that the economy added jobs. joe: absolutely. he definitely trumpeted the numbers -- i think he said three children dollars in stock market cap added, about what -- $3 trillion in stock market cap added. those transfer in place before he got elected and it is a continuation largely of them. nonetheless, you heard him in those, citing the momentum as evidence of his early accomplishments. julia: "trumpeted" was a nice word there. he is also confident he can get the health care bill this summer. the quick comment at the end of james comey testifying on thursday, and donald trump said, "i wish him luck." joe: you see markets a little bit lower, but let's get more on where the major averages stand. abigail doolittle is standing by. we are looking at very

small the kinds for the major averages a second day of small the clients. half an hour ago, the three major averages it line ever subjected climbed ever so slightly higher, but as -- major averages did climb ever so slightly higher, but as trump was speaking -- we have big 7.5%s in this macy's down from hitting a seven-year low after the cfo earlier at an investor conference and annual investor date to say that the company expected margins to be 1% lower on a year-over-year basis and as a result, they will be engaging in rigorous cost-cutting -- cost-cutting in order to maintain the earnings forecast. of course, how much can you cut costs? investors not cheering that. we are seeing other retailers falling, including kohl's, foot locker, and nordstrom. this is an ongoing theme this year, retail, as is risk-off. when you look at the haven

bidts, we are seeing a today. today we are seeing a big haven bid. haven bonds are rallying. gold is up 1%. the yen is also higher. spikinglso have the vix 5.5%. not a huge spike, but it is well above 10. the reason i say even with stocks that near all-time highs and there is a bit of a risk-off , we go to the bloomberg and look at g #btv 5706, it is pretty interesting. we have the nasdaq, best of the stock indices, in white. yellow, gold, orange is the yen, and blue is the 10-year yield. the first 2.5 months of the year, sideways trading range great but then around march 15 come when the fed raised rates

for the third time in about a decade, we see that stocks continued higher, gold went higher, yet went higher -- yen went higher -- and the 10-year yield back near or at levels last seen the election is that this is really pretty interesting to pay attention to, considering that we have stocks at all-time highs, but we also have this strong haven bid on the year, joe. joe: thanks, abigail. what'd you miss? south africa's economy fell into a recession for the first time since 2009. gdp contracted 0.7% in the first quarter, surprising economists estimated as much as a 1% expansion. joining us from london, gabriel sterne, head of global macro research at oxford economics. gabriel, weakness in these emerging economies notwithstanding, you are out with provocative claims recently arguing that emerging-market

hard currency debt, the borrowing that sovereigns do in currency not their own, typically dollars, is structurally undervalued. explain to us the are -- the argument. gabriel: that's right, joe. what i'm doing is trying to find a little bit of alpha, which is not so easy these days. but there is alpha in an unfashionable place -- this dollar-denominated debt. the reason is as follows -- in the phase now, when original sin is kind of over -- by that i mean it used to be the case that veryvernments found it difficult to issue in their local currency and out the markets are very tolerant. the local currency issues come even a decade or so ago, just 15, 20% of the total government decade now they are well over 60%. that in itself means that because sovereign debt is such a small proportion nowadays of

total debt, what is the point of defaulting on it anymore? brazil would be the extreme example. dollar bonds in brazil around 2% of gdp. even if things get bad in brazil, what on earth is the point of defaulting on that tiny share of gdp? scarlet: my question to you, then, is is this reflected in what ratings companies are saying about emerging-market economies? they are fairly negative on these economies, and whether ratings agencies say, they cannot do much about that. gabriel: i think ratings sometimes get behind the curve. i think they are a little bit behind the trend here in the sense that partly because rating agencies themselves use the matrices of defaults based on history, and i think history is not necessarily good view of future here. for example, they would say now b sovereignsbb to

default in 10 years, based on history. i think it is a bit less now. i think recovery values are a lot higher nowadays in the sense that if you defaulted -- which the imf is pushing people to do debt, don'tfile the do big haircuts can just deal with of liquidity problems, but pay out in full later on, then it doesn't hurt you very much anymore. i think ukraine is a very good example of that. julia: and obviously, the settlers ukraine, where the dollar bond is far more superior than the domestic debt. but you can't compare that with greece and what we saw there, and the right down -- writedowns, and the imf pushing for some kind of report falling or what they can get away with . gabriel: greece could be -- and almost tempted to say that greece could be the last great

default, except we have venezuela waiting in the wings. those 2 countries are very -- well, not unique, but very different. there it is all about dollar debt, and they are very unusual in that respect. they certainly cannot control the debt buyer having about of inflation. doubt of inflation. it is an external currency in a sense. a lot of the em sovereigns nowadays, they can inflate the debt away. in ukraine, rather than impose a big haircut, that is what they chose to do. that is the trend. in a way, greece and venezuela are probably the very high-profile cases that might just disguise the trend and let , sovereign investor make some alpha in the meantime. joe: gabriel, scarlet ask you about the ratings agencies and the degree to which their they perhaps are not

