more than 15,000 weapons, countries are threatening the said -- president erdogan countries with more than 15,000 weapons are threatening the world. move as a sees a boost for global trade in the s as of what the bloc view increased isolation. the bulgarian economic minister told a news conference in brussels that a free-trade deal with australia and new zealand would benefit its sectors, including motor equipment, chemicals, processed foods, and services. trade commissioner says the two countries our friends and allies. part of this circle of friends who believes in good trade and multilateralism, and it is also economically beneficial for us to have agreements with them. it would put our companies on an equal footing with competitors revisedtpies in the

-- the revised tpp agreement. signal,strong reaffirming their commitment to strong trade. on the may's position economy is facing criticism. the u.k. for an secretary, boris johnson, said may is responsible for assuring the u.k.'s control and power. >> the prime minister is the custodian of a plan, which is to get on with that project with all convenient speed. that is what we are going to do. johnson has sent may questions, and he has said he will quit the cabinet if she does not meet the conditions. 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. julia: live from bloomberg world headquarters in new york, i am julia chatterley. scarlet: and i am scarlet fu. joe: and i am joe weisenthal. julia: some up trading in the u.s., some giving up earlier gains. truce perhaps overshadowed by questions about north korea. joe: the question is "what'd you , miss?" the president saying there is a substantial chance the meeting with north korean leader kim jong-un will not wake -- workout. and the commerce department cut off a company from its u.s. supplier.

and carrying to medication satellites. we will bring it to you live, later this hour -- and carrying communications satellites. we will bring it to you live. about thenking strength of the u.s. economy with the release of the fomc minutes. any are expecting it to raise rates next month to stay ahead -- many are expecting it to raise rates next month to stay ahead. saying do not panic about inflation. really, do not panic. yes. i have been trying to push that with clients this year. demand, andggregate you have had the fed folks talking about that. the trade war, which was a trade truce, that is stagflationary, and then the wage data came out a little hot to start the year although it has been reversed

back, and return of the phillips curve seems to be on a lot of investors' minds. we have been missing inflation for five or six years now. it is hard for me to get too excited about the inflation story. joe: inflation sources are known, oil prices rising, freight sort of jews, a fiscal boost supposedly late in the cycle. sources, a fiscal boost supposedly late in the cycle. demographics, to me, extremely disinflationary. labor force growth was practically zero. previously, it was double digit. people want a lot of stuff. technological demands. amazon. some of these companies come in to figure out how to give you a better product for a better price. away.are not going

the cyclical ones, corporate tax reform, is actually disinflationary. they can give it to customers, lower prices. and then you have got deregulation, a big theme from last year. again, it is like a tax cut. disinflationary. and then you have the fed hike. the fed has hiked six times. and we have added 200 basis points in my opinion. plus, the balance sheet is contracting. it is disinflationary. they are trying to slow things down. and the last one is just debt. lot of debt. corporate debt, government debt, household debt. the percentage in gdp. it produces a lot of inflationary pressures. it was written about in the 1930's, and it is probably one of the biggest forces out there. about one ofs talk them, and the fed tightening

cycle, which you said. they have tightened about 225 basis points. comparing this in previous times, what have you observed, like 1994 to 1995? in 2004 and 2006, nothing really broke until about a year or two later. see any deleveraging between 2004 and 2006. you were still seeing deleveraging, loans being made, people doing crazy stuff in retrospect. you go back to the 2004 cycle, we only raised rates 300 basis points, and by the time we got to the end of that cycle, we broke orange county and mexico and the entire global long-term government bonds markets. there is a lot of leverage in duration, a lot of leverage with just 300 basis points. the fed realized they kind of made a mistake with everything that was happening in 1995, and then they turned around and were

cutting rates by the middle of 1990 five, so i think you have to ask yourself, are we seeing 1995,-- by the middle of so i think you have to ask your self, are we seeing signs? they are doing things. there are three signs that actually be higher rates are beginning to bite. have they tightened enough at this stage? david: i think they will. i think they will go in june. theymething breaks hard, will go in. it is almost like the fed has to do a trial by error. where does it break? and is it something negative domestically? i think they will slowly go until they find that. that is where things start to get a little bit rocky, and i would just argue based on the 1994 experience that we are a closer to that than

the 2004 to 2006 experience. we will have more in just a few minutes time, and we can show you this from the vandenberg air force base in california. i just want to show you this. joe: cheaper communications for everybody. you have been sort of pounding the table on one consistent ande for nine years, explain the trade, and is it still working, because some of these are classic risk parity portfolios that have not been doing well. trade that takes the meat and potatoes, the guts of the trade, from the idea that the fed is going to be operating as some sort of backstop to the equity markets, and so, a lot of

people are nervous about jay powell. they do not know about him. if we got a correction in equities, it probably means we are not making a lot of jobs, probably means not a lot of growth, so these predictions for rates two or three years out are a little too hike. right now, we are forecasting about a 3% funds rate in about three years' time. there are those two themes, and you're basically long stocks, leveraged long fixed income, and if stocks go down, the thought is you will make a lot of money. joe: we have had a series of episodes this year. in aprilry, i think where we got intense selloff, higher rates at the long end. you do not think this is the start of a new regime?

