terrorism. it is a global phenomenon, the global threat of islamist terrorism extends from europe to the middle east to the americas into australia. so the sharing of intelligence , not just between the five r's, but between all nations that are committed, it is more than important than ever. alix: still to come on "bloomberg best," more of the week's most compelling conversations. we take the pulse of the fomc. and as financial stocks limp through a nervous week, morgan stanley's james gorman sizes up the trading environment. >> there is enormous uncertainty which would breed volatility, and it is not. alix: and straight ahead, -- speaking their minds about u.s. policies.

>> it may be important for the u.s., but not for russia. alix: this is bloomberg. ♪ these days families want to be connected 24/7.

that's why at comcast, we're always working to make our services more reliable. with technology that can update itself. and advanced fiber network infrastructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most.

♪ >> do you think the hedge fund industry is in a permanent decline? >> no, i don't. i think there is a tremendous amount of capital out there. i think it is tougher for the smaller guys. the business has become much more institutionalized. i think the fee structure may have to change a bit, but there is always going to be the need for high-quality investors. there is no question about it. >> when you say fee structures might have to change what do you , mean? >> do you pay two and 20 four a fund that is matching what is happening in the s&p -- >> should any funds be charging two and 20? >> there are always guys that

will outshine the rest of the group. there has to be some flexibility going forward in that fee structure, but it is very tough for investors to look at it and two andm going to pay 20, but you are barely beating the s&p. is that worth two and 20? alix: that was former hedge fund manager phillip falcone back in the financial gain following a five-year sec ban in a rare and exclusive interview with betty liu. our colleague erik schatzker traveled to st. petersburg, where he set down with several of russia's leading business and political figures. here are some of the highlights of those conversations. erik: before the election, mr. trump was promising a warmer relationship with russia. do you still think that is possible? >> well, i think -- it is not warmer parent but more constructive. there is a good reason for this. the whole world will sleep better if russia and america

will have a better relationship, but his ability to conduct any policy now is under a threat. erik: the whole world would sleep better why? >> because russia and america are the largest nuclear powers, and not to have dialogue between them, i think makes the world a much more dangerous place. erik: because there is a risk of what? >> risk of any conflict which can happen. i mean, let's face the facts. we have the situation before. erik: you are referring to the cold war? >> cold war. we are now in a cold war. erik: you believe we are in a cold war? >> absolutely. absolutely. >> president trump said he will consider major action, his words, if his administration decides that steel and aluminum imports threaten national security. if he were to undertake major action, whatever that means, how

would it affect the global market? >> the u.s. is a classical destination of many goods, including steel and aluminum. the united states needs steel imports because of supply-demand balance, but any substantial distortion, and a potential deterioration -- eventually we will all pay for it. david he has also said, : president trump of course, that he wants the u.s. government and american companies to buy american when it comes to steel. given your experience there, " policybuy american help u.s. steel suppliers? >> difficult to say. maybe short-term it could make some impact, but in the long run, it undermines free trade, a level playing field of competition, and less motivation in the improvement of efficiency

of american steelmakers. then there will be reciprocal trade actions that would lead to barriers for efficiency improvements. the widely spread conviction is that more protectionism at that time, which was driven by short-term way of thinking, which is understandable. but nevertheless a substantial , deterioration of the economic situation in the u.s. and the world at that time. they should avoid that mistake. >> president trump's top economic advisor gary cohn warned over the weekend it is possible the u.s. will toughen sanctions on russia. is that now the probable scenario? >> once again, it does not matter that much. we are concentrating on what is happening in our economy and the structural changes in our

economy. so what is happening inside russia is much more important. important, butre i cannot imagine that sanctions don't matter. >> it may be important for the u.s., but not for russia. we are concerned with what is happening in our economy, the problems we have in the labor market in terms of financial investments. we are anticipating those issues -- we are concentrating on those issues. >> you are concentrating on this issues? >> we are not dependent on the capital flows here like other emerging markets. in the past several years, we have learned to live without huge inflows from the global markets. we're self-financed. so our local problems mean much , more for us. >> so no fallout for the , sanctions, and no fallout from the investigations taking place in the u.s. congress? >> is your story. [laughter] what is happening in the u.s. doesn't matter much for us. alix: there was plenty of fed speak on wall street this week as the fomc is widely expected to raise rates at its upcoming june meeting.

