♪ >> coming up on bloomberg best, the stories that shaped the weekend, business around the world. president trump and this and taste the u.s. out of the iran nuclear pact. >> it is a very risky move for trump. >> we are back to where we were before the deal. >> a stunning election and delivers a powerful shift in malaysia. >> i think this deal is totally unacceptable. >> we are actually quite confident that we will gain the approval.

>> an exclusive conversation with james dimon. >> the bond market is part of the market. >> it is time for women to take charge. all straight ahead on bloomberg best. >> hello and welcome. i am julie hyman. this is bloomberg best, your weekly review of the most important business news analysis and news from bloomberg telogen around the world. they will decide whether or not they would remain in iran nuclear deal. that uncertainty was having an impact on the price of oil.

>> oil prices on the move, in rising by $70 a barrel for the first time since november of 2013. >> the markets are betting will pull out of the deal, will reimpose sanctions and as a result, you might see a lot of uranium barrows disappearing. >> what happens? >> we have seen varying estimates but right now we are talking about 500 barrels of oil a day coming off the market by the end of the year. when you combine that with what we have are regime from opec, that is a substantial amount of oil and we're in a market that is much closer to supply and demand balance. anytime you have any geopolitical tensions, we're seeing that reflected. >> this ends tomorrow, president trump twinning earlier that i will be another my decision on the iran deal tomorrow from the white house at 2:00 p.m..

crude oil took a leg lower on the news after pushing past $70 a barrel for the first time in three years earlier in the session. >> the question is where are we. is the u.s. walking away? a lot of the market has rallied on that fear. so anything short of that, you start to see people selling off a bit. >> president trump is said to have made a decision to leave the iran nuclear accord. the president will announce this from the white house in a few moments. president trump: i am announcing today that the united states will withdraw from the iran nuclear deal. we will be instituting the highest level of economic sanction if the regime continues its nuclear aspirations. it will have bigger problems than it has ever had before. >> it is a very risky move from trump in some ways. it is a new level of brinksmanship.

>> this was a huge gamble by president trump, basically suggesting that the u.s. is going to bow out and essentially daring iran to go ahead and violate the deal itself. but what has happened here is iran has said ok, well, the deal will remain intact and we won't develop a nuclear weapon as we had promised before, so it leaves the united states quite isolated diplomatically. >> we are back to where we were before the deal. we imposed sanctions on iran and hope to bring them to the table. you heard the president say he thought we had maximum leverage and did not effectively exercise it to get a sufficient agreement. i guess he believes now we will have that leverage and the iranian economy is stressed. and that economic pressure will bring them back to the table. it is a huge gamble, but it is certainly a possibility. >> france, germany, and the u.k. say they regret donald trump's decision to pull america out of

the 2015 deal to curb iran's nuclear program. >> there has been a string of european leaders who have gone to the u.s. in the run-up to this, trying to convince donald trump not to go ahead with this decision. they did not succeed. now they are saying, well, they do regret the decision, but they are going to stick to the agreement. >> for companies, the question is where do we go from here? the iran business has really started taking off in the past couple of years. siemens, airbus. you already had a couple of companies appealing to european leaders saying we need your support and europe needs you to step up to the plate now. him and >> oil is extending gains above $71 a barrel following president trump's decision to pull out of the iran nuclear accord and as a conflict between israel and iran ratchets up. israel says iran fired missiles at the soldiers in the golan heights and retaliated by striking iranian targets in syria.

but >> the region has been on fire now since basically 2011, but we have not seen a head-to-head confrontation between major regional powers since the 1980's. the rhetoric between israel and the rhetoric between iran is heating up. we will have to see where this leads, but there are definitely worrying signals. >> the stunning victory in malaysia's election, ending the six-decade rule of the coalition. it really was a historic event. what comes next now for malaysia? >> he will have to put a government together. he says he has to speak to the presidents of the four parties and come to some sort of conclusion to put a team together. few people would have expected for this to happen, 121 seats out of 222 contested. out of power for 14 years, but he has shown he still knows how to win an election. winning this election is just the first step. there are so many more he challenges that he needs to overcome to perhaps help a

nation that is seeking reconciliation. >> i think it is going to be a volatile few days for the financial markets. >> just a few days? >> it depends how the new government calms markets down and how quickly they can lay out their agenda, and also who takes the reins, particularly in the economic portfolios. mark: sterling dropping on super thursday as it is known, policymakers voting to keep rates unchanged, the decision ending a roller coaster ride for investors who expected a hiking a couple of weeks ago. governor mark carney says the bank intends to deliver modest tightening, but is in no rush. >> we will wait until we see some progress before we think about it. >> this is unique. i have never really seen anything like it. sterling trades as if the market suffers from bipolar disorder.

