offer last month to congratulate putin on his reelection. fight the moments at another florida school when a gunman opened fire, wounded one student, before taking to custody on a day planned for a national custom walk that the protestant violence. the shooting happened is morning at forest high school, which was put on lockdown. the wooden student, a 17-year-old boy, was taken to a hospital -- the wounded student was taken to a hospital for non-life-threatening injuries. students led a nationwide walk out on the 19th anniversary of the combine high school shooting which left 13 people dead in littleton, colorado. south african president has cut short of a visit to the u.k. to return home and do with filing protests. demonstrators and police pots during protests over alleged government corruption. ramaphosa is calling for calm,

rather than violence and anarchy. also urged police to show restraint. north and south korea have installed a telephone hotline between two leaders as they prepare a rare summit next week and that resolving the nuclear standoff. the south korean presidential office spokesman confirmed that a successful test call was conducted on the hotline between the pyongyang state affairs commission and says the hotline, which will be maintained after the summit, will help's dialogue and reduce misunderstanding during times of tension. global news, 24 hours a day, on the air, and at tictoc on twitter. powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. ♪

julia: live from bloomberg world records in new york. we are 30 minutes from close off and equity trading in the u.s.. tech wearing with apple the biggest drag, and rates rise. joe: the question is, "what'd you miss?" scarlet: shaking off drunk drivers after oil falls. -- and a glimmer of hope for ge investors. and bloomberg school with the industrial giant looking to unload its rail units. we seea mentioned, declines in u.s. stocks and you can call it a selloff after we

are steadily declining on the trading day off of session lows. apple was in the selloff, falling as much as 4.2%, right at the 200 day moving average of the morgan stanley cut iphone shipment projections and people are concerned about what is happening with hardware sales. sent hisesident trump twitter iron from the james comey book tour to the price of oil. president took twitter, saying it looks echo opec is at it again with record amounts of oil all over the place, including the fully loaded ships at sea. all prices artificially very high, no good and will not be accepted. here with us is bloomberg metals reporter, and managing editor for energy and commodities. first. will come to you we are seeing oil track higher,

and opec. tina: we see the price of gasoline increase by a dollar, so that has got his attention as we head into the midterm elections and try to find a little something to out in terms of the tax cuts for each dollar increase. that is about $500 on average for you middle-class household. that does cut from the tax benefits. scarlet: is he correct in the price of oil? words, if, in other we look at the five-year average, the stockpile has gone from 200 million over the average to 30 million. it is much less than it was. terms of oil that floats on the sea, a nice place to hide oil is too much on the market, it is done by more than a half of the year. julia: and what to do about the trackback for inventories. joe: and this week we are talking about oil, but it has

been incredible week for commodities, especially in the first half of the week with metals. three days we haven't seen the huge gains with nickel and aluminum, but were the things stand right now in terms of the supply picture and supply chain? >> if we look at the aluminum closely, it is a question of supply. the metalts to touch sitting in stocks that has been technicallyich people can use. if you take out 6% of the world 6% consumed in the u.s. alone, people need to scrabble to find replacement units for the metal. it goes down the supply chain and that is why you see the huge pickup in aluminum, but the .uma a human

it seems it is up in there with where this goes. your have goldman back america conference $2000 aluminum metals. to go inre's more scrambling come and that the symptoms there is maybe a few people were sitting in a good position and they don't buy a lot of russian metal, so they are saying we are fine. but their metal looks more appealing to other people. joe: it strikes me that there is a difference between oil and the other things, where is with metals, you have one company and the entire supply-chain goes into disarray. it is hard to make them of that would affect the price of oil. that trumpte today doesn't have a ton of options if he finds the current situation unacceptable. tina: there are a couple of things you can do. in sectioning individual have aes, that won't huge affect. his thinking of sanctions --

which resulted in huge decline in venezuela's output, and with iran, if he says not to renew the waiver and real postal sanctions, with this either supply drop quite ignorant thousand dollars a day. joe: such appended the price of oil up, but he can't get it down? it is a mixed message from and to be honest, u.s. producers, as opec will tell you, o the organization a big, wet kiss to drive up the price of oil. people in west texas were producing as much to fill that void. the russian response, saying look at the texas situation, particularly with the shale. they are coming out prices as they rise significantly above the breakeven. there's a number of elements that is eyebrow raising about tweet.

