its trade deficit by $200 billion at the end of 2020. bank bashing. bnp and socgen miss out, while hsbc opts for organic growth over buybacks. april's payroll numbers set to shake off marches weakness. coming to a are beautiful shot of the capital and washington, d.c., welcome to bloomberg "daybreak." it is jobs day and equity traders should not be looking at washington, they should be looking at churchill downs. just before i came on set, in the last 10 years equity markets have only been down one time after the kentucky derby. only one time. not up a lot, but up. urth be withe fo you.

points,res down five but sitting right at the 200 day moving average, which pretty much every asset class is also. a stronger g10 space dollar story. we had some softer emi out of europe. of the lossinding do we continue to see? the yields down about one basis point in the u.s. crude getting a nice used. -- boost. david: time for the bloomberg first take. trade intart with china. we had the discussions. the chinese agency said the two both sides had a thorough , protection ofws intellectual property rights, as well as tariffs.

what does steve mnuchin have to say? we are having very good conversation. [laughter] did anything come out of this? >> nothing came out of this, and the expectations were low. we might actually already be in a trade war, and these negotiations are not producing any progress to get us back from that. china is already turning away ships full of our sorghum. drop,e seen soybean oils and we are seeing the chinese step up their inspection of the ships making it into point -- port. the u.s. delegation is back on its plane, coming home with nothing to show. david: if we are already in a soft trade war, is it showing up in the economy? carl: we saw some evidence of this in some of the trade statistics.

q4, which factors into gdp, it looked like there was some rush to get materials onshore before tariffs went into effect, as they saw some odd behavior in net exports and inventories. they were seeing lots of mention of the trade war and tariffs in industrial surveys. it does not seem to be really weighing on business decision-making yet. it seems to be compartmentalized. alix: is it the same for the equity market? yesterday, i could not find a single real trigger for the selloff and the buying where we end up flat. is that a china story? romaine: partly, and we are seeing the markets holding. until you have some clarity about the business implications, and this is about business climate. what the market is telling you is that it is concerned about how this will reflect on the needy chain, and analysts

to factor that into their models and cannot while this is going on. alix: our second story has to do with european banks. bnp all getting hit. why are we not seeing them capitalize like the u.s. banks? carl: the market over there is much more split up. you have a lot more uneven growth in terms of where you will look for investment banking business country by country. socgen's problem is a little bit different. i am not sure about the management shakeup. gave a decent explanation that volatility scared away a lot of their clients. alix: right with goldman and jpmorgan. carl: hsbc was not really in a bad position. alix: let's get to that. bloomberg spoke to mr. mckay at hsbc about that buyback and why

investors were important. >> the buyback we are announcing this morning is broadly speaking, in line with the pattern of what we have done in the last couple of years. the community is expecting a little more. from our perspective, the numbers from the first quarter bear out. alix: do your point of view, it feels like there is also a divergence in economic data from the u.s. as well, and the need for buybacks? carl: look at the german interest rates and what portion of the yield curve is still in negative territory. negative interest rates are not an effective policy. if you want healthy economic growth supported by an extension of bank credit, negative interest rates is not the right path. the fed has been clear this does not look to be a viable option, and the european example, whether we are looking at the earnings results for banks or the broader performance over the last couple of years, also

bolster that view. lower interest rates help. negative interest rates, not so much. david: it does not seem that the guidance.ive any carl: that may not be good -- romaine: that may not be good for some of these banks. david: it is jobs day. the forecasts are way up from last month, but last month i think was sort of an aberration. rate going down to 4% and average hourly earnings of 2.7%. given the notion that the economy is accelerating, wage pressures have been slower to materialize and that tells us there is more elasticity for workers. if workers were becoming more expensive, we could see a reduction in the pace of hiring and increase in productivity growth. that is not happening, which means faster gdp growth

translates into faster hiring. we are at 2.15 on the payroll change. due to the fact that we have been over the natural growth rate for so long tells us we are long overdue for further decline in the unemployment rate. i would not be surprised if we are below 4% by midyear. david: the markets are focused on that wage number, aren't they? carl: if we got a second month of a week payroll print, they will scratch their heads and ask questions of, our tariffs weighing on to job creation concerns? as soon as we get that rebound, the focus will go to any sign of wage pressures that could push the fed off of its confidence with respect to the glide path of interest rate normalization. alix: that brings us to the market reaction, in particular, the dollar. cm is getting hit. i wonder what the upside is. carl: i think it will be a --

romaine: i think it will be a no-win situation for the market. we need to see a higher wage number and a higher growth number, and i do not think we will get that. the market at this point does not really have a great conviction that the economy is still accelerating. there is a lot of concern it is decelerating based on the data. while the economic data may not show that just yet, the price action is telling you that traders do not buy it. until we get solid numbers that show inflation is contained but the economy is still growing, that is when you will finally get some positive momentum upward. carl: if we get heavy economic or stronger wage growth, we will get higher numbers for the dollars. the fed is the only game in town tightening policy. thank you both very much for being here. a trade tax, go rolling on.

china hadnd negotiations and walked away saying they need to talk more. we had to hong kong to find desk head -- head to hong kong to find out the latest. this is bloomberg. ♪

david: the united states and china fought to a draw in the first round of their trade talks, with knows this if it progress. curran.me enda thank you for being with us. what the sense of united states was after in these negotiations, as far as they know -- as far as we know. enda: they presented a lengthy list of demands.

one analyst described it as impossible for china to agree to. the headline take away, to narrow the trade deficit by $200 billion by 2020, and a whole lot of demands linked to opening up market access for u.s. --,anies, protection around reduction in tariffs, and both interestingly throughout the document, there is a demand on china that they do not retaliate to u.s. actions. a lot of people point to those clauses in particular of being especially fundamental hurdles for china to agree to. a lengthy list of demands from the u.s., and china made similar demand. david: there was a statement from steve mnuchin saying, we had good talks. they did not say when they would get back together, did they? enda: they did not.

