the professor was named as an fbi source who approached three trump advisors in the summer of 2016. on twitter the president as the lid his recent attacks on the fbi, calling them criminal geeks state. -- deep state. skripal has said her recovery has been slow and painful and she hopes to go home to russia someday. in her first appearance on camera since the poisoning that escalated tensions between russia and the u.k., she said her and her father were both lucky to survive this attempted assassination. she was discharged from the hospital in april and her father last week. both were taken to an undisclosed location for their protection. european union lawmakers are unhappy that facebook ceo mark zuckerberg left a number of questions unanswered. zuckerberg did apologize for

recent travesty problems, fake news -- privacy problems and fake news. it was called only a start. respect of different companies of the rules of the european union. we will work hard in defense of our citizens. 2019.e european election mark: one of the questions zuckerberg pushed aside was whether he thought facebook should be broken up. officials are taking steps to prevent toxic gases from seeping out of wells after lava entered a g mode -- geothermal plant. --ise a spike in gas levels could prompt a mass evacuation. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

i am mark crumpton. this is bloomberg. julia: live from bloomberg's world headquarters in new york. we are 30 minutes from the close of trading in the u.s. stocks reversing earlier losses and the dollar rallies as the fed all but confirms a june rate hike. joe: the question is, "what'd you miss?" scarlet: currency crisis averted for now. emergency meetings halting the slide for now. it is hard for retailers to please wall street these days. investors pushing targets even of the company reported its best

quarterly store traffic and more than a decade. a surprise approach to dealing with north korea. mike pompeo eases demands the regime give up its nuclear weapons immediately. after three weeks of currency market turmoil, central banks step in to stop the rate liquidityng rates by 300 basis points to 16.5%. the emergency meeting came after the lira dropped to a record -- record low. they left other rates unchanged as a movie described as powerful monetary tightening. the lira then reversed its daily losses. -- here more insight with more insight we welcome greg. it stemmed the losses -- reversed the losses we saw. do you think this is enough to stem the overall pressure we have seen? greg: i guess we will have to

see. in your intro you get a key point, only one of the policy rates was raised and the others were not. we do have a policy meeting coming up on the seventh of june. my guess is they were holding those rates back to see what would happen between now and then. i think they run the risk of further pressure over the next several days as the market ponders that thought. scarlet: explain what the late liquidity window is. as did they choose that rate opposed to the others it has at its disposal? greg: you would have to ask them but i will give you my view. it is window dressing. it is like the fed raising the discount rate, if you will. it is not really a rate that anybody has to pay. so they are trying not to cause any pain in the financial system, any sort of panic. not trying to hurt economic growth. they are trying to give the

market a signal that we are here, we are watching and tightening. julia: is it actual tightening? greg: not really. joe: when you put it that way it is hard to have too much confidence is a put an end to the whole thing. event, itthis type of just happens in good periods, bad perios, from time to time. at the end of the day, does the central bank, if it is committed enough, have the firepower to put a halt to this? or could they theoretically require something bigger on the policy side? greg: so, these things do not happen this often. we are 20 days into the month, a little more, and we have had two currency crises already in may. argentina and now turkey. currencyall it a crisis anytime you move more than 10% in a month.

this goes back frankly to the late 1990's. scarlet: 1997. greg: yes. so what is going on here? prices have been raised to places nobody expected at the start of the year. argentina and turkey pretty much import all of their energy. it creates a payment imbalance that the market is aware of. for a long time, neither central bank did anything to calm the markets. in turkey's case you have an election on top of that. julia: and a stronger dollar as well that people were not necessarily expecting. greg: yes, the big dollar rally. so, i would say, this is serious. that just allnow by itself the central bank of turkey will be able to stem this. scarlet: what about people who say ok, this is argentina and

turkey specific. this is not china, this is not taiwan, singapore, malaysia. those countries are in a better fiscal position and otherwise. this is not contagion the way the 1990's were. is, aso, the good news you know in the 1990's, it was like a pack of 20 wolves that roamed around looking for weak animals. at this stage we have four ot five wolves and they are old and tired. so yeah, other countries are probably more safe, but anybody who is a fewer importer of energy running a current account deficit, they should be running scared. joe: i am curious, i remember a couple years ago when there was concern about a slowdown in china and europe was not so great, we started to see some language from the fed about international conditions being something they were considering. right now you're not hearing

anything about this, but a lot of these developments we're seeing are very fresh. if they work to continue to rumble and we saw more weak spots, could this cycle back and caused the fed to get a little more anxious about the tightening cycle? greg: i think maybe. who chairs thed, g20 this year? argentina. and they have been through one of these crises. asr the next six weeks policymakers get together and have the discussions, argentina will be leading it. january, when people were worried about the weak dollar, now they're worried about the strong dollar. i think the fed might have to have global pressures and concerns. julia: i lost count of how many conversations we had when people say emerging markets is the place to be, this time will be different, it is great. this is one of the

best traits. it was until a couple weeks. then ever own had the same conversation. now we need to be a bit cautious here. give us the fundamental reasons why we need to be more cautious and some specific stories here? what really changed? itit sentiment or is idiosyncratic stories that are spilling over into the entire region? greg: a combination of both, sentiment and stories. the growth is there. that is the thing to keep in mind, it is still in those countries. is following night, there value all over the place in countries with at risk premiums built into them. julia: when you have people saying the e.m. is going to be a disaster, when you have big economists saying i see a real problem here, i see other traders say now is the time to

get back into emerging markets. d.c. that, -- greg: you do not catch the knife. but there is value out there. scarlet: i am glad you brought up economists saying things like that. paul krugman, he tweeted out are going to party out like it is 9097 -- 1997? he talks about turkey being in a freefall and argentina not looking good. what is it about where we are in a cycle that makes people more likely to believe that we could be in some kind of currency financial crisis contagion situation? greg: it is happening. [laughter] scarlet: but is this a condition of the late cycle? greg: i don't think it is as much that as a condition as oil just moved 60% in six months, and that causes shakeout's always. julia: got it. a perfect storm, i guess.