realizing times have changed. what about market pricing? when we talk about the rising rate cycle in the u.s., the strong dollar, worrying about the hard currency debt, how much are we talking about the undervaluation by your measures if the historical patterns don't hold anymore? gabriel: well, i gave you the historical pattern, and to some extent markets will be ahead of ratings, because that is their job. but i would estimate that if you actually allow for what i think are possible recovery values and a slight decrease in the amount of default, it could easily be that on a fundamental basis, you actually gain 50 basis points right across the sovereign spectrum. and then if you add to that lower risk premiums that markets priced in, maybe you get a bit more than that. we are not talking huge, massive gains, but in this era, u.s. come emld trading

investors moving up the risk scale, i think there are a few good cases where you can make -- brazil to turkey to zambia -- where you can find good value just on the basis of by the debt debt, and those people cannot be bothered to defaulting because it is not worth defaulting. just not priced correctly. julia: can i ask you a question -- attention, slightly less frontier market, and that is the united states bond market. you were talking about the prospect of using inflation. why does in the fed -- why doesn't the fed do that, inflate the balance sheet? gabriel: oh, so you bring the conservative out of me now. [laughter] gabriel: too long out of the bank of england. i think it would be a bad idea. but the u.s. stays very manageable, and if anything, we

take the opposite view that the trump trade looking like it is on wanting faster and faster, notwithstanding what we just heard from the -- unwinding faster and faster, non-withstanding we just heard from the president, the markets are probably right to keep those bond yields a bit lower than they were a few months ago. joe: gabriel sterne, great stuff. head of global macro research at oxford economics. thanks very much for coming on. we want to check again on the markets, which are fading a little bit in play action. here's the intraday look at the s&p. not talking about a big selloff, but near lows of the day, down about a quarter-percent. let's look at a few different asset classes to put some perspective. nasdaq faring a little worse -- down to .3%. gold obviously, or not surprisingly, i should say, catching on the risk-on move. and 10-year yield's got a little lower than that early in the day. reporting that

china may be inclined to continue buying more treasuries. we are at levels not seen since about november 10. the immediate wake of the election. a little bit of a risk-off move. coming up, apple takes on tough competition. we will have more from our exclusive interview with apple ceo tim cook on a voice controlled speakers. this is bloomberg. ♪

miss?t: what'd you apple putting its first major new product in years at the center of a home tech empire. it is an effort to keep

customers in its ecosystem. in an exclusive interview with ceo tim cook, emily chang sat down to discuss the future of the tech giant and why he is challenging amazon and google. -- what wee hear have tried to do is fill the breakthrough speaker first. is it is deep -- music is deep in our dna, dating back from itunes and the ipod. we wanted something that, number one, sounded unbelievable. i think when people listen to it, they will be shocked over the quality of the sound. and of course, it does a lot of other things, and all those are important as well. -- wantedted to a really high-quality audio experience as well. emily: you are focused on how this will reinvent music in the home. will i be able to make a phone call, order groceries?

tim: there is a lot of things you can do with it. one of the appendages is there is a lot of things that siri knows how to do from sound. we will start with a patch of those, as phil showed today during the keynote. and and there is nice follow one activity there as well. emily: talk about e-commerce. e-commerce is important to these devices. i can order paper towels. does this tell us about apple's desperation in retail? -- aspiration in retail? tim: i wouldn't read into it in that regard. apple is a company that wants to deliver -- cares deeply about music and wants to deliver a great audio experience at home. we reinvented in the portable area and we think we can reinvent it in the home as well. we know that people want the speaker to do more than that. and obviously, we want a speaker

to do more than that. we are sort of combining what has been thought of to be 2 distinct a given things until now. -- distinctly different things until now. i think people are going to love it. i know they are. i'm a user. i think they will be blown away by the experience. emily: how long have you been working on this? tim: multiple years, multiple years. the underlying technology here is something to behold. and to get the experience that we wanted and the quality we wanted, like apple products in general take multiple years to do, starting from the core technology and building the product. emily: you have people out there saying, finally! what took so long? tim: for us it has never been about being first anything. if you think that, we did not

have the first mp3 player. we did not have the first smartphone. we did not have the first tablet. there was a tablet shipping a decade before. few people used it. arguably be shipped the first modern mp3 player, first modern smartphone, first modern tablet. but we were not first in any of those. it is not about being first come it is about being the best, and giving the user and experience that delights them every time. we don't let that impatience result in shipping something is just not great. it is the 10th anniversary of the iphone. you have unveiled the new ios. what is that tell us about what is next? 11: i can tell you that ios is unbelievable, but for iphone and ipad. --doesn't global things from