the u.s. did demand and their documents that it would be a quarterly review of all of this. what we do not have a sense is where do we go next? a public press reefing by either side is telling us -- briefing by either side is telling us not much progress was made. there are significant disagreements between both sides. i think we will have to wait for some direction from the top, when the u.s. get back to washington and see how trump responds until we have a clear direction on how we go next. little clarity or visibility after two days of talks in beijing. david: thank you so much for joining us from hong kong. alix: joining us now from newton, massachusetts, is not mainly. maley. mainly -- this takes a look at the world currency rankings and this is

the dollar over the last month. peso, the rand, the biggest losers of the month. much of that is idiosyncratic and how much is global issues moved higher by the u.s. dollar? matt: based on what you guys were talking about, i'm a little confused. maybe i should be worried about the impact of the kentucky derby. seriousness, the thing we have to worry about right now with these moves on the currency markets is we have to consider that yes, part of it is what is going on fundamentally. we have seen weakness in the growth -- in the economic numbers out of europe. that has had an impact. we also have to look at positioning. you look at the futures traders. the euro head record long positions -- had record long positions that are starting to

unwind. the same with the dollar. those things can have an impact on the currency markets for several weeks to a couple months , even though the moves are only quite minor on a fundamental basis. when i will be looking forward the next couple of weeks, what will happen on a pullback of the dollar? the dollar broke above its key trendline, going back to its highest in 2017 and it is above its 200 day moving average. if it pulls back down, we will be fine. if it bounces back to a lower high than a higher high -- i am sorry, higher low and a higher high, that will be important to what is going on. the markets move in front of the fundamentals. my point is that we have to be a little careful to draw too many conclusions too quickly. alix: the dollar continues to climb higher. what asset class has the biggest rewriting potential if we get

that higher high, higher low? matt: emerging markets. the correlation or inverse correlation between the dollar and emerging markets is about as strong as you can get, and it is almost tick for tick. we look at the emerging markets etf, that has been rolling around for a while. it is getting close to its february low. if you see a lower low, this is a situation where you have a crowded trade. people have been bullish on emerging markets for a year and a half, so a lot of people are on one side of the boat. if that breaks to a new low, that will change a lot of thinking. the mentum is a big driver of the markets, and that will pose a big problem. -- momentum is a big driver of the markets, and that will pose a big problem. a strong is the inverse correlation is with most commodities, it is not as good with crude oil. in the first half of 2017 they

traded down in tandem for months. headwindsreate some for some of the other commodities which have been rallying. david: you made an interesting point i did not understand. i thought the correlation between em and the strength of d over asr had weakene those economies have evolved. more involved in tech, a lot of them are. you are saying it is just as strong as it ever was? it translate one for one into weaker em? matt: looking at the charts and the way it moves, if you look at the eem emerging markets etf. it bottomed right when the market topped out at the end of it6, beginning of 2017, and started to rally strongly as the dollar sold off for the next year. as soon as the dollar looks like it has flattened out, the emerging markets flattened out

the same thing happened now that the dollar is starting to rally, the eem is rolling over. i agree with what you are saying on a theoretical side, but the markets are showing something else and the markets are usually right. they are telling us the dollar is breaking out and emerging markets are starting to be weaker. the 120 day correlation is -61 basis points. i was with you, because we usually hear about em. up, equity futures trading lower this morning ahead of today's jobs report. do we get that march rebound in the april numbers? this is bloomberg. ♪

alix: we are about an hour away from the monthly jobs report,

which is expecting to show a bounce back in hiring after some weakness in march. joining us now is brent ryan of deutsche bank and matt maley is still with us. your call? brett: 185,000 on payrolls. we think the job market is doing fine. it is really the earnings number that will get the most attention . we are 3/10 under on earnings. that would be tying the highest from this cycle, which was reached back during the hurricane impacted month of september. policy makers such as dudley, 3% wage growth would be consistent with meeting their 2% core inflation target on a sustained basis. alix: the market is expecting consensus to be 2.7% for april. what number four average hourly growth year on year would freak you out? using, i doind of

not want to go tubing far because 50,000 above consensus -- too far, because 50,000 above consensus. the key is what impact it will have on the bond market. we have seen interest rates rise. they had risen on the long end. we have been staying bright in the 3% range, that short-term rates have come up quite a bit. , there is no alternative, so the interest rates are having an impact on the market. if it looks like the fed -- we are hearing numbers of six rate hikes going forward. if you start getting higher than four, you will have a problem. david: six this year? matt: no, no. david: you were freaking me out for a second. matt: i have heard some numbers

that this kind of cycle will have six more in it. people have been talking three to four, and i am hearing numbers as high as six. david: the market really reacted when the 2.9% came out. or was just an outlier that indicating more is coming? brett: the general direction has been creeping higher. that was an outlier because it had to do with the hurricane. david: fewer people were working. brett: that was an outlier, but this one will be real. wage growth should be approaching 2% within the next 12 months. the phillips curve -- if the phillips curve has any life in it. our numbers say the unemployment rate will fall to 4%, the lowest since december 2000. this is when wages should start rising and when the fed will start moving to its neutral. we see no reason to stop along

the way at this point. alix: the question for me, we do not care about that as much, but you get a three handle and that raises questions of what we will do with inflation pressures. you have the core pce is the white line, and the blue line is you three. what do we have to get two to trigger that rise in inflation? in some sense, you need productivity for wages. i think you are already starting to see it pick up. the six month annualized change in core pce, you are at 3% now. part of that has been health care. health care inflation is 20% of the core pce. we are seeing health care prices pick up and that is going to be supporting -- that has been a drag on core pce this entire cycle. it has really been health care and that is interesting.

an interesting dynamic playing out. we are getting the tightest in the labor market. david: as you take a look at these numbers, which sectors are particularly sensitive to the numbers? interesting,ind of because we are seeing some interesting moves in utilities. interest rates have been moving up, utilities have been holding up nicely. that is something we usually do not see. the other thing is the bank stocks, they should be highly correlated with higher interest short-term-- interest rates have been moving just as high and the yield curve has not been steepening so it has not helped that group is much as you would expect. i am sorry? alix: go ahead. matt: i was getting some feedback. what we need to watch is the broader market and see how it impacts these groups.

i am getting some feedback, i am sorry here it alix: sorry it out that. -- sorry about that. matt maley and brett ryan, thank you very much. cannot ask -- do not miss our exclusive interview with outgoing fed member bill dudley. a la bob as earnings out, unbelievable. -- alibaba earnings out, unbelievable. the revenue from core commerce up 62% in the last quarter. david: they be on earnings per share and revenue. 60 sue percent up with this base -- 62% up with this base. ♪

alix: jobs number, an hour away. s&p futures down by about five point, dow down 30 points. dax up by 5/10.

we have some pmi coming in squish year than anticipated. that is causing the euro to take a little bit of a hit, down 2/10 of 1%. most of the emerging-market currencies are getting hammered. we will be seeing more dollar upside after the jobs number. yields moving lower by one basis point. i am watching the 5-30 spread, flatter as she goes, back to 33 basis points. crude up 1/10 of 1% despite the stronger dollar story. can we talk about alibaba? david: everything, i cannot believe, it is extraordinary. core commerce up 52%, cloud computing up 103%, active users in the marketplace up 37%. revenue growth up 60%.