scarlet: greg anderson, fantastic to get your thoughts. i love the pack of wolves analogy. this is an exclusive. janet parker is the activist fund, it is mulling whether to push for a sale. that stock initially spiked higher and said -- retreated a bit since. the size of the stake is currently below the 5% threshold that requires disclosure to a regulator. according to people familiar, jana has built a small position and you can see casy moving as a result. coming up, jay clayton, jeremy of the sec, see similarities between initial: offerings and security efforts -- this is bloomberg. ♪

scarlet: i have never seen an icl that is not a security. those are the words of jay clayton. we spoke with the sec chairman and asked him if the agency is obliged to offer initial coin offerings. >> that's the job of the sec. it springs out of what happened in the 1920's when you had what we would call today unregulated public offerings with unregulated trading, which is what you see in a lot of these ipos. you see people going for a broad spectrum of investors, promising trading in the secondary market.

each of those transactions is unregulated. we decided in 1933 that that was a really bad idea. and if you look at what is actually happening in that market, it is a really bad idea. once again, proving that the people who wrote the security laws back in the 1930's, they knew what they were doing. we have adjusted the laws for technology and i want to continue to do that. part of what i was saying about tricking the time is technology is now available what people can assess and offering in a much shorter period of time. we have done all that. but the fundamental principle, if you're going to go out to a broad audience and provides secondary liquidity, you have to provide basic investor protections like financial statements. it works. we have built $819 trillion economy following these rules. the rest of the world would love to have our economy.

i am not going to throw it out because someone says it does not fit in my model. does that answer your question? >> it certainly does. but when regard to see the regulation of ico's? >> we have. >> how are great -- how are you regulating it? >> if you break the law, you are in trouble. >> it's a lot more than saying if you break the law, we will come after you. >> that's an amazing thing that happened here. if you went to your lawyer arab -- lawyer or banker and set i want to have a private offering, they can say we can help you and here's how you do it. you could go to a certain set of people, you cannot trade these securities in the secondary market freely without registering. or if you want to do a public offering you have to file with the sec, go through our process, probably list your securities on an exchange.

with the ico market they have elected to do none of those things. so, our securities -- >> would you have enforcement actions? >> i cannot comment on anything specific. >> in general. >> we have brought cases in this space already including people who were completely fraudulent. they had no business. they collected millions of dollars and were headed for the border. >> as you look at regulation of cryptocurrency, how do you strike the right balance between making sure you protect retail investors and creating innovation? one of the themes of president is we have gone too far with regulation in many places and curtailing growth, curtailing innovation. how do you make sure we get the right balance in this new area of making sure we are protecting people, but we are not thrown too much cold water on it? >> let me ask you a question.

so, we came out of the financial crisis. and if you talk to bankers around the world, central bankers, why did the u.s. come out of the financial crisis quickly? it was because of the nimble maker -- nature of capital markets and ability to fund new projects and growth. what has changed that we cannot continue to do that just as we are, that you need to allow people to blatantly violate security laws to raise capital? i do not buy it. scarlet: that was jay clayton speaking with our david westin. we want to move to our stock of the hour. red robin tumbling. comparable sales unexpectedly dropped in the first quarter. i cannot member the last time i have seen a red robin. is it a mall kind of restaurant? >> they are in malls some times,

freestanding red robins are sort of around. joe: kind of like where you would see a chili's. julie: it is comparable to that. robin, it seems to be competition and a lot of price-cutting that it has been doing in order to keep up with that. joe: i am curious whether this is one of those companies caught in the middle between mcdonald's and burger king, then all the hip ones like five guys, shake shack. julie: it seems like it is trying to find its way. it also kind of had a false start. i have the comp sales for red robin. last quarter, the company had a pretty decent same-store sales gain. after having disappointing numbers -- it's been choppy. there was a hope that things were starting to improve, but

the momentum has now been lost. we saw comp sales down by 9/10 of 1%. looking at analyst commentary, traffic rose by 1/10 of 1%. the average check it was down by 1%, which might speak to some promotions they have been doing to get people to the door. eter downgraded the shares to neutral. --said competitive decal discounting is putting greater pressure on company sales and margins. he says they are doing better than the overall industry but it is inconsistency which is the problem. another problem for the country is that he is not alone in noticing that inconsistency. short interest on the stock is incredibly high. the bloomberg gives us that data. on the bottom is the absolute level of short interest. if you look at it as a percentage of flow, which is by my cursor, 32% of the shares are sold short.