it is nuanced because the less hated when oil prices went high, and now they are beneficiaries of it and it is a message economically. which are talking about in a price increase? as a result of thing taken out of the iranian deal and the sanctions against venezuela, what are we talking about in terms of price impact? tina: we have heard people talk about a return to a wonder dollar -- a hundred dollar per oil. as we look at the price increases across the commodity complex, we are talking about aluminum and alumina, and joe was also talked about palladium. is nickel being caught up in this too? joe: nickel is being caught up

in this too, considering the different holdings. scarlet: but nothing official there yet. joe: nothing official, but the largest producer of palladium -- and all the other metals to get this and say, there's things like sections and traits tariffs, and everybody wonders how that might impact them. it seems like a wild card in the space. joe: earlier bloomberg reported scramble,r roussell and circumvent sanctions. any evidence they are making progress? is: the latest we have there's high-level discussions between russian officials and those in china. but it isn't certain that anything was going to come out of that more than discussions. it seems at this point the russians are happy to have the conversation in the first place. julia: there's a number of elements, and the final factor is the sanctions -- and we have

the global deficit going on the delays in the chinese plant expansions. and the brazilians in terms of the underlying producers operating at a lower rate. what does the timing on these kind of things, because there is a confluence of factors that has generated a panic in the market? joe: there is a perfect storm happening here, especially with aluminum sanctions and tariffs in the underlying raw material's. the largest refinery of that has curtailed by 50%. everyone is looking at saying, how high can it go? we are try to sort that out at the moment. scarlet: tina, a final question to you. when opec began reducing production, was a compliance is going to be an issue and that cannot not be an issue. but might cause compliance to decline and opec members and russia to go their own way and

not comply anymore? tina: it could be a number of factors. the biggest part of that is venezuela. they are complaint even though they don't want to comply as much as they are. that is anything falling out underneath them musas they have played a huge role in how that operates. if you look at what may happen in terms of the people breaking away from the deal, if you start to see oil spike up substantially, people are going to realize they can make a lot of money by going to the market, and not to the quota. scarlet: and implicitly. tina davis and joe, thank you both so much. julia: cameron crise point out earlier but the correlation with inflation and base metals. and the degree of correlation between these two things in the moves we see in the rates market.

no surprise we are once again talking about inflationary impact. scarlet: the next couple of weeks should be interesting, especially with the fed meeting in two weeks. speaking of oil, we spoke with russia's energy minister about president trump's criticism about opec in saudi arabia. take a listen. that theually think market is what sets the price, that any organization. there are many factors that affect the process, and one is supply and demand, part of which is u.s. shale oil. we have seen a price increase over the past two years, which has driven shale oil in united states. if you look at the statistics in the past 1.5 years, wrist shot production has increased bass

u.s. show production has increased. years,look back 1.5 don't forget the state in which the shale industry was. we remember 1.5 years ago that -- anddy was rejoicing it helped restore texas. >> surprises aren't artificially high? market is what sets the price based on fundamental factors like supply and demand, and other factors like sentiment. >> you think the group can talk to rick perry, the as secretary of energy about? ande have no discussions, have not discussed it. would be more than got to see mr. rick perry, and i have invited him to have the opportunity to discuss this, but

no plans at the moment. scarlet: there was russia's energy minister. coming up, electric shock therapy as ge shares jump after corley results. and a bloomberg scoop. this is bloomberg. ♪

scarlet: general electric lights up as shares surge. for more analysis, spring in rick who covers g4 bloomberg. ge these days. rick: it has been a difficult

few months -- actually more than a few. it has been quite a while since shares have been up on earnings. today was pretty good. think was probably more about what they didn't say, which is anything bad. last quarter to a drop bum when they said the sec was investigated. good, ander looked shareholders are being rewarded. forecast,the profit to the lower end of estimates, that is cited as one of the reasons for the positive press retching today. a hold of the people have come out and said dyslexic a real challenge in order to achieve it -- you will have come up and said this is a real challenge. the: they acknowledged

power division is tough and worse than they were jake thought coming to the year. they got it the low end of the range and they said that again today. guesting with the target for now and investors are got to hear that, although we will see if the year goes along. joe: to put into context, the stock has jumped to the highest levels since early march. has a long way to go before substantially erasing any declines. for now, is it an effort for ge to avoid bad news? rick: i think that is enough for now. what investors want is some comfort that we hit a bottom, and we're not getting more big, nasty surprises. if they can go in wild and give investors that level of comfort, i think that is when maybe you can see the shares come up. julia: to put this into perspective, 13 statements of declines, and then a pop

higher. it was a long time coming. is also looking to sell its rail unit as well. it is now in talks to sell its rail unit according to our editor, ed hammond. rail is a big chunk of profits overall, while the headline is encouraging, when that be better results -- what it that be better for results? rick: by selling it ge can bring in cash and that is what they need right now. that is what investors want, and also what they want. is for ge to get more focused this is part of that process. she has said they are going to shed at least $20 billion of assets. that will allow them to focus on a few core markets.