david: they added 100 million active customers last quarter. they were starting from a really high base, and to say they will have 60% more revenue next year, that is extraordinary. alix: operating margins are taking a hit. nobody cares. if you post good numbers. david: a chapter out of jeff bezos' book. we pay so much attention to facebook and google and also that, and there is this -- alpha , and and there -- alphabet there is this little thing called alibaba. alix: the gains are cut to about 5%, so the market quickly re-rating that. david: we want to hear about what is going on outside the business world with kailey leinz. beijing, two days of trade talks between the u.s. and china have wrapped up, and there

is plenty of work to be done. china's news agency says the two sides reached consensus on some .ssues but disagreements remain the u.s. wants china to reduce the trade deficit by $200 billion by the end of 2020. two developments from the korean peninsula. ignored --ouse has that comes from south korea's presidential office. north korea reportedly will allow international inspections of its nuclear facilities with the u.s. there could be a politically explosive decision involving brexit. according to senior british officials, a brexit transition period may have to be extended years. system is scheduled to end in 2020. global news 24 hours a day and

twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am kailey leinz. one of those companies will be formed from what had been the materials science business and will reclaim the dow name. the chief executive officer of down next year -- dow next year, jim flittering. congratulations. it is a very exciting time. i want to get a sense for our viewers what your new company will look like. we will put a pie chart up that relates to dell dupont. it -- dow dupont. if you could tell us how much of the pie you are having and where the constituent parks are coming

from -- parts are coming from. where do you fit in? jim: if you look at those segments called packaging and specialty plastics, industrial intermediates, and performance materials and coatings, that will be the new industrial sciences division and our plan is to launch it for ipo in the first quarter of 2019. that will be the most innovative material science division in the world. david: that is a lot of that pie that you just described. how big in revenue will it be? how many employees? 50,000, maybeout a little bit more employees, $50 billion in revenue. the materials division booked just over $12 billion of revenue, aided by a lot of new investments in our core businesses. that company will be the

bellwether materials company in the sector, and that is what our target is, to be the best in class performer. david: you said you are the most innovative. what distinguishes you from your competitors? jim: we have a powerful innovation engine. inhave made huge investments research and development, so our time to commercialize products and bring them to market is fantastic. we brought 5000 new products to the market last year. alix: let's drill back and talk about the macro look. let's talk about the environment in which you are operating and in particular, talk about tariffs. how does that affect your business decisions on where to build plants? jim: we are in the middle of a tariff discussion right now that i think is targeted at trying to make sure we have fair trade and fair regulatory and forcible

practices in place. it is also a target protecting ip and making sure we are protected from dumping. in my view, i do not think this will have a big impact on our business. most of our plants are located around the world. we have plants in the middle east, which was built to service the middle -- the asian markets. constructed on the u.s. gulf coast. alix: if you were deciding where to build your next plant, you just make a $6 billion expansion s, that has to wind up affecting where you want to build the plant. jim: if you look at aluminum and steel, and things happening through the negotiations like canada and mexico might be exempted, south korea might be exempted. when you look at sourcing for alumina months deal, we will be

-- aluminum and steel, we will be able to get them from other places. we have to look at a lot of different inputs when we build a plant. we have to have good construction labor and affordable construction labor, and a good regulatory environment. david: does it affect you in a different way? , -- insecurity, uncertainty about what is coming, you just described that does that say to you as the new ceo, i have to hold off on making decisions? jim: what is happening right now is you see the uncertainty in the marketplace and you see people nervous. that is why you have seen value run out of the financial markets. our end markets and consumer demand, 70% of our business is consumer driven demand. we just posted a fantastic quarter and we have seen

double-digit growth. haveis interesting as we seen top 40 economies around the world all growing positive gdp. we delivered 22 consecutive quarters of year-over-year earnings growth and we did not have all 40 of those economies in positive growth territory. it puts uncertainty into the market, but we still have to grow our business and keep up with the demand. we have choices around the world, including the united states, and we want to invest more here. david: this is jobs day in the united states. you are about to be responsible for 50,000 employees. of us your sense of the job market. is it hard to employ people? what is happening with wages? jim: the vast majority of our employees are in the stem education field. we have a lot of degreed employees but have ramped up opportunity on apprentices and

two-year degrees. apprenticeship programs are bringing them into the workforce. we have hired 16,000 employees over the last five years to replace a workforce that is aging and retiring out, and renewing that workforce. in certain science and technology fields, things are tight. in i.t. fields, things are tight , and we deploy a lot of people in our i.t. departments and manufacturing and -- alix: so unit labor costs are going up? jim: i think they are going up because we have a growing economy, so people are paying more wages and more salaries. alix: so you can pass it on? jim: we are high paid jobs, not a minimum wage employer. these are high-paying, really good jobs for people. we have been increasing wages and salaries over many years. the: let's dive deeper into

petro chem world. we have a chart that shows plastic prices and the input to plastic prices. the white line is plastic prices going down. the orange line is anything prices and the blue line -- ethane prices and the blue line is propane prices. jim: we increased margins by 100 basis points in the first quarter, and it is a complicated because we have flexible feedstock capability inside the dow sheen. -- machine. we can crack the industry average for ethane, we can crack the max for propane, butane, or knapsack. naptha. what sets the plastic prices is supply and demand for those prices -- products, and that has been tight.

at these growth rates, you need the equivalent of four to five world scale plastics plants to with everyone percent of gdp to keep up with the growth rate. feedstock,, a base you need four to five world scale at the link wreckers coming online every year -- ethylene crackers coming online every year. we have three to three and a half for the next few years. things are balanced to cite as we go through the next several years, and that is why you see people out talking about the next wave of growth. it is the next wave of high roc incremental growth we can deliver because we have made investments in saudi arabia and the u.s. gulf coast. david: good to have you today, jim federally, dow dupont incoming ceo. he is actually the dow ceo.

a slump in trading hits european banks, but not their u.s. peers. we look at the troubles facing them, next. this is bloomberg. ♪

kailey: this is bloomberg daybreak. i am kailey leinz. ,oming up, alan krueger princeton university professor of economics. alix: we turn now to wall street eat, wear recover three things wall street is buzzing about. europe's trading troubles, bnp and socgen this.

