palestinians and wounded others -- killed more than 60 and wounded others. they refer to the killing of the .alestinians as a massacre the israeli ambassador said hamas should be condemned for the violence along the border. they added israeli troops were the country. the un security council holding an emergency session to discuss said violence today. monday's bloodshed claims 60 lives with an estimated 2700 palestinians injured. claimed 60 lives with an estimated 2700 palestinians injured. the violenceley: should occupy our attention.

the common thread is the distinctly conduct of the thatan regime, a regime promotes violence throughout the middle east while to private its own people of basic human rights. mark: north korean officials -- canceleded tomorrow's stocks and are threatening to cancel the summit with president trump according to the south korean news agency, which says the meeting was to a village.in meantime, the north korean news service as the summit was canceled because of joint military drills conducted by the u.s. with south korea, which the north calls a threat of war. has lifted a hiring freeze that left hundreds of jobs unfilled. they were authorizing the department to hire foreign service officers and civil servants as funding allows. this is the latest a series of undo by pompeo to

initiatives put in place by rex tillerson. global news 24 hours a day, on air, and @tictoc on twitter, powered by more than 2,700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. julie: live from bloomberg headquarters in new york, i am julie hyman in for julia chatterley. scarlet: and i am scarlet fu.

joe: and i am joe weisenthal. "what'd you miss?" scarlet: the 10-year lead is pushing up. joe: but the question is "what'd , you miss?" scarlet: protesting a decision for tariffs. now, targeting wall street. the crypto exchange has new institutional products. we have the details up ahead. anchor "what'd you miss?" :north korea's threatening to cancel a meeting. ,or now, we have michael hirson with eurasia. you came in to talk about china and zte and trade. we will get to that in a minute, but in your time spent covering the region, is it typical to have this sort of fits and starts, and should we take it as a dead and now or that this is all part of the negotiation, if -- as a dead end now or

that this is all part of the negotiation, if you will? could be an emotional or rhetorical response by north korea, and now there will probably be some behind the scenes diplomacy. obviously, president trump wants to make this happen. kim jong-un has strong incentives to have this summit toohrough, so i think it is early to write it off. president xi has been more in the background when it comes to the north korean talks. where do you think he fits in at this point? xi andell, president have strong incentives. they want to have a strong korea on the peninsula and of what a conflict and a tightening of sanctions that would topple the andme, -- on the peninsula

do not want to have a conflict and a tightening of sanctions that would topple the regime. working prettyy well with this approach. keepst: president trump giving him shout outs, to two theg paying -- chinese president, so what are they doing in the background? : one of the important things that china has done is brought the economic pressure to korea, and that includes the steps that china is doing to enforce sanctions but also allowing the u.n. to go forth with multilateral sanctions. along,ly, china has gone and that has really been a game changer in terms of paving the way for this meeting.

joe: what is your read on the zte? prerogative, the saying i do not like the penalty that was imposed on them, we have to find another way. win for is a short-term the president. he can help diffuse what was an area of tension that really threatened to do rail trade talks, so that is for the president. for the administration -- threaten to -- threatened to talks, so that is for the present. for the administration, some are criticizing the president for this move -- so that is for the president. for the administration, some are criticizing the president. it is more strained.

joe: what does it mean for by hisross, to be told boss on twitter to do something different? mike: i think it hurts wilbur ross with the chinese and with outside stakeholders, so that is a clear byproduct of this. anchor: we have been talking , wilbur ross,iers to some extent, and then you have others. fall?does president trump because there is certainly a lot of rhetoric. ike: president trump, i do not know if you would say he is more , and china is taking advantage.

wants to have a positive working relationship. with sheet begins xi jinpingng -- with , and he has incentives, like doh the more hawkish ones not have, and we see them moving back and forth between the two p wants to be a dealmaker, as well. e: does that put him at a disadvantage? are the chinese going to use that, the idea that he does not want to anger president xi? mike: that is moving to the center of the chinese strategy. they have moved skillfully to cultivate a relationship with and president trump.