it does incredible things from peer to peer payments. an area i have great personal excitement about -- i'm excited about all of it, but i'm really excited about ar. you saw the demos being done today. i think it is profound, and i think we today, as we get this developer release out in the hands of the developers, we will have the largest augmented-reality platform in the world. and i think we have launched people,large numbers of and i'm incredibly excited to see what some of the developers are going to come up with. emily: exactly. vr talked a lot about ar and with regards to developers, but what about consumers? when will consumers see apple ar? tim: that is another one of those things i'm not going to answer, but with core technology, as a platform owner,

the first thing and arguably in some ways the most important is to build a foundation, and from that foundation you can do many things off of it, but first you have a solid foundation. i think the developers are going to love what they find in the developer built on ar. scarlet: that was apple ceo tim cook speaking exclusively with our emily chang. julia: time for the bloomberg "business flash," biggest business stories in the news right now. $100 billionaised of investor funding could the social-media site fails to keep pace with rivals. the last funding round was in 2015, valuing the company at $11 billion. the company said its new valuation is slightly higher, $12.3 billion. uber told employees that more than 20 people have been fired after a company investigation into sexual harassment claims.

according to a person familiar with the matter, the company did not name the employees who were fired. macy's shares are plunging today after a warning of tightening second-quarter profit margins. the world's biggest department store says growth margins are a full percentage point below the year ago period. macy's says the cost to maintain earnings forecast, which it reaffirmed today the next earnings release is august 10. and that is your bloomberg "business flash." joe: and we have some breaking news ahead of the testimony tomorrow from former fbi chief -- sorry, thursday, before james comey's testimony on thursday -- he is going to stop short of saying trump obstructed justice, but he is planning to detail his conversation with trump.

we will get detail on the conversations he had with president trump, but according to people familiar with his thinking come he is likely to stop short of characterizing it as obstruction of justice, and he is also said to have coordinated his testimony with robert mueller, who is leading the russian investigation currently at the fbi. scarlet: promises to be must-see television, which sets us up for a programming reminder. on thursday, we will bring youthful coverage and analysis of his testimony before the senate intelligence committee. at nineheduled to begin 4:30 a.m. eastern time on bloomberg television. this is bloomberg. oops. joe: one more thing, this evening bloomberg is hosting the inaugural invest summit. the former trump advisor and colony northstar executive s, bothn, and jim chano at the event tonight. scarlet: that will do it.

this is bloomberg. got it right this time. ♪

scarlet: i am scarlet fu. miss? miss? -- what'd you momentum has been driving the stock market, no matter the recent headlines and impact on oil markets we are seeing growth at every turn. one trader observes that something has got to give, and for him, he believes that value will take over from growth. what we're looking at is the ratio of the russell pure value versus russell pure growth. i have it reversed on the headline so ignore that for a moment. pay attention to that big dip at the end, because that shows you how value has underperformed growth. it shows how cheap it has been compared to growth in 2016. everyone buying on the hope of what is to come -- think tesla, netflix. when is the value going to be recognized?

he says it will eventually run out of fire. julia: the question is when. it is interesting when you talk events,e possible risk yet the vix down in the doldrums. i'm going to debunk one of the myths out there. the s&p real-life correlation -- the correlation between individual stocks. and that is the white chart that you can see there. the yellow line is the vix. below stock correlation has been suppressing the vix -- low correlation, then stocks are moving at odds with each other and there will be less top-level. if you look at this, actually, what we're showing is realized correlation has been rising as the vix has been falling. not a good enough reason to talk about the suppression of the vix. realized relation is and what is going on. good one, because

the declines throughout you were cited as an expedition. julia: exactly. talk about it in november, december, january, but not since then. joe: speaking of risk, gold at the highest level, the white line, highest level of the year. safe-haven stuff and all kinds of reasons -- there is really only one chart you need to look at some the real yields, for tips. gold in the white line versus the market five-year target duration in the blue line. this goes back to early 2015. these 2 lines line up perfectly. if you want to have an understanding of what is driving gold, first you look at where the market is looking at real interest rates going forward, and that will give you a pretty clear answer. cuts away all the noise. scarlet: we are always looking for ways to cut out the noise. the market closes next. we have the major indexes falling right now, but not very much. declines anywhere from .2% to

.3%. they've been consolidating. of risk makes sense given the events we have been talking about. scarlet: from new york, this is bloomberg. ♪

♪

julia: "what'd you miss?" falling for a second day. gold climbing for a third day. julia: it -- joe: we want to welcome you to our closing go coverage every day from 4:00 to 5:00. scarlet: u.s. stocks closing lower, they took a bit of a dive in the final two hours of trading before coming off the lows in the last 30 minutes. it was good for decline of almost if the points. the dow and the s&p coming down seven points, the nasdaq the big loser, all i've .33%. i only saw commodity names, energy companies and providers of raw materials topping the decline. let's look at some individual names worth mentioning.