but with hard and soft data sending those mixed signals, and concerns about winding down the balance sheet, there is still room for surprise. this week, three fed presidents spoke at length with bloomberg television, starting with our exclusive interview with san francisco fed chief john williams. >> you are still hawkish, looking at three rate hikes, and you are not even writing off four. why the optimism still? john: i think the data has been actually very good. we are adding about 180,000 jobs in the u.s., twice what we need to do to be at a sustainable level. unemployment is below 4.5%, and i see it going lower. the economy is doing well, we have good momentum. we still have a little ways to go on our inflation goal, but i am still optimistic. we need to to continue -- we need to continue the process we started of getting interest rates back to normal levels. haslinda why aren't you that

: concerned about the weaker inflation data? john: well inflation is , influenced by a lot of different factors. we have seen some transitory things push inflation down. when i look more broadly over the trends of the past couple of years, i see inflation measures moving towards our 2% goal. we are still below that, but with a strong economy growing at a good pace and unemployment getting towards 4%, that will give us an up you up draft to inflation and move us into i think 2% within a year or so. haslinda: so if you continue to , see inflation below 2%, would you have to rethink the june rate hike? would that make sense? john: well i'm not saying what , we will or won't do in june. but i think our strategy is a good a gradual movement of one. interest rates back to normal. let's not forget that even today, interest rates in the u.s. are very low. a $4 trillion balance sheet, so we are still giving the economy a good push where we have monetary policy today. just a gradual process of moving

back to normal over the next few years. i am comfortable with where we are and where we are going. we don't want to let this expansion run too hot for too long. i think that creates risks on the other side. we are trying to get it just right and make sure we don't stall the economy, but make sure we don't let the economy get to an unsustainable point. >> i think a good thing about unwinding the balance sheet is that it will create policy space for the committee in the future if we needed. and on the rate itself, i think we are not very far from an appropriate rate for the u.s. economy that will keep inflation not too far from target and the labor market performing well. and so what i disagree with is the idea that we have to go two hundred basis points higher in order to get to some sort of neutral rate. i don't think that is the environment we are in. i think we can stay about where the idea that we have to go two we are, possibly a little bit higher than where we are today. >> we have a hot jobs market, but our inflation numbers appear to be cooling. whether you looking at pce, cpi,

or core cpi, we hear from john williams and others echo to more hikes this year, so what do you see that they don't? >> i think those inflation numbers have been a little bit surprising. in 2017, we have been arguing we are making progress towards our 2% inflation goal, but these have been going in the opposite direction in the early months of 2017. i also think, in the first quarter, we got a relatively weak gdp report. it was revised up a little bit, but even with that revision, i think the first half of 2017 ordinary gdpively growth of around 2%. the economy isat growing a lot faster than trend, and this is going to push up inflation, i don't think is matching up with the numbers

that we are actually seeing. and furthermore, inflation expectations actually started to decline after our march rate increase, and that is an important variable to keep track of as well in this discussion. >> business confidence right now is high. ok. there is a lot of business optimism. and you see business investment is stronger this year than in the last years. the issue is that is great, and it can help gdp growth, but 70% approximately of the economy is the consumer. so at the end of the day, businesses are more optimistic for several reasons, but ultimately everyone is watching the consumer. the consumer is the primary driver of gdp growth. increased business investment helps, and businesses right now are optimistic. >> do they see it? the disconnect right now is while they are more optimistic, when you ask a business leader

, do you see improvement in your business? oftentimes the answer is, not , yet, but we are expecting that. >> does that have to do with length or duration coming out of the financial crisis? it just takes time to heal, or is there a new format of globalization where american business is waiting to pull the trigger on the nostalgic investment we remember? me, i think some business leaders are hopeful that fiscal and other policies might help improve gdp growth. that is part of it. and in addition though, some of the things have been headwinds, which i don't think are going away. sluggish population growth, which has a big impact on consumer spending, and sluggish gdp growth, but also increasing disruption and new business models increasingly are displacing old ones, which are giving many business leaders pause, even though they want to

invest in the business, they are not sure the model they are investing in will be sustainable, so that is a countervailing headwind. ♪

♪ alix: you are watching "bloomberg best." i'm alix steel. let's get back to our review of the week's top stories. it may not have been a trade dispute or a north korean missile launch, but the computer failure that stranded british passengers certainly qualified as a disaster. >> british airways is in recovery mode after the airline suffered a massive computer failure that left thousands of passengers stranded. nearly 600 flights had to be canceled. how much is the weekend breakdown going to cost?