after trashing high-frequency trading for years, mark cuban buys into it with a well-timed wager. sphere under fire. opening a probe after the vix allegations that the index is rigged. kelly joining us is jason . let's start with those european banks and focus on socgen, because they got hammered the most, down 6% to 7%. their trading business is off a lot. you see what happened to their stock. we actually got to talk to him and asked him what went on because equity trading was down. this is what his answer was. >> if i take specifically the equity, we are more overweight on structured products than on cash. the market has the dynamic of cash and products, so in that

specific segment, we delivered the same result as our peers. david: you are looking at it the wrong way. the market did not think to buy it. jason: they did not buy that, nothing to see here, please move along. especially in light of what we saw in the united states, one of the interesting things mentioned is a 32% jump in equities revenue across the top 5 wall st firms, and then you had this performance. , sols investors love a comp when you have those comparisons, it seems to speak to -- and this came through in the socgen example -- still some big questions around europe at large and how those banks are navigating. david: it raises the question of why it is so different in europe than here. all of the people are nervous

because of the vix and the uncertainty. you say, that is why they went to goldman. alix: we are so scared. , becauseironic volatility in the u.s. is higher than europe. i wonder if that is part of the issue, because at the end of the day volatility in europe should be higher than in the u.s. jason: we also sort of go to this notion that we talk about in this segment so much, these people get paid money to make money in almost any market. in the all terms world but in the banking world, these are sophisticated people. they should be doing a bit better. alix: mark cuban is trying to do better than that. this has to do with high-frequency trailing finally making investments of virtue. jason: i love the fact that he reversed course. he has long been someone who "trashed" the fastest

firms in finance. they are not trustworthy with computers, so he says. as you see him ranting and raving on the side of the dallas mavericks, you know he is a human being. it was pretty smart to get into virtue. we will see them reporting earnings today, so we will see how that trade is going. mark cuban, whatever you think about him, pretty smart guy. david: and he likes to make money. the third story is the vix, the allegations that maybe there is some rigging. has started the sec separate investigations. the cbo keep saying, nothing there, but their stock price has taken a hit. jason: that is the thing that jumped out at me about this story, the numbers do not lie

and investors certainly are looking at this. one of the interesting things -- speaking of nothing to see here -- the fix has been fine, no one is manipulating anything, but they have been talking to a lot of compliance departments. is there anything going on? is anybody saying anything? it will be interesting to see how this plays out. period ofa significantly less volatility than a couple months ago, so maybe they have time to figure this out before we head into a higher vol world. david: that is bloomberg's jason kelly. the turnaround at weight watchers continues. their earnings beat estimates on earnings and revenue, and they increase their profit guidance, driven by a 29% jump in subscribers. shares are up 8% now after gaining as much as 20 -- 12% last night. we welcome mindy grossman.

i want to pull this up, what the stock price has done since you took over, july 1 of 2017. it is a pretty dramatic story. mindy: the team has done an incredible job of really pursuing the idea of going from the best of weight management, to a more holistic approach to wellness. it is really resonating. we ended the quarter at 4.6 million subscribers, the highest in history. that is one million additional subscribers since first quarter. more important, and what i am really pleased about his retention is now in the higher -- is retention is now higher, which means the engagement is there. david: when you were here last, you were talking about what you were going to do, and it is not just wait, it is lifestyle and health and well-being.

does that limit your upside growth because as you expand out, you have more competitors? mindy: our biggest competitor is people thinking they can get healthy their cells. only -- their self. only 5% of people use a commercial weight-loss program. if we could be the partner to that 95% and be a community for wellness, and we will still be the best weight loss program. freestyle, the new program that launched this january, it is resonating so well is because it is completely livable. it is simple, it is free. there are over 200 zero point foods, and people are losing the same or more weight given that flexibility. alix: off of david's point, if you have wearables still on the market, silicon valley entering that space full-time. amazon,e hathaway,

jpmorgan for a health care initiative, at some point that has got to start to bite into your -- mindy: there is a difference between healthy living and health care. month, way sync with 100 -- 1.3 million activity devices. we have 1.7 million people who monthly are in our closed loop community platform, and hence that is why our engagement is so significant. stats, we favorite had 2.5 million people use our barcode scanner and 260 million foods tracked. that is 260 million opportunities for engagement. we are not just the program. the community aspect of what we do is so powerful, which is why we are spending and investing in all of the assets to make that journey even more personalized,

and using the data and ai so everybody can feel it is their ww. the first thing people look at in the morning and the last thing before they go to bed. david: how sensitive is your consumer business? do you track closely consumer spending? mindy: we look at everything. our goal is to democratize wellness. there is a tremendous amount of affordability to what we offer people to inspire, engage, and help them. david: do you have a sense of how well the company at -- the consumer is doing? kenny monitor that, or they are a little nervous? mindy: we certainly can. i think consumer sentiment is somewhat more positive. important, we track if they are spending, what they are spending on. on, put my old retail hat

many of the stores are spending a significant amount of dollars in expanding their health and wellness within their environment, whether that is workout, connected technology sleep has become very important around the tech knowledge he. -- technology. you are seeing a shift in where people are putting their dollars. everybody wants to live their healthiest life. they just need the tools to be able to do that, and we want to provide them with that. alix: how many people will you get to hire and what are you seeing in terms of wages? mindy: we are looking to hire a significant amount of particularly tech and product talent. we are expanding our offices in san francisco and opening offices right after labor day. we have a great need for everyone from dana analytics, and certainly it is -- data analytics, and certainly it is a

competitive market. we have appeal with young people because we are a company with a purpose. not only will we be able to have a financial return on equity, for every element of growth we have a human return on equity, and that has been a big asset for us. alix: it is competitive. what happens to the unit labor costs and how do you manage them? are you able to pass that on? mindy: our margins, if you look at our expansion, because of the nature of our business being a member and recruitment model, that is not the stress point for us. we will hire the right talent at the right point. david: what is the stress point? mindy: we have to keep innovating and serving our customer. i would like to be talking about retention in terms of years, not months. we would like to continue to add significant value to our numbers , to be able to continue to grow.

the other thing we are very focused on is the diversity of our members. age, gender, lifestage, ethnicity, geography, and we have strategies against each one of those whether it be our influencers. we just added keven smith and dj khaled with a focus around young moms. how do we continue to expand our reach of who we are serving? everybody wants to lead a healthier life. alix: mindy grossman, thank you so much. coming up, alan krueger of princeton university will be joining us. market trading in a tight range. the dollar is stronger with the jobs number. this is bloomberg. ♪

♪ alix: jobs reboot.

april payroll numbers out in 30 shake off march's weakness. china reduces the trade deficit by $200 billion by 2020. beijing pushes back. a slump in trading has european lenders, but not their u.s. peers. david: a beautiful shot at the in washington dc. may 4, jobs day. come out and will about 30 minutes. alix: may the fourth be with you. david: twice in one program? alix: they're telling me to say it, but i'm nerdy enough that i would say it anyway. david: love star wars. alix: i have a yoda hat. a little to the downside by 73 points. the s&p off by eight. a stronger dollar story. euro down by another .2% below the 200-day moving average. you have weaker pmi numbers out of europe as well.