i think investors want to see this happen. they want to see progress on asset sales. the fact they are getting close on this one is something that investors -- joe: what are other units? ge has said they are looking to get out of lighting. that is one of the symbolic moves. scarlet: ge want flight up anymore -- want light up anymore. rick: it want impact the bottom line so much, but it is a symbolic move. and the have the oil and does business, and they said they are not in a rush to get out of that and on a majority stake in that. is something investors think could go in the relatively near future. and the potential kicker. scarlet: it is a different ge.

thank you rick. we have breaking news crossing the bloomberg. the u.s. government investigating at&t and verizon or potential collusion and coordination by the two companies with telecommunications standards organization to hinder consumers from switching wireless carriers. this is according to the new york times, which sites and identify people. representatives in the doj declined to comment, but it is having an impact on the share prices. julia: and at&t cannot catch a break. scarlet: will monitor this developing story for you. this is bloomberg. ♪

♪ scarlet: apple shares are down for a third straight day after

analyst morgan stanley cut their forecast for iphone shipments, adding concerns for the price of revenue before the company reports in may. joining us is abigail doolittle. it is done for three days in a row so investors are not taking coming to this. at the end of the day, investors and traders are worried about the incoming earnings report. mentioned morgan stanley, that is bearish, and morgan stanley is saying after the corridor, by the depth -- after the quarter, buy the dip. and china is a big deal, you look at an annual basis of china and green come and over the last couple of years china is coming down. europe and purple is beating china, and that is not what investors are looking for.

the chinese adapting to the iphone x and the upgrade cycle as they hoped. joe: and this dovetails with the warning from wednesday night of a taiwan semi conductor that does business with the iphone, and that is when it started. abigail: their guidance from the second quarter coming in less than expected. thatgan analysis saying has to do with the iphone, and if we hop onto the work we have a chart showing why that matters. apple is a direct customer of taiwan's semiconductor by 20%. but is not a huge chunk, what you are looking at and white is apple, and blue is that semiconductor come and to your point we see the semi conductor slicing down and apple falling. some egos i would like to point out is -- more talk about this yesterday -- these reports are not new about slowing iphone the man's -- demands.

you also have these chip companies missing, so you when you have so many factors coming together, to support the idea that could be weakness it points to the idea that perhaps it is truly going to be week. apple shares are trading right at the 200 day moving average. abigail: it will be interesting to see if buyer step up and support the stock into the earnings report. it is not next year, the week after, but the other reports with microsoft, intel, cisco, they may come into play. and you could that more analysts weighing in. wai when you have a lot of chatter like this coming from the supply tale, often in 2015 was a of revenues declining. so maybe this is not going to be so positive. and julie, you made the point that dividends and buybacks will increase.

scarlet: we will continue to monitor apples moves. canmarket closes next you see that apple weighing on the s&p and 500. this is bloomberg. ♪

♪ julia: what to miss.

u.s. tenure as a year-to-date high. i'm julia chatterley. scarlet: i'm scarlet fu. i'm joe weisenthal. we want to welcome you to our closing bell coverage every week day from four to 5 p.m. eastern. scarlet: we begin with the market minutes. stocks opened a date lower. they hit the session flows just after 3 p.m. since then we have come off the worst levels of the session. the nasdaq down 1.3% and the dow losing 200 points. ending the week on a down and out -- down note. a dismal last couple days, particularly for tech companies. joe: we'll talk about it more, but it was one of those no

places to hide kind of days. norlet: certainly there was place to hide if you are an apple shareholder. the stock closing down 4%. morgan stanley reducing its production forecast. iphone shipment projections. coming on the heels of iphone being downgraded. indicated that demand may not be there for iphone x out of china. all of that waiting on apple before they report in two weeks time worried the other hand, ge beat earnings for the first time -- by the biggest margin in years. 33% was the beat on the bottom line. ge also maintained its profit forecast for 2018, although there are concerns about whether they can get there. skechers usa down 27%. replenishannot quickly enough and there are distribution bottlenecks. higher costs associated with

wishing them. proctor and gamble lower as well at 73.75.ading the let's take a look at bond market. i skipped ahead earlier because it is a huge aspect of today's story. look at that 10 year yield up to 2.96. that smashes through the high from february. the 2014 two-year yield also inching up. let's take a look at a year to date chart of the 10 year yield. you can see us breaking through the high. the key characteristic of that february selloff was the simultaneous selloff of wants and stocks. that is what we are seeing right now. some obvious catalyst. there is not an economic thing or fed thing. nonetheless, people selling everything today. julia: let's tie it to headline

inflation. the problem is you can't guarantee it. today you could have hid in the dollar. heading for the biggest week of gains since february. the highest treasury yields and some risk of benefiting the dollar. amid a report the ecb will wait for the july meeting to signal an end to two 32. we had weaker api data. let's flip on as well and take a , we've been talking endlessly about the 120 level, the dollar and parts of what help trigger the dollar buying. the trade-off between the ecb and the swiss national bank does with thomas jordan saying we are in a hurry to adjust policy. both are speaking next week. ecb that a from the pulls away from the 120 level?