>> there are several numbers floating around out there. one number puts it at 100 million pounds thereabouts, , essentially the numbers that passengers can claim. you add to that three days of severe disruptions and lost business essentially. some analysts say that is 30 million pounds a day. as far as i can remember, it is one of the epic meltdowns we have seen from an airline. >> ryan air reported a 6% gain, europe's biggest discount airline also says it is in talks with boeing to add more jets to its fleet. >> frankly, people are moving around to get our cheap fares. what happened over the weekend can only be good for our business. our airline is four times larger than british airways and we don't expect to have the kind of i.t. issues they struggled with over the weekend. you have to wonder where the disaster recovery program was? vonnie billionaire steven cohen

: is planning his comeback. he was barred for five years after pleading guilty to securities fraud in 2013. but that ban is almost over and , he has plans to return to the industry. >> well this is a man was , something to prove. he only returned 1% last year. previously, the year before that, 15%. if you go back far enough compounding on the order of 25%. ,and that 1% really does bother him. will he be able to raise money is one of the big questions. and i think you are going to see a rotation in the kinds of people that invest. previously, his big investors were blackstone and citicorp. now it will be people much more comfortable with headline risks. he will be watched incredibly closely, but one of the positives from where he sits and his ability to raise capital is -- he has paid $1.8 billion or some similar number, and the thinking is he is done.

>> uber has fired the engineer hired to lead its self driving car effort. he is at the center of a legal dispute over the technology with his former employer, google, the parent company of alphabet. why was he fired? >> so, on may 11, the judge in san francisco issued a partial preliminary injunction, which required someone to turn over some paperwork on exactly the plans leading into the self driving tech at bloomberg. -- at uber. either uber had to turn it over or the engineer had to turn it over, and if nobody was going to do so, it required that the engineer's job would be threatened. no one turned over the paperwork. there was a deadline till june 15. but the company apparently made the decision today that it was going to part ways. >> the latest reading of the factory floor in china shows manufacturing holding up in beating estimates. -- holding up and even beating

estimates. pmi at 51.2, matching april, showing the economy is maintaining some form of momentum. >> the main number is steady as she goes. really to see what is going on, you need to look at the sub readings. there is interesting stuff going on there. two trends -- is the pmi number one is broken down into three carter gary's -- large -- into three categories -- large, medium, and small enterprises. what led the recovery at the factory floor in china was the large manufacturers around the end of last year. they started looking better. but the medium and the small guys were still sub readings and -50 still struggling. that is turning around now. they are closing the gap for small and medium enterprises, so that is a good thing, more innovative, smaller firms. >> official data showing the pmi was maintaining economic momentum in april. the private one, not so convincing. >> not so good.

it came in worse than expected. we were expecting 50.1, 50 is the line between expansion and contraction. it has not been in negative territory since june 2016. this is the private survey of mostly private, smaller companies. and so we are seeing increased , pessimism about lines of credit and access to capital in this deleveraging campaign, even though the official saw the index of small and medium enterprises in the pmi yesterday improved month over month. >> j.p. morgan and bank of america shares tumbling as executives from both companies report trading revenue in the second quarter dropped significantly. what does significantly mean? >> it is a good question. j.p. morgan told us in the second quarter trading revenue , would be down 15% compared to last year. bank of america was not quite that bad. brian moynihan today said it

would be down 11%, 12% or so. vonnie: so, they had a fantastic first quarter. a quarter we were not expecting in any way when it came to trading revenues, so is this a little give back? >> it is. it is important to remember what happened last year. last year's first quarter was terrible for the big banks. and in the second quarter was a huge quarter. this year, we had a bit of a reverse. the first quarter was better than last year. and that is what you would expect. but now the second quarter, because of the comp last year is , not as favorable and we are seeing it down a little bit. >> are you seeing the same impact? is that trading revenue starting to weaken as well? >> it is an interesting environment. there is enormous uncertainty , which typically would breed tremendous volatility, and it is not. there is this very passive perspective that investors have, and i think the downside risk is outweighing the upside risks.

