in which the president informed the north korean leader he was canceling the planned june 12 summit. new jersey democrat robert them the art of diplomacy is harder than the art of the deal. diplomaticrobust efforts to denuclearize the korean peninsula, many of us were deeply concerned that the of preparation necessary before a summit is agreed to was not taking place. south korean president moon jae-in called the cancellation of the summit regrettable. julia skripalys released a statement of her own freewheel. she said yesterday her recovery had been slow and painful. a spokesman for vladimir said

the kremlin does not know whether she made the statement under pressure or independently and with or her rights have been respected by british authorities. a russian military missile brought down regulation aircraft over ukraine, that has opened up the possibility that dutch prosecutors could sue the kremlin. the dutch led the investigation because the plane took off from amsterdam. everyone on board was killed. russia has denied responsibility. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton, this is bloomberg.

julia: we are 30 minutes from the close of trading in the u.s., stocks coming back from losses some extent. the s&p 500 down nearly 1%. joe: the question is, "what'd you miss?" scarlet: president trump canceled his meeting with kim jong-un citing anger from pyongyang. more saber rattling on trade. tariffs on cars and trucks couple getting the trade between the u.s. and china. the justice department opened a criminal probe focused on illegal practices. "what'd you miss?" president donald trump coming off his summit with kim jong-un. he called the canceled summit a setback for the world and threw

the ball back into north korea's court. >> if and when kim jong-un chooses to engage in constructive dialogue and action, i am waiting. julie: for more, let's bring in group asia director. what was this about? why did the president cancel this? >> it was a combination of factors. both sides were worried about walking into a summit where they were not necessarily on the same page. they did not have the same goals. then we had an uptake and rhetoric two weeks ago started with john bolton talking about the model he preferred for north korea which he said was the libya model that pushed all the wrong buttons in pyongyang. they started to heat up their own rhetoric than on monday, we had mike pence talk about the libya model and we had another

reaction. that seemed to have been enough for trump to think this would not going the right direction and he pulled the plug. scarlet: we mentioned in the letter that the president sent, he blamed tremendous anger and open hostility. later on, he seemed to point to finger at china. is the president justified in looking at china and saying perhaps they are to blame? heard, heat we have probably is wrong about that. , it wast with kim twice the second meeting trump seems to be focused on. thought is that maybe china was looking to use the north korea card to improve leverage with trump on trade.

hearingd, we have been that that did not take place. as long as trump thought it took in to this idea that the summit was not going to end up successful, that he could call a win. joe: there is a lot on trumps plate and the end of the north korea summit at least takes one thing off for now. given this dynamic that perhaps china had some leverage on trade, does that mean trump may feel emboldened to be more aggressive on trade with china now that he does not need their help? >> that is a strong possibility. he took a much softer approach or was moving in that direction a few days ago, it looked like they were getting close to a deal that they could both live with but that was premised on

progress being made toward the summit. now that that is not likely to happen, i think you are right that trump will have fewer reasons to go easy on the chinese and so they will have to take a second look at negotiations and we may see a worsening of the ties there. also curious about what happens on the korean peninsula. south been watching the korean won and the japanese yen cross as a risk proxy. today but it is nowhere near the levels where it was last september. what is the probability of a military conflict at this point? is it higher after today? >> i don't think it is higher. i think the market has priced in a very low probability of a military conflict resulting from

the tensions we have seen. that is not to rule it out completely but, we think probably right now the chances of a conflict are perhaps lower than they were before just because more people have chimed in, have talked about the dangers and risks attached to that and a lot of allies in the region, japan and south korea, have made it clear that that is not an option they want. military conflict is not the same as military posturing. do south korea and the u.s. continue with war exercises? resume testinga nuclear weapons? to seeink we can expect the united states and south korea continue military exercises. they have talked before about that being a necessary thing for , regardless of whether they

are actively talking with north korea or not. they have a legitimate reason for those exercises. whether kim decides that he needs to act more provocatively to make a point that he is upset about the situation, we will have to see. in the nearunlikely term that he would decide to test another missile. to see what waiting kind of reaction we will get out of pyongyang. joe: what about the consequences of the fact that our partners were notoon jae-in aware that this would happen until the letter was tweeted. i think if they are smart, which i think they are, they certainly had this in mind. surprised everyone by accepting the summit a few months ago. that came as a shock to allies

that did not have much of a heads up at all. the fact that he has decided to cancel or push it down the road, i think people in japan, china and south korea has certainly built this scenario in and they are just following the plan now. scarlet: it is kind of proof that you need to be prepared for anything. asia director joining us from washington. thank you. what should have been a good day for best buy has turned sour. we will discuss why first quarter just was not enough. this is bloomberg. ♪

julie: it is time for the bloomberg business flash. the biggest stories in the news. the governor of russia's central bank says putin's plan to transform the country into one of the world's top five economies is achievable. she spoke to bloomberg in st. petersburg. >> it is a very ambitious goal that requires action but it is possible. there are times when our economy was growing at 7% per year. at that time, the growth was largely based on growing oil prices. today, the growth should be ensured. julie: uber recorded a $2.5 billion first-quarter profit after accounting for sales of its asia and russian unit. without those wind fills, it lost money. the ceo was asked today if the startup would ever make money.