i think the challenge is for the more hawkish advisers is they are going to try to cut short that process. they are going to be very careful now, especially after zte, -- after zte. joe: just a headline here come the state department saying the u.s. had no reason not to plan for a summit. see withe things we the trade talks is that some people are very interested in issue,hnology transfer and some seem to be really interested in the trade deficit and getting that number lower. on which of those two can you see china doing something more significant? think the trade area is where we will see more concessions, and the key is president trump. i would say broadly in the people doommunity, not view the trade deficit as really an accurate barometer. they are more concerned about

policy and transfers. the way this breaks down is you will have china making a little bit more than symbolic -- they will be putting together a package that appeals to president trump and that gives him essentially tweetable victories. that may not bring down the trade deficit in the long-term but will lower tariffs on some goods, committing to import more from the u.s. -- i think that will give president trump enough that he will be satisfied on that score. the challenge is what happens , and youtech transfer can bet that robert lighthizer and the other trade advisers will be making sure that there is not a deal until those concerns are met. how problematic is the meeting for the u.s.? you look at the problems that zte is experiencing, and it kind of vista lies is things. crystallizes

things. china is doing things behind the scenes, including moving forward with this initiative. doubling down on that? yes, the made in china 2025, the very ambitious plan that china has to move into the forefront of advanced manufacturing and other sectors, it really aims to have china grab market share. to have china, saying, ok, this gives us more reason to have alliances in critical technology, i think this will be a really difficult challenge. investigations, what the tariffs evolve around -- i think this is one of the reasons why it will be difficult with this first round of tariffs. scarlet: all right, michael , thank you.sia

and in an interview, tim cook, the ceo of apple opened up about what he told president trump at a white house meeting. i met with the president the next day, and i would not want to say what he said, because that is not the way i look at it, but what i talked about was i talked about trade and the importance of trade and countries, that two trading together make the pie larger, and that it is true, i think undoubtedly true, that not everyone has been advantaged by that in either country. we have got to work on that, but i felt that tariffs were not the right approach there. him some more analytical kinds of things to demonstrate why. we also talked about immigration

and the importance of fixing the dreamer issue now. you know, we are only one court ruling away from a catastrophic case there. you can watch that full interview with the new season of the david rubenstein show, coming only on bloomberg television. coming up in a bloomberg exclusive, turkey's president makes the case for control over monetary policy. we are bringing his market moving comments next. this is bloomberg. ♪

scarlet: "what'd you miss?" president erdogan plans to

tighten monetary policy if he wins an election next month. he explained to our bloomberg reporter why the monetary policy decision should go to him. now, first of all, you are the head of the state. when the people fall into difficulties because of monetary policies, who are they going to hold accountable? they will hold the president accountable. give off the image of a president who is influential on monetary policies. : so you will play a role in monetary policy going forward? is that the big change? yes, this may make some uncomfortable, but we have to do it, because those who rule the state are accountable to the citizens. reporter: you hold very unorthodox views of monetary policy, from an outsider's view.

greater role, it will be on a different basis than the rest of the world. is that something you're comfortable with? while doing all of these, of course, we are not doing them to disturb some circles on an international level. while doing allbut we take ther to protect my country's interests, and we will do whatever my country's interests require. reporter: i am just curious how you think it will work, how your relationship with the governor of the central bank will change. the moment, however the central bank's relations are continuing at the moment, they will continue in the same way. we are not new to running the country. we have not taken over recently. we have been running the country

for 16 years without interruption. reporter: you said that turkey has an independent central bank, and you said things will be the same. will turkey, with your greater role in monetary policy, still have an independent central bank? above all else, and it is not just turkey, we will apply the same governance in turkey in the same way that it is applied globally. governanceever the approach in the u.s. or europe, we will apply the same in turkey, as well. what is legitimate for them us.ot be illegitimate for everyone should know this, and we will take our steps accordingly, but we will never let our country lose. reporter: do you think -- i am -- the comparison with the

united states, is your assessment of president trump and the chair of the federal president does the speak to the chair about interest rates? is that something happens -- that happens elsewhere, because you are saying you will take a much greater role. is there another example where you can see a model working for turkey? is there a country that stands out? no need toe is argue. the u.s. interest rate policy is known. we do not need to reinvent it, because we know that we have all of the information at hand. in other words, we know what the interest rate policies are and are not in all of the countries of the world. we are not just discovering them now. therefore, of course, we will make our assessment according to this. i mean, we assess what it is in the u.s., what it is like in

argentina, mexico, brazil, and others, and we always make this assessment and will continue doing so, and we will make our own decision accordingly. : mr. president, i would like to talk about politics and what will happen in the election. we have a presidential election and a parliamentary election. if you were to find yourself in the position where you won the presidential election, but we have a more mixed result in the parliamentary election, like we did in 2015, would you call another election to make sure you secure the elementary update, as the system is set almost like? >> we have a saying. you do not for your hands before seeing -- now, there is no point at all to fuld in be hands -- you do not fold your hands