scarlet: joe: let's look at commodities. for once we're not talking about aluminum or nickel or palladium. kind of a quieter day. scarlet: old school. joe: crude oil ended up, which is funny that trump tweeted earlier that help it was too expensive. no one thinks he's going to do it. crude oil ending higher and gold selling off mostly. those are today's market minutes. scarlet: breaking minutes. ready to order emergency inspections on jet engines. this action follows the fatal southwest failure incident in which an instant engine broke apart killing a woman on board and prompting an emergency landing of that flight. the faa is said to ready and emergency inspection order for jet engines. the ntsb still trying to determine why that fan blade tore loose and shattered the engine.

weight will continue to keep you posted on further developments. the faa ready to take action here. for more on today's market action and a week that was, let's bring in mike reagan as well as i read jersey. joe was showing us, the year-to-date highs, 2.9583% surpassing february. was there a catalyst? ira: not a big one. a lot of this was a continued weling them yesterday where saw a pretty big steepening and the yield curve. it started with the u.k. with mark carney saying they would be hiking rates. that cars -- that cause a global selloff. some of this was continued reaction to that. it's important to that 2.95% level is important is above that you are talking about yields over 3% as the next important technical level. julia: it's quite interesting

because we are concerned slightly about the european data. but it just adds to the global mix between asset classes and investors are trying to ingest now. there is going to d a lot of head ringing about is it qe, is it technical that are causing all of this and same thing with life wars. at the end of the day we are still looking at higher rates regardless of what is causing it. for sure it is looking equity investors. julia: what is leading at this moment? what do you think is-- mike: as far as the biggest drag, it is tech. you have apple and the concerns about the forecast for the iphone sales and semiconductors following along with that. but with all the stories i've read, hundreds of stories, the

ones that keep sticking out to me is something did. we've had many corrections and you tend to forget about them and think we got over that. it takes 200 days in this market to recover from a correction. even if you look at the shortest correction, it would take until july to recover from it. we are in the middle of that process now. it feels like it will never end. is three a done deal? ira: it's not a done deal but it would surprise me if we didn't see 3%. it will create a lot of headlines but it is just a number. one of the interesting things about the recent move is if you look at data surprises, what has gone on with the data and how it has done compared to consensus, data surprises have been declining. you actually have had worked data in general. the bond market keeps selling off. that's an unusual scenario. at some point, one of those

things have to correct. is it the bond market telling you we have better data? maybe not. some people are worried that next week or in two weeks we are going to get more supply from the treasury and you have a deficits. some people are concerned about at what price we are to have to fund those deficit. scarlet: does better data include higher inflation ratings driven by the gains we have seen in commodity prices? ira: it certainly could. particularly at the headline level. allof the things we look at the time is what is going on in the treasury inflation protected securities or tips market. if they get back to their 2011 or 2014 highs for breakevens and real yields, we will get to 3.19% in 10 year yields. interesting level because that is the kind of level if we get to there and don't go through it, it's probably not bad for the economy. you get much higher and you're talking about higher mortgage rates and a lot of people worried about more sustained selloff in 10-year gilts.

that could have serious economic impact on the road. week will bext huge for earnings. it feels like there is an intra-tech rotation of who is the whipping boy of the day? a while back at with facebook and nobody talks that facebook. it was trump and amazon and now it is the chips and apple and amazon is close to all-time highs again. netflix just goes up. joe: is there something big with tech? mike: i think semiconductor sales have just had an enormous growth spurt. there is a lot of about how sustainable that is. the taiwan semiconductor considered a leading indicator the other night. their outlook was not so great. they were a company that is ratcheting up the topics. that is something everyone wants to hear. it makes you wonder, the runtime

to be doing it? you have a bit of uncertainty about some of the long-term growth -- future growth of semiconductors. is crypto mining going to be a source of growth? joe: that could never go away. mike: right, what could go wrong with that. are rightconductors now with valuation and a chart level, they look like they are poised to bounce. with all of these questions in the air it will be interesting to see if they do or if there is some skepticism about that outlook here it. julia: let's get through earnings season first. bloomberg intelligence chief interest-rate strategist guide, thank you for that. scarlet: let's recap the breaking news we told you about the top of the hour. ordera is said to emergency inspections for jet engines. they are planning to require these inspections for one of the most popular jet engines in the