david: wedavid: we looked back e risk parity selloffs we had in 2010, 2011, 2012 -- the tantrum that was not a good time for the trade. you get these kind of rate backups come or you get an equity move for people do not get to your mobile excited about what the fed will do in response to it. we have 10%, 12% pullbacks in this trade from peak to drop before he turned, but it also has been a 20%, 30% year, -- before it turned. it is drying down about 5%, 6%. in this grand scheme of things -- it is drawing down about 5%, 6%. scheme of things, i am kind of comfortable. i do not buy the inflation story, and the one thing with risk there to give inflation, because the fed cannot come in and be a backstop, right, because they are the ones in the hotspot, and i just do not see it. scarlet: and there is something about soothing the market hit

you want to watch the u.s. dollar. market, and you want to watch the u.s. dollar. after we saw the big rally in the dollar that ultimately led to the chinese devaluation in august 2015 and the big selloff in 2016 -- which, risk parity worked beautifully then, because the fed act away from all of the rate hikes that were priced in -- that story line, is the one you have to watch. i they thinking about it? are they thinking about the fact that corporate's have issuance? issuance is down. em rattled. lots of bonds that are not having homes in the em. kashkaristen to your kashkaris or jim

bullards. we should feel bad for missing for five years. julia: they are just not going to vocalize it. surely. david: some have been more vocal than others. this goes away, and you worry about inflation now. there has been a lot written about price level targeting. interesting that they allow the overshoot to be priced in, so i think if we were to get an unusually high set of inflation numbers, i think they would fall back on saying, wait a minute, guys. nothing really worked like we 2015,t going into 2014, 2016. we went through 4.5% inflation, now 4%. when we were in the 5% range, we

did not get the inflation. the phillips curve did not work. figure out if maybe there is a different story. julia: you said you have been having conversations with people fearful about the situation. that is how we started the story. david: absolutely. that: getting investors are pretty fearful on a daily basis about things like this, and data points. is there something else? david: a lot of folks in this market, they have just have a demon inside that wants to get out. this qe was going to be a bad thing and create lots of there is ao anytime storyline that brings that back, especially the old-timers who remember the 1980's and even back in the 1970's, when we were trying to get rid of this pernicious problem. i think there is a lot of people who feel like there needs to be some type of payback for all of

this qe and all of this experimentation. i do not think you're going to exorcise all of these demons. and the sixth disinflation eric forces i described just -- deflationary forces i just described go back in the rabbit hole. and he did not bring his skullcap with him. thank you. david: thanks for having me. as we mentioned, you are looking at vandenberg air force spacex rocket set to launch in a few moments time. let's bring in the cofounder of valley space center, sean casey. talk about this time around.

exciting. is very number one, this is about the satellite constellation. eight launches. that is 77 satellites in lower orbit, of which 66 are required for regular communications. orbital are used for spares, in case they need to swap some out, but if you add them up, there are eight launches. use 75 only going to satellites. that means there is a spot on one of the launches, and that is this launch, for extra payload, and it is this mission, the grace mission, the nasa mission, partnered with the riches center with germany, a combined u.s. and german -- partnered with center with germany, a

combined u.s. and german project. as ice sublimate and goes into form, and as water ebbs and flows, it changes the gravitational field, so the previous version of grace, which operated up until 2017, was a very successful mission. this will give us another five years of observations and track the global water distribution. sean we are about a minute away from left off, so it is t - 53. notnderstanding is there is going to be an attempt to land the first step of the booster. so we're going to see a launch. and then, what happens? yes, the previous launch we covered was for the workhorse of the series, a block 5. this is a block 4. forlast time was in florida a security mission, and it

safely returned, and this will be the second reuse of this one falcon 9. it,re not going to recover but what we will do is try to part, ande $6 million there was a ship at sea with a vehicle, it we are hoping the para foil will guide it from orbit, from lower orbit, back down to earth and be captured by the mr. stevens vehicle out in the pacific. we hope this is the case. let's see what happens. julia: you mentioned the difference between the block 4 and the block 5, going forward, and how incredible an advance this is. about 30 seconds before the actual launch. i am counting in my head now as we await this launch. just talk to us again about the rocket booster being

used. this was previously launched, i believe, from the u.s. air force, the zoom omission, back in january. ion, back inmiss january. i can hear the countdown. we can see the launch it we are going down to the final few seconds. scarlet: there is the lift off. anchor: wow. falcon: and there is the 9 rocket being launched by spacex. five commercial satellites. a pretty big deal. julia: yes, it is. a mission we have talked about. sean, come in here. again another successful launch. we do not know what is going to happen until we get the first stage cut off and then the

second stage ignites, which is going to boost these loads -- to the required area. we should see the deployment of the two satellites, but it will be an hour or so before we actually deploy the other satellite. julia: and how do we have to wait? sean: this is going to be within the first few minutes. the vehicle is operating. people in the control room are looking for nominal conditions. it is really a tense moment. conditions, sod by the time you get to a few minutes, it is really all over. what did we learn from the first grace satellite? sean: the first grace satellite gave great results.