so people just not that active. >> auto sales unmixed bag. -- auto sales have been a bit of a mixed bag. ford better than expected, nissan up 3%, ford up 2.3%. gm sales surprising to the downside, down 1.3%. what is your initial take so far on what we have seen out of the auto guys? >> it is starting off as a pretty soft month. even though ford and nissan have done a lot of sales to commercial fleet sales. ford had a big month with commercial fleet sales. you have general motors being down, and they were predicted to be up. general motors is saying the seasonally annual adjusted selling rate is 16.6 million vehicles. last year it was 17.2 million , vehicles. it is not an awful month, but it continues to be basically another month of down sales. so, not terrible, but just continues to soften up. ♪

♪ >> news from e-commerce giant , amazon. its shares pushed asked that huge psychological $1000 mark in u.s. intraday trading tuesday, and analysts expect that to go even higher. i dive into my bloomberg and check out the analyst recommendation function. green means buy, red means sell, and you can see, there is absolutely no read on this board. -- there is no red on this board. there are 39 buys, seven holds, and no sells. alix: there are about 30,000 functions on the bloomberg, and we always enjoy showing you our favoites on bloomberg television. maybe they will become your favorites, too. here is another function you will find useful -- quic .

it will take you to quick takes where you can get important context and fast insight into timely topics. and this week's quick take brings us back to the subject of north korea. >> north korean leader kim jong un likes to brag about nuclear weapons. his country is thought to possess as many as 20 nuclear warheads. kim's military has tested a wide variety of missiles, and according to defense analysts, has moved closer to producing a missile capable of reaching north america, and a new warhead compact enough to ride on it. that is why neighboring countries and the u.s. are all watching north korea and its unpredictable leader closely. pres. trump: it will be solved. you can bet on that. >> here is the situation. september 9, 2016, north korea conducted its strongest nuclear weapons test in a decade. the 10 kiloton underground blast was almost as powerful as the bomb dropped on hiroshima. un warned7, kim jong

of more nuclear weapons test. he stepped up ballistic missile testing with some lending in the sea of japan and promised to test long-range missiles that could reach north america. in response, president trump said he would consider all options. pres. trump: we are probably not safe over here. if he gets the long-range missiles, we are not safe either. >> after meeting with china's president xi jinping, trump agreed to work with beijing to find diplomatic solutions. he later warned of a major, major conflict if diplomacy fails. in april, the u.s. installed a missile defense system in south korea, and the chinese are not happy about having the system surveillance capabilities in their backyard. china, north korea's only significant trade partner, has been pressuring the country and has suspended its code oh purchases -- and has suspended its coal purchases from there. but the chinese are reluctant to push show hard as to risk the collapse of the north korean government. meanwhile, south and north korea

have hundreds of thousands of troops deployed on either side of the border. here is the argument. north korea has a long history of escalating and even de-escalating tensions to broker economic and diplomatic concessions, which leaves the u.s. and the world in a tricky position. most situations call for a carrot and stick approach. unfortunately, neither that carrot or stick has worked. what is left on the table is ever stronger sanctions, awaiting the downfall of the kim dynasty or military , confrontation that risks enormous casualties, but doing nothing is dangerous, especially considering kim jong un's erratic behavior. he has executed top advisers. a senior defector went so far as to say that as long as he is in power, the country would never give up its nuclear weapons "even if it is offered $1 trillion or $10 trillion in rewards." ♪ alix: that was just one of the many quick takes you can find on the bloomberg. you can also find it on bloomberg.com. along with all the latest business news and analysis 24 hours a day. that will be all for "bloomberg best" this week.

thank you so much for watching. i'm alix steel. this is bloomberg. ♪

♪ david: you started out, your father was a stockbroker. had you ever considered go into banking? jamie: i knew more of what i didn't want to do. i did not want to be a doctor or a lawyer. david: you chose to go work for sandy -- jamie: it was a hell of a run. he fired me. [laughter] david: you had a lot of jobs, i think you were offered the ceo of home depot. jamie: i wear the jersey. i am not a hired gun. david: do you think the country is better off for having dodd-frank? jamie: the system is completely recovered. part of that is dodd-frank. david: you would never consider running for office, would you? >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright. ♪