a lot of people are betting against the stock right now. joe: a big win for them today. scarlet: that has paid off for now. thank you so much. coming up, a ship carrying store is riding the waves of the u.s. china trade limbo. this is bloomberg. ♪

scarlet: a lot of trouble in turkey. although the central bank raised rates to halt the latest plunge, that lifted shares of the etf that tracks turkey. the turkish stock market close at 11:00 a.m. eastern. after that is what investors here overseas could trade turkish equities after hours. are on the time the headlines crossed the central bank raised interest rates. it had been down as much as 4.1%

and is now up 4% at session highs. volumes of spiked right around the same time the headline crossed. let's take a look at the value of trade in the etf. this is turnover in tur. there is despite today in turnover -- the spike in turnover. just under $50 million traded. today you have $88 million trail. -- probably is not going to quiet down anytime soon. here's my favorite story of the day. it is about one ship caught in the middle of the u.s. china trade dispute. of as carrying a full load grain that the u.s. exports to liquor,ing feedstocks, it is a sweetener. it was traveling here and was going to go to china. it was around the horn of africa, then the terrorists went into play in the middle -- then

the tariffs went into play in the middle of april. so then it did a u-turn and said ok, we're going to spain. it is just a ship out there floating. when up to europe to make a delivery at a different port. then of course there is the next you turn this weekend where they paused the trade war, so they decided to go back around. now it is actually headed to singapore. we forget about the real-world ramifications but if you are out on a ship delivering something, it might have to change course in the middle. julia: we are going to get an update on a weekly basis. joe: we're going to keep following this one ship. julia: i am sticking with china. the prospect that china might signal -- finally drop the limit on the number of children and family can have.

didn't we abandon that in some part a few years ago? they did. they allow families to have two children and it made zero difference. this is why they need to focus on it. if you look at this chart, if there will 2023, actually start to be more people aged 65 or older than those 14 and younger. as you can see, increasingly aging the population. a declining birth rate. but there is a bigger issue on my next chart. birthrates are not just falling in china, look at hong kong, japan, singapore. this has been falling in china even before the restrictions were introduced. these guys are affluent but it is not just about affluent countries. india, indonesia, thailand. joe: they are going to have some work cut out for them. scarlet: it's an issue for all

the developed world. the market closes next. we're looking at modest gains for u.s. stocks. this is bloomberg. ♪

♪ julia: stocks rallying into the

close. the fed hinting strongly the gin rate hike -- the gin rate hike. the central bank feeling the spotlight with their rate hike finally coming. i'm julia chatterley. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. if you are tuning in live on twitter, welcome to our closing bell coverage every weekday from 4:00 to 5:00 eastern. we begin with markets minutes. u.s. stocks rallied into the close. this was not a wide range in terms of the moves. by have the indexes closing 3/10 of 1% for the s&p and dow. the nasdaq faring better. up by 6/10 of 1%. this coming after the federal reserve meeting minutes show the central bank, not really in any rush to pick up the rate -- the past -- the pace of rate hikes. even though it looks like the economy is doing well. they basically confirmed they are going in jim. joe: a little bit of dovishness

in the mention of willingness to have and overshoot. it seemed to help the market. overall, i don't think people thought there were many surprises. scarlet: in terms of the industry groups, utilities rose the most. 9/10 of 1%. a little bit of the defenses and rate sensitive companies and the growth companies as well as financials and telecoms leading the decline. in terms of individual names, it is earning season for retailers. tiffany investors cheering that company's results. the stock up by one quarter of one -- 25%. strong sale growth at tiffany. they announced a share buyback plan of $1 billion. global same-store sales blew away estimates. reported results, but we wanted to add that bloomberg has learned bill ackman has taken a stake worth about $1 billion in the company.

he is supportive of the company's incoming ceo marvin ellison. named ellison the ceo on tuesday. comparable sales missed estimates in the fiscal first quarter. the outlooks look better. things are starting to improve toward the end of the first quarter. bloomberg exclusive when it comes to caseys general stores, jana partners, the activist fund, has built a small position in the company. they are deliberating whether to push ahead to get the company to sell itself. hpe down by 10.5 percent. the biggest drop than more than a year. it's forecast less -- left analyst less than impressed. joe: let's take a look at the government bond market. dip inu.s., there was a rates today. the 10 year yield down to 3%. once again, will there be questions of whether we break through 3% except going the other direction? it made sense earlier in the day when we were having a risk off and everything was selling and people were buying treasuries. dovishhe perception of

minutes caused them to stay low, even as risk rallied to we say that decline on the two-year and 10 year yield. the story of the day is turkey. as we go into the terminal, what you see is that the spread of turkish yield to the aggregate em yield is at its widest since 2003. i will expand it here. worse level and 13 years. that is how much of a premium investors are demanding from turkey and the rest of the em world. today, it is hard to believe today's rate hike will be the end of the story. deep concerns from the international investment community about turkey. julia: investors saying risk is high. let's take a look at what happened in a currencies. what's we finally got was a late liquidity window rate rise of and emergencyts, tool as we mentioned earlier in the show. they have other options.