>> of course we will be profitable one-day. i cannot tell you when. revealedother error today underscores the scope of the struggle at deutsche bank and they work ahead for its new ceo. the german lender confirmed it accidentally sent $30 billion as collateral for over cap -- over-the-counter derivatives trade in addition to the $35 billion payment error in march. netflix is king of the media industry. $152 billionrd to market value, stripping the most valuable title away. 2002,mpany went public in it leads s&p with a gain of more than -- that looks like 74%. that is your bloomberg business flash. scarlet: best buy posted solid

earnings, beating analyst estimates. why did investors dump the stock? best buy is our stock of the hour and our senior retail reporter joins us. i suspect the answer lies in something we have heard repeatedly, they are investing in e-commerce but that investment hurts profit margins. >> they are investing for the future. they have to do this to catch up with amazon and keep pace with each other but it is coming at the cost of profitability. cost margins were below what analysts thought and the investments they are making on the web and services will hurt margins going forward. joe: is there a sense that e-commerce investment will slowdown? ours is the kind of thing where it is so cutthroat, there can be no let up. billion onspent $15 flip card. they have to be the first

movers. you look at same-day delivery, that is expensive. like, a must become you're not going to get it to me by 8:00 tonight? i will go somewhere else. that is very expensive. it is all about the right spending. they need to be smarter and savvier. it is interesting because even when it is working they do not seem to be rewarded. best buy has been doing well. strong, targets we saw a similar situation where it's investments seemed to be working. it is still getting punished. >> they are doing well in the stores. target had their best start -- storen the best traffic in the last 10 years yesterday. let's not forget that. been raised.have investors are realizing that this is not a retail apocalypse,

it is an apocalypse for companies who do not know what they are doing. expectations happen raised and any bad news, the bears are going to jump on. joe: even with the recent selloff, it was a good day for best buy shares. this is one of the best turnaround stories in all of retail. if you had bought best buy five or six years ago, we all thought it would go to a of circuit city. it has been a good growth story. doingt: what is the ceo to make sure that best buy stays ahead? >> it is twofold. he needs to get deeper into the home. he's doing it with total tech support, if you pay $199 per year, they will service any gadget you own whether you bought it at best buy or anywhere and you will get a

discount in price on home visits. it the atr you do chat or online but they will come to you for a discounted rate. you have to pay for that visit. there are doing in-home advisors, a team of 380 sales people who will go to your house for free and sell you anything from a router to a refrigerator in the hope that they will establish a relationship and they will be your first contact, meaning you look at amazon. scarlet: doing that means hiring the right people so doing that costs money. >> the training is very expensive. you can't just grab a blue shirt off the street and say go into somebody's house. it is risky that person does not do it correctly. julie: have a talked about whether they are able to find those people? not only do you have to work on the expertise but the reliability. >> on the services side, they are using the geek squad. they have 20,000 geek squad

agents as they call them but for the in-home advisors, they are recruiting from their best and brightest salespeople. i hear they are grabbing people from home depot, lowe's, cable guys from comcast. this could be a very lucrative job if you do it right. scarlet: investors are still supportive. >> very much so. it is a love fest right now. six years ago, everyone thought who is this guy, who is he he has never worked in retail before. i feel like the retail conversation is more exciting than it was a couple years ago. i appreciate that we are talking about strategy with these companies. >> it can get morbid sometimes but for best buy, walmart, it is exciting. will see how this

plays out. thank you so much. scarlet: "what'd you miss?" today, he discussed what it takes to turnaround around a big company like general electric. >> don't go with the guys that got you in the ditch. there is a problem. capitalism isof there is no room for cronyism or favorites. is, you have to make tough decisions. a good example, i had the getune to be invited on the board by jack welch at the end of the last century. hasll tell you how far ge fallen. when jack asked me, i could not believe i would be invited to serve on this company. if there was a cherry on the that was it.dae, and look what happened to general electric. this nonsense that jack's

success was dealt a bad hand is nonsense. look at the first six or seven years coasting on jack's record. the board has got to take some of the responsibility. >> exactly right. ge ceo spoke yesterday here is what he had to say about the company he inherited. into this newng era, there are certain things we can do and we will. we will take time, we have a lot of interaction and interwoven activities here but we are moving to a much smaller corporate. >> his task is reinventing the entire business. three years ago we were talking about it being a huge oil services business. strategy emanates from the ceo through the board of directors. they went into the oil and gas business at the wrong time. they bought a business they

turned down years before. it is a disaster. we never hear about amersham anymore. they went into the security business. they then sold some of those things. we a decision of that size is typically voted upon by the board of directors -- full disclosure, jeff felt i should be the board because i was a bad boy, i gave fortune magazine and interview and used colorful language. >> not you, ken. >> of yes. it is out there. i wish i hadn't but the point is, you can say i am a sour grapes. i saw a lot of things going on there that said to me, what is going on? scarlet: that was the home depot co-founder.