one is about the ice mass that is melting off of greenland. you get about three gigatons of water that is generated from greenland, flowing back into the ocean. about half of that is observed in the aunt arctic. and the aunt arctic are the three major computers -- majore arctic are three contributors. you can see in dropping, the total ice mass dropping as a function of time over the last years. we have also been able to look at the reservoirs of freshwater water in california and elsewhere around the globe and see how some of these aquifers are being depleted by the water used for farming and livestock and urban areas. incredible technology. just to remind you, once again, we're looking at the spacex rocket that has

lifted off. nasdaq, five communications satellites, as well. satellite that is going up into space. grace-fo.ntioned, the just talk about the relationship, sean. scarlet: what was happening there, sean? sean: i think we are seeing the separation. scarlet: this means that everything is in good shape, right? sean: yes, we are proceeding as anticipated. and there is the ignition of the second stage, which issean: boog the whole payload up to the 500 kilometer orbit. here, incredible pictures

sean, that we are showing viewers at the moment. let me just go back to what we were talking about these satellites, five iridium satellites, and they join other satellites from five previous spacex launches, sean? sean: yes, this is the sixth, idium, as everyone knows, that was around the beginning of the 21st century, and this is a major hardware upgrade to the iridium constellation. 55 of thember thatlite, and going from iridium to this one is going to internet.odem

you are getting vastly improved data communication rates, much like when you had your first aol account. we are moving up. this is a major upgrade, and it is also a major launch acquisition by spacex at the time in 2010. $500 million, eclipsed only by the oneweb purchase for their satellites, which is yet to be launched. sean, you mentioned it earlier, but they are going to fast-movingg a tell me. stevens -- about that. at the top of the rocket, the payloads we are seeing today, you have to enshroud them

with -- when you look at a rocket, and you see the tip of a rocket, it is the pointy parts, and that is to get us through the earth's atmosphere. we jettison that after we get out of the earth's atmosphere, and it no longer provides the aerodynamic needs of the vehicle. , but asst extra weight the engine takes on, you might as well get rid of what you do not have to carry at altitude, and this splits open, and what you see, and what we have seen in some of these videos is the interior payload, and we are ready to go to orbit. just one of those steps that we have to make. ean, compare and attract what we saw today with what we saw the four which was the upgrade of the falcon 9, and it was seen as the greatest

iteration of that rocket. it has some technology and some improvements that people are looking at for the next stage of what spacex will be doing. right. spacex has been in this upgrade mode for their falcon 9 series. was intermediate, therefore full thrust model, and ,ventually it was the block 5 which had improved employment lakes, improved grid fings. -- fins. ofher than being made out aluminum, they were made out of titanium. it used the sub cooled liquid oxygen, both the block 4 and used that, which allows you to carry more fuel to orbit, and it provides a 10% thrust increase for the falcon 9 series. the block 4 was a stepping stone

to the block 5, whereas we about the block 5 to do 100 flights of routine maintenance at a 10-flight interval. to block 4, we only expected do a few flights, and this is an example where we just did two flights with the block 4, and then it is over. maintenance,s for edit will be the work force of spacex in the years to come. julia: the benefit of being able again and block 5 again, bringing down the cost of launching into space, just give us a sense of what today's launch will have cost. launch is on the books at a lube it more than $60 million. dlr is footing half of that cost for the mission. forfalcon 9 generally goes

$60 million, and that is divided up into 60% for the first stage, 10 for the second stage, percent for the varying, and then another 10% for operations, g, as you recover the ferryin you are increasing the profit margin. are costs, what you can sell to consumers, and already, spacex is priced below current industry rates, so spacex is going to be printing cash by flying the block 5 that they can program andr bfr also for their own satellite constellation effort. julia: a critical, critical point. you are reminder, looking at live pictures of the spacex falcon 9. we have got one of the grace-fo

alsolites, and the iridium going up, and we are talking about the grace-fo mission, a u.s.-german mission, and you can see behind the rocket -- what incredible pictures here at this moment. really is quite amazing what we see from these spacex launches. we talk about how these satellites are being launched into space. how long will they be in circulation for, and how long will, i guess, they be expired -- toed to be replaced ,s be replaced, sean. ean: we have got two more launches to go, but that iridium should last into the mid-2020, 2030 timeframe, to provide

emergency vehicles, military, ships at sea. this also has a transponder that is going in a secondary payload that will allow companies to track aircraft while they are at sea. this is a new capability. mt is enabled by the iridiu satellite, billed by flight aware, and it is a great opportunity not just for the iridium community but for their partners, as well. to be they were going launched by spacex. what happened in the relationship? they shifted their satellites to spacex. aboutyou know, we talk launch opportunities with russia, with china, with europe. um, part of the

launches were expected from a part of the 75 satellites, were expected to be deployed on a russian-ukrainian joint venture, and that relationship is strained. russia, in fact, canceled those andches, which left iridium also the grace satellite with no place to go, so it all ended up on spacex, and that is what we are seeing today. an, in terms of spacex, looking at their own ecological roadmap and what they have to overcome, what is next for them in terms of establishing their business with commercial vendors and the u.s. government? sean: spacex is going to rely on the block 5 series for a lot of their existing payloads. again, 100 flights. it would just be cranking out the flights and delivering orbit, destinations.