if you look at the fundamentals and pay heed to these in the press conference. the labor market is strong, wages are picking up gradually. those are some pretty strong things that are supportive for the headline from the boe that there is going to be gradual tightening over the medium term. >> the date for president trump's meeting with kim jong-un, the president tweeting it will be june 12. it was supposed to be anticipated after the scenes that unfolded at the andrews air force base overnight. >> president trump said last night that he thinks this is a sign that north korea is ready to abandon the nuclear program and enter into the league of nations, enter into the broader world community and sort of abandon its past situation, it's past position as a rogue nation. we heard from mike pence, the vice president, that there is skepticism that this would actually lead to the type of grand bargain that president

trump wants, but they are looking to try and make that happen on june 12 in singapore. >> the u.s. yield curve is the flattest and more than a decade. the spread between five and 30 year treasury the lowest since august 2007. the curve could actually be inverted by august or september. >> it is possible. i think we will see more movement upwards along rates. remember, the federal reserve is increasing its bond sales or reducing its balance sheets more quickly. the ecb will get out of the business of buying long-term bonds, but there will be pressures on the long end also. but if it inverts, it will not mean anything. in version used to be a worrying sign for the economy, but this is basically a broken barometer. we have never had central banks so active at the long end of the bond market. it is not telling us the kind of things that used to tell us in the past. >> president trump will propose

sweeping reforms of drug pricing this afternoon. the blueprint, called american patients first, is meant to increase competition and lower patient out-of-pocket costs. president trump: we will have more competition, more innovation, and much lower prices at the pharmacy counter. we are very much eliminating the middlemen. the middlemen became very, very rich. [applause] >> he didn't talk about pharmacy benefit managers. if that's not who he was talking about when talking about the middle man, who was he talking about? >> i think that is who he was talking about, but he did not say it. it indicates there is still room for working out how exactly this is going to work and how this is going to be rolled out, pointing to the lobbyists being -- quite an interesting approach. but if you look at express scripts, shares are up and investors are clearly relieved that this did not sound so strong in terms of targeting them and their role in the

system. >> president trump calling on congress in the next couple of weeks to bring forward some type of legislation that they would be able to enact. right now, there were a couple of working proposals, but it is unclear whether this would get a major legislative push ahead of the midterms. >> still ahead, jamie dimon says to prepare for 4% bond yields and for four fed rate hikes this year. plus, the heads of central banks in lebanon and the philippines explain how they are coping with economic stresses. and up next, more of the week's top business headlines. walmart spent $16 billion to get an e-commerce foothold in india. >> it was slow to get in china, which is another massive market. it does not want to make that same mistake again. julie: this is bloomberg. ♪ >> julie: this is "bloomberg

best." i am julie hyman. let's continue our global tour with a barrage of big deals, starting with the tie up of a food giant and a coffee brand. >> nestle and starbucks are teaming up in a multibillion-dollar deal. nestle will pay starbucks nearly $7.2 billion in cash for the rights to sell starbucks branded products. so this is not about nestle getting any physical assets. this is about marketing licenses? >> that is right. nestle will pay about $7 billion to get these licenses to basically sell coffee, packaged coffee products outside of starbucks chains in various outlets, such as supermarkets and food service. >> is this a big and in a test for nestle? not all of the past have gone that well?

>> it is the third biggest acquisition for nestle and the biggest for the new ceo, mark schneider, who has been leading the company since january of last year. some analysts are saying it is an expensive bet, but on the other hand, it is starbucks. it is the name in coffee. >> activist investor elliott management has made an all-cash bid to acquire athena health for $160 per share, sending the stock to its highest level since january 2016. investors seem to like the deal, so what do analysts say athena health is doing wrong? >> pretty much everything. it is everything from you missed operationally, you have failed to issue accurate guidance. you have missed the forecasts you do set out. you cannot launch your products, too much executive turnover. it is a brutal letter in terms of assessment of the performance of the company, and is making the argument that pulling them

out of the public market to get things under control would be a better option for them. >> let's finally get back to the buying of rival drug maker shire. the deal transforms it into a top 10 pharma giant. does this prove the adage if you do not succeed, try, try, and maybe try again? >> this is the fifth offer takeda made. they finally did succeed. they had a long process and got a pretty good premium in the end, 60%. they needed to do something very transformational. they had a french ceo they brought in who had done some smaller deals, but he had not done anything this transformational. this was a chance for him to make a big splash with the team. >> a battle for e-commerce supremacy, zeroed in on india. walmart has agreed to pay $16 billion for a 77% stake in india's biggest online retailer, flipkart.