treasuries, that is the trade, yield hitting lower by two basis points. it is the back and that is seeing the most by an with the job numbers. crew checking off any stronger dollar up .3%. david: right here with first word news. two days of trade talks between the u.s. and china have ended in beijing. neither side has much to show for its efforts. china's official news agency says the two countries agreed on some issues but says there were major disagreements on others. the big question is if the u.s. has enough to delay tariffs on chinese products. the koreans from peninsula. the u.s. has denied a new york times report that president trump ordered the pentagon to prepare options for withdrawing u.s. troops. that comes from south korea's presidential office. north korea will reportedly allow international inspections of its nuclear facilities.

a south korean newspaper sites intelligent sources. there could be a politically explosive decision involving brexit. according to senior officials the transition might have to be extended for four years. reason is a new customs regime might not be able to come into force in time. global news, 24 hours a day on-air and on tic toc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. alix: where about a half-hour away for the monthly jobs report, expecting to show a bounce back and hiring after week numbers in march. joining us is alan krueger, princeton university professor brad bechtel.nd you have never said anything other than solid report.

4.1% for six month in a row is what unemployment sat at. the sampling should move around. i would expect it to age down. alix: what would freak the markets out? made they don't seem to be happy by anything. they want to make sure that they keep getting better. as long as the markets are reaffirming, they will be ok. alix: does that mean low-wage pressure and better job growth? the same market is not thing as the economy. on the perspective of the market they don't want it to be too hot or too cold. istronger wage number, which think would be healthy for the economy might have an adverse effect on the markets if they think it would cause the fed to raise rates more quickly than they otherwise would. david: to put the market aside for one moment, talking about

the economy and growth, that is something the fed backed off a little on the indication of growth. some of the data coming in a little bit more ambiguous. what would be the strongest indicator of growth in the economy? alan: i would look at retail sales and retail trade employment. that is probably correlated with retail sales. manufacturing with the dollar getting a bit stronger. save manufacturing is holding up. alix: the other part is the average hourly warnings, which we did to unit labor costs conversation which leads into the margin conversation. as of the data yesterday, it doesn't feel like unit product costs are enough that all have some kind of margin squeeze. what do you think? lori: i think with the industry struggling with is how much of an increase in unit labor costs can we withstand? we know is moving up, wage pressures are firm and that is bad for margins, but investors are struggling with windows that

hit margins and make things get squeezed? the industrials really spooked investors for a very good reason. we put out a piece on monday that shows when margins come in our gets do tend to struggle with that. these are really legitimate concerns the market is struggling with right now. david: is it wages or input? lori: both. both have an impact. an impact onhas margins. an improving economy is a good thing but rising wage pressures and commodity inputs are negative faucets. the market is struggling with how this shakes out right now. we did a survey in mid-march with equity investors, we had 36% tell us that they thought margins were going to expand this year. the industrial companies came and said, not so fast. i think that disappointment, that has been hard to swallow for a lot of people. david: that would suggest they lack of pricing power. supporting input costs, and

healthy environment, you would be able to pass most or all of that to the next level. is a markable that margins have held up as high as they have this far into the recovery. i would be worried about in terms of squeezing margins in addition to labor costs, what is going on with trade and suppliers, the uncertainty being created by the uncertain trade environment. affecting is investment a little bit. companies don't know if the supply costs will be. in some cases, it is having an impact on how quickly companies want to expand. dow, we have the incoming earlier in the show, and when we source fromcan different places. maybe we can look to mexico for new plant rather than the u.s. he seems unconcerned about the trade issues. where are we seeing it most of the market? lori: i wouldn't say it is one particular place it is showing up, but it is just the general

uncertainty. the longer this goes on, the longer we don't have resolution, the more it can affect confidence. it is very squishy right now, but that is the big issue. what we sawt i yesterday when we ended flat at the end of the day? is it a sin credit conversation, just a broader risk off field? lori: what i was hearing was sking.l the risk -- de-ri i'm not sure what pulled it back other than it may have got into overdone on the short term. alix: when do we see the soft data, which we have seen have questions, with whirling into a hard data that does affect things like hiring, productivity, wages? momentum inderlying the economy continues to be solid. we don't have the kind of excess buildup of bubbles that we had the greatiod before

recession. housing still has a lot of room to expand. there is a reasonable amount of pent-up demand. i would not be surprised to see the pace of growth continue in the 2% to 3% range this year. the tax cuts, it we will get short-term stimulus. long-term, they will mostly increase the deficit and not do much to help the economy. in 2018, they should provide some support for the economy. alix: how long does it wind up holding up, especially with the global synchronized growth story we have been talking about starting to the verge? -- diverge? been a resilient recovery. there has been a lot of threats to the recovery and it has continued to go on. one reason it has been so resilient is we have not had the boom and bust cycle. a lot of consumers were cautious. they didn't have access to funds even if they weren't cautious. that helped to elongate the recovery.

lori: i was going to say, the whole conversation about the economy, that things still look really good, i don't take anyone disputes that. i think we are maybe being overly reliant on that narrative. there are a lot of conversations coming up about pace. is this as good as it gets? you hear about that in the job market. rates, are they getting was -- getting less good. alix: will it be a value play of the u.s. versus europe? i don't know anyone buying s&p just for the margin story. lori: if the margins are eventually peaking, that is what industrials spook the margins on . if you take the kool-aid away, what will get us there? people are trying to figure it out. on valuations in particular, they are fine, but i hear a lot of doubts about valuations from

equity investors. why do i want to buy a pe multiple at average when the e has been jacked up by tax reforms? a distaste. people want to see that the underlying fundamentals are getting better. i don't know that they are getting enough confirmation of that right now. david: thank you so much for being here, lori. we want to break a little bit of news that just crossed the terminal. former ceoield, the of the british utilities company , they have been in the news after they are earning statement. cfo. that was the didn't the cfo say it was a high water mark? david: it is possible. anyway, they have a new cfo coming from national grid. bonfield, thedrew new cfo of caterpillar. we will get a read on hiring from andrew cogan.