spacex is going to focus its rocket development on the bfr -- series.fr they are talking about point-to-point travel, perhaps, minutes.e globe in 30 i know as an industry, we have been amazed at what spacex is able to accomplish with reusability. these spacex engineers are going to shift their focus from the falcon 9 -- from the series to this bfr. there is another building a satellite constellation. is 75 satellites in orbit. companies like spacex are looking at putting in 800 or more satellites in orbit, so it will be creating some pretty crazy times. have the launch of the manned spaceflight system with nasa.

returning u.s. astronauts to the space station on a u.s. vehicle. we have companies like the glow that are expected to flight spacex. that are expected to fly spacex. engineers, in my opinion, have done a fabulous job of creating a wonderful vehicle that is going to disrupt the spaceflight industry. sean, there have been concerns about plans of spacex to keep the rocket fuel at super cooled temperatures and only hack it in like several minutes before takeoff, some concerns about the safety -- and only several minutes before takeoff, some concerns about the safety. can you explain this? is 66 degrees kelvin, so

it becomes denser. it improves the engine thrust, but come as you say, for a manned spaceflight, -- but, as you say, for a manned spaceflight, this is not something that nasa has done previously for the 50 years of spaceflight that we have seen in the past, but when you are on an to flye, getting ready point-to-point across the ofntry, you have a refueling that aircraft with people on board, so you are going to have to work through all of the safety precautions, something we do on a regular basis in the aviation industry, but it is going to be new for the aerospace sector. it is all about safety and management. scarlet: of that aircraft yes, absolutely, t efforts tot spacex's

convince nav said that humans should travel on their rockets, thatll -- to convince nasa humans should travel on their rockets, as well. i believe we have to see seven successful flights on the block 5. there was the first mission, the flat, so i think later this year, we are on a countdown where we expect to see the other six successful flights of the block 5 before nasa signs off on the use of the block 5 for nasa astronauts. julia: i saw a story today talking about the delayed launch of the global positioning system that was supposed to go this month, i believe, and they postponed it until at least october to review the upgrades of the rockets they see from spacex. ands not just about spacex nasa, of course. it has defense implications,

too. both nasa and the air force one to see the success of the block 5, but assuming that nasa is able to successfully manage the development and reuse of these vehicles, we have seen some amazing results come out of spacex, and, you know, the jury may be out. is spacex going to continue to be successful? which is why i believe it makes these flights so amazing, he can as you know so much is riding on because yousa -- know some much is riding on and wehe nasa payloads, have got countries around the globe, whether it is russia or china or the europeans responding to the reuse of abilities of the block 5. spacex has put the industry on notice. ean, you are excited,

and we are excited, too. you are our space guru. for talkingnk you us through the launch of that rocket. all right. "what'd you miss?" a leg retreated, taking lower, accelerating in the final let's call it 15 or 20 minutes of trade. we know that the president has started to cast doubt on whether this summit with kim jong-un will happen. energyindustrious, losing ground. just to point that out. scarlet: in addition, the dollar declined. earlier surge,n but it erased those games and finished down. for more on the market action, let's bring in jason, the cohead of putnam investment.

jason, your outlook for the second quarter was the markets trade trump's inflation. the metrics on trade are not necessarily encouraging. talk us through the markets right now. jason: one of the things that the markets are dealing with is the constant ebb and flow of twitter, for example, so people are trying to feel out exactly what the headlines mean, and one of the things, the geopolitical risks that markets have had to digest in, say, the last nine to 12 months, with, for example, brexit and the italian government coalition now. there is a difference between actual policy being implemented and talk about policy, and so i think one of the things we have had to deal with in the selloff since february, or particularly as it deals with trade talks with china, is kind of digesting

what ends up being implemented in reality, versus the bluster. investor to is an do them, sort of ignore the noise, ignore the bluster, and stick to the plan? -- so what is an investor to do then? jason: sort of having a view over the next several quarters is much more important than having a view over the next weeks, and when we think of the fundamentals now that we are out of earnings season -- for example, a big story has been buybacks and the resurgence of buybacks coming through, deeper repatriation, cash from overseas to get some return capital for shareholders. as we go through earnings season, those companies are in their blackout periods and are able to talk about buybacks, and now that we are through the biggest part of the earnings season, i think i backs will be a big part of the story, for equities -- i think buybacks

will be a big part of the story. wereur last segment, you talking about risk parity. a lot of people are talking about the backup rates, and we have had days of risk off, where rates have backed off, but the price correlation between stocks and bonds is actually still negative longer-term. for example, if you look at ief spy on the bloomberg terminal, you will see on any reasonable investment timeframe, the correlation between stocks and bonds is still negative, meaning there is still a diversification benefit for having more than one in your portfolio. joe: jason, i was going to ask you -- we were talking to david zervos, and he said we get these scares often, there is no inflation pick up, and a, do you think inflation is overrated, and, b, do you think if it picks