it is the biggest deal ever as it looks to fend off amazon in the world's second-most populous nation. >> this deal is about getting ahead in an e-commerce market that is exploding. india has the second largest population of internet users in the world. walmart needs to get ahead in this market as it battles amazon pretty much around the world. it was slow to get into china, and it does not want to make that same mistake again. it was willing to spend this much money on a business that is really not profitable yet. >> australia has laid out its budget with a deficit forecast of $10.8 billion. the government is wooing voters with process of test cards and also the first since the global financial crisis. here is what scott marston had to say. >> there was a further market to expand and grow, and that is boosting revenues over the

medium-term and the shorter term. >> are the numbers sustainable going forward? >> we believe they are. our economic growth forecast are more conservative than those by the reserve bank of australia and they are overly optimistic organizations, so we have the track record. >> deutsche bank is considering a sweeping restructuring in the u.s. that could shrink its workforce there by 20%. now, that is according to people briefed on the matter who say that a decision is close. the plans have been denied, which would follow the move to retreat from businesses it deems less competitive. >> what they are looking at is each business unit separately. they do not really have a specific job cuts target for the group globally. what they are doing is going through the bank unit by unit and deciding how much they want to cut it. those cuts could add up to 20% of the u.s. workforce in the

maximum scenario. they have already singled out a few units they are definitely going to cut. for example, u.s. corporate finance, they recently said they will close the houston office, which is their coverage location for the oil and gas sector. it is difficult to anticipate how many side effects this will have on other parts of the business, how many clients will say well, if you pull out of that area then you are really not the bank i want to do business with anymore and we are therefore cutting ties with you -- it is difficult to anticipate that. i think that is what they are trying to figure out now to make sure that those that affects can be minimized. >> a bloomberg exclusive, the bank searching for a new chief executive. meanwhile, the bank is reaching a deal to pay $4.9 billion to resolve a u.s. mortgage investigation. rbs is looking for a new chief executive.

is that a reflection on the job he has done? >> this leads the bank to a point in which it can stop paying dividends again and put this significant legacy issue behind it. that also paves the way for potential sale down from the u.k. government, which is still a whole 70% of the bank's shares. the kind of language that has been used today range from a watershed moment, a symbolic moment, a milestone. that is how significant this settlement really is for the bank. >> michael cohen may have been more than legal advice to his maki client, president trump. we now learned major companies and a russian oligarch with ties to vladimir putin paid his firm substantial sums of money reportedly for insight into the trump administration. so michael avonatti posted on twitter yesterday with no advance warning a link that took us to a dropbox site that

contain what we call a suspicious activity report produced by a bank about transactions that were moving through an account set up by michael cohen. this account has money that not just moves through to a porn star, but it included big corporations and a russian oligarch. there has been little explanation about what the money was intended for, where it went. at&t, novartis, and the korean aerospace company have all in knowledge that this was in some way to get some insight or access or something from the trump administration. >> let's talk about what is happening in italy. efforts to form a broad coalition to dilute the power of the antiestablishment five-star movement floundered this week. party leaders spent yesterday morning drawing up plans for governing alliance. the president gave the two parties until sunday to reach an agreement to possibly form a government. >> lots of optimism from both five-star and the leak.

they were in parliament yesterday, and officials are saying they are working on first of all, the party program, the priorities, but also behind the scenes. they have to find the right people are the job. and some lawmakers are saying perhaps the new government, if all goes to plan, could be sworn in by the end of next week. ♪ ♪

>> welcome back to bloomberg best. i'm julie hyman. jamie dimon spoke exclusively with bloomberg's stephen engle after j.p. morgan possible china summit in beijing. his outlook for the u.s. economy remains up. >> more people coming back to work. houses in short supply.

that is a pleasant the economy. the capital markets are wide open. there is much less leverage in the financial system than in the past. banks have twice the capital, twice liquidity. consumer balance sheets are in good shape. the way to look at the recovery is look beyond the year. we had 20% growth over nine years, and the nine years is really good, the 20% is bad. it should have been 40% over a shorter time, and that's why wages did not go up and all these things. it looks like this may have legs to go, one year, two years, maybe more. remember, the rest of the world is doing better. japan 1.5%, europe 1.5% approximately. i don't know. it is 1.5%. the last 10 years it was 0%, so that is a positive. i hope it will continue.