live from new york, this is bloomberg. ♪

>> this is "bloomberg daybreak." -- in india, the border of flip guard has agreed to sell to walmarte-commerce for $50 billion according to people familiar with the matter. amazon has also made a bid for for part. they spoke has been doing research to see if there is a market for an ad free version of the social network paid for

subscription. the plans may not go forward, but there is internal momentum to pursue it because of facebook's recent data privacy scandal. retailerargest online posted larger than expected profits. alibaba got better than targeted online ads. from the core business. the cloud revenue more than doubled. that is your bloomberg business flash. david: we are 15 minutes away from the april jobs report. that is after a relatively disappointing march that a lot of people think was an aberration. cogan and alan krueger. knoll does a lot of things for residential and office. thehave a viewpoint into office across america and beyond america. are you selling more office furniture? our people -- our people hiring

more people? andrew: we have been working hard to change the business. 60% of our revenue is tied to the office world. we are seeing an interesting stop ason will employment gets tighter, the pressure to create environments that retain talent, the workplace is becoming a tool to recruit office workers. increasing investment. though it is happening in different parts of the office, it is an increase in investment in the workplace. workforceigher drives your business because they are competing to keep them. versus a mix of social individual areas in the office is changing. more companies are investing in collaborative and meeting areas. that also plays to our strength. you finding more workers are working from home, that you are providing office

furniture at home, crossover furniture? andrew: the workplace still has the primacy that it always did. the idea of working at home, keeping people isolated, is less of a factor. we are seeing people in co-working environments, shared workplaces. the values in those are filtering over into corporate offices. they are providing more hospitality, food, collaborative and informal areas. that is playing into our business, our strength. we have experienced both how people live and work. alix: you mentioned a lot about experience. does that mean that you see businesses are hiring more people, or they just need to make the environment better to keep the people they already have? andrew: both. millennials are looking for jobs and opportunities, after pay and benefits, the physical

environment, what it says about that isy's culture, reflected in the office design. my company creates an environment that helps companies attract and retain workers. that plays to our strength. three you have 4 plants, in the united states and one in canada. are you having trouble recruiting workers? we are we are not, but seeing challenges on input cost, inflation, and other factors impacting business, but not attracting talent. david: you are international, what about trade. are you concerned about tariffs, the trade war's? s? andrew: we don't use any imported steel, but the threat for steel tariffs has raised our consumption cost, and that has forced us to look at actions to raise prices. lot ofrun counter to a the good stuff in terms of tax reform where we are benefiting.

david: even i said you're not having difficulty recruiting, have you had to raise your wages in the tight labor market? andrew: inflation with 1.5 to 3% range the, accelerated inflation is on the commodity side. that is more through the threat of tariffs and those initiatives. alix: you mentioned talking feel pricing power, do you like you have pricing power? very competitive industry. people are aware of the commodity and transportation inflation. we try to offset that with our only in initiatives and consolidating and finding ways to be more efficient, price increases that are lasting. the other thing we are benefiting from is a change in the mix of our business, focusing on social areas. those are higher margin areas, collaborative areas, where design makes a difference.

that is increasingly the area we are getting a marginal lift from in terms of the mix we are selling. those don't use steel. alix: wage growth, how do you measure the experience? if you're being retained because of the coos ball table and free snacks, how do you factor that into a tight labor market? alan: 70's look for ways to avoid raising pay, such as improving working conditions before they raise pay. that will reach its limit to a point. if the unemployment rate continues to fall, it is interesting andrew is not finding additional wage pressure despite unemployment falling to 4.1%. andrew: companies are investing more in individual areas. height adjustment areas, ergonomics, individual areas of the workplace are driving more investment. that is a category where we have growing strength and margins. alix: andrew cogan and alan

krueger. we have breaking news. n.s. activist investor wi over a french media conglomerate. getting the most votes are a shareholder meeting. they have been trying for months to get control of telecom italia it seems like. it is to billionaires up against each other with very different views for the company. holsinger saying let's sell things off and retire debt, draw in our supply lines. singer haske mr. prevailed. at the endard seats of the day. he will have a fair amount of influence over what happens at telecom italia. alix: the best weekly run so far this year. we'll look at what it means for currency markets when the jobs

number comes out. this is bloomberg. ♪ out. this is bloomberg. ♪

>> the dollar has been steadily climbing. you wind up seeing euro-dollar below the 200-day moving average. what happens in seven minutes time when the job numbers comes out? shorts are left in the dollar? brad: there are a lot of shorts left in the dollar for sure. it is a position that has been widely held and there have been a lot of forces pushing the dollar lower. there is a pretty big decision left. we have moved quite a bit in dollar-yen, euro-dollar,'s sterling-dollar. there is plenty of room for the dollar to rise. alix: but you need to see from

the jobs number to get another leg higher for the dollar? brad: more on the average early earnings. if we get a 185-200 area, that is good. if we get a strong average hourly earnings, something along 28 or 29, that would be shocking. it would confirm the dollar longs. even just a healthy average hourly earnings will give confidence to the dollar bulls, who are in control. alix: the euro dollar, the cable rate having its biggest jump in two weeks since we saw since the flash crash. what will be the biggest reader rating if the dollar goes higher? the dollar continues higher, e.m. fx will continue to take the brunt. euro-dollar still has plenty of room to go down. the ecb is being repriced. a little bit of a soft patch in the data. same in the u.k.. there's plenty of room.

they are a little overextended. the dollar has had a good run in a short time. a little overextended, so some pullback would be normal. at the same time, i think there is plenty of room to go in the dollar length. --id: how much will we see let's take dollar-euro, for example. the positioning, the trading, how much is fund iamentals? -- atthe physician side the position side hasn't kicked in yet. we have been eating away at it as little bit. we get better momentum on a -118.through 119 then the position will unwind. this has been more of a fundamental move, more of a reaction to the ecb reading cautious while the fed remains pretty much on track. the u.s. data remains pre-much on track while the european data takes a little bit of a

breather, a little bit of a pause. more fundamentally driven. on e.m. fx.iew inside the bloomberg, this is the one-month performance of emerging-market currencies versus the dollar. only the philippine peso is the only currency that is up. the argentine peso, the ruble, the real. you are at a record low for the lira as well, as for the argentine peso. -- is idiosyncratic factors? the market gets comfortable selling dollars when global sink a nice growth becomes a thing. everything is looking stable, and growth is chugging along globally. owning at is couple wide variety of emerging markets. when yields come back into focus as they rise, the dollar moves higher. then people look at the local fundamental story and to say i don't want to be involved in

turkey. i'm watching out for the mexican elections. i have to be careful in this place or that place. you have to pick and choose. you might end up with asia as being more stable in these cycles, the many cycles, then we have seen in the last which will take the brunt of the pain. or turkey, which always takes the brunt of the pain when energies is rising along with it. markets get selective when the dollar starts to rise. then everyone closes their eyes and buys everything else when the dollar starts to fall. alix: where are we seeing kerry value? brad: there's plenty of carry where people are comfortable taking risks. maybe the indian rupee. there are clearly other fundamental drivers to be careful on. you're losing carry in a lot of places with traditionally high carry players. is anhorting the euro expensive proposition these

