evacuating the town, allowing the syrian military to splinter. it came under full government control last week. suspected chemical weapons attack. benjamin netanyahu says a worldwide disease spreading around us. he spoke today at a ceremony in jerusalem remembering victims of terror and promised to continue the fight against extremism and the right of israel to defend itself. president trump saying he did not fire former fbi director james comey because of the russia investigation. he made that claim in a tweet, fbiing comey the worst director in history. in an interview days after firing comey last year, the president admitted the probe into potential collusion during the 2016 campaign was on his

mind at the time. the south african president has taken steps to tackle challenges facing the country. in the two months since he place -- replaced -- following years of mismanagement. guy johnson was told in london without -- that south africa's maintaining a growth target of 3% this year. >> we are going to make every effort to ensure we get close to that. has revised their own figures upwards. i'm hoping to revise mine upward as well. so i think that is possible. mark: the south african president speaking with guy johnson in london. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2600 journalists and analysts in more than 120 countries.

i am mark crumpton. this is bloomberg. ♪ julia: life, i'm julia chatterley. trade 30 minutes from the in the u.s. , it is all about energy stocks higher. joe: the question is what you miss? scarlet: the meeting heard round the world prayer president trump's of his own are being worked out. meanwhile, relations between u.s. and russia, the chief economist says cold war to may have broken out. energy stocks higher. joe: the question is what you miss? and, shock waves are being sent through the states.

consumers and traders plug the hole in the global supply train -- supply chain. rising tensions between the u.s. and russia in the russian role in the con id. at 20 extend u.s. elections. after the threat of more sanctions, the trump administration says there are no immediate plans to impose sanctions. is trump coddling moscow? duringelsen spent years his tenure at the ims world bank. great to speak with you and thank you for joining us. two has brokenr out. world one, we understood, not perfectly, but there was a process on both sides. this time around, it is up to zero. there is not one big power in the world and is not clear how

-- decision-making processes it is somewhat more comfortable i think. >> the next day, the president will the walking about. >> there are still parts of american comments that i trust more in terms of processes. joe: we have had the sanctions with various pockets. >> even though

the europeans are taken aback and part of that is history and part of that is commercial. now, -- >> we can throw in italy and greece, always reluctant to do anything. china, whatever the international policies going on that the united states is right at the heart of right now. you know, i didn't know as an

analyst how you keep up with our decision-making and scarlet pointed out the for -- the , a more fruitful direction. >> i watched bloomberg news. it is absolutely right, i felt on sunday when i wrote a note that the week had given me hope. critical ofquite the trump administration and the chaos around it. the lack of process and communication. in a week, we have nafta, the transpacific trade.

britain, not involved. suddenly, they saw something new. they back pedal. now it is four forward and two back. >> even with russia, we're talking about the prospect of cold war. a third set of sanctions here. try and salvage some things. >> that may be true. the weird thing for me is i cannot figure out where trump stands on russia. two weeks ago, chemical attacks in syria, for the first time to my knowledge, he criticized putin personally. ?id he give up or the domestic pressure? i don't know.

>> you mentioned maybe there are glimmers of hope. science are they want a nafta deal done imminently and wrap that up. i'm curious whether you think happen.ld >> no, unfortunately, i don't. is actually all about intellectual property here that is what it is all about. i find that optimistic. it is an issue with china, no question about it. realistic.ink it is there is certainly a clear , that they are china

bashing. if he is doing this for political reasons, then, he just hit your midterm election and things will ease up a little bit. i find it too optimistic. he seems to be all over the place. to your question, it is difficult to say ok. we just did this. a very carefully balanced thing. it is difficult to put the genie burned the bottle and he so many bridges when he came to the white house. >> whichever market you're looking at -- trying to decipher the odd communications and decision-making. you say it does show up in markets mainly through oil.

talk us through what shows up. fundamentals would suggest one thing but the politics and the rhetoric is driving prices in a different direction. >> i think this is right. gdp, we don't know exactly how much but leading indicators, instead of growing by four, it is 3.5 or something along those lines. .7 down. the demand seems to be easing. there are enough supply around with all the rest of it. from a fundamental and economic view, you drop by -- drop down to the 65 miles per hour range. about fearonstantly of supply out of the middle east. because they have been dropping in the past five or six months,

they have felt the sensitivity, higher than they usually would be. >> going back to the intellectual property question, ignoring rhetoric about trade deficits, is there a case that it will only get worse so we might as well act now in terms of defending intellectual property? and if there is a time for hard --perty >> that is trump's line, already lost. >> it is probably right but i think there is a clear case. at the world today, chinese issue the and access to the market, you ,annot invest in china without that is not appropriate anymore. as an economist, i wish trump , that is not appropriate anymore.