the fact is, america is in pretty good shape. you have some benefit of regulatory reform, tax reform. i think those things will drive growth a little bit, hopefully better than 2%. >> i read your note to clients in april. you said one of the biggest risks is underestimating the ability or potential of the fed raising rates more aggressively. inflation could rear its head. we just had oil above $70. is this a worry? >> i'm trying to explain to shareholders you have to prepare for all possibilities and probabilities. it is a possibility that the growth accelerates, the fed raises rates more than you expect, both the short end, which might force the 10 year up, not down like in the past. you can easily deal with 4% bonds. again, if it is because america is strong and healthy, i almost call it normalization. i pointed out by the end of the

year that the fed plus the deficit has advanced a lot. that is a huge shift and eventually other central banks will reverse buying bonds, causing volatility in higher rates. more growing is more important that. i would try to keep that view. financial markets are one thing. they fluctuate, move, rates go up and down. commodity prices go up and down, but what matters the most is jobs, wages, stability in the economy, not necessarily in the markets. julie: coming up on "bloomberg best," more of the weeks news, featuring earnings reports and a few deals. plus, what are the markets making of the latest shift in the geopolitical landscape? we get expert perspective. >> there is little evidence there is a geopolitical premium in oil prices. >> we have no doubt there will

be an issue of volatility as a result of this. julie: this is bloomberg. ♪ mom, dad, can we talk?

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>> i am happy about me #metoo, and i know people say it is too much. i do not think so. it is time for women to take charge and also, you cannot just say, we need one woman on our board. it is like i need a green plant on the table. >> we have learned that is not enough to focus on hiring. if the focus on hiring, progression, and retention for it we have implemented a very innovative service called a warm line. this is a place where employees can call into and get assistance

if they are having retention challenges. >> everybody has goals they are supposed to meet, if they do not meet them, there will be repercussions. people will be moving to different agencies. they understand in this goes to studios, networks, talent agencies, etc. women have started this movement and they have gathered women from all walks of life to include them in this movement. there is no way a man can ignore it and say, we are going to go work with this group. everyone is included for it -- is included. julie: those were the guests who came to the bloomberg headquarters to discuss equality. they also spoke with leaders about the impact of geopolitical shock as a result of president trump's decision to take the u.s. out of the iran nuclear deal.

>> without a doubt, there will be additional volatility as a result of this. we will probably have a lot of our u.s. allies negotiating what is the next move, what can we do, and that is going to generate a lot of speculation about what is going to happen. i do not think it should be dramatic. it should depend on what kind of sanctions. this is something the market has been looking at and assessing and trying to play it forward. while there will be some short-term volatility, it all determines on how it plays out. >> do you see it asia-pacific a geopolitical risk rising now?

>> i do not think it is rising. if you look at what is happening in north korea, south korea, that is quite significant. i was in south korea last week and i had a chance to understand what is going on and what is the feeling from the south korean side. one of the things that surprised me is the amount of support that south korea has in terms of trying to make this work. they really want to make this work. they have a lot of affection for their counterparts on the north. there is a huge amount of interest in helping the nation rebuild. whatever solution comes will also involve a lot of help and aid flowing from south to north. >> we seem to go from the

geopolitical shocks -- in a space of a week, you have what you would normally have a year, but the market rides them out. what should clients be worried about? what is the shock that is going to bring this bull market to a close? >> the biggest things to be concerned about is mainly the possibility that the economy overheats, inflation rises significantly above the targets, and the fed submits to getting some thing like 2% cemented and therefore, has to be aggressive and slowing things down. once the unemployment rate starts to increase, it tends to be difficult to calibrate that in a way that pulls off of a soft landing. there is never been an increase in the u.s. unemployment rate in more than 35 basis points that was not associated with a recession. not a law of nature, but it does suggest that doing the soft landings is harder. a situation where the economy is already growing at a below trend to pace, and that is trying to slow things down, that is coupled with a more significant shock from financial conditions

or oil prices, which is another common factor or common concern, then the risk of recession would go up. >> there is very little evidence there is a geopolitical premium in oil prices right now. that said, the way to think about re-imposing sanctions on iran is it reduces the capacity to produce. the reason for that is we may lose the iranian exports but it is likely to be replaced by saudi production and other allies. secretary mnuchin made that very clear that the allies will likely replace it.