we have breaking news. investigators in manhattan are preparing to arrest harvey weinstein after inquiry into allegations that he sexually assaulted women. he is expected to surrender to authorities friday morning. once again, harvey weinstein accused of sexual assault is expected to be arrested friday. this is bloomberg. ♪

"what'd you miss?" retail is not necessarily dead but it is on sale. at least versus its long-term valuation. this is one index that tracks retail participants. it has 85 members and includes things like nutrisystem. you can see the price to earnings ratio. here's the average, the pink line here in that price-to-earnings ratio and you

can see, even as stocks have come back, this index is up 3% which is in outperformance of the market. evaluation is still below that long-term average. everything is relative, you get what you pay for and people are pricing it perhaps where they think it should be at this point .ut still it is discounted especially if the prospects are not as dire as people fear, maybe that is looking cheap. i am keeping an eye on fang. year foren a banner netflix. they overtook comcast in market value and today netflix's gain and disney's decline has pushed netflix past disney, the blue line. netflix is the most valuable media company in the world now. it is just try of $152 billion, more than double its value at the end of the second quarter. there was an announcement that

they were teaming up for a production deal with barack obama and michelle obama. about the ramp up in debt, which has doubled in the past year. joe: they happen getting crushed haven't they. there is a lot of noise going on, geopolitics, trade, all kinds of stuff. you know a story that people may be missing? the economy looked pretty solid. regional manufacturing reports from this month all up, beating expectations. here are a few of them. may, wecing back in have kansas city fed not on the chart. market pmi report. we should make sure we do not lose sight of the fact that when you look at how things are going, things are going well. scarlet: it is a contrast to what we see in europe. the market close is next. take a look at the major

indexes. with less than four minutes to go before the close, we are off 1%. this is bloomberg. ♪

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margaret: "what'd you miss?" -- the dow was down as much as 280 points, but paired earlier losses. joe: if you are tuning in live on twitter, we want to welcome bell coverage every weekday from 4:00 to 5:00 p.m. eastern. >> we begin with our market minutes, as we get market close here. we saw a lot of zigzagging in today's session, with the s&p 500 at one point in the day falling by as much as about 0.95%, almost 1% let's call it, before coming back to a decline of 0.2% by the end of the day. the drop coming after president trump said he was canceling the summit with north korea, but then investors apparently remembered, they don't really care about geopolitics, and we saw stocks come back. energy shares were the worst

performers, with a selloff in oil. financial shares down a second straight session with a slide in yield. some movers on the day. best buy, as we were just discussing. the company came out with numbers that beat estimates, but talked about spending in the second half of the year that could affect margins, including on things like new in-home services, all of it in an effort to continue to keep up with amazon. as joe rightly pointed out, the stock is still up sharply this year, so it is not as though it is erasing all the declines it has seen. l brands went in the other direction. it was trading initially lower after it's burning -- its earnings report, then traded higher after the company said merchandise margin will be flattish in the second quarter, better than the trajectory. albemarle also on the move. this has to do with a chilean competitor, sqm, that also makes

lithium. that company is investing in supply, in production. that news for the overall lithium market and albemarle included. joe: let's take a look at the government bond market, starting with the u.s. two-year and 10-year. 10 year yields, down to 2.97%, earlier below 2.96%. a a lot of people thought maybe after we broke 3% that it was off to the races. not so much. scarlet: let's look at currencies. a bid for safe haven currencies, the yen and swiss gaining. what i want to highlight, we saw asian fx markets already closed on the announcement the meeting with kim jong-un would not happen, so instead look at the not deliverable one-month forward on the dollar-won pair. if we can pull that up, that's

what you want to look at. see it as an equivalent to a futures contract. the spike at 9:40 a.m. eastern time, right after the announcement. the won pared some losses, but still weaker. also keep an eye on emerging markets. so much for the lira rebound sparked by the emergency rate hike, today resuming the selloff, the biggest the klein among em currencies. president erdogan did not mention the lira or the rate increase in his campaign speech in ankara. the told you how he had pledged allegiance to global principles of monetary policy, but today radio silence on that front. see yesterday's move, but it does not change the trajectory, beforee lira weaker than . joe: now let's look at commodities, starting with oil, down 1.6%.