would leave that war and use the euro and the rest, they line up beautifully behind him. on that point, he is right i think. >> engage. >> the people on the team negotiating. eric, chief economist. please stick around. coming up, tensions with the u.s. and also across the pond for more on the eu as well. from new york, this is bloomberg. ♪ bloomberg. ♪

>> worry but not panic. we're back with., chief

economist. three days of rally, come on, guys. ink about what you meant terms of worry. we're talking about synchronous -- we have seen lofty levels. >> that is right. that is why i worry a little bit . in a sense, what you have seen is an elevated level of soft data, pmi primarily. europethree months ago, with gdp, growth would go to 3%. months coming down. -- ec this, do you just think it goes down and now we are at the right level, or is this at the beginning?

that worries me. >> so what is the answer? it is facilitating -- >> shockingly bad weather, sorry to throw that in there. we have had a lot specifically when we talk about trade journey -- trade, exporting, italy, expect a level of caution. you take pmi and break them statement onsent the present state of affairs was still very strong. a slow down with this constant trade wars. >> people keep talking and we

have talked quite a lot about this show. driven to thelly left the front end of the curve. -- you see this and i certainly speak to management, we think really hard about, could it be a problem with the banks? we can't see it in any other data and it doesn't feel that way. but it has delivered more than one -- so the issue for the fed is you have a path, whether you believe it or not, you have actually done about one more now

, so the tightening is happening a little faster and that is probably an issue. >> should the fed be talking about 3.5 or four hikes if we have seen this implicit -- -- i loved hear the it. he disputed all of this here just forget about it. you say this guy through any forward guidance out immediately. say do nothe fed over interpret the data. i do not like forward guidance precisely for that region. they do what they feel is right. >> should they be recognizing this more? it is about recognizing. >> he said we do not do trade

policy. >> there wasn't much to go on at the time. >> you have a guy down the white house and you say, i do not need to tweet on this one. data, earlyof u.s. in february, a lot of talk was about inflation is finally here. this time after years of false alarms, has anything changed on that? or is it still we should be seeing it under these same underlying conditions? >> it is strange. back, thek and come market tells you, i mean if you look at the technical spreads, you see the flattening curve. it tells you other things, that we are probably heading toward a recession years down the line. it starts slow down and all of the rest of it. inflation, where

would the recession come from? >> how do you think this will affect discussions? does anyone have a new breed on the issues this year? >> my view is they put out a quite optimistic report. last year as i understand it, the americans are not there so the europeans, they walk in and there are conversations and this is a conversation that does it -- doesn't interest him. he is not an economist. if it is like last time, he would sign off on it. i do not think it actually matters a lot. it is a bit strange, i understand, because, you know, the u.s. used to play an active role and not so much. about the end of the cycle and impending

slowdown. let's go back to the low-inflation area environment, and what we do in the last eight years, what would precipitate your recession in eight years time? can we continue to just cruise? >> we do these eventually and one issue is it really is quite -- tight. but maybe some will come back again. if it is tight, the probability models, >> that -- let's say we have the probability in the next three years because there is no labor market anymore, just think about the payroll numbers, you cannot find these people. and should push wages up then we can start talking about it if you are back in a year. right now, it is too hard to see where it comes from unless it comes from a premature to big monetary tightening.

then you get tightening through the financial conditions. bethat wonder if we will talking about this in five years time. >> thank you for spending time with us. to washingtonay for the central bank meetings. a reminder, we will be live from the meetings in washington on thursday and friday. do not miss our exclusive interview. this is bloomberg. ♪

>> it is time now for the stock of the hour and that is ebay. abigail doolittle joins us now. >> a big move there by brian over at morgan stanley. he updated twitter yesterday and

those shares, a really great day today on this upgrade. he is bullish on the fact that they will be migrating to handling their own payments ander than using say paypal other vendors. he feels this could really add to it. that is the positive call. in a way, it is a call on earnings. joe: whatever we talk about fake tech companies, we affect their not part of it. >> that is a great point because i think we should. a couple of years ago, we were negative on ebay, sort of the slow old one relative to amazon, but this stock has more than doubled since 2014, slowly but surely climbing. they do report next week and they're looking for big growth, 10% on the bottom line, 17% on the top line. a lot of good things are going on. plus, valuation. you were going to pull up a function for us and i appreciate that.