days, similar to shorting the yen. they carry differential stories is more in favor of the dollar than it ever has been coming in the dollar is viewed as a funding currency, largely because in some cases it has to be because of the way people have to invest and that sort of thing. it is an interesting dynamic, that has changed in the last year and a half. alix: the cross, for the next two minutes, how do you plan it? brad: which cross? alix: the jobs number, what is the trade over the next few minutes? brad: definitely going to be dollar-yen. that is always in the cross hairs. you have to look at euro-yen. the yen has outperformed the swift, for example. dollar-yen has led the move. i would see euro-yen falling while dollar-yen falls in the euro-dollar falls. it has got that euro weakening while yen may be strengthening a

touch. it will be interesting how that reacts. alix: thank you. great to catch up with you before the numbers. stay with us, alan krueger. final thoughts in the next 90 seconds. alan: i'm curious what happens with manufacturing employment. strong or dollar will affect trade before long and that could be reflected in manufacturing. david: what about education. we had a note from some of our colleagues that say, watch education. that could be an outlier. hard withs always education, but i wouldn't think that it will is such a hard time for seasonal adjustment for schools. alix: we wanted to check in on the markets and where we stand. it feels like we are in a tight range. the dow jones, 75 points. the futures market. the dollar spot index is moderately higher. the g10 currencies story as euro-dollar grinds lower. european stocks are down by -- up by .2%.

buying on the longed it seems to be the trade flatware for the two tens and the five 30's. i want to get to the latest read on jobs. we are joined live from the labor department. 164,000 jobs were created last month in the u.s. far below what we were looking for, 190 2000. the unemployment rate is down to 3.9 percent. a very tight market. march was revised up to 135,000, bringing the march and february gains up from the number that we had. 230,000 additional jobs. all of the jobs are the private sector. government jobs are down 4000. average hourly earnings are up 0.1 percent, below what we are looking for us.

participation rates, little changed, 62 point 8%. we were looking for 60 2.9%. average hours -- worked, also 34.5. we have the marginally attached, 7.8 percent. this is the lowest since july 2001. in the many fracturing sector, this is going to be one of the stories of the day, up 24,000. this is up such july, been up since july, also up more than expected. the sheen or he, and fabricated metals, both of those are up. metals,y and fabricated both of those are up. women, the latest unemployment since 2000. african-americans, the lowest on record, six point 6%, the lowest

since 1972. alix: thank you, very much. foot.rket on its a lot of by coming in, the 10-year yield dropping like a stone, the dollar turning negative. the future seems relatively calm. it feels like we are rethinking the potential stronger job market story on the margin. we are in a tighter labor market. the 3.9% unemployment, it will be interesting with will be the trigger for those higher wages. david: the dollar a little bit softer. rajappaus is subadra and alan krueger. solid? this is below what was expected. the hourly earnings rate was 2.6, not 2.8. do you still think it is solid? alan: this is perfectly solid.

pretty small. last month's revision, if you add that we are on expectation. labor force is, if you would have asked people, unemployment percentuld drop to 3.9 and labor force participation rate is down over the last year, president trump ran on raising labor force participation. none of the policies are focused on bringing people back to the labor force. the market should focus on that. it suggests we will hit speed bumps when it comes to expansion. sooner or later we will be running out of workers if the recovery continues. that will put oprah pressure on wages. the wage numbers are a disappointment. pressure on wages. the wage numbers are a disappointment. the chief krueger was

economist for president obama, we should note that. these look disappointing, even though they are solid? subadra: that is reflected in the lower unemployment rate. they .9%. the consensus going into the report was 4%. the consent is going into the report was 4%. we haven't seen people coming into the workforce. it is mostly driven by demographics. that is driving the participation rate lower. 3.5%ears we may end up unemployment rate if the participation rate doesn't pick up. david: why hasn't the participation rate picked up? 164 might be disappointing, but it is above the 125 you would need to be even. isn: part of it demographics. older workers have a lower labor

force because of patient rate. the next two decades, that will put downward force on labor force but as a patient. when people leave the labor force they often rearrange their lives. retire early, take care of their family. it is difficult for people to come back to the labor force. even when we saw labor force but dissipation rise, it was because staying in the labor force longer. it will be a challenge for long time to raise labor force for dissipation unless we make the workforce cleanly or to women, more flexible to primary caregivers. this will increasingly be an issue because we need people to take care of older family members. that will put more downward pressure on labor force but dissipation. alix: the long-end? subadra: this is what i was the wage number

was a lot lower than expected. you would have expected a rally in bonds, and what you are seeing is a flat in her. alix: how much will be the message for positions that we see? subadra: that could be a driving factor, positioning tends to buying from investors who are short going into the unemployment numbers. partly be responsible to why we are rallying today. i think it is mostly the mess on the hours hourly earnings. alix: is it sustainable? are these going to be short-term trades or what makes you think it will be a longer term trend? subadra: the longer term trend is for a flat in her. you will see bouts of steepening as we get strong numbers in the u.s., but for the most part the flatten or is here to stay. fedd: we talked about the not commenting on strong growth. how will they interpret these

numbers? will they see these continue to raise questions about the strength of growth? hand, thene moderation and job growth looks sustainable. something that is more sustainable. wage growth is weaker which means they don't have to hurry as much in terms of raising rates. the fact that labor force per dissipation continues to decline will be an argument that we are facing a tight labor market. one thing that i would add, i thed put more weight on employment cost index than the average hourly wage. it is designed to pick up compensation pressures, the same job quarter to quarter. 2.9% overcked up by 12 months. that is a better indicator of wage pressures. do you feel that the fed needs to raise?

what does that mean for the markets? subadra: the national rate of unemployment is around 3%. if you look at the one-year forward the five p or one year, at 3%. they sickly, the bond market is telling you the national rate of unemployment is around 2%. the bond market is sufficiently priced for that. we need some change in the dynamics that will eventually lead to a higher national rate in the fed funds. , that is what we're looking at. the natural rate of unemployment could be a lot lower given the fact that over time if you don't in theeaningful change wage picture, the national rate of unemployment will continue to go lower. david: brady received 1.5 trillion dollars of fiscal stimulus in these numbers? $1.5 trillion see

of fiscal stimulus in these numbers? alan: you don't. the only pick up in investment was driven by oil. i think it was a poorly targeted tax cut. maybe over time it will lead to more investment and that will filter through to the economy, but so far it has increased stock valuations and lead to more stock buybacks. alix: favorite trade? in 510: i would say long 30's. that trade probably works over the near-term. we think the flattner is here to stay. alix: alan krueger is sticking with us. let's recap the jobs number. unemployment,3.9% the lowest since december of 2000. jobs missing forecast coming in 164,000.