the central bank meeting june 7. we had relative losses in the turkish lira versus the u.s. dollar which rallied more broadly. you can see that plunge or that increase in the value of dollar turkey. ultimately seeing turkey stronger i 2.6%. i want to give you a quick look on the world trip -- currency rankings over the year. the turkish lira for the first time in a long time, the outperform a relative to the u.s. dollar. you can see broader gains on the downside -- games. on the downside, you have the colombian peso, a mixed bag of names. i want to change that to one month. turkish lira, the argentinian peso. just to go back to what we were saying earlier on. there are other things going on the new world. a concern about the euro. the dollar was stronger. this was interesting because we did get european data composite index, the pmi's for germany and france coming in softer than expected. the entire euro

region actually posting its weakest reading since when he 16. and what we saw was the euro versus the u.s. dollar losing ground further. joe: finally, on those commodities, let's take a look starting with oil. down a little bit. it got slammed earlier in the day. still not that big of a deal. gold, not moving much. lumber have been lower. then it closed in the green. hopper, really getting hit. there is -- copper, really getting hit. there is some anxiety about this. often, copper finds itself in the middle of that as it is seen as a global proxy. it fell 2%. i was today's big mover. those are today's market minutes. scarlet: for more on today's market action and where markets stand overall, let's bring in mebane faber. great to see you. thank you for joining us. we mentioned the s&p 500 rally

into the close. it was the highest close since march 16. on the back of fed minutes, then indicated that the fed is going to move ahead with the rate hike in june, but it was encouraging at least or sufficiently encouraging in that it was dovish enough. what i wanted to ask you is when you look at the 10 year yield and it is holding above 3%, have we repriced equities or is this something that is in process given that shifting views of the me rephrase,-- let the shipping view of the economy keep making people question where equities are expensive? mebane: yeah, if you look at valuation, we don't include interest rates as an input. inflation has a bit of a impact. in general, if you look at global valuations, we have been singing the same tune on the last few years. u.s. stocks are expensive, one of the most expensive markets in the world.

but expectinge, low single-digit returns. you look elsewhere in the world, foreign stocks, foreign development is reasonable. reasons, you have this massive performance disparity. 2009 all the way to 2015, u.s. stocks outperformed everything. to see really starting an inflection point over the last few years where foreign markets started to outperform. particularly the cheapest markets to have had three months or years despite the volatility of the past few weeks you have seen the cheap stuff at one of the largest spreads in valuation relative the u.s. in history. joe: right now, obviously, a lot of the anxiety is centered around emerging markets. we have been talking about turkey, argentina. in general, off africa, not doing -- south africa, not doing great. where are we now? what is your assessment of them here? printed twove

months or years. the cheapest backs -- basket, 20% in 2016, 30 percent last year. the cheapest quartile which is a lot of emerging markets still trades at the low teens ratio. on the one hand, you can look at it and say, look, turkey is getting to her, these countries are getting cheaper. turkey is probably down to a single digit tape ratio. -- cape ratio. markets, historically, say the volatility and risk, it feels like emerging markets are risky right now. but historically, looking at the data, it says the risky markets are actually the expensive ones. if you put expensive markets into a bucket, and we just had talk monte on our podcast about this where you said, if you look at the future drawdowns relative to valuation, you have a much bigger chance of a big fat loss when you pay a lot for an equity market. we would argue the highest risk

is not in emerging markets, rather it is owning too much u.s. stocks. julia: we had you late -- earlier, and you were talking about timing and missing the 200 yearsays between a few had a impact on your annual return. in light of the fact that you are saying beware of the risk, particularly in u.s. equities and the importance of timing this right, what is the message here for investors? meb: we look at things into being camps. there is the -- in two dance. the value side, we think u.s. stocks are expensive. trend side is not quite as flashing the red light yet we started to see jiggles. we just finished the longest streak of history in up months. it has not entered into a full-blown downtrend yet. who knows when that will happen, if it is this year, we are in

year 10 bull market right now. it could happen next year or five years from now. valuation is certainly flashing the yellow flashing light. trend will be the final signal to say, look, u.s. stocks, not a good thing right now. ago, we were weeks all focused on the 200 day moving average, above it, below it. hat youe the trends would like to see either to say, we have resumed his solid uptrend or we are in a downtrend? what are your favorite indicators? meb: indicator does not matter which one you picked her 200 days popular, we talk about the 10 month moving average. the point is you are using one in the first place. it doesn't matter on these i percent, 10% moves. metric, itany trend will keep you out of the market that is going down 50%, 80%. if you look at other markets, greece, russia, brazil, they have these 6%, 90% drawdowns, that is when it matters.

if you are going to pick one, it makes sense to stick with it. julia: you will be staying with us. investment management cio staying with us. coming up, more on that back -- that bounce back the lira. from new york, this is bloomberg. ♪

♪ mark: i'm mark crumpton with the first word news. national football league owners approved a new policy aimed at addressing the controversy over national anthem protest, for binning players to stay in the locker room during the star-spangled banner but requiring them to stand if they come to the field. a clearly, our objective as

leak and to all 32 clubs, which was unanimous, said we want people to be respectful with the national anthem to stand. and make sure that they treat this moment in a respectful fashion. mark: any violations of the policy would result in fines against the team, not the players who were not part of the discussions during the owners spring meeting in atlanta. attorney for jared kushner says a secondat for interview with special counsel robert mueller as part of the ongoing investigation into russian election meddling. abbe lowell says kushner is cooperating with mueller's probe and has turned over all requested information. kushner obtained a permanent security clearance more than one year into his work in the white house. tensions soared today between india and pakistan in the disputed region as rivals soldiers shelled dozens of allages and border posts for