before seeing, and now, there is --point at all two folding hand.ding the plan a, b, c. 40 days later, a plan will emerge, and 40 days later, turkey will wake up to a much more different era. anchor: and that was guy johnson's exclusive interview with president erdogan. it has been trading at near record lows, and guess what? another low when he said he would take more responsibility. joe: not a vote of confidence with what he had to say. that was one thing that

stuck out. the question of whether he will win the election, this is turkey. he is going to win the election. julie: and we talked to another in the wake of this interview, and he said turkey tried the same thing in 1994, and he said that is how we ended up withjulr interest rates -- ended up with interest rates that they thought but then went up several hundred percent. definitely a alarm bells. ok, coming up tomorrow, we have an interview with james bullard at 1:30 p.m. from new york, this is bloomberg. ♪

anchor: well, we are going to the mall for our stock of the in themong the worst real estate sector, already the worst performer in the s&p 500. abigail doolittle is here, going shopping for us. there is a lot of retail news but also a lot going on in real estate, as well. abigail: yes, and this is one of the largest mall companies, in 25 states, new york, arizona, california, and one you will be familiar with is across county mall up in yonkers. case, they own various properties, but the main story course, weh -- of had the backup of the yield, and with the bloomberg, we will see

why this hurts macerich. gtv is a chart in the function, and it shows percent, relatively high, and that the s&p 500 dividend yield, so on a day like this, when the yields are soaring, even though these are higher, they look more unattractive. joe: they do not like to see higher rates, but this is the higher rates plus the retail weakness. you are right about that. back when the price was close to $96, and we have a chart, there is the double whammy of the mall youspace but, plus, if we lookt function,, the gtv this is a chart one back to 2009, and we see the great recovery in real estate. this is 2016. big support.

that needs to hold. anchor: abigail doolittle, thank you so much for that coverage on macerich. this is bloomberg. ♪

[closing bell]

anchor "what'd you miss?" stocks selling off, although bouncing a little bit, the 10-year yield at its highest level since 2011. i am julie hyman in for julia chatterley. scarlet: and i am scarlet fu. joe: and i am joe weisenthal. and we want to welcome you to our closing bell coverage every day from 4:00 p.m. until 5:00 p.m. .nchor: and we began looking at stocks, it looks like we will finish off of the lows, but really, stocks have been around the bottom of a range, stocks falling by as much a point by 1%, and senior the s&p 500 looks like it will finish down by about two thirds of 1% -- and seeing here, the s&p 500 looks like it will finish down by about two thirds of 1%, real estate the worst performing sector in the s&p 500, utilities performings also

poorly, but so did information technology. a lot of the big drags work tech. amazon, apple, google, intel, those are the biggest drags in point terms, and in terms of the percentage movers, home depot, the first of the big retailers out with earnings, and the earnings-per-share beat estimates, but comparable sales missing estimates and perhaps indicating some weakness at the beginning of the spring selling season for homebuilders, and we saw the homebuilders take a pretty sharp drive. horton and.r. example. there are few red flags for the housing sector, but we could be in the later innings of a protracted expansion in the sector. and showing strength, after we got the retail sales numbers

that matched estimates from last month, but then we sighed pretty significant up a revision for the prior month, the company also reaffirmed -- but then we upwardretty significant revision for the prior month, the company also reaffirmed some markers. and we saw some apparel manufacturers rising, and one , they hadsting earnings below estimates. interestingly, number of analysts coming out and saying to buy the stock on weakness, but there was not much evidence on that. it finished near the lows of the session. joe: before we get started, some quick, breaking news chinese holdings increasing. sound and fury, but it never seems to happen or matter

in the data. let's look at where today's action was, because it really was in the government bond market. we saw a spike after we got the solid retail sales numbers and a good said number. the 10-year yield up to 3.07%. at one point, we were up to 3.09%, so ending their pretty close to the highs, and part of the story was the strengthening dollar and higher expectations. we are seeing the selloff of some assets. and turkish assets really getting slammed after that aired erdoganafter that interview, him taking -- talking about taking increased control. yes, and the dollar is at a new 2018 high. if you look at the dollar index,

manufacturing and retail sales higher, and other things i want to look at, the mexican peso and the loonie. mexican economy minister said a nafta deal is not likely by thursday, and the modded to currencies, as joe was andioning, the latest -- commodities and currencies, as joe was mentioning, and the lira with a new low, the government raising less money than planned, with two target different bond options. bank risk,so rising so if you look at the lira for 2018, it is the second worst currency. the dollar has surged. as you can see, it is up about 15% versus the lira.