it makes the markets more exposed to events like venezuela, and then goal of -- and angola. you have an election on may 20 that could lead to more disruptions. the market is far more exposed. the upside risk is substantial to geopolitical risks. >> the u.s. is a big exporter of crude. should it have a national oil policy? >> only think about compliance due to the reimposition of sanctions, will players like india and china complied to this? the u.s. at is as large of an exporter as iran, 2.5 billion

barrels a day. that gives them a bargaining chip. it is a way to enforce compliance. >> emerging-market economies were in the spotlight this week, putting pressure on him currencies. they discussed the policy responses to economic challenges. >> for this year, we are releasing a step up -- we are seeing a step up and inflation -- a step up and inflation. before we see a tapering, the deceleration of it inflation back to our target range by next year.

>> you talked about how it is spreads to the white economy, what have you made in observations? >> it is growing faster than the average and that is one indicator that we are looking at. despite inflation, -- the spike in inflation is currently coming from the rice price. our objective is to hit our target. our commitment is to be at the target range. the target to be well in the middle of our target range.

so far, we recently updated inflation forecasts. >> the eurobond market was has seen higher yields, is in fact undervalued today and the government does not intend to make a new issues to the market. our intention is not to sell more than $2 billion of eurobond in the next 12 months. >> what that means for asset allocation, are you diversifying more? >> lebanon is the second holder of gold in the middle east. >> you can never have enough. >> we have been since more than one year, playing the floating notes in our investments.

we have a local market that provides us with revenue that are enough to keep the central bank profitable and not to have to take a large risk abroad for it -- a broad. >> that is a no to more gold? >> will not sell the stock that we have. ♪

with an $89 million.

this is a sign that cryptocurrencies will turn sour. >> in the big picture, it is a blip. it is a signal for the next 90 day cycle and say we saw the news with goldman. the new york stock exchange is looking at doing somehow some kind of crypto trading. there is a lot of momentum building here for chip sales.

♪ >> we hop into the bloomberg and we are taking a look at some of the top shareholders and see the top shareholder at 12.6%, janice, morgan stanley, elliott is down here at a less than 1% stake.

with options, they have an 8.9% stake. >> there about 30,000 functions on the bloomberg and we always enjoy showing you. -- our favorites. here is another function you will find useful, quicgo, it will lead you to our quick takes. where you can get important context and insight into timely topics. >> you may have seen a few of these pop up in your phone or email. google, facebook, twitter, go daddy, and many more are updating their policies to give consumers more control over their personal data. those updates and changes are thanks to a new policy called gdpr. it only applies to people who live in the european union but its adoption is largely expected to have americans asking, why do we not have that? there's how data collection works.

the terms give facebook the right to track your online activities even if you're not actively browsing for it -- browsing. facebook and let advertisers -- can let advertisers access that. rightsumers will have the to ask for copies of anything, up to entire archives of the content they have generated. >> on may 25, companies with more than 250 employees will have to get on and that u.s. consent from users to collect your data, instead of burying the ok inside of fine print. it will also make it much easier to revoke consent. for consumers that do opt in, they can request a free copy. >> companies like google and facebook, they have made data available for download and deletion by request. >> consumers also have the right

to be forgot, to request that organizations delete their data. it also gives consumers the right to retrieve their data and sell it to other companies. you may obtain like a gift certificate from sorrow for a shopping certificate from j.crew. any failure to comply with the new law will be costly. penalty fines could be as high as fourth percent -- as 4% of the company's global revenue. >> europe expects companies to act seriously, and not just follow it to the letter. this means there will be disputes and legal precedents to be set over the coming years. >> while the u.s. is still reeling over the cambridge analytical scandal, the eu is moving ahead with tough new rules. many will ask if the u.s. should be next. julie: that was just one of the many quick takes you can find on the bloomberg. you can also find them at the bloomberg.com along with all the latest business news and analysis 24 hours a day. that will be all for "bloomberg best."

i am julie hyman. this is bloomberg. ♪ .

♪ jonathan: from new york city, i'm jonathan ferro. this is "bloomberg real yield." ♪ jonathan: coming up, weaker than expected inflation. solid demand for treasuries. the yield curve flattened since 2007. a year ago argentina issues a century bond. a year later they request help. we begin with a big issue. is 4% the new 3%? >> is there a possibility the growth accelerates, then inflation accelerates?