up that it is poison for those risk-parity strategies? jason: yes, the mixture of stocks and bonds in the 1950's and 1960's, those were periods of general raising rates, where risk parity did well, particularly a balanced portfolio. where risk parity struggles is when you get these inflation scares. the 1970's would be a good example of that and the oil embargo, so i agree with both parts of that, and for us, as well, we are not convinced there has been a regime shift to higher correlation. there are parts of the labor market that are indicators. for example, even with the fed's thatabor market dashboard they look at, it suggests there are some areas of slack in the labor market in the u.s.. the fed cares about core inflation, so when we look at pce, the biggest

is what is going on in the health care markets and prices, and those have been very well behaved for the last several quarters, and we expect that to continue. inflationyou are get skeptic, at least at this point, sing and have to think sort of longer-term or at least medium-term, that all sorts of risk events coming up at the back end of the year, political events, like the midterms come as well, which could have an impact, so what are you telling investors right now -- like the midterms, as well, which could have an impact, so what are you telling investors right now? jason blood there are a few our main risks, how you feel -- group ofere are a four, including credit markets, so we are still

pretty bullish on equities and commodities and still a little bit cautious or underweight credit risk, and we do not think this way, but that turns out to be pretty classical late cycle we think thatnd regardless of what happens in the midterm elections, you know, that feels about right, and that feels about kind of where we are. we are not concerned about recession in any sort of 12-month horizon, but those will be positions that will be, i think, important all of the way through the midterms. you,et: final question for jason print with equities, with --ll cap, the russell 2000 jason. with equities, with small cap, the russell 2000 retreating. do not see a big diversion sin our large cap and ourl-cap -- to virgin's in -- we do not see a big diversion in large cap and small-cap.

if anything, that would probably benefit mid-caps, which is stupidly a place where mega-cap companies like to play. they do not move the dial or risk a credit ranking by taking too big of a deal. great to get your insights, jason. and thank you for watching from new york -- and thank you for watching. from new york, this is bloomberg. ♪

mark: i am mark crumpton with first word news.

unaware that intelligence favored donald trump in the 2016 election, nielsen. secretary was asked by reporters what other states or actors might be attempted to interfere in american elections. secretary: i think we see that do havetries the capability to do this. we think about china. russia, sobout iran, we are continuing to wash. i think we'll be naïve and made the assumption. mark: the secretary called russia in 2016 "and integrity issue." integrity issue." republicans asking for a new special counsel to look into whether agency officials were

biased against president trump and whether there were any surveillance abuses a minute as part of it. fisa will be outlining abuse, how and why the hillary clinton email probe ended, and how and why the pressure probe began. it also calls for the appointment of a second special counsel to investigate the gross misconduct, with the understanding that the justice department cannot be expected to investigate itself. an announcement that top officials have agreed to meet with congressional leaders and review highly classified information. the lawmakers have been seeking that. and ending speculation about more onreelection, october's election. a single digit approval rating and mounting legal troubles with a successful campaign unlikely.

2016 after another was impeached and removed from office. global news 24 hours a day on air and at @tictoc on twitter, powered by more than 2,700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. scarlet: all right, coming up. stocks growing in popularity. we will speak to a president next. this is bloomberg. ♪

scarlet: "what'd you miss?"

soccer fever continues to spread haves the u.s., and united drawn thousands to the mercedes-benz stadium, not bad for a team only in a second year of existence. i spoke with a commissioner in march, and he highlighted united's success. inso many things happening our country where politics are taking shape that are shifting opportunity. demographics are changing. atlanta is one of those veryding cities, very, young, a lot of new entities coming with their headquarters there, lots and lots of soccer games played at the youth level. exploding. probably the most successful launch of a new team in the history of the major leagues. scarlet: and the president of eales, isited, darren

soccernd he knows the landscape well, having played. knowing the team completely, when you look at the attendance records, it is higher than any nhl and mlb team in 2017. is atlanta a one off? can this be replicated elsewhere? touched uponust it. this year, we are projected to average in the 50,000 range. it is a demographic. there is a younger generation getting into soccer. atlanta is a 7 million and rising city. it was thought to be a fickle sports fan. i think what we have shown is the city could unite kind atlanta united and show the city is on the rise.

-- the city could unite around atlanta united. scarlet: what does atlanta have? it is a city of transplants. if you grew up in philadelphia, your dad may have taken you to an eagles game. some people do not have that baggage, so for us, it was that kind of game that people can unite around, and perhaps you have a guilty secret that you are a green bay packer, and you have your cheese head scarlet:. -- your cheese said. scarlet: and you play in the brand-new mercedes ben's -- mercedes-benz arena. business, thes technology available, is that a factor here? absolutely.

we get to play in the best stadium. made it soccer specific as well as american football, and we can have a full sized pitch. .e have a scale with banners what it feels like is at the united stadium, they can come to the next day with the falcons, and it feels like the falcons' home. we made it clear that atlanta littlewas not the brother of the falcons. i think they understand that. scarlet: yes, it was an upfront investment, and when arthur you encouraged, him to not spend on established names, like others do. basically, it getting young players to invest their career on a team that did not exist yet. : it was difficult. when we side one, it was nearly

nine months before we kicked a ball to get we had no coach, and the stadium was being built and was not finished, and we were literally selling sunshine, but now, it is such an easy sell, because we are playing in the stadium and have an average crowd of 53,000. we have the training facility, and now we have got the issue now where people are beating to come door, wanting in. the league is on the rise, and taking younger talent to develop them. scarlet: with atlanta united, it do you find signs taking youngeo develop them. scarlet: that others are following your playbook and doing what you're doing in terms of developing talent and locking them in when they are young and then letting them go elsewhere? coming what i notice from the premier league is it is much more collegiate. it is all for the greater good. doing a fantastic job. they are winning games. it is incredible.