a key theme of the day -- actually, interestingly enough. most commodities were down, but there are some exceptions. west texas. really getting hammered. we saw the pain of the safe changed. expectations it is now down two percent. lumber, it just goes up every day. i likened it to one of those chinese ipo's that go up every and platinum, down 2% or 1.85%, and real quickly, brent crude coming close to $80 per barrel at one point today before pulling back, and you can see it continuing to climb to multi-year highs. anchor: and let's bring in our bloomberg global macro

strategist and a chief rate strategist. cameron is right next to me. ira is in our princeton bureau. you.t to start with we saw our retail sales. we saw yields kind of going crazy today. was that, indeed, the trigger? well, there were a couple of things. as you say, the data was good. werel sales were april more or less in line. this puts us on a higher trajectory for gdp growth. the atlanta fed came up, and it is still at 4%, and that is obviously pretty robust. was a bit of a technical level. that was the were more or less high yield of 2014, which was right after the tantrum, so when that broke, i think there were some -- was some technical related selling from traders, and let's not

forget there is a big flattening in the market, so once it starts to sell off the little bit, that will encourage some to maybe ring the register a little bit. scarlet: ira, jump in here. what are you looking at, and what will push us there? yes, it was around 91 basis points, and they are hovering right around there at night -- 89 basis points. there is not really a technical level above that 91 basis points, and that has really been the driver, so this is not been at inflation story. when you think of higher treasury yields, a lot of times you think the market is thinking we will have significantly more inflation, but that is not the case. it is just over 2% treasury inflation break even, so it has

been a risk premium that has been increasing in the market, and that is maybe saying that the market thinks we're finally getting capitulation aced on all of the supply we have had. today, we had these settlement -- based on all the supplies that we have had. today, we had the settlement. on the block, you were talking about a 3.25% on the 30 year as being a key level. we have this on scarlet's terminal. this is sort of the next point on the map. clearly, the market has respected it. we bounced off about six time over the last three years. is there some magical bell that brings? you will still have to have the same kind of technical selling that we saw today if that level was breached.

joe: what is the degree of the that we arel off looking at? how much our stocks taking their cues from this? cameron: it certainly matters. talking about the yield curve, and he does not what it to invert, and the flattening, but the funny thing is, whenever the curve steepen's, there is a selloff. -- steepens, there is a selloff. there are risky asset returns, but we have to it knowledge there is an adjustment period, and whenever we see a big lurch natural fort is some to become more defensive, like we saw today, particularly with a good performance over the last week or so. we talk about yield

competition between treasuries and utilities, for example, which tend to have a high yield, and then we are also watching what is going on with the yield overall. i have a chart on the bloomberg, and we are starting to see the dividend yield on the s&p falling below that, below the three-month treasury. how does that go into investor decisions? basedey making decisions on when they are going to see more yields when you see things like this? aa: it shows that cash is now viable asset class, so if you just want income, you could buy a money market mutual fund or 18 you could not buy a money market mutual fund or a t bill, because you could not make money on it and call it an actual investment.

now, you can make 1.5% or 2%. it is not sexy, but it is better than zero. i want to go back to what cameron was talking about it we are approaching a lot of these technical levels that we were talking about, but investors today really reacted massively to the selloff in that they bought a lot of puts on treasury futures, so when you weight them, you areight basically getting to a point today -- the less time you saw about a month ago, the market selloff actually stopped right around 3%, so it would not be a big surprise if we wound up seeing a bit of a push back, because investors now are very well hedged. thankt: cameron and ira, you both. helpingp, coinbase

cryptocurrencies go mainstream with tools to attract institutional investors. we will look at their pitch to wall street next. this is bloomberg. ♪

mark: i am mark crumpton with first word news. israel says its military has delivered trucks of medical supplies to the gaza strip. the trucks are carrying more than 50 tons of supplies as strugglingms are after military fire the day before. the french ambassador warned that conditions in the middle east and the gaza strip pose a perfect storm. he says it only reinforces a radical and potentially

-- and potentially terrorist organizations in the region. threat to: given the peace and security that we are threatened with, the security council must take its responsibilities. it can no longer remain silent. if the security council is not allowed to deal with such an issue, then when should it be? added thatmbassador the situation in gaza "only confirms the urgent lead -- need in the palestinian-israeli conflict." the military that interrogation technique is not one that should have been done. gina haspel says she has learned hard lessons since 9/11.