macy's trading at the lowest since 2011 after warning investors that profit margins are tightening. a new headache for investors of the embattled department store chain that are dealing with shifting secular trends and online competition. advanced micro devices, a leader in the s&p 500 gaining almost 7%, reportedly back in action according to the chief technology officer who make comments at the global tech conference in san francisco, saying amd is back in action on high-performance applications and will boost average selling prices. so pray -- perhaps some pricing power for that company. the qatar exchange index extending yesterday's decline. plunged moreay it than 7% as saudi arabia and arab allies cut diplomatic and economic ties with the kingdom.

so for two days, qatar is down by almost 9%. joe: let's take a look at those government -- government bonds. 10 year yields is the one that really stands out, at one point today 10-year gilts got down to -- we are very low and some bloomberg reporting this morning about china being confined by more treasury, putting tenure yields that some of the lowest level since the election. mexican bonds continue to rally over the weekend with the state election in which the established party of the , so growingn confidence in mexico. a quick look at the intraday on ten-day. . staying close to the levels throughout the day. the dollar down to the

lowest level it's been since october of last year. as joe manchin, that report from china, leading to a weaker dollar today. heading into the risk event we have this weekend. above, the april 21 low is the one to watch. haven flows, more kerry potential encouraging the rally. on the longer-term if you go back to november when we saw the election of donald trump and you see that spiked higher there. we've now taken out all those losses.

on the commodities front, a little bit of gains. we've talked about gold, gaining on some of those safe haven buys and crude oil of nearly 2%. nymex still below $50 a barrel. scarlet: "what'd you miss?" high drama out of washington in the next few weeks and james comey's upcoming testimony on thursday. the gold and yen have been gaining. we bring in a macro strategist. joe was joking how the trump trade was erased but there is some truth to that and that we see things like treasuries and gold climbing quite a bit. we you say the momentum trade has ended? >> we talked about this before. worked greatrket for a month or two and had

slowly given everything back. it is fair to say that the vacation of meaningful reform from the administration's more from expectation to a faint hope. we are seven months away from the time where the midterms will become an impediment or at least an excuse for an impasse in congress. so were getting to put up or shut up time and there seems to be more focus on other things than taxes or. -- more than tax reform. day, lotsday is a big of questions about whether the james comey hearings are a market story at all. what would have to happen in those hearings for traders to care? i'm looking at a chart you have made for us of 10 year treasuries continuing to trade right in line with your model. what do you think would be the bar?

what would have to happen for the people you talk to all day to really care about this? >> it would have to say something extraordinary. we would have to point the finger and say he stopped me from doing my job and obstructed justice. there have been some headlines out earlier today that in fact he's not going to a that. no evidence that market participants are caring about this. deafening.e has been you do better to look through and focus on the fundamentals than to worry about the next political headline because you will get an ulcer if you sit there and worry about every headline used the. scarlet: at the same time you can bid up things like the yen and goal. i have a chart showing risk off assets performing strongly. driveill continue to these kinds of assets.

do we need to see more to break out beyond this, or is it just something that is there in the absence of other news? >> i tend to view it is more that monetary phenomena in it risk appetite phenomena. what have we seen over the last several months? a seemingly never-ending stream of for economic data. the hope of meaningful fiscal toorm going from expectation distant hope. what has happened is the market has ratcheted back expectations for the fed and the model showed earlier is based on the current avel of fed policy rate and couple of with economic data. so what we're looking at is ultimately the market basically saying to the fed, we don't think you're going to do what you have said you're going to do our projected, and that seems to

be a reasonable conclusion based on past patterns of behavior. about yournt to ask article today, you would expect the nikkei to see some weakness. normally you can overlay the two of them and it works great, but we also have to consider that the s&p is that close to the dingdong record highs. emerging markets are faring and testing it well. em currencies are close to their highs in the last year or two, which is not what you would think of as a classic risk off. say what you want about gold or the yen as a safe haven, you've seen a tremendous blow with crypto currencies. safe is not the word i would use for them. joe: if you're talking about

inflows into alternative assets, what does that suggest? >> there are two things. sense, people are thinking we are in the same spot as 20 years ago, the dawning of , whatever,aquarius in terms of the shift in the way business is conducted. 20 years ago it was the internet, and now it's this crypto currency phenomenon. you look at the chart joe has posted on twitter a few times, the market capitalization of all these current basically has gone vertical. to my mind, it is implemented couple double. when you have things like these offerings where

these companies or exchanges can conjure money out of their and say we're going to call it a offerings where thesewidget, and it's worth $15 million. that is crazy. scarlet: thank you so much. this is bloomberg. ♪

mark: it's time for first word news. the ranch interior minister says the assailant who swung a hammer at police officers near notre dame cathedral yelled, this is for syria, before he was shot and wounded. people fled the esplanade outside one of the world's most famous churches. it was the latest act of violence charging security forces at high profile sites in