they went to younger talent. i think what we have seen is it is good for the whole league. if we can show that this is a league that whole -- that young layers can come to an develop, getting better media revenue -- that young players can come to and develop, and we get better media revenue -- scarlet: the u.s. is not even in this tournament. how do we fix it? it feels like for decades, we have talked about how soccer is the future of the u.s., and it has not happened yet. was interesting, coming from england, and the media taking the u.s. to task. i think it is a good thing and a that is introspection important. it is important that the baby is halfhrown out with the water. it is good for the country, e did nottion, and chil

qualify, italy did not qualify for the world cup. it is not just a magic bullet that is going to solve everything. got it. looking ahead, never mind nafta, the u.s. and mexico are clearly seeing i die when hosting the 2026 world cup. eyere clearly seeing eye to when hosting the 2026 world cup. does it hurt the u.s. chances? theen: excited about prospect of the world cup coming to north america, this is a huge moment for the sport, because if we get it, it is june 13, if we can get the world cup in theica, imagine it with eight-year lead and. all right, president of atlanta united, darren eales, thank you. president trump warning there is

a substantial chance that the summit with north korea will not happen. ♪

mark: i'm mark crumpton with first word news. a newly released pentagon report to congress as nuclear weapons are central to north korea's strategic goal of ensuring the of the family dynasty. the report said north korea seeks the capability to strike the continental u.s. with the nuclear armed missile. the report was based on an assessment of development in 2017 and was provided to congress in april, a month after president trump agreed to meet north korean leader kim jong-un. hittingministration is our revenue sanctions. the treasury department announced today it is blacklisting five iranians for supporting shiite rebels in yemen. the sanctions three's any assets

they have in the u.s. jurisdictions and prohibit americans any transactions with them. on monday, secretary of state mike pompeo said the u.s. would step up efforts against iran support for those type of groups. the uk's foreign secretary boris johnson says prime minister theresa may must deliver on interviewexclusive with bloomberg in argentina, johnson said the prime minister is responsible for ensuring the u.k. takes back control over its tariff regime and for gaining the power to break away from e.u. regulations if need be. and mademe minister absolutely clear that we are market,ut of the single and what is intel by those promises is very precise. it means we take back control of our tariffs, and we want our own commercial policy.

it means we are able to do things differently if we choose, when it comes to our regulatory framework. may'sprime minister negotiations are facing growing criticism from within her own party, whose members have reportedly been privately threatening to remove her if she quick, have a click -- clean brexit. a new book disagrees with the claim the pilot flew the plane beyond the search area to deliberately sink it in the indian ocean. peter foley of the australian transport bureau, who coordinated the search on malaysia's behalf, was questioned by an australian senate committee about the book, written by a canadian air france investigator. australian aviation officials believe the plane ran out of fuel and crashed after flying far off course. the plane was carrying 239 people when it vanished in march route kuala lumpur to

malaysia. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i mark crumpton. this is bloomberg. let's get a recap of today's market action. we saw declines in u.s. stock, book a colossus coming in the final hour trading. the s&p losing .3%. we should mention that the russell 2000 also closed lower, for the first time in about four days. so retreating from that record high, that dollar risk lower as well, and we continue to keep not on what's going on with trade. latest headlines indicating the president is not sure that his summit with kim jong-un is still on. and during an oval office

meeting with the south korean president, trump told reporters there's a very substantial chance it won't work out and take place as planned on june 12. senior asiahe analyst for the eurasia group. great to have you with us. clearly the water has been muddied by talks of a future live in model as far as north korea is concerned. we've obviously got china talking to many of the players in the background and we've had the military exercises between the united states and south korea also. what are the prospects it is -- that the meeting goes ahead? still a think there is good chance that it goes ahead as scheduled and the two leaders meet on june 12. there is always a chance, and president trump mentioned that today and he's mentioned it before that if he decides that it looks as if he's not going to have what he needs for a successful summit, that he is ready to pull the plug.

this could get postponed. if it does get postponed, that isn't necessarily a bad thing. if anything, it might give all the players involved more time to take a step back, take a deep breath, and do a little more planning to ensure they are all on the same page when they do finally meet. there are so mean moving parts right now, with korea and trade and trade elsewhere, all kinds of stuff going on. i feel like the president is getting hand by all sides right now. panned by allg sides. you see marco rubio slamming him , how do you rate trump right now as a dealmaker? scott: i think one of the problems that he has run into is that he's got too many deals going on at the same time. i think we were somewhat surprised that, heading into