world. this is according to a person familiar with the medicare we will keep you posted on further development. from new york, this is bloomberg. ♪

mark: i'm mark crumpton with world and national news. defense secretary james mattis had this morning for syrian president a sharp al-assad, >> there has been full support for that regrettable but research attack on his and engineering part of his weapons program. he would be ill advised to ignore the international community's statement. mark: in an effort to ease

japanese concerns, mattis said reducebout we will not our commitment to the bilateral relationship to japan and the u.s.. united nations special envoy said today the war-ravaged country has had " a very dangerous week. >> its priority for the yuan -- secretary and secretary general current the priority to lower the temperature. the temperature when too much high in the world and potential of major complications. mark: he also said it was important for officials from the organization for the prohibition of chemical weapons to begin access to the site of that

alleged chemical attack in syria. protest continued today on gaza's border with israel. palestinians who flew kites with flaming rags trying to set israeli fields on fire. the ministry says more than 400 protesters were injured. the protests are part of what organizers led by gaza's ruling group have billed as an escalating showdown with israel to culminate in a mass march on may 15. in puerto rico, a federal patrol board has voted to double tuition at the island's largest public university. cutboard also voted to benefits to the school and consolidate some campuses. government and university officials are promising to fight the changes. the island is still recovering from hurricane maria, a category four storm that struck seven months ago. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm mark crumpton, this is bloomberg. scarlet: what'd you miss? the country of pakistan gets ready to release its 2018 to 2019 ajit. that is before general elections. pakistan's advisor to prime minister and finance joins us from washington. thank you for taking the time to speak with us. i know the government is targeting greater than 6% gp next year. there are plenty of skeptics whether you're talking to and analysts who expect growth to slow. what is the plan to achieve that trajectory? >> we have had 5.8% growth this year. even last year's growth was revised upward to 5.4. next year we are targeting 6.25% with tiffany's coming

into play for next year, i am confident that we should be able to get to 6.25% of gdp growth. things, theyother devalue the currency twice since december. what impact have you seen from that? whetherexpecting to see devaluation either before or after the elections in july? are currency was misaligned p are currency was misaligned. we had a policy of taking the currency to the dollar at some nominal rate. given that are exports were going down for the last three years, import was going up, it surpluses were becoming very high. invite right thing to do was to devalue the currency. luckily there hasn't been inflation so far. it is less than 4% for the first nine months. the government of pakistan has a lot of come if we need to we

would but we don't see any need now. just in the month of march, exports were up 24% from year on year. so i see a good thing happening right now and i don't see any further need for devaluation right away. you have ruled out an international bond sale before the election, but we know that 450 million is being raised through a syndicated loan and you still need to raise other 1.5 million. talks through your plan. month -- last bond week sold and we haven't gone back to the bond market. up on to have a spend china next year in september or october. then we will go back to the national bond market like we did last your. in terms of the financing cap right now, we are talking to commercial banks and taking a commercial loan from commercial banks. julia: everyone that we have

spoken to including diplomats is expected pakistan to be added to the task force watchlist from june of this year. is that a foregone conclusion as far as you are concerned and what impact do you expect that to have as far as your external environment and financing flows are concerned? >> i think it's a fair conclusion given the board in february. or march, i should say. we would go on an action reporting plan. we have prepared a plan and i think we will share it with them on the 25th or 23rd of this inth, once i go back home will take a look at the final look at the plan and share it with them. once we implement this plan, -- we expect to be on the gray list for no longer than a year. have, we willthey work with international

community and implement those reforms completely so we're out of the gray list. julia: so you're willing to do whatever it takes to shore up confidence and could off that watchlist? >> absolutely. i don't think there is much left to do. whatever is left to do we will do it. think that's what other countries expect us to do we want to fulfill our international obligations and pakistan willrd not allow any financing of terrorism or money laundering. julia: thank you so much for talking to us. thank you for us to ishmael. the prime minister of finance heard coming up, coco goes crazy. citigroup predicted the tightest supply in a decade. we get an update from ghana. next. this is bloomberg. ♪

♪ joe: what'd you miss? hedge funds going all in on cocoa. getting yours are what is going on with this crucial commodity for chocolate? we joined now by christie leslie. cocoa.hor of the book she joins us now by phone. joiningu very much for us. i have been reading your work today and just a few months ago, you were talking about how cheap it is and now the prices are searching. what is the key driver of this market that influences the strings? christie: we are in the reverse scenario now from when i was finishing the book. was dishing up

as the time i was writing was a surplus season. wasmain reason behind that because we were in an el niño cycle until mid-2016. that's the warm cycle. it can often create drought conditions in west africa. ended, wecycle returned to favorable weather conditions. surplus and just tons of coco coming out of this part of the world. and the price drops as a result. now we are in the reverse situation. year,ng in january this were not in a new el niño cycle now, but there have still been pretty dry conditions here. that has been negatively impacting cocoa crops. thing, butd a good the ivory coast has had rain in the past few weeks.