france, which remains under his date of the after a string of islamic extremist attacks. one saying future attacks will be harder to stop it prime minister theresa may wins thursday's election, praising the tremendous bravery of the police during sunday's terror attack. he warned that london could lose third -- close to 13,000 maycers if prime minister wins and pushes through budget cuts proposed by the conservative arctic. senate republicans say they are nearing consensus on health care .egislation they reportedly narrowed down options today. president trump spoke to reporters after a white house meeting with republican congressional leaders. >> if congress doesn't act to save americans from this democrat inflicted catastrophe, next year is only going to get worse. is going to get a lot worse. although i don't know how it

could get worse than 230 percent, but i'm sure the democrats will find a way. praisede president also the house for passing its own health care bill this year. fbi director james comey will publicly described conversations with the president but will stop short of saying if he thinks mr. trump sought to obstruct a federal probe of russia's role in the 20 16 election, according to a person familiar with the matter, mr. comey will describe in detail any of his interactions with the president during the senate intelligence committee hearing on thursday. he has coordinated his testimony with robert mueller who is now special counsel in charge of the russian investigation. u.s. treasury secretary steve mnuchin spoke about the u.s. trade and economic issues with china today at the u.s. china business council meeting in washington. he said the u.s. wants open markets, reiterating what president trump

proposed early on. >> the president was very clear during the campaign and was very clear with our meetings that the imbalance in trade is a significant concern. the chinese have heard that and i think they understand that, and that's not going to change overnight, but that's something we are working towards. said secretary mnuchin he's pleased with the direction the u.s. is heading with china. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. steve for more on mnuchin's comments on china, let's bring in bloomberg's treasury reporter who joins us from washington. just scanning the headlines, mnuchin pleased with the direction of talks and comprehensive dialogue will begin this summer. even an acknowledgment that china is supporting the currency. the tone here incredibly

different president donald trump's talks during the campaign. what you do here treasury secretary mnuchin talking with more nuance when it comes to the relationship the u.s. has with china. he has been strong in saying it's an important relationship for the u.s. and mnuchin went on to say that they are pushing for reciprocal trade with china and opened more dialogue when it comes to current and other aspects of the relationship. up ont: i want to pick the currency point. president trump had vowed to label china's -- china a currency manipulator -- manipulator, and that went by the wayside. the fact that countries keep their currencies intentionally week to gain an advantage in exporting to us. >> we did hear some pretty strong comments that the u.s. will not tolerate any currency manipulation, especially if it is for a competitive advantage.

he ate knowledge that china is intervening in pushing the currency in the other direction to prevent capital outflows but it looks like the dialog is open, but the u.s. message is very clear and consistent, don't mess with us. are u.s. treasury reporter. was just reporting earlier, fired fbi director james comey will describe many of the interactions with president trump but will stop short of saying the president sought to obstruct justice. the latest development comes as the world readies for the highly anticipated testimony on thursday. will any of it move the needle on the russian investigation or anything else? for more, let's go back to washington with kevin, bloomberg's congressional editor. what will it take in this hearing for james comey to meet expectations? a stock ore

something, the bar would be set so high for these earnings with all the hype. so what does comey have to do to get the number? kevin: i suppose it depends on what your expectations are, if you're a republican looking for this to fade away and regain some level of normal, or whether you are a democrat looking for something that will further undermine the president who is already deeply in battle. i think always the people will be looking for elements that start to build a case that would be toward obstruction of justice. it is possible that comey will lay just enough groundwork to get there without actually saying the words are going as far as offering is public opinion. some expected to describe of his conversations were president trump has reportedly asked him to stop his investigation into michael flynn , the ousted national security adviser. depending on how those conversations are prescribed, we could see a pretty uncomfortable

trump administration, even if he doesn't go that final mile and use the word. comey has report that coordinated testimony with a special investigator robert mueller, and even if he stops short of alluding to some form of obstruction of justice from president trump, should we also assume the possibility that perhaps because of that coordination was a special investigator, it may not be the case he is being as open as he perhaps might be behind closed doors. kevin: there will definitely be vague areas where comey simply will not answer. get into the status of the fbi investigation when he left or the scope of it and there's a whole bunch of areas you can imagine him simply not getting into. comey and mahler go way back, they've had a long relationship working together. i think comey went into this knowing already areas that were definitely off-limits and at

some point there was a question of making sure he wasn't going to step on something that robert mueller is going to work on. expect any cut testimony from ron rosenstein who has taken over this part of the investigation from jeff sessions, who had to recuse himself? down the road, will he likely be called to testify? it's a little unclear. obviously he's handed off his responsibilities to robert mueller come the special counsel, but he does still have some role in overseeing certain elements of this, we think. he will be on the hill tomorrow along with several other officials including the acting fbi director. it will be an unrelated hearing that looks at four intelligence asked and authorities that expire at the end of the year. we had no idea what questions if any rob rosenstein or the other officials up there are going to

answer, but there is little bit of a warm-up act tomorrow before comey hits the main stage on thursday. joe: we will be watching, on thursday. kevin, thank you very much. julia: have you ever noticed that trump tends to announce that big announcements are coming in two weeks? to push the agenda forward, so we get that, but the , that it often happens in two weeks. we put together this package showing how often donald trump predicts things are about to come. ♪ >> were going to be announcing something, i would say, over the next two or three we, that will be phenomenal.