this summit with north korea, that trump decided this was a time to really ramp up trade talks with china. china of course is seen as a and some country that needs to be on board it really supporting this process. and hitting them on trade right -- may not have been have produced outcome that trump expected. so he has just got a lot going on, and he struggling to find one area that he can really reach in and pull out a winner. scott, why would more time make a difference here for any of the players involved? korea andu got north sanctions, you've got the united states clearly with complications, but whatever brought kim jong-un to the table at this moment, that doesn't go away. in fact the difficulty only gets worse. scott: the way we look at it is that normally, this sort of process begins with people at

the working level talking to each other for months or years, and ensuring that a deal that is acceptable to all sides is pretty much in place, and then meetave the heads of state to sit down and finalize it and to kind of tie ribbon on it. has done is essentially reverse that process. he has convinced himself and is trying to convince the world that he will be able to show up, sit down with kim, and the two of them will be able to hammer out a pretty decent deal. but that's just not the way things normally work. so if they decide to push the date back a bit and i have more time to really ensure that they are meeting to achieve the same basic goal, and maybe this is not such a bad pause. scarlet: we talked a little bit

about that libya model. is that suggestion by john bolton still to blame? how much of a difference is that really make here? is that the dealbreaker, or is there something more at work here? scott: that didn't help. we have been talking for a long time about the fact that we know north korea is looking at the history of the u.s. in libya, have.s. in iraq, and certainly seen some handling of the issues but it would not want to be approached in the same way and have the same thing happened to it. john bolton kind of pulling libya out at this particular juncture just hit all the wrong , and they pyongyang were very vocal that that was not the model that they had in fact, that'sand in a situation that they are

completely unwilling to get into. unclear ifas bad, mr. bolton said that to be problematic or not, but that is water under the bridge now. scarlet: who needs a summit to happen more, the u.s. or north korea? kim,: for both trump and as you mentioned, this is extremely important. once this as a signature foreign-policy win, something that he can take with him, put it in his pocket as he moves closer to midterm elections in the fall. and for kim, meeting with trump will be a huge win, simply because it will allow him to be ,ecognized as an equal player equal to the president of the united states, and in many cases, people have said that even having trump offered to win. has given kim a so they both needed, but we will

have to see if they are able to come up with a framework that allows them to meet in the next three weeks. julia: what role is china playing at this moment? there have been reports that kim,dent xi is saying to stand firm, he kind of has a safety net in china, if that is true. china, i think, it's difficult to confirm what conversation took place between president xi and kim jong-un when they met most recently in china, but certainly the impression that i think trump has is that in that second meeting that president xi probably if a sized that kim jong-un should take a pretty tough approach, and ensure that in return for anything kim does, that he is getting concessions from the united states. that concession part from the u.s. is not something that the trump administration has spent

much time on and i think china has objected to that. , thank youott seaman for joining us from washington. we will hear from steve bannon and former white house counsel to bill clinton lenny davis. from new york, this is bloomberg. ♪

scarlet: it's time for the bloomberg business flash. teslas model three may get the coveted recognition after all. the news amazing set is willing to reevaluate the sedan after it come -- after complaints about braking systems as well is difficult to use controls. elon musk argues the magazine had been delivered on an earlier

production model but said the braking issues will be addressed. and that your business flash update. julia: elon musk has had a busy day. we want to bring an update on -- spacex mission arts earlier in the day. these are live pictures of the rocket and there will be an eight second restart of the falcon 9 upper stage engine. it was due to take place at four: 44 eastern time. -- 4:44 eastern time. there it is, as we speak. unless you are a space expert, i'm not sure you know what you're looking at. restart -- we are one minute away, barely. what i can say is that the doctrine 9 upper stages in communication range with the round tracking station in australia. they receive their first , thelaunch signal

follow-on mission. remember that part of the joint next,m with the iridium we are just counting down now to that eight second restart. in case you blinked a couple times and you missed it here. there you can see, it is happening. incredible. >> this was a successful ones that took place today from the vantiv borg air force base in california. there we go. + 57.s nowt the original take on happened 57 minutes ago. >> that's what we wanted to hear. the control navigation engineer reports this is a good orbit for

separation of the iridium satellite. we will see the first of the five iridium satellites coming up in what we will do now is pause and resume. scarlet: we will continue to keep an eye on it. "what'd you miss?" lanny davis and spoke to our stephanie baker in prague. ony were there for a forum economic integration. it was time, what the heck is going on in america? if theie s bannon president should sit down for an interview with special counsel bob miller. steve: i have, once again, i don't think that's necessary. we kind of know at least riley where the investigation is going, at least most of it.

i think it was jay that took the notes, and somehow it got out or was leaked about the 44 verticals or lines of inquiry. i think it's all pretty straightforward stuff but i don't think the president needs to sit for an interview. i thought the press -- about the questions to be answered in writing. as for the president's lawyers and counsel to work with them, but i didn't see anything in those lines of questioning that were going to be that problematic. some may be a little more than others, i thought it was fairly straightforward and i think this thing should be answered in writing. i would say that unless it's absolutely necessary, president should not sit down. crazy if i could get my two cents in, i completely agree with steve bannon. rudy giuliani was the best decision that could possibly have been made. he is wage attorney-client privilege, he lies all the time,