gd function, the graphic dashboard and i love it. it outlines exactly what is happening with the stock here. we see that valuation, 53% discount for peers, and that is another reason to be positive on these shares. week,mpany reports next he does seem to be on upgrades tear. sometimes you have an analyst making this kind of a trade and it a point to the fact that he believes or the firm belief it could be a solid quarter similar to what they are delivering. >> looking at the consensus, 21 by 17 holds. >> yes. it is really a more bullish direction. if we had to that a year or two ago, many more analysts are on hold. they are still that you have uys as opposed to neutral. >> thank you. the market close is next. you were talking about a three-day rally but it seems to

have -- a little bit as we head toward a close. the s&p hanging onto a gain of .1%. by 1/5 of up of -- 1%. this is bloomberg. ♪ welcome to the xfinity store.

i can tell you about... streaming the most free tv shows and movies on the go. yeah, and... xfinity internet. it's so fast! and you can save by... by getting up to 5 mobile lines included. whoa, you're good. i'm just getting started. ♪ simple. easy. awesome. come see how you could save $400 or more a year with xfinity mobile. plus ask how to keep your current phone. visit your local xfinity store today. ♪ julia: stocks drop in the close.

oil meanwhile soars. i am julia chatterley. joe: and if you are tuning in live we will you to closing bell coverage every weekday from 4:00 to 5:00 eastern. scarlet: we begin with market minutes. the s&p 500 manages to hold on to gains, up by almost three points. off 2/10s coming down, of 1%. these are not big moves. -- a quite day, they given the range. stanley came out with results, and ibm posting weak results. delicate industry groups, energy is the best performer -- when i

look at industry groups, energy is the best performer on the latest inventory data. industrials the second best performer. utilities declining care by a third of 1%. and since it is earning season, let's talk about individual companies that reported results. that's begin with csx, the railroad company. 8%, reportingy results that showed cost cuts and improved operations, persuading investors that the ceo can match efficiency goes to his predecessor had put in place. pretty decent, numbers on the equity and fixed side. coming off higher levels on the day, finishing early in the green. surpassing

estimates, they make the sestak aircraft. sesna. make the joe: looks like we had some steepening at the very end of the two-year yield. story, the real extent to which the short-term rate keeps moving higher, continuing to hit new post crisis highs. the tenure at 2.87%. of the 210hart spread, which is a tiny bit of steepening. but that doesn't matter because the main theme is the flattening heading down today, at one point below 42 basis points. currency -- a mixed bag for the dollar. euro, also watching the

and the ceiling level there of 1.20. and the dollar cap, the governor sake interest rates many to remain below the neutral range and discounted the nafta risk. something else to keep an eye on, but the statements are more dovish than they were expecting. in the sterling weaker in a year according to the latest data. taking some of the steam out of the recent sterling value. and look at the emerging markets. you could see the dollar turkey lower by 2.24%. we had the president calling for early elections on june 24, and people are saying we are seeing a rally here. and the bank of turkey unable to raise rates in the face of the presidents potential fury to

stabilize the currency. also seeing gains in brazil and for the ruble. joe: let's look at commodities. a time of action and the space, starting with oil. up 3.4%. west texas intermediate getting close to $69 a barrel. is going to get a lot of attention if we hit the 70 mark. and the opec meeting, a high level of compliance. and demand continues to be president. much --metal didn't do gold. and palladium, a precious metal. and cocoa is on an absolute terror, up the -- absolute tear. but at some of these moves. green, green, green.

aluminum and copper, and everything those are up. aluminum, micco, palladium. is all about sanctions anxiety. the key thing is they fade into each other. and a supply disruption of one company can affect another company, so there is a lot of anxiety about supply across the industrial metals space. they was a huge they bloomberg some index in industrial metals, and those are today's market minutes. scarlet: and we will talk about that later on in the program. chong --ng and peter you and your team came up with a model to look at where we are in the cycle for equities. what you concluded his u.s. stocks should continue to rise but there are late psychodynamics. -- there are late

cycle dynamics. typically there are two models. the market conditions that we have to value against what the underpinning looks like. we computerized this approach by running it through machine algorithms. we had data on the underpinning in market conditions. interesting is the underlying economic fundamentals remain strong in that been strong. what shifted is the market conditions actually indicates we are in a interstage cycle of the market. the beta stage cycle typically includes extended valuation, break in price momentum for stocks, and the withdrawal of liquidity and the commendation. to with that environment, when

you see is a lower trajectory of equity returns. joe: we have a chart here -- you point out at goes of the thousand five -- 2005 era. little about 2005, 2006, 2007. we try to put this into algorithms, and what is interesting is that combination of this economy, the last time it's been a discourse was 2005. they are similar to the current environment for the fed engaged in a rate hike cycle. inflation was over 2.5% and was expected to continue expanding, and gdp was fairly robust. a key thing for both recognizes just because it is late cycle does it mean the gains are over.