i haven't noticed them so much here. but the rains haven't helped, they have hurt. they've been so severe that they been damaging the flowers on the cocoa trees and the baby pods and the anticipation is that the damage to the crop will result in a much lower crop coming out of the ivory coast later this year. were just in a bad weather situation here in west africa and there is also been some statistics coming out the last few days. that i'mding is a term not that familiar with. what are we to read into grinding? how does the layperson interpret the data? christie: that's a great question. grinding's are a proxy for chocolate demand. to create chocolate out of the cocoa bean, you've got to grind it down.

and that's what people make chocolate out of. you grind the cocoa bean down to make local butter. and cocoa powder. these are the things that we use from the being. when we talk about grinding, we're talking about how much cocoa is being processed into something usable come into a chocolate bar, cocoa bar, cocoa powder. we look at grinding particularly by the largest chocolate companies to see how much chocolate product their making. the reports have been the grinding's are up in europe and the ivory coast. they are weaker than expected in north america. but what it basically means is that europe and the ivory coast have more cocoa than anticipated. that suggests higher demand. joe: real quickly because we have a minute.

yousef north america kind of week. where do we see the biggest demand growth? kristy: that's a great question. i don't know if it's regional as much as it is -- asia has had a fastest growth in the past. 10 or more years. as far as demand growth overall, china and india. we can look at it another way, globally and all markets the demand for dark chocolate is rising. in making a dark chocolate bar, you're using more cocoa. is an overall trend that we need to pay attention to. joe: a member of the faculty, author of coco. joining us by phone from ghana. the dark chocolate is simply the best stuff. julia: now i have the munchies after just watching that flickr chocolate coming out. we're talking all thing japan. we willjapan next week.

discuss from new york, this is bloomberg. ♪ is bloomberg. ♪

♪ mark: i'm mark crumpton with first word news. federal aviation relators are planning to make emergency .nspections mandatory this follows a fatal accident on a southwest airlines plane earlier this week. southwestday, all announced it would provide $5,000 checks and $1000 travel vouchers to passengers who were on board that flight. the ntsb is trying to determine why a fan blade tore loose. found signs of metal fatigue. dnc today sued president trump campaign, the president

son and son-in-law, the russian federation and wikileaks. the suit alleges they conspired to help mr. trump when the 2016 presidential election by breaking into dnc computers and stealing tens of thousands of emails and documents. the lawsuit seeks unspecified damages and in order to prevent further interference with dnc computer systems. francis suggesting that syria and russia may be covering up evidence of a chemical weapons attack. two weeks of obstruction by russia and syria are hurting the investigation. the minister went on to say it allowing unspecified perpetrators make proof of evidence disappear. they have been unable to visit dumont. britain supreme court denied an appeal for parents who want to

take a terminally ill patient to italy. be decision said it would pointless to fly him to rome for treatment. the toddler suffers from a neurological condition the doctors have been unable to identify. the child's parents met with pope francis this week. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. ♪ scarlet: let's get a recap of today's market action. it was to the downside on u.s. stocks. the nasdaq, the biggest decline and applelosing 1.25% getting hit pretty hard on a deteriorating outlook on china. the computer chipmakers and or thee tech companies brunt of the selling their as

the s&p fell for a second straight day. we just wanted to recap some breaking news we told you about earlier. a u.s. probe over mobile technology. the doj investigating coronation by these two companies along with a standards group that would make it harder to switch mobile phone carriers. you can't just take out a sim card and replace it with another sim card, you get your phone unlocked. joe: people come here and there like what is the deal? scarlet: we will continue to keep you posted. julia: what'd you miss? president trump and prime minister abe met. the prime minister did not convince the president to rejoin the transpacific partnership and also on the radar, the bank of japan's decision is out on

wednesday night as well. great to have you with us. let's start macro and we can drill down into micro. obviously doesn't change much there, but what about as far as fiscal policy is concerned and addseform that particularly as labor reform? reform, one of the key goals for abenomics is to put the fiscal house in order. without growth, we cannot start addressing this problem. right now, the key focus should be on structural reforms some of reforms andfrom tax there is no single reform. it's a collective effort. scarlet: doesn't that depend on people supporting the prime