john has urged his associates to reject her nomination due to her -- john mccain has urged his associates to reject her nomination due to her artistic patient with these in the past. global news 24 hours a day, on air, and @tictoc on twitter, powered by more than 2,700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. anchor "what'd you miss?" bringing bitcoin to the masses, and now they are looking at wall street to bring institutional investors. here with us is adam white. crypto week. there is a lot of talk about this. really, when we saw the introduced futures, there was a lot of talk that this was going to be this thing that would finally get institutional investors interested. it did not seem to be the

tipping point. for bitcoin, at least for now. what are you guys offering that you think is going to grab institutional investors? adam: absolutely. we think there is a wave of institutional investors waiting on the sidelines, but we have to have the infrastructure the institutional investors are used to. is a safe, secure place to store digital currency. the headlines are about hacking, , and they areents concerned they cannot store their crypto safely. we often -- offer one of the we are pools, and looking at things like low latency trading, and with that, we have a brand-new office in chicago pit we are attracting some great talent, and third and -- in chicago.

we are attracting great talent, and third and probably, leveraged trading, borrowing, all of that will be wrapped up in our institutional offer out of our new york office. joe: there were some manic customer service, people not being able to get in and execute trades. how are you going to do with that on the institutional side and be up to guarantee to able tothat -- and be guarantee that clients will not have to lock in over and over again. greaty don't just need products. they need great services, as well. we have a great team that comes soapclient services, morgan stanley, others from the new york stock exchange, so from morgan stanley, others from the new york stock exchange, soap from day one, we

actually have people that from ,ay 1 -- so from that day one we actually have people that can deal with that. we want to make sure we have an exchange that is not going to fall over and that we are facilitating a majority of that volume. scarlet: let me ask you a dumb question. do you have a regulator? >> that is not a dumb question. the sec is being very vocal. others have come out. we work with all of the regulators as much to help inform and educate as well as to get proper licensure. julie: electronic transaction clearing, the company you are working with, they settled with the sec in march over a violation, and they did not -- admit wrongdoing.

what do you say when people ask about that? >> transparency and trust. we look at that with our partner etc, as wellner, as others that are coming on board. ,e are taking what coinbase which is safe and secure storage of cryptocurrency. does well, which is auditing and reporting and working with regulators. we think we can offer service that meets expectations. joe: facebook may be dabbling in crypto at some point. i am not the right person to comment on that. i think david has been a tremendous asset to our company.

he knows this space well, president of paypal, worked with messenger. really enjoyed working with him. do not know what is going to happen in the future. white, thank you. as a brick and mortar retail stores, next. this is bloomberg. ♪

scarlet: "what'd you miss?" investors getting some insight this week. results from first quarter, and the first three months following setsritical holiday season the stage for the whole year pin with us is a bloomberg opinion columnist. as we saw -- for the whole year.

with us as a bloomberg opinion columnist. 20% growth year on year. do we expect that trend to continue for the retailers? be pretty good. they are really coasting on a santa claus and holiday cheer, and the sentiment is pretty strong. i think the only thing that kind of looms in the background is that fuel prices are rising, but generally, the conditions are out there that shoppers should be spending, and if retailers are executing well, a should be able to get off of that. anchor: retail, and then there is individual differentiation. is group struggling department stores. we have a chart. macy's, same-store sales, and it looks like this is a monthly basis. this is not a pretty chart. where is macy's at? what are we going to hear from them? have a secondwill

quarter of comparable sales growth. it doesn't like maybe they are laying the groundwork for a turnaround, but i would not expect anything blockbuster. 1%, and evenat to if we do see strong results of the first quarter, take that with a grain of salt, because there is a timing issue here, where the important friends and family sale has been moved into the quarter. that will be giving them a bit of a lift. joe: so with walmart, what is the big thing we are going to be looking for? is a numberhing that had been really strong for them, and the founder had been working his magic and seemingly putting walmart on a good path to finally be a formidable competitor to amazon, and we saw that go off, with e-commerce growth slowing down. walmarts that a lot of that had to deal with blips in their

inventory -- walmart said that a lot of it had to deal with blips in their inventory management. obviously, a lot of the retailers, especially the department stores, have a lot of debt on their balance sheet. to what extent is that going to play in this quarter or next year? down the road. we do see the department stores looking for ways to deal with that, so maybe for example the ongoing program to spin off a lot of its real estate. cash,as been freeing off and investors are looking to see progress on that and if they have gotten any more deals, like bears state street store in chicago that gave them $30 million. state street store in chicago that gave them $30 million. anchor: inflation. how is that going to play out?