and we all know what happened in 2007 through 2009, and this can and in ways other than the hooch crash, right? into a late cycle in 2005 but didn't shift until 2007. and throughout the history of the model, there are two potential outcomes in a late stage. one is and thousand seven and thousand nine, the financial crisis. of in the late 90's, because the expansion of the tech sector we saw a continuation of the market rally. what we are trying to characterize to investors as a late stage cycle is positive for stocks. the circumstances are there are potential spikes for volatility. anderson potential shift for super bowl sectors where we think in value orientation might outperform any risk-reward basis. julia: how much money will i make if i invest in technology and financials? peter: quite a bit, i don't

know. historically, the way to model has worked as technology and financials have led in this late cycle. chong, thank you for that. scarlet: peter is relieved we have taken him off the hook. [laughter] it is earnings season and american express is reporting first-quarter results, beating analyst estimates. this is the beat on that front, first-quarter earnings per share analysts were looking at 1.71. and it is up by 2.4%. joe: facebook is getting into chips, building a team to design semiconductors. here with more on the scope is

bloomberg's mark gurman. the last time we talked about a company building its own chip, it was apple, and it makes sense because it is a hardware company. but what is it with facebook they feel they have a reason for an advantage to do chip design in-house? mark: this is a significant story with our number team of ian king and sarah frier. basically the chip business. they have started forming a team and tiring management to build a team that can develop ai chip servers, and all sorts of stuff. that goes into their long-term pipeline of what is going to power servers in the data farms that power the facebook website and facebook app. and also on devices, what components are going to power smart speaker's, and the facebook oculus goggles, and what is going to happen internally with those.

joe: facebook does have hardware ambitions, and they are nascent and we'll talk about the much, but they have their own gadgets in various stages of development? mark: as part of mark zuckerberg's master plan. 5, and tenure stages, and this is in the latter half of the plan. we had a story last year indicating facebook is working on alexa like smart speaker's. and are due to announce those in may in their annual

but sarah wrote recently given the privacy things going on with cambridge analytica, to are going to delay that until later in the year. as with a of the long-term strategy. scarlet: if we use apple as a template, it has shifted chips -- would you extrapolate facebook is going to use chips and how much will it be buying chips from the likes of intel or qualcomm? mark: the apple situation, they are perfect company to build their own tips because they have different categories. they have the ipad and iphone and the watch and apple tv. what think but there chips into each of those devices and update them on their own schedule -- facebook is doing the are going to jump ahead here. they don't have much hardware out in the world, to have ideas and teasing some things like the oculus and speakers, but want to see what will do in five years and what kind of devices will be able to enable by developing their own chips. that is what this is about. this is not in africa will see the light of day for quite a bit of time. the chipmaking world is an incredibly expensive and intricate process. there is no way they can get anything out within the next couple of years or so. it is a long-term that. bet.a

julia: google is also doing it themselves as well, does it make sense for individual companies to be investing in this kind of high-tech, super expensive technologies themselves, just to make them less reliant on others? believe in they tech wrote that if you don't on the entire kit yourself and don't have talked the bottom vertical integration -- it means if something goes wrong for you, and if you on the whole kit, all you have to do is trust yourself and your engineers and you on manufacturing process. the potential for things going wrong down the road is much lower. scarlet: you can make the argument companies will invest with the new tech. bloomberg technology's mark

gurman, along with ian king and sarah frier in san francisco. julia: experts are rubbing their hands together. joe: let's get the mark crumpton with first world news. members of the senate foreign relations committee had mixed reactions to the news that mike pompeo had a secret trip to north korea. the committee is considering pompeo's nomination as secretary of state. >> we have always known that our contacts with north korea through the intelligence committee, it made sense for him to be the person to meet with them. i hope we have other officials doing the same thing in setting this meeting up so it has a good chance for success. mark: the committee's ranking democrat of new jersey can the latest announced his opposition, raising concern that pompeo failed in their private conversation to disclose his meeting with kim. investigators from the national transportation safety board are examining the damaged plane that

made him emergency landing in philadelphia's airport on tuesday. one woman was killed and several others on the flight were injured. the ntsb says one of the engines fan blades broke off from the hot. and debris booked a passenger window. the plane was headed from new york to dallas. the what has budget office is investigating the epa spending a $43,000 on a phone for scott pruitt's office. testifying before house director today, budget mick mulvaney said that i am not any happier about it then you are. the new inquiry can stays after the general accountability office found the epa violated spending laws. in islandwide blackout in puerto in with an is to go unstable power grid seven months after hurricane maria. 36icials say it could take hours to fully restore power.