minister and his team and his advisers? the financee minister is caught up in this elementary school sandal that involves the prime minister and the prime ministers wife. throughster abe push with the finance minister and with a cloud of the scandal hanging over them? >> the ongoing political scandal, there is a lot of uncertainty. eventualnow what the outcome will be. i'm not worried about the current situation because, worst comes to worst, even if we were to have a new leader which is far from, i don't think japan would go off the rails. profitabilityn's is already far stronger than five years ago. parties andon growth over fiscal reform. joe: it is often cited as a

reason to be bullish. how rapidly is that happening and where specifically do you see the fastest action? >> it's not really a rapid change unfortunately. but it is changing slowly but firmly. companies talking about their financial performance in terms of r.o.e. and much more often than before. it's really night and day compared to five or 10 years ago. joe: how did they talk about it before? >> joe: you said they talk about differently now, explain what would it have sounded like? >> japan is notorious and has been dubbed socialist capitalism. today, there is much more awareness around that and as a

result, corporate japan based on the most recent statistics, 2017 r.o.e. has exceeded 10% for the first time. julia: talk about what we're seeing now because now we are seeing double-digit earnings coming in. much more room is there and talk about your picks here because stock bank is one of them. >> i'm a long-term investor. in the short term anything can happen. tomorrow, shoots up initial reaction will definitely be negative. corporate japan has become more resistant. julia: why is that? it wasuse 10 years ago 75 or ¥80 to the dollar. that is when they really started to address the cost structure. now, today corporate japan is leaner and more profitable.

arehese levels, companies regenerative. scarlet: so it's not a case of hedging, but more about managing operations better? >> correct. julia: how much room is there? how much room are we talking given the rally we party scene? now, japan trades at about 14 times each year's earnings. japan andive years eps grew about 20%. the market went by a hundred 40%. the market hasn't gotten ahead of itself. continue to be driven by earnings. earnings over time, 10% r.o.e. means at the same rate. julia: talk to me about softbank. and it remain resilient in the

face of what we are seeing is far as a broader shakedown? >> the rationale kind softbank for me is bidding on mr. son. i think he is the best entrepreneur of all time in japan. i know there's a lot of controversy in the u.s.. it is just an amazing track record. i'm happy to give him the benefit of doubt. he is doing interesting things. so let's wait. resilient? nervousness? >> i don't get too worried about the movement i focus on the he alwaysl heard delivered on his past commitment. scarlet: thank you so much.

us, normally based in hong kong but visiting the u.s.. coming up, white pension funds need to extend their time verizon. reminder, surprise -- subscribe to our podcast on itunes where you'll find the best context each friday to employ over the weekend. you can listen to them on audio. from new york, this is bloomberg. ♪

♪ scarlet: what'd you miss? when it comes to stockpicking, long seeks dividend. we call ourselves

unconventionally conventional. it's nothing can see, it is actually a bit boring. as of what has transpired in the industry over the last 25 years, we are seeing somewhat of a relic. qualityery high long-term approach with an emphasis on common stocks. the top-down approach where we are getting ahead of print themes. i think the most unique thing about the approach and why they have been so successful is that is a 20 year investment approach. julia: that's your time horizon. >> the reason they use a 20 year approach, we did a study several years ago and determined that there has not been a 20 year time in our history that a bull market in a bear market and a recession and a speculative bubble and a war. the a great way to measure

total in all different market situations and circumstances, the total performances of the manager. , weother intriguing thing look back to 1928 and we looked at every 20 year rolling. different71 twenty-year segments. the average return for common those times is over 11%. that gave us -- validated our approach and to take the 20 year approach. the third component of why they have been so successful is relatively low fees compared to other public funds which, by the way depending on the study some estimates are saying there is a $5 trillion unfunded liability crisis and so but i think we have done is somewhat unique.

i'm curious what your top holdings are, how often are you looking for new ideas and new investments as opposed to building up the positions you have or changing them on the margins? >> it depends on the top-down work we're doing. we're focused on economic policies and particularly on the monetary size. , we start by answering broad questions. where do we want to be from an industry standpoint? >> are common stocks attractive given all of that? >> it is a tricky time and the two big questions we're asking, where tenures in and we just started the 10th year. is it realistic to think we can

undergo economic rejuvenation tenures out and number two, can the fed engineered this cycle without inverting the yield curve? we would answer in the affirmative to both of those for a variety of reasons. on the outside, policy reforms are really going to re-incentivize the economy and so i think you have a situation in capital spending which can drive up productivity. it used to routinely grow at 2% and we've been at less than half of that for a while. we think we could be on the front end of a capital spending reforms.use of policy >> even given the threat of tariffs and a potential trade for, how do you factor that in? >> i think were a bit different in that, that might end up possibly. freer trade

if it works. it is a gamble, but i think post-world war ii general trade tariffs and that model is over now. i think that is over where you large multinational thousand page deals driven by corporate interests. frankly, they are replete with problems in terms of addressing barriers and currency manipulation and intellectual property issues, there are a lot of problems with large deals. the tpp negotiations, i talked to someone involved in those, none of those issues were addressed. the tpp is the old model and the new model is the south korean model. it was just successfully renegotiated, so i think we are moving from multilateral which has some problems but has been great in the postwar era.