sixth straight day. officials say at least seven people were killed including six civilians in the violence that both countries blame each other for an sickening. the fighting has sent tens of thousands of villagers fleeing from their homes. to work withging washington to resolve a growing trade dispute head of a visit by commerce secretary wilbur ross. china says it welcomes imports of american products and is promising to buy more american hem goods and energy while plans to travel to beijing next month. global news, 24 hours a day, on air and at tic toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. mark: -- joe: still with us is meb faber. the hottest asset class this year's commodities. we are starting to see retail

flow into commodity etf's. folks i goldman coming out and saying if there is moreland to run. how do you think about value and commodities and is there a case to be made that should be part of people's portfolio? meb: if you look at asset classes in general, we tell people you have to be asset nostic.-- asset class back a handful of years, mid-2000, everyone loved commodity. every institution was getting in and all the funds were getting marketed. you had commodities rip roaring bull market. then they got pummeled. they have been terrible over the past 10 years. you had a situation where all of a sudden, we wrote about this in a book where we talked about when you have asset classes are down multiple years in a row. it is a rare scenario for them to be down to the income of three years in a row. you saw this happen with emerging markets in commodities

and ending in 2015. in 2015, no one wanted commodities. universally hated, down a ton. that sets the stage for the next bull market. what we have seen over the past two years, emerging markets have her up. only recently, have you started to see commodities start to take notice. it started with base metals. you had energy over the past few months starting to do well. mixedt medals have been a bag. the one we are holding out for that is universally hated that is doing terrible and is very familiar to me because i have the world's least profitable wheat farm is the agriculture section -- sector. if you look at the charts, they are starting -- talk about an asset class that is hated, cheap, and starting to go up. agriculture will probably one of the most interesting places in the next couple years. scarlet: we will keep an eye on that. one reason we like having you on as you help promote the fact that you will be on. yesterday, we noticed you went

on twitter -- i have pulled up the 20 that indicated you will be on bloomberg television today. you kind of crowd sourced to see what people would want to talk about. what people want to do hear you talk about. one of the questions posed by one of your twitter followers is, what happens when etf's get easier to build? they are referring to the sec's potential role change that may facilitate companies and launching etf's. certainly not just the ones who have regulatory approval to do so. does more etf's and faster etf introduction add instability to the market? meb: the media loves to talk about etf's. that's great for me. we have a billion dollars into the etf's. the problem is etf's are still a speck of grain, a little piece of sand and this large asset class universe. it something like etf's are still one third or a quarter of the assets of mutual funds. there is like three times as

many mutual funds is there are etf's. while etf's are a vastly better structure than mutual funds, and i think etf's will cross mutual funds in assets and all the money will be in etf's, only in very rare places -- and there's a lot of terrible screw etf's, dopamine wrong -- in rare places will itactually have -- actually be in markets. you get triple volatility funds, they should almost be a separate class of funds. etf's in general one of the eight distortion. they have way too dilute little -- they own something like 6% of the u.s. stocks. it is a minute amount. i hope it gets bigger. for now, it is an afterthought. scarlet: but there is a lot of innovation around etf's as well. including etf of etf's. why are people convinced this is a bad thing that will cause untold damage on the broader markets? you mentioned the scale and how it is a small portion. that there is so much chatter

about how it adds this degree of instability and it will cause damage. they areink misinformed. if you are looking at -- here is an example. to my knowledge, etf has 0% management fees, like you mentioned, and has a 30 basis point ratio. one of the cheapest allocation funds in existence. there is about 4 billion in these asset allocation etf's that charge about less than 30 basis points. inre is almost $1 trillion asset allocation mutual funds that charge more than 30 basis points per we are talking 1, 1 point five, 2% points per year. if you look at what is better than -- for the investor, there are still all the high fees and taxes -- tax inefficiencies in these expensive mutual funds. hopefully the assets will transition. right now it is a story with little credibility as how etf made this -- made the markets. with the exception of these tiny

markets in places where the market cap is tiny. scarlet: great talking to you. meb faber, joining us from los angeles. coming up, we will be looking at the downturn in emerging-market assets of the plunge of the lira. there is some technical analysis. this is bloomberg. ♪ ♪

♪ it is time for smart charts with abigail doolittle. it's our segment where we look at three charts on timely topics. ons week, a lot of focus a.m. volatility. tell us what you see. abigail: you are right. joining me to break down that volatility, marked -- mark newton founder. , thee talking about this

turkish lira, down. at that time commit was down. i put the title on turkish lira oversold based on your readings and then it bounced back. mark: a lot of these emerging-market currencies have shown signs of deterioration. you see the turkish lira had gotten down to the lowest level, almost that for 85 per dollar before snapping the back. almost 5%. that is in consequent of the dollar moving higher. i think a lot of these currencies have shown signs of parabolic declines. it doesn't seem to be metastasized and over to the u.s. we don't see a sign of stress based on what has happened. it seems to be much more per valent in the currencies -- prevalent in the currencies. abigail: let's look at a broader jpmorgan affects. we see a clear breakdown. is going back over the last couple years. on the right-hand side, this is a fairly big break we have seen for the first time since really

the u.s. election. if anything, the dollar moving up has hurt these currencies. my thinking is a are getting oversold. the dollar is showing signs of being overbought. i think we can balance a little bit. we will need to make progress to think if this doesn't turn back further to the downside, i think in the months ahead. it has gotten problematic on an intermediate-term basis. short-term, oversold. abigail: you mention the fact that we have not seen this migrate over to the u.s. yet or developed nations so much. it suggests there is not systemic risk. let's take a look at your chart of the em equities index. this is interesting. mark: as the dollar was rallying, we have seen the emerging markets index drop a little bit. we have seen lacking. the broader breakout is very much intact for that. i think that is what -- i think that is key. a saw a big breakout from nine-year consolidation pattern. we have seen in the last couple months the dollar has rally char -- rallied sharper.