have been without normal electronic service since maria hit the island in september. global news on air and on tictoc on twitter. or mark crumpton. this is bloomberg. scarlet: more earnings breaking across the bloomberg terminal. beatingeps of $.70 estimates, and the 3.09 billion dollar print matches analyst estimates. when you look at the outlook here, anywhere from 3.5 billion to 3.7 billion. this stock was at a 10 year high heading today, so a surging mark. is a company that kicks off earning season, and

nobody is about much, and now it is at the center of attention because there is so much interest in this. a reason to pay close attention. scarlet: and sanctions have turned up the heat on these guys. and the rock stars of today's markets are the metals. aluminum on a three-day winning streak as the market looks to secure supply after u.s. sanctions. on thekel is satire concern that sections can be increased to another russian company that happens to. be the world's second-biggest producer. or with more insight is bloomberg commodities reporter, suzanne barkley. is is all driven by sanctions and talk of sanctions? concernedders are about their ability or inability to secure metals and aluminum. you see the surgeon prices, and depressive aluminum is up 24% sensation's were announced on april 6, support forward the market has spread to other

metals. we also see the nickel and palladium move up, and those two metals in particular moved up because people expect that there could be more sanctions that nickel, one ofnd the major producers of palladium. joe: something interesting i found from reading the reporting here is the intertwined thi this market is. some matters might depend on supplies that are constrained, to have to worry about their supply chains, so is all interconnected. there are refineries and they take bauxite,

crush it to aluminum. jamaicae refineries in and ireland, and all around the world. they are in intricate part of the global supply chain. if you look at the figures this morning we see that aluminum set a record of $800 per ton. -- alumina. increases input cost for the manufacturers around the world. you would like a certain companies that make aluminum, and they would expect or want the price of aluminum to increase even more so they can make profits, because of the price of the raw material is moving up, and means everything else moves up. and you look at other companies like auto manufacturers, and their input cost would go up as well. scarlet: talk about how companies are responding to this.

are going to expect to hear more companies working things out and try to get a grip of how their supply-chain works? which isabsolutely, why we see metals going up. yet companies -- and we don't understand all the implications yet -- but one company is saying that this supply shock is going to scar us. others are trying to sort that material. where they are going to get it? from other players. joe: analysts think this is a bull market that will continue? arenne: we don't know if we at the end of the fallout yet, but when we have goldman saying aluminum we hit $3000. julia: how do we adjust to this situation if you look at alternatives? to have any sense of how you look at alternative sources? this is unprecedented.

there is a deficit in the aluminum market. we get a lot of supply coming out of china, so there are companies in china. but everyone is in a rush to fill those contracts, and they are up in the air. scarlet: that opens a whole other can of worms. suzanne barton, thank you so much. have more tomorrow on commodities edge with alix steel. volatility sort, so imagine actually trading it. this is bloomberg. ♪ ♪

scarlet: time for our weekly

segment with abigail doolittle pick-and-pop technicians to look at in-depth charts and bloomberg functions. abigail: i guess today is frank cappelleri. the return of volatility, talk to us about what you think is next. this is a long-term chart of the s&p 500 going way back. we see the plus or minus moves, and it became very low at eight, thousand lowest mark since 1966. we knew it couldn't continue, so over the last three months the number has jumped to 35. that is still relatively low,

and average has been 55 over that time. -- can see in previous lows when things changed, they spiked. regardless if we are high or low, volatility moves. abigail: to the we are going to see a new low or all-time high first? bullish, and the reason is because last year in 2017 -- low volatility period ended, the uptrend did not. as they start to move up, the uptrend moved for a number of years. have is one concern i the sector composition, the s&p 500 sectors are lower, and utilities has been in a correction. yet a chart of utilities and the 10 year yield. frank: utilities and bond yields have been together long-term.