still hanging in above $70 a barrel. big winners today, precious metals, interesting enough, which you might not think because there wasn't a tone of volatility, though sometimes they get bought on geopolitical concerns. gold up 1.15%, silver up 1.71%, platinum up 1.10%. those are today's market close. scarlet: for more on the reaction to the knee-jerk cancellation of the north korean summit -- i like what julie said earlier, the market suddenly remembered, we don't really care about geopolitics. doesn't the market reaction today show investors never really priced in a summit, or geopolitical issues like the north korean summit? they don't know how to value it, so they just don't include it. jim: the market remembered it hasn't really cared about politics basically since the presidential election in 2016.

but you are right, there was a knee-jerk reaction, the summit was over, then a rebound, maybe this is a gambit, they will revive it in another form soon enough. so the market was generally confused, but at the end of the day, it wasn't a big deal. the market was down, but it has been kind of trending around, so i actually think the stories you were talking about a second ago, with italy and turkey, probably matter more to the markets than the north korean cancellation. joe: how do you factor in those risks? kind of different in nature, but the risks emanating from abroad, how do you factor them into the market? jim: let me start with this. we do this analysis of federal reserve speeches, using a natural language processing program and we look at the big trends of every speech by every federal reserve official. what comes out of that, they are very calm, not talking about uncertainty. they think inflation is a

problem. they think the economy is great. in fact, it is one of the best mixes of speeches we have seen in the post-crisis era, and maybe in the last 20 years. so when you start introducing things like italy, introducing things like turkey, that add to uncertainty, that will be a problem for the market, because right now we all expect great economy, we all expect great numbers, and we don't have anything in the mix suggesting the rug might be pulled out from under us. italy and turkey are not necessarily big rock -- rug pullouts, but a surprise we might not expect. julie: more broadly, what is emanating from washington. when you talk about the federal reserve, what is going on in other nations, when you look at what's going on here in washington, president trump specifically, whether it is north korea, or probably more important for the markets, trade talks and tariffs, to just

ignore? is he a risk? is he a benefit? what is president trump to the market right now? jim: keys an on -- he is an unknown. we know he makes this bellicose language, but at the end of the day, we recognize he is a businessman, he understands what trade means for the economy. he has tied his fortunes to the stock market, so i think the calculation we are making is that this is just a negotiating of the dayt the end he's not going to do anything for the u.s.ous economy or the stock market. he's just trying to get what he wants. any good negotiator will tell you, you have to be prepared to walk away and say no. when the market thinks of it in those terms, i don't think it gets has worried. that is a misjudgment on our part, that no, he will go the full nine yards, will do something that might be injurious to the economy, than i thank you -- think you will see a much bigger reaction.

joe: the last full week of any month is usually quiet on the eco front. one exception this week, the fed minutes, and the interpretation seems to be the short-term path tooixed, but maybe not aggressive in long-term eagerness to fight inflation. what does that say? does that give a risk-on green light to the markets right now? jim: not yet. right now, the odds the fed will raise rates in june a 100%r. they have been there since may 2.that is the earliest ever the market has priced in a 100% chance of a hike in the modern fed era. june is done. we will raise rates in june unless something really outside the box happens. september is the next one. we are still at 80% chance they will raise rates in september. so talking about risk-on, the fed not going to back uoff, a lt

can happen in six months, but right now the market is ok with that. it believes it is all being driven by the good things, growth, jobs, and that's why the fed has to raise rates. if it came to the idea that it was being driven by the rising inflation, it would be taken poorly. that's why the market's not so worried, even though you might be right to say, on the face of it, rate hikes should not be a good thing, but in this case they are coming about for reasons people think is good. scarlet: as you say, june is a done deal, but there's a lot of economic data next week, a shortened week as well, including the jobs report on friday. anything in that jobs report that could cause nervousness, could cause people to rethink their assumptions? the same thing that made us nervous about the jobs report all year, the wage component. we will probably look a little past the payroll report, because at a very low unemployment rate, near for employment, a weak

number could be explained, it is just getting harder to find people to fill jobs. we want to know, this low unemployment rate, are we going to see wage pressures, which would lead to infection -- inflation? right now the answer is in the mail, not definitive either way. i think we will get more of the same, kind of a middle number that is inconclusive, and we will try again in july. julie: thanks so much. jim bianco, good to see you. a new addition to the fleet of carnival, the newest ship christened by queen latifah. we here about that and the outlook from the industry -- for the industry from ceo arnold donald, next. ♪

mark: pentagon officials say american forces on the korean peninsula remain on a normal state of alert in the aftermath of president trump's decision to cancel his plan to summit next month with north korean leader kim jong-il and. earlier, the north said it was prepared for a "nuclear to nuclear showdown" if the u.s. didn't follow through with next month's planned meeting. president trump had this response. >> i have decided to terminate the planned summit in singapore on june 12. while many things can happen, and a great opportunity lies ahead potentially, i believe this is a tremendous setback for north korea and indeed a setback