he seems slightly manic. he's the best thing we've ever had. thank you, donald trump, for putting in rudy giuliani. second, fax or stubborn things. steve is absolutely right that there are 44 lines of questions. leaked outw that got by various friends who got that story for only a couple of people in the room, but the truth is -- steve: i cannot believe you bring up leaks. anything that goes on in the special prosecutor's office is immediately written up, or i should say typed up in the new york times. lanny: we had a hard time with leaks at the clinton white house, so i'm sympathetic. but my point is that truth and facts are stubborn, no matter or anyone elsemp

does. the truth and facts are going to prevail, and that's what mr. mueller has going for him. year, andhas been a i'm saying just go back to the 44 questions. that's where we know at least in some official capacity this is going. i think these are pretty thin reeds. it's a pretty thin reed to hold on and i think the american people will weigh and measure all this and in the midterm elections are think will speak loudly about what they feel about this. >> are you in touch with rudy giuliani? bige: unlike lanny, i'm a friend of rudy giuliani. some of the media heads are better than others. giulianim a fan of staying on tv and speaking for

the present. please, keep going. >> are used to advocating that rod rosenstein be fired? steve: i thought the cross alignment michael: situation, his recalcitrance in really coming forward with this situation about either the informant or what type of surveillance was done by the fbi and other either intelligence agencies and or law enforcement presidentlso -- the gave him a direct order to turn the material over. he should be fired. i was part of the team with senator sessions that reviewed rod rosenstein and was a big advocate of his becoming deputy attorney general, but i think the track record is pretty clear, so was a strong advocate that type cap should be let go and i'm a strong advocate that rod should be let go as well. way, if he should dare to fire his own attorney general, who he -- who has done

it many times publicly, he should go back in history and take a look at what happened steve bannon was the one person who warned all caps on to fire james comey. i think james comey should've been fired, but by barack obama because he violated every justice department ruled there was when it came to handling the hillary clinton emails investigation. but it was steve bannon who warned him that the consequences would be great. gets back to the facts. if you can'that ran --t lanny davis revved up, it must be a backstory. elongated has been and now they're talking about potentially wrapping it up by the summer. ,ulia: that was steve bannon

former white house chief strategist. scarlet: i thought it was interesting how he framed it that way. julia: house republicans are looking at the last shot to ease wall street regulations ahead of the midterms. 16 senate democrats and independent angus king have said they will oppose any further changes. cirilli is on capitol hill with the latest. great to have you with us, as always. do they have the votes to pass this and separate out what this means for some of the smaller banks and what it means less for some of the bigger banks. this: were expecting within the next hour or so. i spoke with several republicans and democrats, and if you're outside of washington, you want to keep a careful eye on him he democrats are going to join republicans in this dodd-frank tweak.

the is the illustration of policy fight ahead of the midterms, the more centrist, pragmatic progresses versus those who advocate for more stringent oversight over large financial institutions. the fight i have my outline, and whether they can clear republicans to get about 25 democrats on that will be interesting to watch. what this specifically does is provide community banking regulatory leave, and the big banks have been out in full force in terms of saying this is significantly help them, but they are hopeful that the capital will be able to trickle down through the community banks and help them in the long run. something else i had my eye on today, out of the senate banking committee, they moved an amendment that would really make it tough for president trump to carry out the lifting of these trade restrictions against

chinese telecommunications firm zte. it hasn't come up, but i spoke to a senior source close to senator marco rubio, the republican from florida, who said he is working on a veto bulletproof strategy that would make it very tough for president trump to continue out with lifting those restrictions. joe: kevin, on this reform bill that's going to be passed, we know a lot of progressives don't want to see any rollback. what is the political pressure on those moderate democrats to vote yes for it? are there banking reform voters who care about this? kevin: the democrat from north dakota but it was the pelicans on the fisa legislation and said it would help community bankers. from a donor standpoint, this is something that a lot of centrist democrats deftly had their eye on. but from a policy standpoint, it's also something that people

like conor lamb, the democrat who was able to win the congressional district in southwestern pennsylvania by more than 20 political percentage points, he would also be on board with this. but again, if you are out of washington and trying to play it forward, to democrats take control of the house of representatives? someone who is in line to take over the house financial services committee is the ranking member right now. that's congresswoman maxine waters. you can surely bet she will not invoting with republicans just under an hour on this dodd-frank. scarlet: i think that is fair to say, kevin. i would agree with you there. what is not in this bill? what is left out?

kevin:kevin: this does not helpr provide a blanket covered for big banks in any way, shape, or form. it also does not get beyond designation for nonfinancial institutions as well. this is one crack, but this is far from over. kevin cirilli on capitol hill, thank you for that, as always it -- as always. joe: and coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: u.s. stocks closing down on the day, including the russell 2000. the federal reserve releases minutes from last meeting tomorrow at 2:00 p.m. eastern time. joe: an economic status -- data out at 10:45. scarlet: that does it for "what'd you miss?" joe: have a great evening. this is bloomberg. ♪

emily: i'm emily chang in washington and this is "bloomberg technology." in the next hour, mark zuckerberg bases the wrath of european parliament and leaves a lot of questions unanswered, and a lot of lawmakers first rated. we will bring you the highlights. plus, could currency markets have a friend in washington? a candidate joins us to find out what he thinks a digital currency expert should be in the capital.