what is interesting is that utilities continues to be in an uptrend. along with other etf's. it coincided with peaks in the 10 year yield. that is why we are in a critical spot. that is the 10 year yield covering around here. abigail: it seems to be breaking out. speaking of the 10 year yield, the rising yield should help regional banks. what you make of this? frank: regional bank etf's, very sensitive to interest rates. banks have reported they haven't been good in stocks as a result of that. all of a said it we have this pattern, a classic head and shoulders support line. if this breaks to the downside

if you are bullish on interest rates, you want that to hold. abigail: frank cappelleri, thank you for joining us. julia: abigail, great interview. up next, cia director mike pompeo secretly visited north korea to meet with kim jong-un, and president trump's tweets about the summit being worked out between the two leaders. we will have the latest, next. this is bloomberg. ♪

mark: president trump says he is seeking free, fair, and reciprocal trade in discussions with japanese prime minister, shinzo abe. during the second day of meetings at mar-a-lago, the president said japan is ordering large numbers of airplanes from u.s. companies that will help with the process of equalization of trade. officials from the state department testified before the house foreign affairs committee, today outlining u.s. policy in syria. >> a syria in which assad remains leader in this regime is not a syria which would predict to be meaningfully secure are stable, and that a source of

violent extremism and whatever name in the future. mark: secretary acknowledged that the state reduced geography but the iraqi border area still have to be confronted and destroyed. funeral services for barbara bush will be held saturday morning at the houston church, where she and former president george h w bush attended. the public can pay respects on friday, and she will be buried on the grounds of the bush presidential library at texas a and m university. the couple's three-year-old daughter who died of leukemia in 1953 is also buried there. barbara bush like yesterday at the age of 92. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries.

i am mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market action. must stocks are rising, and the s&p and nasdaq managed to hang on to gains, and the dow coming down closing off 38 points at 24,748. snp, it comes on the heels of mixed earnings, especially since ibm gave a disappointing report that was a drag on the nasdaq. morgan stanley results were stronger, and it lifted the financials as a group, but morgan stanley came off of the highs. after the market close we heard alcoa, and this is a stock that is at a 10 year high because of sanctions against russia have resulted in a squeeze, and that has given a boost the aluminum prices, going

up better than 3%. and we also seek american express in after-hours trading, after than 3% better-than-expected estimates. 2018 revenue is also up at least 8%, priestly it was anywhere from seven to 8%. julia: mike pompeo travel to north korea to meet with kim jong-un about a possible summit on denuclearization. president trump said the meeting went smoothly and a good relationship was formed. details of the summit are now being worked out and denuclearization will be a great thing for the world, and also for north korea. pompeo, who is awaiting confirmation is the highest ranking less official to visit the isolated nation since albright in 2000, talking about

significance of this is michael green, the senior vice president for asian and japan strategic international studies. great to have you with us. back in 2016, you said ultimate meeting to president trump the candidate and kim jong-un would be a bad idea, and you have not changed your mind, why heavy not changed your mind, and who would be the alternative? >> let me be clear that dialogue with north korea is useful in many ways, and necessary. but the risks of the president of the united states meeting with the leader of north korea are enormous. nothing we have seen so far has removed those risks. michael: number one, for the president of the free world for the first time to meet with the north korean leader after north korea has defied the world, and the fight multiple u.n. resolutions and tested nuclear weapons, and assassinations with

nerve agents. after doing all of these things, and then reward them with a summit of the present is on its per kim jong-un in his domestic propaganda. if we got something substantial for it, it might be worth the risk. but there is nothing so far we have seen that would suggest the summit will lead to a verifiable limitation of north korea's nuclear weapons program. north korea has told the chinese and south koreans, and perhaps also mr. pompeo, that they are prepared for the denuclearization of the korean peninsula. president trump held this is a historic breakthrough. was in negotiations with the and otherstration, were in negotiation with obama, and it will tell you that when the north koreans say they are prepared with the denuclearization, it does it mean anything.

it is a stock phrase they use in saint if you stop your nuclear umbrella and stop basis and sanctioning us, know that perhaps talk about nuclear weapons. there is nothing evident on the north korean side of the equation. we should talk to north korea, but sending the president for what appears to be the stock north korean phrase is risky for us. far has scored points. should the president do it? i wouldn't advise it. piece, you say a meeting between the two is not good if only one of the two participants know what he is doing. it is clear which of the two participants you are referring to, and it is not president trump. are people around president trump more cognizant of those risks?