for the world. mark: north korea's harsh rhetoric followed remarks by vice president pence and white house national security adviser john bolton linking north korea with libya. at a joint press conference, french president emmanuel macron and russian president vladimir putin weighed in on the cancellation. president macron said that despite the cancellation, the process of trying to end crises in the region should continue, and president putin said kim jong-un did everything he promised in advance, even blowing up the tunnels and shafts of nuclear testing sites. nicolas maduro has been sworn in as venezuelan president-elect. the ceremony left many confused, because his next term will not begin until january of next year. butro was elected in may,

many say the elections were neither free nor fair. the families of two students killed in the parkland, florida theol shooting are suing manufacturer of the gun used. the families say that american outdoor brands and the store tactical supply are complicit in the use of this ar 15 style rifle used to kill 17 people at marjorie stoneman douglas high on february 14. 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. this is bloomberg. scarlet: coming up, a super bowl arnival went all out for the salvation for their newest ship, the horizon -- celebration for the new a ship, the horizon. we hear all about it and the company from ceo arnold donald,

next. this is bloomberg. ♪

scarlet: we have some breaking news, gap coming out with results, first quarter eps of $.42, that misses average analyst estimates by four cents. miss resulting in a big drop in after-hours trading, a decline of 9% right now in after-hours trading. julie: looking at comparable sales as well, they were up less than estimated, 1% versus 1.5% estimated by analysts. 4%, bananasts up republic up 3%. gap and banana republic were negative last year, so they did show a turnaround, but not enough to make up for some earnings pressure there. scarlet: we will continue to

keep an eye on gap shares. toward the end of earnings season, you will hear less and less from retailers. for the most part they have come out with decent numbers, but one of the themes we keep coming up against, spending on e-commerce and investors are punishing them, because it cuts into profitability. let's get you to the bloomberg business flash, some of the biggest stories right now. the world's second-biggest pc maker grew at the fastest rate in more than two years, but lenovo also pushed a drop in net income. the ceo discussed the quarterly report with bloomberg news. >> we are aware we didn't do as well as we expected, but look at the, we business and generally the numbers show decline, but if you really look at core markets, latin america, we see increases

in topline and profitability. north america, significant growth. scarlet: bitcoin extended declines after a bloomberg news report the department of justice opened a criminal probe into potential virtual currency manipulation. authorities worry about the lack of regulation for such currencies, and wild price swings, which they say makes them more susceptible to fraud. the doj has focused on illegal practices, like flying markets with fake orders. shareholder discontent over lucrative executive pay packages is on the rise. 21% of investors voted against the lender's compensation model, compared to just 2% in 2017. received $8.6 million last year, making him one of the highest-paid bank chiefs in london. software companies are pushing back against a proposed change by accounting regulators on costs attributed with moving data to the cloud.

they claim the disclosure rule requiring companies to reveal the cost of moving to cloud platforms would be difficult to apply and offer few advantages for investors. cisco, apple, google and salesforce says the rule requires accountants to capture data that simple he doesn't exist. that is the business flash update. julie: "what'd you miss?" -- the general data protection regulation, the european union's expensive ever to give citizens more control over their personal data. it comes into force tomorrow, with big indications for business and probably for you as well. here's everything you need to know. >> the eu is introducing new rules that will dramatically impact how companies collect, store and use data, the general data protection regulation, or gdpr, applying to any company collecting personal data of eu citizens. instead of fine print and legal jargon, companies will have to post clear notices and get

unambiguous consent to access information like credit card records and even biometric data from fitness devices. these do not only affect websites, but also property management companies. if there is a breach, they have to notify within 72 hours, so situations like uber's attempt to cover up its 2016 data breach ofl be met with huge fines, up to 4% of global annual revenue. in companies with billions sales, that could mean up to $4 billion in fines. a pretty good incentive to comply. scarlet: we are keeping an eye on what happens with gap shares, declining after first-quarter eps missed analyst estimates,

shares down over 8%. we need to go to carol massar and jason kelly, standing by with a special guest, the ceo of carnival corp, arnold donald. carroll: we appreciate it. we want to get to arnold donald, at the new york stock exchange, president and ceo of carnival corporation. great to have you here with bloomberg tv and bloomberg radio. you launched a new ship yesterday, so obviously you feel comfortable spending money. give me an idea of what the environment's like right now for your consumer, your passenger? arnold: first of all, hi carol and jason. thank you for having us on. it is great for cruises right now, and especially for us. the carnival horizon, the newest was in our carnival fleet, named yesterday here in new york with a lot of fun, with queen latifah as the godmother. innamed the seaborne ovation