>> wiretap covers a lot of different things. i think you will find some very interesting items coming to the forefront over the next two weeks. we will be reporting back sometime over the next two weeks as to nafta and what we are going to do about it. i will be making a big decision on the paris accord over the next two weeks. >> we don't have press conferences, just don't have them, unless i have them every two weeks and i do it myself. >> were doing very well in the fight against isis and will be having a news conference in about two weeks to let everybody know how well were doing it the mines are starting to open up. having a big opening in two weeks. pennsylvania, ohio, west virginia, so many places. a big opening of a brand-new mind. it's unheard of. wonderyou have to

whether all the background work has been done behind the scenes. another possibility is that he uses that as a way to get the people working for him to speed up, so maybe there are some other management practices behind the scenes that it serves a purpose for. the meantime, news keeps breaking in the intervening two weeks, so a lot is going on. market calendars on thursday, we will bring you full coverage and analysis on james comey's testimony before the senate intelligence committee, it's due to begin at 9:30 a.m. eastern time. we will cover it all day on bloomberg. from new york, this is bloomberg. ♪

julia: "what'd you miss?" china's holdings of u.s.

treasuries have climbed. let's take this dive into the bloomberg and you can find all these charts using the function at the bottom of the screen. a few weeks ago we were talking about the kick up higher in chinese ownership of treasuries. there was a rumor this morning that china is prepared to increase more of its holdings of u.s. treasuries under the right circumstances as the chinese yuan stabilizes. ,ou can see since june of 2014 it's been on the decline but we've seen that slight tick up we're talking about a couple weeks ago. they're looking at combined holdings of china and belgium. seen as a homen to china's custodial accounts. that's why we added that rise into the numbers. scarlet: it's a better picture of what is actually happening. plenty of chinese private citizens have been putting their

money into real estate overseas, specifically toronto. toronto's red-hot housing market is showing signs of cooling down a little bit. the blue line is tracking the ,umber of sales, down 20% indicating how new home buyers are taking a step back. the white line shows the number of new listings in the region, surging the most in seven years. the ontario government announced on theeign buyer tax greater toronto region to clamp down on speculation. if you look at vancouver, prices came down a bit that now they're back up near record highs. joe: lots of regional angst about all that money coming in. this is the best way in the world to watch tv, tv . i'm looking at our own show from a few minutes ago at the beginning of the show. the best way to recap what's , the future ofo>

tv. this is bloomberg ♪.

mark: time now for first word news. british police have named the third london bridge attacker as a 22-year-old, they say he is believed to be an italian national of moroccan descent who lived in east london. the other two attackers were , all three were wearing fake suicide vests and were shot dead late saturday after ramming a van into pedestrians on london bridge and then slashing and stabbing people in a nearby market. the attacks of seven dead and dozens more wounded. homeland security secretary john the block on the

trump administration's travel ban puts the u.s. at risk here at secretary kelly said the u.s. led attacks on iraq and syria increase the chances of attacks on lone wolf small towns and cities. secretary kelly also said there are more terrorist foot soldiers now that it any time in modern history. the u.s. is threatening to quit the yuan human rights council unless the body institutes a series of reforms and stop singling out israel for criticism, according to u.s. ambassador to the u.n. nikki haley. the trump administration says the council shields repressive regime's such as venezuela and iran from scrutiny. secretary of state rex tillerson warned in march that the u.s. will leave the human rights council if the organization doesn't make changes. amal clooney have .elcomed twins

ella and alexander were born at a london hospital this morning and are happy and healthy. adding that george is sedated and should recover in a few days. the couple married in 2014. these are the first children for both. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. joe: "what'd you miss?" president donald trump has suggestingcked -- that the move could be the beginning of the end to the horror of terrorism. what are the roots of the tension? joining us from london is the co -cio, i want to dig deeper into the roots of the isolation of qatar. what is the significance of donald trump's recent visit? how might that have catalyzed

the intense this of the trip? >> the proximity of his visit cannot be underestimated. effectively he has gone to saudi arabia and outlined, this will be the u.s. role here, take the lead against the fight on terror. it seems a lot of the simmering issues that have gone into the fore. have come to the this is what we are seeing right now, an unprecedented move on the part of saudi arabia and other gulf members to blockade qatar. this is massive. they cannot even flyover, that cut the borders. a will survive, but this is major step from just trying to get along as they were in december. saying: president trump the america first -- i wonder if there is a catalyst in a recent

kidnapping in iraq where a couple of qatar royals were kidnapped. this has to do with the amount of money that qatar has and how to use that to get what it wants. been trying to play a larger role in the region for the last decade or so. they backed the muslim brotherhood and democracy. head around the libyan intervention when they win in on the ground that in the air with actual munitions supporting some of these groups. that's been a key source of friction between qatar and some of the other groups. saw theyear ago you qatari royal kidnapped in iran and recently there was a media -- a ransom paid that could of amount to hundreds of millions of dollars.