will they be able to pass on some of the price increases, because they have not been able to do that much so far? category by category. are in apparel retailer, it should be a little bit easier an apparel you are retailer, it should be a little bit easier to do. you can absorb those price increases. anchor: you would think, but it is hard to find things that have not been discounted in some shape or form. coming up next, pressure is building for the dollar. we have the strength of the u.s. currency. this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.

i am mark crumpton with first word news. the huge number of wounded protesters in gaza is putting extra pressure on gaza's already stressed hospitals. all operating rooms have been working around the clock, and there is many wounded people waiting for treatment. officials say the hospitals are also facing and equipment and medication shortage. during a visit to the u.n.'s european union headquarters, on sonia gutierrez was asked about the bloodshed. >> terrible tragedy. sorry [indiscernible]

it shows how important it is to have a policy, a two state solution for the israelis and palestinians to live together. mark: the british prime minister theresa may is calling for more restraint from israel on its border with gaza. she held talks with turkey's president, who is campaigning for reelection next month. president erdogan, who spoke exclusively to bloomberg tv, plans to tighten his group -- his grip on turkey's monetary policy. imagehave to give off the of a president who is influential on monetary policies. >> you will play a role, is that the big change? >> yes. this may make some uncomfortable, but we have to do it. mark: president erdogan speaking to guy johnson. the u.k. interview plan to

collaborate on the fight against terror. president erdogan asks the u.k. cleric gulan.e canceled talks with south korean counterparts. they are reporting to cancel the summit with president trump. that is according to the south korean news agency which says the meeting was scheduled to take place at the border village . the summit was canceled because of joint military drills conducted by the u.s. and south korea which the north calls a rehearsal for war. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. let's get a recap of the market action. we saw a big decline here with points, the.8%, 193

s&p 500 losing .7%. it was accompanied by a selloff in treasuries with 10 year yields moving higher to .37%. earlier it reached as high as three .29%, the highest since 2011. is at its.s. dollar strongest level this year as rising rates and treasuries underpinned appetite for the greenback. joining me with insight is the director from the jerome levy forecasting center. a few months ago everyone hated the dollar. it was political, some referendum on trump or something like that, now the dollar is really strong. what turned it around, and where do we go? >> the forces for turning around the dollar were already in place since beginning of the year. if you look at what drives the dollar long-term, it is the u.s. growth relative to the work, and that has been expediting.

we got the stimulus this year and frequency caps. all of that means unit growth. weighing down on that was political considerations you are talking about. joe: people have looked at the interest rate differential, say it has not made any sense, but that is misleading. it is more the growth this -- growth differential. srinivas: it is a function of growth. growth in one country is strong, it is unlikely to be higher there. but there are factors like interest rates with qe and those policies which might be starting differential for sure. joe: what is the situation? people are starting to believe that maybe europe is slowing down. the u.s. data continues to look mostly fine. does that augur for more strength? srinivas: yes, and people are underestimating the 2.5% growth

we have broken out of. we have two quarters of slowing gdp, quarter on quarter basis, but if you look at the euro, it is still accelerating gdp. cap.ve the sequester we have removed that, the $1 billion budget authority for this year and next. and that may take time to build up to that, but we are building up more spending. stimulus.is is fiscal tax cuts aside, this is fiscal stimulus not necessarily being factored in, growth estimates, and you don't see the fed offsetting that? srinivas: the fed does that to some extent, but it is imperfect. the fed is also at the same time -- remember monetary conditions, even if the fed is hiking, financial conditions are using. you look at the survey, across the board financial conditions

-- the fed is fighting several forces. joe: what does this mean for corporate profits? one of the stories with q1 earnings, they were fantastic. nobody denies that, but there is this fear it is the high watermark, and growth will look mediocre, maybe the second half or next half of next year. srinivas: as far as this half is concerned, second quarter, you are looking at profit being very strong. part of that is the sequester cap. if you think of fiscal stimulus, if the deficit is widening from the macro flow of funds that we look at, that is actually an indicator of the economy. so you would be ramping up that source of profit. joe: there is still more to go on the profit growth. let's talk about the macro picture. one of the big questions is, is this growth going to translate to inflation? will we see strong wages?