malta, and we have other new ships for our german line later this year. it's a great time. we continue to do very well. every market is under penetrated in the world, including the united states, and we are excited. jason: you said these markets are under-penetrated. how do you get to those customers, and what are they willing to spend money on maybe they were not willing to spend on before? arnold: the reality is, we are a great vacation value, at deep discount compared to a land-based vacation, and a great vacation experience. one of every two people who sails sail with us. that's what we mean of under-penetrated, only 3.5% of the available travel population actually cruises. people are excited to spend

money on experiences. they want memories, they want fun, and that's exactly what we in the cruise industry and carnival corporation provide. carol: you have talked about china before, becoming the largest cruise market, talked about cruising being in china's five-year plan. i am curious, with the back-and-forth between u.s. officials and chinese officials over trade, has any of this may be changed the outlook or may be complicated what might be to come, certainly in terms of your collaborations with china on this? arnold: so far, not at all. our partners in china are cssc, one of the largest shipbuilding industries in china, and cic, the sovereign fund. they have a domestic business there, and we are committed to having a ship built by them that will go into this cruise line by 2023. also, of course, we have our own lines that have been sailing there for a number of years.

but we have not seen any particular issues there end cruis -- issues there. ise is a small industry relatively speaking, but it has a huge economic multiple effect. they are committed, and so are we. jason: when you think about places people are going where maybe they didn't used to go. think about the caribbean, the mediterranean, but you are pushing into dubai, i believe. what are the other places that are new and different? arnold: well, we go to places we have always gone to, barcelona, caribbean, but new places. cuba, we were the first to be able to go there from the u.s. carrying u.s. citizens to and from cuba, and you mentioned dubai. we go to dubai, but we have a portinority stake in a new indubai that will become the center for cruising activity in that part of the world. dubai has a lot to offer, and

within a short distance is a very large population of travelers who could cruise to a number of very interesting places. carol: in terms of your market outlook, jason and i, we spend a lot of time trying to figure out where we are in this market cycle, in this economic cycle. i like talking to you, because you have different brands playing to different consumer types. what kind of visibility do you have, about the next few years? arnold: for us, we have a lot of visibility. as you mentioned, we have contemporary brands like carnival, and then luxury brands like seaborne, princess, cunard, holland america. we have a wide range, and we our german brand, british brand, so we get to see lots of different nationalities, lots of different global economic reactions. and what we see is that, at the

essence, people are still looking for experiences with friends and family, and travel. so with travel, whether it is general travel or specialty and whether it is crew with guests, guests with guests, guests with locals, they discover what is common along the way, and learn to celebrate differences. that feeling of adventure, cultural immersion, learning about others, adventure, balls are inose things the cruise experience, and that is why we have been doing well. jason: you mentioned elements of growth, which is a theme on your watch for the last five years or so. you mentioned partnership, more deals to be done. but to those look like, and where? arnold: our deals right now are all over the place, but especially in the area of destinations. we are very committed to sustainable tourism, so we have

partnerships in many places around the world. we just established a new terminal in barcelona. we mentioned the one in dubai. obviously we are doing work in china, working in cuba, working all over the world to create interesting destinations. often we are just there to support and counsel, other times we are actually partnering, taking some ownership, or in some cases we are completely developing the experience. so that's where our big investment opportunities are. then we invest in the most important thing of all, our guest experience. job one for us is to exceed guest expectations. if we do that, everything else works. on our ships, experiences on our 103 existing ships, we are investing constantly to enhance the guest experience. carol: i was lucky enough to go on a ship, go into your kitchens, look at what there is to make these ships work. there's a lot of workers, oil,

are costs going up? are commodity costs, oil costs coming up? arnold: every year fuel prices go up, currencies go the wrong way, just part of the business. we managed by reducing our requirements for fuel usage. we reduced consumption by 29% the last several years. carol: thank you so much. arnold donald, chief executive officer at carnival corporation, joining us from the new york stock exchange. back to you. scarlet: thank you so much, carol massar and jason kelly of bloomberg radio. first word news with mark crumpton -- mark: an international team of saidtigators sent today 00-- today a russian missile system was responsible for malaysia airlines flight 17 over eastern ukraine nearly four years ago. an australian police commander spoke to reporters in the netherlands. >> pieces of debris found at the

crash site were visually compared with reference material of missiles available. in addition, a missile was detonated in a controlled environment so comparisons could be made with parts of a detonated missile. mark: the plane was heading from amsterdam to kuala lumpur when it was blown out of the sky over eastern ukraine in july 2014. all 298 passengers and crew were killed. russia has always denied involvement. the new york times, citing two law enforcement officials, hollywood studio boss harvey weinstein is expected to turn himself in to investigators friday morning. and arrest warrant had been prepared in response to allegations he sexually abused multiple women. releasedbia has