a lot of the emerging markets on an absolute basis have held where they needed to. it has been more of a currency issue than an equity issue. if the dollar starts to peek at and pullback in the months ahead, i expect emerging markets will stabilize and turned back higher. i am bullish on the basis on emerging-market equities. abigail: when you talk about currency volatility, i typically as on a dog, the actual body, stocks are the tail. you don't think we will see that show up more so in a.m. stock or u.s. stocks -- em stocks or u.s. stocks? mark: for now, we have held where we needed to. it has an effect of the stocks. this line, it has lasted almost two years, it is right to still be positive. if the dollar moves higher, you will see them lag. until you see the breakdown, it

is really still proper to be long emerging markets. and think, when it starts to widen out eventually and you start to see different ois could bepotentially it a problem. we don't see the signs of funding stress or anything with regards to u.s. as of yet. abigail: for if you see a breakdown below this level which would suggest a breakdown for this session. mark: if i see a break of 1100, that would send alarm bells. that would not only break february lows, but the entire -- abigail: what that -- what would that mean, hypothetically? mark: we have seen that in april. for right now, it is still right to belong global equities versus emerging markets. abigail: great comments. thank you so much. mark newton of newton advisors. back to you. julia: great conversation. thank you for that. the good news for target is online sales are booming. the bad news, it is spending a lot to catch up with amazon.

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♪ mark: i'm mark crumpton with first word news. citing the first amendment, a new york federal judge has told president trump he cannot block twitter users from following his personal account. the judge said parts of mr. trump's personal account are a public forum and that blocking users on the basis of political speech is a violation of their free speech rights. secretary of state mike pompeo says the trump administration will not tolerate russian interference in the 2018 midterm congressional elections. foreignof the house affairs committee today sought assurances that the white house takes the issue seriously. lead him -- the ministration done enough to deter russian interference in

our next the lush it -- in which is six months away? >> there's more work to do. we have not been able to achieve deterrence effective for these efforts of the russians. but this administration has taken enormous efforts to push back against russia that have not been done an awfully long time. either here in the united states or from our partners who are more threatened by russia. -- withoutthat elaborating, secretary pompeo said countermeasures are being taken in response to what he called the continued russian efforts. a woman who was poisoned says her recovery has been slow and painful and that she hopes to return to her home in russia someday. in her first appearance on camera since the poisoning that escalated tensions between russia and the u.k., she said she and her father were both "lucky to have both survived this attempted assassination."

she was discharged from the hospital in april and her father last week. both have been taken to a undisclosed location for their protection. italy's has accepted a mandate from sergio to perform -- form a new government. he is backed by a populist coalition to he's as he plans to work on a government program in line with what was decided by a five-star movement and the anti-immigration league. to dosays he is aware that in europe. global news, 24 hours a day, on air and at tic toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market action. the fed's minutes pushed stocks higher. equities rallied into the close with the s&p 500 adding one third of 1%.

the nasdaq gaining 6/10 of 1%. after the market closed, we ofrd from the parent company victoria's secret. the first quarter numbers revenue comparable sales all beat analyst estimates. it's a ps outlook is anywhere from $.30 to $.35 where is analysts were looking for $.41. the stocks tumbling. julia: target is getting a much -- getting better at delivering goods. if only it could deliver profits as reliably. the retailers is quarter earnings fell short of estimates. companys punished the for failing to improve profit margins. the prophets got squeezed by new initiatives to drive online sales. here with more on the retail outlook is the bloomberg business columnist. great to have you with us. we were talking to you earlier on today. we were saying, port target. it is boosting traffic, it its sales rose, it is -- i think

people are being too tough on the company. >> yeah, it seems that way. it seems like target and its counterparts are stuck in this paradox where investors really want to see it post e-commerce growth so it can show it can keep up with amazon. but that costs money. every time they spend the money, investors are frustrated and when you delve into these numbers, gross margin was affected by costs. there -- it was impacted by sales mixed. they sold less strength in apparel and more strength in everyday essentials like groceries, beauty, consumer packaged goods. that is kind of a good sign for target. those are the kinds of products that drive footfall. those are the things that get people in the stores more frequently. in a way, that is a good thing. joe: sarah, i want to go back to the e-commerce growth. mentioned the declines on margins and the investment. is the cost of that growth, is it the type of investment that

will pay off in increased margins down the road once it stabilizes, or is of the type of customer acquisition cost ongoing, online advertising that is not necessarily going to scale and if they were trying to dial that back, the -- than the revenue growth would fall? sarah: it is a little bit of both. some of the investments they are making our one-time things such a payoff for the long haul. i point to examples for the way they are remodeling their stores to make it easier to buy online, pick up in-store orders. those have proven popular. especially when they are easily accessible at the entry of the store. once they make on investment and make that more attractive to folks, that should pay off. certain things like the film in cost, those will keep growing the more people that order, the more it will cost to get things to their doorsteps. it is a mix of both. scarlet: in regards to the profit margin and how that is being squeezed, a lot of retailers have come back,