and if it does happen, how could the risk be medicated? itigated? michael: john bolton knows the nature of the korean regime and tactics while. mike pompeo is newer to this account, but as cia director, and instinctive hock will watch this with skepticism. and secretary mattis with the pentagon. the experts are going to be skeptical. and that will count. i don't know how much the president will listen to them. downsideo mitigate risk is to be extremely clear there will be no reduction of our military exercises, and our missile defense deployments, and sanctions until they are very concrete and verifiable steps taken by north korea to eliminate or at least begin eliminating its dangerous missile and nuclear weapons programs. that may be what pompeo and

bolton are telling the president. if he goes in and it's with kim jong-un and says i have done something the president has done and signed a peace treaty with north korea, and they have promised to denuclearize the korean peninsula, their site of the promise is meaningless. if we begin a peace treaty, we are in effect dismantling or at least symbolically dismantling all of the architecture of our containment of north korea from the korean war. our sections of north korea are in control. would be called into question in the region if we had a peace treaty. it is technically very complicated. it should be something of an indicator that china and north russia, are in favor of this peace treaty. breast japan and australia are much more wary.

boltonefully pompeo and -- where as japan and australia are much more wary. julia: what is the outcome going to be in your view with all the knowledge of the strategies involved? what is the outcome? michael: donald trump is a masterful performer. i would look not to the history of negotiations with north korea to look at the outcome, but the history of the miss universe pageant and world wrestling federation matches. the president will keep people tuned in. i suspect it will say stay tuned, we'll see what happens, while claiming historic steps forward. the more experienced hands around him say we can't agree to a peace treaty until we have verifiable steps from north

korea, then maybe we'll have some drama and the process will continue. a very bad outcome would be if somehow, the president concluded that north korea's commitment to a peace treaty means we don't need troops on the korean peninsula anymore. there are a lot of voices in congress and the pentagon that will say not so fast my but that will an are a lot of allies in the region. and out give hope to china and russia, which is a reason we should be cautious about this. it is possible north korea is scared. of give the administration and president credit for some very tough sanctions. those are the toughest we have ever had. it is possible north korea will agree to concrete steps and verify them, because of the pressure they are under. that would be a good outcome. but as ronald reagan said, we have to be able to trust and verify. it is all about verification. what can he do to get inspectors

in to get things dismantled, removed, something concrete. scarlet: michael green joined us from washington, thank you so much. up next, and ought spike in the vix caused across to go higher, and we will tell you why. from new york, this is bloomberg. ♪

scarlet: it is time for the bloomberg business flash in the news right now. facebook is looking to design the entire 18 manager according to a job listing on its corporate website. the move follows apple's similar efforts in the broader trend in tech companies to reduce the

dependence on other chip makers. looking to raise $1 billion to boost growth ahead of its hong kong ipo according to people familiar with the matter. there trying to develop a screening test that can diagnose cancer at an early stage, even before symptoms appear. a spokeswoman says the company does not comment on speculation. and that is your business flash update. joe: before the trading session began this morning, futures in the s&p 500 were trending positive. the vix, which moves inverse of the s&p spiked higher, and some market watchers suspect there may have been manipulation. our bloomberg reporter joins us over the phone from ottawa. the actual cash market, not that interesting, but they do expect

in the vix this morning, what is going on, what is the theory? >> all the action was early in the morning, so we had the april and ining off the board, 8:30 a.m. at night 30 hour, the s&p 500 options, and we find a clearing price were all those settled and the current price determines the official settlement level of the mix. what happened is we had a disproportionate amount of premium being spent that the options that had a strength crisis of the present downside from current levels by the end of may. the theory here is that maybe vix that were expiring were able to push the vix higher by bidding up these

s&p 500 puts, and maybe escape in bigger lost in the would have had on their vix options, and still eat it next month when these expire. joe: and we have a chart you brought us that shows the volume in a far out that the money s&p 500 over the last several of trading days, and at various times this year. you can see in the far right part of the year there is a massive surge in volume that is completely out of the ordinary, versus other days earlier this year. that is the trade that appears in theory that was designed to push the vix around? luke: that is one example. i believe what we have there is the may 2018 1200 put on the s&p 500. this thing is never trading, and

then at 9:30 a.m., you get the explosion of that. but to be kirk, it is not just this one strike -- just to be clear, it is not just this one strike. if you compare it to a chart of the premium dollar value traded during that hour in march, when is march mix was settling, more of a bell curve distribution around where the s&p 500 actually was. just outside of those levels, and one thing to keep in mind options ares&p 500 so much less liquid, and so much vix deep than the consumer options and futures. it is almost like design incentivize to

nefarious activities. joe: i am sure it will learn more about it in the upcoming days. luke, price for joining us on the phone. scarlet: still ahead, a venture firm launching a bid, and the message that the robots are coming and there is no solution in the future. from new york, this is bloomberg. ♪

national transportation safety board is a linear briefing on the investigation of the southwest airlines flight incident that left one passenger dead yesterday. out give you an update of what we are hearing. that will give preliminary flight recorded data.