julia: that was julie hyman talking with jay bolin. trade tensions and concerns and president trump the earning stage next week, but recent volatility is raising concerns. from new york, this is bloomberg. ♪

julia: trade war's privacy concerns and tech giants, out of that facebook and microsoft all returning next week. taking a big toll on the equity markets. more and what to expect is

bloomberg. expectations are pretty lofty and that we had a confluence of factors knotting confidence. every sectorlike of check whether it is advertising or business models, have had certain things that have come and raised a lot of uncertainty around the stock, notmost of them are markedly down from february, but there has been a lot of volatility over the last month. joe: when it comes to facebook, people say regulation might be a concern. core business the is how their stock does. is there any evidence that you find compelling weather does on business advertising or usage side that suggests a slowdown? >> there's no suggestion of a slowdown yet. they'll show advertisers are still spending and consumers yet.an -- haven't #deleted

they might force facebook to make it easier to opt out. instead of opting into giving away your data and going through their terms of services to pull it back, if they do it more upfront in an easier way, of course people will like, yes i don't want facebook using my data. that is when we will see the problems with the company. scarlet: let's also talk about alphabet. costs are rising for google in particular. in the past we used to look at results and look past the acquisition cost. but not anymore, these expenditures are bigger chunks of what google has to pay. that cost number has been something people have been focusing on edit is not going away. them.a problem for the privacy concerns matter for google as well. if regulators in europe and elsewhere decide to come down on that, it is not just going to be

facebook, it will be other business models that work the same way. scarlet: so far they are not the crosshairs of regulators? >> regular leaders know they can just keep going after facebook but that is what they've been going on right. julia: amazon has been in the crosshairs of first the president concerned. what we heard was good news about the prime subscription and they've now got 100 million users. what are we expecting from amazon, because something they've cited going into these earnings. tojeff bezos has chosen ignore trumps twitter tirades besides, he did invite james comey to come give a speech about his book at amazon headquarters. scarlet: trolling him a little bit. >> your words, not mine. that's a hundred million prime subscribers. it's a number they've never disclose before. why disclose that now? they been very secretive. julia: big number.

>> maybe they wanted to wait? the sec has been giving them grief about what they've is closed. joe: are there any concerns about amazon's business? over, it's iphone rolling and microsoft, i'm sure something. what is it with amazon? >> when the president initially tweeted, people ignored it but then in the midst of all this, there was a tweet that hit the stock really hard. you talked about it. it talked -- it is back up now. the president of the united states is the most powerful person in the world and is not something you want tweeting against her company. yes, well. take it for that. sounds like a lot of agree with you. scarlet: let's start with the ims. the ims does not approve of the

u.s. approve of using unilateral methods. >> given the openness of europe, abouty we are concerned the risk of an escalation and our policy advice you know is we have a multilateral framework and wto and we think that whatever concern and grievance there are need to be dealt with inside this framework. opec's: secretary-general responding to president trump's warning today that prices are artificially high. price is not our objective. our objective remains the ability, and stability on a sustainable basis. , not just asst

producers but also consumers. oilhis context, the u.s. industry is also the beneficiary . scarlet: that is your business flash update. joe: what you need to know to gear up for next week. this is bloomberg. ♪

♪ scarlet: what'd you miss? a decline in u.s. stocks led by tech shares. coming up, speaking of tech don't miss this. tech earnings kickoff next week with alphabet on monday and facebook and twitter on wednesday. amazon and microsoft on thursday. the ecb announces the rate decision on thursday. angela merkel meets with angela -- meets with president trump on friday. that does it for what'd you miss? joe: have a great weekend. this is bloomberg. ♪

♪ mark: you're watching bloomberg technology. here's a checkup first word news. russia andsuing wikileaks, saying they interfered with the i-16

election. some frightening moments at another florida school today when a gunman opened fire wondering one student before being taken into custody. the wanted student was shot and the ankle. in parkland, florida the scene of the february high school massacre, students led a nationwide walk out on this, the 19th anniversary of the columbine high school shooting which left 13 people dead in littleton colorado. final preparations are underway in houston, texas for saturday's funeral for first lady barbara bush. mrs. bush died on tuesday at the age of 92. federal aviation regular leaders are planning to make emergency inspections mandatory for one of the world's most popular jet engines. people familiar with the matter say the move is in response to the fatal accident on i southwest airlines plane this week. southwest announced it would