several women's rights activists. the three women were detained last week in a crackdown that drew condemnation from international human rights groups. some of those taken into custody had been pushing for years for women to be allowed to drive. the kingdom's ban on female drivers will be lifted in june. president trump today granted a boxing'son to first black heavyweight champion, clearing his name more than 100 years after what many saw as his racially charged conviction. he was convicted in 1913 for violating the mann act, making it illegal to transport women across state lines for "immoral purposes." johnson was traveling with his white girlfriend at the time. >> i believe jack johnson is a very worthy person to receive a full pardon, and in this case a posthumous pardon. so i am taking this very

righteous step, i believe, to correct a wrong. johnson'sson grea -- great-great niece press trump for a pardon, and john and harry reid have been pushing his case for years. global news, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. scarlet: a recap of today's market action. a decent dive in equities when the president announced he was canceling the u.s.-north korea summit, but then equities kind of made their way back. we finished lower, but at one point the dow was down as much as 1.1%. after hours, we want to highlight gap. gap shares tumbling in extended trading after first-quarter earnings per share, comparable sales all missed analyst

estimates, including net sales as well. julie was talking earlier about the comparable sales of the different brands. the only brand that performed better than expected was banana republic. old navy and gap, the namesake brand of gap, both came in with numbers worse than anticipated. julie: interesting, because old navy in particular has been the most reliable of the three parts of the chain. "what'd you miss?" -- another threat of tariffs from president trump, this time aimed at imported cars. the president ordered the commerce department to investigate auto imports for possible threats to national security. secretary wilbur ross responded on twitter, saying the department will conduct a thorough, fair, transparent investigation. for more on how the industry is responding, we welcome the ceo of the association of global automakers. -- yourresentation association represents some of

these automakers. i would imagine they are not happy about this threat. what is the message to the administration? >> you have to wonder what is going on here. the u.s. auto industry is absolutely thriving. 13 car companies building cars and trucks in the united states today, and soon that number will increase to 14. so we have a vibrant, competitive auto industry. lots of americans are employed here. we are making cars and trucks all around the country. joe: talk to us about supply chains. this is a factor a lot of people might miss. the degree to which all cars, no matter who they are built by, have components made across the border several times. john: that is right. this is a global industry, with global supply chains, and what you have is big networks of suppliers and other companies that are producing parts and components of vehicles that get shipped to assembly plants as those vehicles are being built. if you look at the united states, half of the vehicles that are imported into the

united states come from mexico and canada, and a lot of the content in those vehicles made in mexico and canada are built by americans, american supply components going across those borders into those cars. joe: talk to us about the ramifications, if something like this were to happen, if there were to be tariffs. would it just be a matter of people see prices go up, or would there be something more fundamental in how the industry changes? john: the consumer will certainly take a hit. prices will go up. vehicle choices will go down. value will be less available on the marketplace. i also think, and this is to your question, i think customers will have less opportunities to get advanced technologies and new features in vehicles, so this market will be less vibrant and less innovative as well. scarlet: what is your sense that the administration will hear you out, and actually follow through on this consideration of auto

tariffs? i know that you were opposed to, for instance, the tariffs on steel and aluminum, and the administration rolled back a lot of that for individual companies. how does this play out, given your experience with seeing how the previous tariffs played out? john: we are at the beginning of the process. and investigation will take place. we are looking forward to an open, fair, transparent investigation of whether these tariffs are necessary. i frankly don't think they are, given how much the industry is thriving. but the most important thing here is that the administration understand and take into account the impact on the u.s. auto industry, in total. all 13 companies that build cars and trucks here. will some of your members shift manufacturing to the united states? is that a potential outcome of this? john: look, you have to ask yourself, why are we doing this

to begin with? why are we imposing huge price increases on consumers of automobiles? that's the first question, before you even -- julie: couldn't you say it is a tool to get more manufacturing capacity in the united states, sort of a means to an end? john: i'm not sure exactly how it would play out. i think the very first thing that would happen, prices would go up, which means fewer vehicles will be sold. that will be bad for dealerships, and the employees of dealerships, and frankly, you also have to consider that our trading partners will not sit idly by. we will face retaliation. we export 2 million cars and trucks a year from the u.s. to countries all around the world, eight s&p plants worth of annual production. we certainly don't want to put the u.s. operations of all these companies in jeopardy, either. joe: if there were to be tariffs, and we should be clear, we really don't know if there are going to be. we just don't know.