why in the language of saying you are supporting iran, stop supporting them, stop criticizing us and maybe we will let you back into the fold and normalize relations. julia: i want to talk about the role of social media and hacking in these latest clerics as well. qatar media has been critical of other countries in the region. then on may 23, we obviously had the news agency hacks, praising iran. just what role has that played in this, and who could be behind it? >> it is layer on top of layer. all these things coming to a head at the right time. newsas a hack of the qatar agency with pro-israeli comments saying iran is a stabilizing force in the region. comments apparently on twitter

qatari foreign minister, then there was another hack which apparently had anti-qatar comments on how we can push back on this block here and the qatar media. in terms of interest, the simultaneous hacks, clearly what is happening is that qatar has two options. it can apologize and rejoin the fold of the gulf states and try to make it work without the organizations there or it is a new orbit into iran, russia, and turkey, which is probably one of the most interesting ones here. turkey is trying to do deals in saudi arabia. on the other hand, in the next themays you will see saying they're trying to play both sides. tangled web.dibly

let's look in the market commodities realm which initially reacted early on monday. what is it mean for internal opec politics, and for oil production, natural gas production? spell out for us, where does this go? >> qatar is producing at max. cuts, it's the opec 30,000 barrels of the 1.2 billion barrels. the saudi's are not afraid to be more pugnacious in enforcing and pushing their agenda. this is important because we've had easing compliance and opec. now we have hard compliance, it. don't justify if someone deviates from the aggressiven see very

responses from saudi arabia and its allies. scarlet: how long can the qatar government whether the economic breakup? is an incrediblyar wealthy nation. $200 billion of assets for 2 million people. that's why the next few days are crucial, to see which direction they move. will they move toward the iranian-russian orbit? the u.s. has an airbase there with 10,000 troops. or do they come back into the fold? this type of lock aid you are seeing cannot last that long. if they do move in that direction, toward iran and russia, then the implications of that get very complex and that would be very bullish on oil prices. we will be watching that. thank you very much. scarlet: bloomberg will host the

major players of finance, economics, and regulation. that is this evening starting at 6:00 p.m. eastern. from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" americans are pouring money into their homes like it's the 1990's. the strongest three months since 1994. let's bring in michelle, she joins us now from washington. great to speak with you. specifically why now, why are we seeing such incredible gains in residential construction projects, when so many people

say the housing recovery is getting long in the tooth and the economic cycle is near the in? -- near the end? >> in the story of residential construction, a lot of things are working in favor of it right now. we have solid job gains, some promise of wage growth, and home in stock prices are going up, helping home-equity and helping consumers feel better about spending. borrowing costs are still historically low. in looking at the weather data, we had the second warmest first four months on record since 1895. really that was helping a lot of construction continue in the early part of the year. global warming is certainly a factor here. tell us a little bit about what you found out regarding how much u.s. consumers are willing to spend on home improvements. we have a chart that shows how quickly the spending has gone

up, certainly when you ask your spouse or partner to pick up something else at home depot or lowes or do something else on their checklist. >> steady on cells and construction aside, the chart you showed on home improvement, we've seen that april was the biggest year-over-year increase in 17 years. making fixes on existing projects and not just working on new ones. julia: talk about payroll gains as well. we keep wondering where the wage gains are going to come from. >> this is what surprised me, especially since we're hearing from businesses across the of toughanecdotes times to hire in construction and skilled labor. here in residential construction, they been able to hire enough to make some impressive gains. , boosting increase

the payrolls against a 2% increase for all the private sector. they are finding enough contractors to get the job's done and the demand is there for this to continue. of morethere an element and more homeowners having positive home equity again after the housing crash, and is this prepared them for sales? part of it.hat is a lot of these factors are working in their favor. some people are saying it's the right time to make the big move and take on a big project to make their property more attractive for the next downturn and to feed back into the properties and make sure they are increasing in value. michelle, thank you so much.

scarlet: joe is gussying up his house right now. next, tim cook talks the future of the company. we will hear from that exclusive interview, next. from new york, this is bloomberg. ♪

julia: "what'd you miss?" when the president pulled out of card,s. paris time in a many business leaders disagree. one of them, apple ceo tim cook. he spoke exclusively with emily chang about that, about london's terror attack, and about augmented reality.