some debate whether we are at full employment or not. srinivas: full employment is very nebulous, but we are getting there. 3.9%, lower only one time in the 2000.0 years in 3.8%. before that you go back to the late 1960's. clearly it has been unimportant -- it has been imperfect. thereen the measures -- is another called the available supply of workers which takes on unemployed and those who are discouraged and adds them as a percentage of the workforce. 2011, when ito started tracking this measure, they were afraid they were running out of workers. joe: at 3.9%, the unemployment rate is significantly lower than a couple of years ago people would have thought was full

employment. people talked about full employment when we were in the high fives. how do you have the confidence that we couldn't go down to 2.5%? srinivas: you do see dci accelerating. the fact that it is small, it is small related to hourly earnings . it is adjusted for the occupation and everything. it is properly adjusted measure of broad compensation and inflation. more important thing is you have got to get one metric. you have a variety of metrics. so people, the labor force flow, unemployed people are finding jobs more easily than they are dropping out of the labor force. that is one metric showing how it is. and because of the jobs are plentiful, that is high. so i think the metrics, two years ago when unemployment was

low historically, these measures for all elevated. now they are showing more slack. joe: we got solid data today that was part of the story, futures rate showing up in anticipation of fed moves. four hikes looking likely. srinivas: the expectation for four hikes or maybe to go higher doesn't mean they will get to those four because they could be in trouble. we saw how much they are starting to pay because the yen is the most sensitive to interest rates in the dollar. it is moving to some extent. it does not cause damage, but imagine being two or three more hikes than you are going to have problems. joe: how concerned are you about em? we are seeing pockets in turkey,

argentina, are these isolated stories, or is it building to an em rough patch? srinivas: they always look isolated. you go back to 2013 when israel -- india came out, but it blew up to a big overall year for em at any point in time -- there is always -- the weakest link shows up. the strongest looks resilient at the time. the broader issue is the em index is high, and the have a lot of that. joe: kind of ominous. always good to talk to you. from the jerome levy forecasting center, the director of research. bondet: that news for bull, the treasury turkey just taking a turn for the worse. is this a day of reckoning? this is bloomberg. ♪ s is bloomberg. ♪

scarlet: the bond rout getting worse, 10-year yield hitting its highest level since 2011 and the 30-year knocking on the door of 3.25%. with blue -- bring in ryan has been watching all of this yield action today. we talked about this earlier, what was maybe driving things behind the scenes. a catalyst appeared for retail sales. we have had economic reports before that have not caused these kind of reactions. reporter: i think there was an underlying bearish sentiment. they were looking for a reason to sell off here. retail sales provide the capitalist, but you don't see seven, eight basis points move, better revisions very often. last week we were talking about inflation isd, and

the big print for the bond market for months now. it is a combination of a bunch of things, and it seems like the market is ready to sell. you could see a breakthrough in the rally, and you have all the shorts in the market. it seemed like it was time. scarlet: i want to bring of the chart that illustrates the shorts. this is on gtv, and industry -- it illustrates that. talk about the volume we have seen because we have been looking for some kind of systemic breakthrough. is that the right way to put it? capitulation? did the volume back that up? brian: it was very interest driven. you had all these key levels. joe lexus talk about three followed by four decimal places, and that is what we saw. that was the high from 2014, the intraday high. i got taken out, and now you see

it right higher. joe: it is not obvious that today's economic data was some sort of russell catalyst, but it still is kind of weird that the shortly we saw happen with everyone leaning in that direction, because imagine really violent days in the opposite direction of how everyone was betting. brian: also something that flew under the radar a little bit because as the data was coming out as a move was happening, there was a lot of fed speak today. you heard earlier there is more pricing in. there is greater chance of three additional rate hikes this year, a total of four and 2018 instead of three total. you have the short end moving up, all this stuff, we don't want to invert the yield curve, so in order to not have that with the two-year or the five-year, you have to have tens and 30's rise as well. scarlet: what happens now, are we -- what have people been saying? brian: there is a feeling it is

a bit of no man's land. back in 2011, it was not quite so obvious where it is. one of the interesting things is the 30 year bond. , theook at 10 years 30-year is not on it high. -- on a high. they mention 3.22% as a real stance. he said i don't have conviction if they will go about 3% and they there, but he has said 3.22 there is a lot-- to watch that needs to be taken out, and that is what people are watching for. scarlet: we talked about the selloff in stocks and treasuries -- our treasuries falling in as a class, or are the leading the way here? brian: treasuries have a mind of their own. there is a lot of talk about supply and the fed. the combination of those two and america'smeans for

interest costs and budgets down the line, i think that is happening. between the tug-of-war stocks and bonds, but it was more of a treasury story than anything else. the dollar 50 backed off of piggybackecdd. scarlet: we will keep you postedscarlet: on the next important lines that we will be tossing. what would you like to call it -- important lines. joe: yellow line. scarlet: john garamendi discusses why he thinks trump move on his eta is questionable.