the flight landed 22 minutes after the initial event, and the plane was that they 41 degree angle after the engine failed. we will bring you further headlines. the jet landed around 65 miles per hour faster than normal chairman of the national safety transportation board. any further headlines from that, we will bring them to you. scarlet: the robot apocalypse could be closer than you think, and it is not just elon musk warning. shot bid for the white house rent that idea, and andrew has a new book out, and he joins us now. the future you envision with the creation of the universal basic income, which is income for all citizens -- that at on pure entrepreneurial background.

how did this idea take root in your head? andrew: spending the last six years in cleveland, detroit, and st. louis, i saw the automation wave in those communities. we need to think bigger of how those committees can bring themselves back. universal base income cap but money in the hands of american consumers or they would start businesses around the country. the roosevelt institute projected universal based income would create 4.5 million new jobs and increase the economy by 2.5 trillion. it is very pro-market and very pro-archer partnership to be a universal-based income. julia: when you provide this universal and come for a period entrepreneurism as you hope? and perhaps the mismatch in skill set in the workforce, you can't get people money? andrew: when you look at the

success of government-funded trading, the success is low. they are between zero and 37%, and the average truck driver is 49 years elements like the effects of skills and bias, but how much can people get? get onethe should thousand dollars a month or $12,000 a year, and that would push americans above the poverty line and what it distort labor markets to much because no one is going to quit their job for $12,000 a year. is not going to do enough but does arrive in most parts of the country. julia: how do they spend it properly? more than half of americans can pay a $500 bill, so it will help pay for bills for their kids, and repair for cars, and hopefully they can put away and save, up for school or think about moving for a new opportunity or start a new business. i have worked with hundreds of arch openers, and most

entrepreneurs have etomidate of abundance when they see the possibilities, and the business they want to start to solve a problem. they don't have their heads down try to stay one step ahead of creditors. scarlet: how what the government fund this? we are already fighting over the tax cut that is going to cost us for the next decade. andrew: only 6% of that tax cut has gone to workers. we are in a trap right now that more and more work is going to be done by software, ai, and automation. the beneficiaries are large global tech companies that are great at not take a lot of tax. the way i would pay for the freedom dividend is by implementing a value added tax, which is something other i r countries have. our current spending would be enough to fund universal income for all americans. julia: are coming up with

statements that sound really good to the average voter, but it doesn't work and practice and sipping think it puts us to agree on with just a handout. andrew: if you look at the heritage, it past the house of representatives under richard and itnd i can send one, was signed that this would be great for the economy and society. alaska has the petroleum dividend that is wildly popular. there is a deep libertarian heritage brought the universal income, as well as progressives and liberals. we can build a coalition and make this a reality. will talk to you more and more as we track the midterms. andrew yang, founder of venture for america. and author of white universal basic will talk to you more and more as we track the income is . thank you for that. what you need to

know about tomorrow's trading day. this is bloomberg. ♪ ♪

scarlet: a continuation of the rally for u.s. stocks, the s&p and nasdaq finished higher of the doubt that fall. president trump and japanese prime minister shinzo abe will hold a press conference today at

6:00 eastern. joe: and i will look for the job comes tomorrow. .ulia: and don't miss this, julia:

mark: i'm mark crumpton, and you are watching "bloomberg technology." a blackout has struck puerto rico, which is struggling with an unstable power grid seven months after hurricane maria. some 40,000 people have been without electricity since maria struck in september. investigators from the ntsb are examining the damaged southwest airlines plane that made an emergency landing at philadelphia' airports tuesday. one passenger was killed, seven

others were injured when debris from an engine fan blade shattered the window in-flight. sweden and switzerland are among the places the white house is considering for the summit between president trump and north korean leader kim jong-il and -- kim jong-un. the president confirmed he sent cia director mike pompeo last month to meet with kim. the european parliament is calling on mark zuckerberg to testify on facebook's data privacy scandal. zuckerberg had offered to send a subordinate in his place. the ap says the eu s