>> he did not decide what i wanted him to decide. wrong. he decided i think it is not in the best interest of the united states, what he decided. we have been cooperating with the u.k. government in not only on enforcement matters, but some of the attacks. i cannot speak in detail about that, but in cases where we have information and they have gone through the lawful process, we not just give it, but we do it very promptly. you saw the demos that were done today, i think this is profound. get thisoday, as we out in the hands of the

developers, we will have the largest augmented reality platform in the world. julia: i want to bring in emily chang from san francisco. great work on this interview. another was a lot of excitement about the host might that you will talk about but also some focus on hardware. what goes on with those shrinking ipad sales? emily: the home pod was the new product-- first new category from apple in a while. they are focused on reinventing music and the home in addition to other assistive things that siri can help with. there were a lot of announcements about the ipad. that it's a new productivity features and this is the category where sales have been shrinking for apple. so i ask, ipad sales are still falling. you told us in the past that the ipad is your clearest expression of the vision for the huge or a

personal computing. how can we continue to believe that, if ipad sales continue to fall? take a listen to what he had to say. >> on the surface, you just look at the numbers, keep in mind that the ipad mini came out at a point in time that smartphones were fairly small. people had maybe four inch screens on their smart phone. one of the things you are seeing is a natural move to a smart all of thataking market but taking a piece of it. thate seeing growth rates have shocked us. you're hearing a familiar refrain that we have heard from apple in the past, which is that they are open to cannibalization as long as it means people are using more apple products overall. light of president trump's decision to withdraw

from the paris agreement, there has been more controversy about ceos and their participation on the ceo council. tim cook is not a member of that counsel. what is his view on the theoretical usefulness of groups like that? emily: obviously tim cook was not happy about the president's decision on paris. neither was the ceo of disney and tesla. they both left the president's council but tim cook made a point to me that he never joined the council in the first place. i asked him why. take a listen. these councils in general and committees to be terribly productive. about not wanting to advise on something where i help, orhat we could we had a point of view that should be heard. -- i cannotg

imagine a situation where i would not do the latter because i think it's in the best interest of america to do it. emily: tim cook made it very clear he will continue to keep an open dialogue with the president. he believes it is his patriotic duty as a ceo to remain at the table if he feels it can benefit apple and benefit america. part of that duty is trying to push for changes to the tax code, in repatriation of overseas cash. he has a huge stake in this outcome. they: this is one of outstanding issues up the trump administration. we will see if a repatriation bill hits the floor. it would affect a lot of apple.ses and tim cook has said he believes that repatriation is good for the country. he believes of repatriation tax should be mandatory, and how it should be spent. i asked how should such a bill be structured.

take a listen to what he had to say. >> in our view, it should be a deemed repatriation. this means it should be required tax. so you are not asking the people that have had earnings from their international subsidiaries if they would like to bring back money, you are saying that you must pay the government experts period ofer some time. my own advice would be that the u.s. use that money for significant infrastructure spending in the u.s., because it creates jobs. emily: obviously this is a hugely important issue for many this investors who hope comes back from overseas and is built into the stock price. julia: great work on that

interview, emily chang in san francisco. the bloombergfor business flash. goldman sachs ceo lloyd blankfein highlighting the need for infrastructure spending in the u.s.. tweeting from china, he said he is impressed with the condition of the country's airports and roads. he stressed the need to keep up. echoing similar calls from jamie dimon. increaseng a capital of $5.8 billion, according to people familiar with the matter. santander speaking to advisors about a possible stock sell if it decides to go ahead with an offer. amazon prime will be available to low-income shoppers at a discount. those with a valid electronic benefit transfer card will pay $5.99 a month for perks like free shipping and unlimited streaming of movies and tv shows. some analysts say the move will help amazon better compete against walmart.

and that is your business flash update. today isbig debate who's going to buy the homepod? people onee a lot of social media that excited about it. julia: do you have a home device already? not have one. joe: it seems like you have to inaugurated with the smart home device of some kind. is it $349 or $180? betterlet's go with a tool, and actually, i don't know yet. the aesthetics are also highly important. [laughter] joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg ♪.

scarlet: we have a packed day

tomorrow. china will announce its make foreign reserves. joe: the reserve bank of india announces its latest rate decision. julia: president trump speaks in cincinnati, ohio, about the nation's infrastructure. in: tonight, be sure to tune for an all-star lineup. and bill gross and the nasdaq ceo. scarlet:

anchor: you're watching bloomberg technology. fired fbi director james comey will publicly describe

conversations with president trump, but stops short of saying if you think the president sought to obstruct justice. he will describe in detail any of his interactions with trump during his senate intelligence committee hearing on thursday. department of homeland security secretary john kelly speaking to a senate panel in washington says the block on president trump administration's travel -- thes the u.s. apparel u.s. in peril. london says he doesn't care about the repeated insults he has received from the president of the united states, asserting today that "he really couldn't be bothered about what donald trump tweets." a u.s. back to syrian force said today it has begun an offensive to capture the northern city of raqqa. an american commanders as the battle