scarlet: president trump wants

to allow phone maker zte to conduct business with american companies but congress is not cooperating. a democrat from california spoke to our kevin cirilli on capitol hill. john: we absolutely must keep restrictions on the products this company sells. there is clear evidence that these products, these cell phones and other products, our direct conduit of information back to china. no way, no how should anybody in the military ever get their hands on these phones, and if they have them, they should toss them. kevin: [indiscernible] john: there are some nefarious reasons why he did. one is a sense of negotiations with china on trade deals, giving up our national security in exchange for a trade deal. i don't think so. the other is $500 million. within days of his decision to make china great again, by sending american jobs or

increasing jobs in china, an organization which he is deeply involved in in indonesia received a $500 million loan so that project can go forward. what is one of the major elements? a trump golf course, a trump hotel and trump condos and apartments here there is something rotten here. kevin: the administration would say that is not the case. they would say it is a way to lure the north koreans to denuclearize by saying we will provide infrastructure from the u.s. as well as china telecommunications, other infrastructure investments, and by doing this you are essentially, this is wrapped up to north korea as well. john: is this the same administration that has been blasting the obama administration because the obama administration and the nuclear deal would give iran and upper hand on economic growth? now they want to get north korea and upper hand and do it with a

telecommunication company that we believe and have evidence that they are engaged in espionage with our military because they are using their phones? i don't think so. there is something terribly wrong. kevin: procedurally speaking, should lawmakers, like chairman thornberry who said these restrictions will likely still shoulduded in the nda, that happen, cap president trump use the commerce department to get around this? john: no, not with regard to cell phone and other equipment sales. kevin: walk me through that procedurally. john: the u.s. military has two different ways of doing with this. on the face of the commissary, they have previously sold the te phones.- sold zte

the chinese government can use those come -- those to collect data. so that equipment will not be sold on base. secondly the military can instruct its civilian and enlisted and officers to dump, trash, throw in the ocean their zte phones because they are a conduit of information back to china. in a: as a congressman region where tech is so critically important, to the economy, the supply chain of zte does impact u.s. businesses, qualcomm for example. what do you make of those who would argue the supply chain might help u.s. infantry -- industry? john: let's be real, this is about america. in many cases this is about national security. if we are banning the use of aboutphones, that is all

national security and i care company,s guy, great great california company. make their money some other way. scarlet: that was john garamendi of california speaking to kevin cirilli. we caught up with rudy giuliani, trump's personal lawyer and former mayor of new york. he said president trump and his legal team are planning to use the one-year anniversary of robert mueller's appointment to ratchet pressure to close that investigation. the milestone is this thursday. giuliani told us we will try as best we can to put the message out that it has been a year. no evidence has been presented of collusion or obstruction, and is time for them to end the investigation. we don't want to signal our action if it doesn't work we hope it works, but we have a plan b -- we have a plan b and c .

they will have other steps if robert mueller does not heed their calls. >> there was another notable investigation that took longer than a year and did end up with several consequences. scarlet: are you referring to kevin stark? >> watergate. time for a look at the business stories in the news now. ibm in the hong kong labs, they are working to transform carbon credit into digital tokens. carbon credits are trading instruments that minimize greenhouse gas emissions. ibm said $4.8 billion was spent by the private market on credits over the past decade. they will be issued and managed on blockchain networks. facebook was the most popular stock or hedge funds in the first quarter. according to preliminary data, the firm has made $1.37 billion in purchases during that time, more than any other u.s. stock. in mid-march, shares sank amid the cambridge analytic a data

scandal before recovering, and that is your business flash update. facebook recovered perhaps in part with the new [indiscernible] joe: they piled in. what you need to know for the trading day. this is bloomberg. ♪ his is bloomberg. ♪

scarlet: a selloff in u.s. stocks, in treasuries, the dollar, not much in commodities. reporting first-quarter earnings before the bell tomorrow. joe: looking at economic data, more on housing, coming out at 8:30. >> the pressure is on after the drop in homebuilders. an exclusive interview with st. louis fed president james bullard at 1:30 p.m. eastern. scarlet: bloomberg technology is up next. joe: have a great evening. this is bloomberg. ♪ ♪

caroline: i am caroline hyde, this is bloomberg technology. innovation, diversity and power of the regional tech economy. we are coming to you from the annual chamber of commerce event. coming up in the next hour, how they can hold their own -- we will hear from the sep -- the ceo