if you dig below the details, the service sector hiring was disappointing. construction rebounded. wage growth not matching estimates, 2.6%. deceleration in wage growth from education and health services. it was a broad-based weakness in the service sector. buy bst heard it is buy onds with the yields moving lower by three basis points. the 10-year yield dropping like a stone, 2.91%. not a lot of action in the equity market per se. you are looking at the s&p futures, down by 12 points. i would say we are not in the equity market, the bond market is where we are seeing it the most, and the dollar index coming in pretty much flat. crisiscoming up, the oil -- the opioid crisis.

opioid manufactures are finding themselves in class action lawsuits. can turn on your radio and listen to tom and jon ferro from 7:00 to 9:00. pimm fox from 9:00 to 10:00. can be heard across the united states on sirius xm radio. this is bloomberg. ♪

>> this is "bloomberg daybreak." local up, the blackrock fixed income cio.

now, to your bloomberg business flash. bmw increased profits from automaking and the first quarter. the second largest luxury carmaker said returns on sales were of even though technology dragged on revenue. of a recordhe midst rollout of new and refreshed models. thevo has been dropped from hong kong stock. shares have plunged 57% since they were added in 2013. the company has been struggling since they're mobile business suddenly lost market shares. issounds like elon musk having second thoughts. he saw shares tank after cutting off analysts asking questions on an earnings call. he says it was foolish to ignore the questions. earlier he said 2 analysts were working against investors'

interests. thed: elon musk back in news. on the analyst call there was a twitter exchange where one of the people said the fact that you were unwilling or unable to answer was a red flag to investors. elon musk said "true." alix: i said, who just schooled him? are unable oryou unwilling to give a straight answer is a huge red flag to any investor and also the bond yields for tesla went up and the equity price sunk. he knew that he had to raise more cash. equity market and the bond market. that is not the way to handle it. they sawwas 8% when the handle for the bond issuance. eating some crow. a very serious subject now, the u.s. opioid crisis at

the forefront of national attention. three firms filed suit against major opioid manufacturers and distributors. charging them with fraudulent and deceptive marketing practices, negligence in distributing opioids, and other violations of state and local law. you have done a lot of research on the effective opioids on the job market. travis, who did you sue in particular? suit againstled the primary opioid manufacturers and distributors. the names people are most familiar with, purdue pharma, but others as well. all for their role in creating this opioid epidemic that has become such a public health

crisis that we are seeing across the country. david: why did they do are not do that you think gives rise to damages? travis: it is what they actively did. on doctors andd patients in terms of all of the things they were saying and information they were putting into the market about the opioids. properties of our complaint is 100 pages long so i don't expect viewers to dive into everything, but it walks you through the story of the epidemic and the steps the company's actively took -- companies actively took. they included creating independent groups that were actually funded by drug companies disseminating false information saying opioids weren't addicted. a have known for more than century that opioids are incredibly addictive and should only be used in closely monitored situations. instead, we saw prescriptions spiking.

effects, notter only including health care costs, the subject of our suit, but the effect on the labor market. i want to skip to damages for a moment. that goes to the question, what effect this has had not just on people, but the economy and workforce overall. how are you measuring damages? are in fivesuits different states filed on behalf of the classes of plaintiff -- plaintiffs who purchased health insurance in those states. are the increase in the cost of health insurance as a result of this crisis. there are many different estimates. one of the lower estimates i have seen is using some of the most recent data that has been aggregated from 2013. it shows a $14 billion increase

just in private insurance costs of thelly as a result opioid epidemic. insurance companies are passing them on to policyholders. you, i, everyone purchasing part of an insurance policy, we have paid more for insurance coverage as result of these companies' misconduct. this is an interesting way to increase costs of medical benefit? alan: it is an example of the legal system working the way it should wear those responsible for the problems should bear the cost. i think there's evidence the pharmaceutical companies are changing their strategy. have they responded to the suits taking place? ,ravis: there are many states cities, and counties that have filed suit. they are consolidated in a federal court in ohio.

there's some sense the opioid companies are responding. the u.s. attorney general injured into a settlement a couple years ago to change their marketing practices. yearee them earlier this responding to criticisms saying they will change the way they promote those drugs in the field using their marketing representatives. what you see is a lot of quotes in press releases saying they are concerned about this "complex" situation and they want to address it. the way to address it is to pay for the harms they have cost to the american people. david: i think johnson & johnson, one of the clients fored, aren't you suing what they manufactured in the past? travis: some companies have changed their business focuses, at it suits are looking including past damages on company selling the drugs in the past. alix: does this work? alan: we have seen this

repeated. we seen it happen with the tobacco companies. alix: tobacco companies weren't affecting the unemployment rate, necessarily. alan: the economic cost goes deeper than what i have looked at which is employment and labor force participation. and the loss of life is a tragedy. the council of economic advisers released a report on the total of gdp. cost, 5% this is a macro economic issue and a human tragedy. draw the parallel with tobacco, that took years. what is the timeframe that you expect for your litigation? travis: we are buckled in for the long fight. there are other suits by a lot of other state governments, counties, and cities that are consolidated in federal court. the department of justice has said that they would help with all of these as a friend of the

court. the court is pushing for hopefully an early settlement. the lawyers and the judge are also prepared for a longer litigation track if that is what is necessary. fascinating and educational. thank you. he is a lawsuit going into the opioid manufacturers. alan krueger some it has been great having you here. alix: a tale of two finance sectors. a slump hits european sectors but not the u.s. check out tv and watch us online. interact with us to likely by going to tv on your terminal and check it out. this is bloomberg. ♪

alix: i was watching a billion things this morning and now i'm watching the slowdown in wages. it was broad-based. lower, them were particularly financial services. health care and education moving lower as well. you three 3.9% on the rates, the lowest since 2000 in december. how does that shakeout? that is the question for the bond market and the fx market. david: is this a lag? the lag is getting pretty long at this point. or thehe number 3.9% rate of change, 3.5%.

will that trigger the phillips curve that we seem to be missing? we are off the highs that we saw as fields are down by two basis points. the dollar seems to be holding steady, but i am interested in the impact in e.m.. the argentine peso at a record low going into today. will that continue as the dollar comes off their highs? david: as the dollar strengthens, it exposes all of the video secrecy the e.m. markets. alix: less tolerant as the dollar gains strength. this is bloomberg. ♪ we use our phones and computers

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jonathan: payrolls rebound in april and the unemployment rate dropping below 4% for the first time since 2000. no deal. the u.s. trade delegation returning from beijing with key differences remaining unresolved. swinging,still pushing and analysts who call it a test what short thesis -- tesla short thesis. and off the lows the euro-dollar down 2/10 of 1% to 1.1965. treasuries keeping that bid so let's begin with the payrolls report. the economy added 164,000 jobs in april. the unemployment rate falling to a stunning 3.9%. average earnings coming in at 2.6%.