especially the grocers with their mode -- more private labels. target is looking into that. how much traction has gotten? sarah: private labels have been powerful for target. it started with the launch of thatids clothing program does over $2 billion in annual sales. that is almost the size of lululemon. they really have had a lot of success. they have rolled -- rolled out to theyt have traction rolled out one called goodfellow in their men's division. if you see it coming looks like a bonobos or j.crew. appeal to an affluent a male customer. they are trying to give you a reason to come to target specifically instead of one of the other general big-box competitors. they seem to be getting traction with that. julia: it is a tale with two halves. i want to get your take on low'' s. we know there's a new ceo. he will get to shake up the business as he chooses.

is it a case of focusing on the future rather than looking at past quarters and perhaps the optimism of warmer weather coming to for these guys? sarah: yes, i think that is exactly at. i think marvin allison has his home depot pedigree. he spent 12 years there. he knows how to run a home improvement chain. investors are optimistic about what he will bring to the table. we all know how funky the weather was in april. i know sometimes that is not the greatest excuse for retailers to give for a lousy quarter, but it does seem like for a retailer that gets 35% of its sales from outdoor products in the first quarter, i have a little bit of sympathy that it had this snow we april to contend with. it feels like that is what wade on results. on results.eighed i think investors were understandable -- were understanding of that. scarlet: thank you so much. up, latin american countries have few options left to constrain nicolas maduro

after his reelection. that is what the argentina foreign minister told bloomberg and in an exclusive interview. we will have that next. this is bloomberg. ♪ ext. this is bloomberg. ♪

♪ the first interview by top cabinet members since argentinians financial crisis began, argentinian foreigner -- foreign minister sat down with bloomberg for an exclusive conversation. they discussed sunday's meeting of foreign ministers and when as areas that counted president macquarie in attendance. it was a good opportunity to talk with all my colleagues in the g20 mechanism. they also have the opportunity to talk with president markley.

he came to our meeting on sunday afternoon. he explained his vision about whatrgentina is faring, argentina has to do still, and exchange thathe doface during the last days to the interest rates. particularly in the united states. i think we had an excellent clearon that we were about what argentina is doing. particularly, the reforms. g20ne of the themes of the this year is infrastructure for development. president macquarie has said he will reduce government investment spending as argentina turns to the imf for financing. should companies that want to invest in argentina be concerned? mr. faurie: no, i don't think they should be concerned. we are good because

for the projects in infrastructure. the public and private participation. it is a good instrument. -- it ise will try concerning -- i'm a minister of the budget, but i think we tend to keep the restrain in spending in what we call normal expenditure for sustained salaries or other expenditures. to privilege those that are investment, that we give work to our nationals and review more competitiveness for the economy. reporter: the projects, those state on course? mr. faurie: they will be staying on course. most of the bbp's are financial mechanisms, and require the orticipation of the public

different frames. it will assist in developing these projects. has aer: argentina complicated historical relationship with the imf. in this recent round of negotiations, what specifically does the imf want from argentina and what assurances will argentina give that it will significantly or meaningfully reduce spending? mr. faurie: our minister of the economy is actually in washington doing initiations -- which are recommendations. it is the recommendations the imf will do in terms [indiscernible] at the same time, an objective but all argentinians, we have to assume.

we cannot leave -- live beyond our means. reporter: has the imf helped to specify what their suggestions are? do they want to more significantly reduce the sick -- the fiscal deficit? mr. faurie: the thing that worries argentina and some of our partners is that it is high. we have not arrived to the suggestions or the recommendations that the imf will do to argentina because we are in the process of negotiations. reporter: argentina has become an outspoken critic of venezuela. of spoke about the group members that are taking diplomatic steps to reduce their diplomatic footprint in venezuela, but they are not taking financial or economic sanctions or imposing those sanctions on venezuela. the dictatorship -- why not impose pressure on a dictatorship? mr. faurie: we can impose

maximum pressure if you have the means to do so. if we have financial connections with venezuela, most of the country of the group do not have that. they were already expropriated in different years. there is no means to impose that kind of sanctions to venezuela. we have been following very clearly the path of the money of what surrounds maduro that they are doing with the money that they take out out of the venezuelan economy for their own purposes. to see where they put them. unfortunately, in argentina, we have not detected the money that comes from the venezuelan regime here. we assist any other countries in the area. scarlet: that was argentina foreign minister speaking exclusively with our patrick and when azeris.

aires.uenos mike pompeo says the summit is on as planned the 20 president trump and north korea. we will check in with our d.c. bureau. this is bloomberg. ♪ this is bloomberg. ♪

♪ scarlet: it is time for the bloomberg business flash, a look at the biggest business stories in the news. cambridge analytic out whistleblower -- analytic a whistleblower is criticizing mark zuckerberg's testimony. he spoke at a conference in paris. >> this is a spectacle of nonanswers. facebook'srely strategy seems to go to testify whether it is at congress and

the u.s. or whether it is in the european parliament. backhen saying, i will get to you. i will get back to you. i will get back to you. that's a good question. i will get back to you. scarlet: a shakeup inside wells fargo want unit. -- bond unit. they are bringing and colleagues from their alma mater. wells fargo looking to bolster its shrinking unity bond rate it has fallen to the eighth spot in the list of unity managers. kroger is getting deeper into the meal kit industry. the largest u.s. grocery train -- jane has agreed to buy another company in a deal. kroger could also pay 500 million more over five years if growth targets are reached. sales heard -- surged 150% last year putting it in third place behind weyburn and hello fresh. -- blue apron and hello fresh. that is your update. julia: i can't help but feeling that saying, i will get back to

you, be better than winging it. joe: if i say i will get back to you, i will not. julia: president trump earlier today say he will know next week whether or not the singapore summit with kim jong-un is still on. told the house panel the u.s. would leave negotiations with north korea if the summit goes in the wrong direction. >> it is my view we have made zero concessions to german -- chairman can. we have no intention of doing so. julia: q2 breakdown the latest is alex wayne from washington. always great to have you with us. i feel like we can't separate the discussions over north korea with what is going on with china and the trade negotiations. once again, as far as strategy is concerned, we have raised tension with china. at just the moment we kind of needed china to help with the negotiations with north korea. alex: it is like a balloon. you squeeze one and, the air goes to the other coming you

squeeze the other, it is a very complicated and you are right, the two inextricable, issues per whenever trump gets tough on china, the chinese respond. thepresident has voiced suspicions by pulling strings in pyongyang and all of a sudden, critical comments come out of the north korean government that seem to cast doubt on whether the summit will happen. when trump tries to go back the other way, it causes a problem in his trade negotiations. he gets criticism from his loyalists and supporters who want him to be tough on china economically. joe: alex, on north korea specifically, the government in north korea is willing to talk but they will not denuclearize. they have waived their hands at the libya model. on the other hand, that seems to be an important condition for the u.s. is there a way to thread the needle so that both sides can say, if they go into the talks, that their conditions were met? alex: i think this is why the

talks are looking rocky. it is because donald trump is concerned he will come out of this summit empty-handed. that the north koreans will spin him, will give a song and dance about denuclearizing and then when he actually gets there, he will find out they have no plans to give up their nuclear arsenal. that theyay have said expect to be treated as a nuclear power and they do not want to give up their weapons. scarlet: this is why teams from both countries negotiate all the details in advance before the leaders meet to sign off on everything. julia: ordinarily. alex, come in here as well. to joe's point, the libyan model suggestion came from john bolton. the white house did step away from that and suggest or at least soften the message. was that ultimately the catalyst and is john bolton being gagged as far as comments on north korea is concerned? alex: he has not been gagged. i think he is out there talking

about this. the president himself distanced himself from those remarks. he said it is not going to be the libya model, it will be my model. i don't know if john bolton was a catalyst for this thing getting shaky, or whether it was that the negotiations with china over trade. because just as those negotiations -- just as the united states was getting tough with the negotiations, demanding thought it analysts would be difficult for china to give us come out came these statements from korea about the john bolton remarks which actually were a few weeks old by that point. i tend to think that china is more important. -- ii get the impression haven't seen a single good review of trump's handling of trade with china. and that includes voices from some of the very to free trade types of the wall street journal to bannon, who told bloomberg that they didn't get anything, to marco rubio slamming him over

zte. -- does hetuff cause hear it and is that what caused him to walk it back? for to get anxious about what he agreed to? alex: i don't think there is any question that he is seeing that negative reaction to this worked deal that mnuchin out with the chinese. and he is reacting to that reaction. and now trying to walk back the deal. no question. he is not happy with the response. now he is reconsidering. julia: the question is, is no deal better than some deal as we head toward the midterms? always great to chat with you. bloomberg's scarlet: white house editor, alex wayne. scarlet:the etf industry has something for everyone to with oil prices on the ride -- rise, the fracking is back in spotlight. there is an etf for that. the vectors unconventional oil and gas etf trades under the ticker fra k.

it tracks and index that covers the largest and most liquid companies that is deemed to unconventional oil gas sector which includes coalbed methane come and gas hydrates. among frack's, names including occidental petroleum, eog resources, and pioneer natural -- natural resources. it has put a 5% overlap with the biggest etf. frack's allocation to mid and small caps as well as a 50% allocation to canadian companies provide unique exposure here at but also extra volatility. while frack has underperformed it is pulling ahead this year with returns of more than 10%. the fund has more than $80 million in assets and comes with an expense ratio of 54 basis points. frak gets a green light in the bloomberg intelligence light traffic system with no infractions. lovely soundtrack. scarlet: we picked about out especially.

you need toup, when know for tomorrow's trading day. this is bloomberg. ♪

♪ ended upu.s. stocks rallying into the close and finishing at their session highs. they gained its extensive 1%.

coming up, don't miss this earnings season continuing with first quarter results. joe: i will be looking at economic data. existing home sales out at 10:00 a.m. their deutsche bank holds shareholder meeting tomorrow. perhaps some guidance on what the restructuring in the united states means. scarlet: that does it for "what'd you miss?" julia: "bloomberg technology" is next. joe: 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.

emily: i'm emily chang in washington, and this is "bloomberg technology." facebook's fake news fight. how the social media platform continues to tackle this issue, but can they win and what does it mean for upcoming elections around the globe? plus, tech giants like facebook, alphabet, and apple facing pressure from washington. what's in store for tech regulation? we will talk with the congressman. tech leaders