if there were to be, they would extensively be under a national security pretext, which people find to be very dubious, to say the least, when it comes to automobiles. if it were to happen, what would that do to the international trading picture, and confidence in the global trading rules, if something like a car tariff could be pushed through under those rules? john: you know, we in the united states, we have stood for many years for the proposition that we should all play by the rules, and we in the past, the united states has called out countries that refuse to play by the rules, and change the rules of the game for reasons that would not appear to be necessary. and so, if we were to do that, tousing this argument, impose significant tariffs on automobiles and auto parts, by the way, i think it would

certainly create a major problem for automotive trade around the world, and trade more broadly. scarlet: a lot of people say the president likes to throw a lot of things at the wall and see what sticks. some are calling this a negotiating tactic to pressure mexico and canada to move not quickly -- more quickly to a nafta deal. is this an appropriate tactic to get there? john: i don't think consumers would appreciate being considered leverage. i don't think the auto workers that make toyotas in kentucky or bmw's in south carolina or kias in georgia would want to be considered leverage. i think it is more important that we focus on how to improve opportunities for employment here in the united states, and the best way to do that, frankly, is through more trade, through creating opportunities for us to expand markets around the world. scarlet: ceo of the association

of global automakers. thank you for joining us from washington. coming up, a bloomberg scoop. why department of justice is opening a pro against -- probe against the trading of cryptocurrencies. joe: and a reminder to subscribe to our weekly podcast on itunes, "what'd you miss?" this week. great thing to listen to over the weekend. go listen to the best episodes, some of our favorite interviews from the week, all in handy audio form. scarlet: i just listened to some yesterday. sounded pretty good. we sounded pretty good. joe: glad you are a fan. [laughter] this is bloomberg. ♪

scarlet: "what'd you miss?" -- a

bloomberg scoop. the department of justice has entered a probe into whether traders are manipulative the price of bitcoin and other digital currencies. let's bring in matt robinson, who focuses on sec and ftc enforcement. could fallof things into the purview of this. the pump and drunk -- dump, wash trading. what seems to be the center of the law enforcement interest? that: all of the above. they are looking at spoofing, trades, all the typical market manipulation in this market, trying to see if people are illegally moving the price around by placing orders they are not actually going to commit. scarlet: this is the kind of stuff they look into for every asset, particularly for stocks, talking about spoofing and this stuff. is there any indication that it

is happening? have they gotten reports it is happening? happening a lot, when it comes to cryptocurrency? what do we know? matt: it is a pretty preliminary investigation at the moment, but to your point, spoofing, all these market manipulations happen in regulated markets, markets with a lot more oversight, so it is safe to assume that they will probably find some promising leads. scarlet: and the doj prosecutors are working with the cftc, a regulator overseeing derivatives tied to bitcoin. what happens if they find anything funny with bitcoin or the other cryptocurrencies in the stock market? how they go about that? matt: good question. the cftc and doj have brought jurisdiction to police fraud in stock markets. they don't necessarily regulate spot markets generally, but they can look at fraud broadly there. joe: obviously the first many years of bitcoin and other cryptocurrencies, it was kind of lawless, unregulated, people doing whatever they want.

in the last year, we have seen pretty serious institutionalization of this, with major legacy firms trying to figure out their angle. do they welcome this kind of thing? are they eager to see this kind of crackdowns in legacy assets applied to crypto as well? matt: there have been some firms welcoming this kind of oversight, to give the asset class a little more, to their view, more legitimacy compared to other investments. julie: is there anything about cryptocurrencies that makes it easier, perhaps, to do some of these abuses, or maneuvering of the market, than more regulated markets? matt: given that the trading of cryptocurrencies is very fragmented and illiquid, there's many possibilities. professor thinks it is very easy to spoof this market. joe: to be clear, you could try

inpump up the market on some theory exchange in korea or mexico or eastern europe, with the idea of manipulating it elsewhere. it would be very hard to do the equivalent with equities. matt: the more regulated, the more liquid the market, the more difficult to manipulate. scarlet: what kind of timeframe are they looking at? looking at bitcoin's price, the surge was at the end of last year, beginning of this year. are they looking at right now, or going back in time all the way to last year, 2013 the last time bitcoin really took off? matt: they would be looking back broadly. they have a time frame they can look at of many years, but even without the run-ups, they could be looking at, you know, manipulation when it was not so much at the top of the conversation. scarlet: i would tend to guess there would be a lot more instances of potential manipulation right around the time of the frenzies. matt: the more volatile, the more it might be moved around.

scarlet: it will be very interesting to hear about the outcome of all this. sec ando bloomberg's cftc enforcement reporter matt robinson. up next, a trucking strike against diesel prices has put brazil's government in a corner. from new york, this is bloomberg. ♪

julie: "what'd you miss?" -- what we feared has reportedly happened. amazon's alexa, according to a

couple in portland, oregon, recorded a conversation and send it to someone on their contacts list. this is just a report by a local tv station there, which cautioned people to unplug their a lax -- alexa devices right now, which seems a little alarmist, but interesting this is going through. amazon sent a statement to the station saying this is extreme the rare. joe: not reassuring at all. how did that ever happen? scarlet: this is an increasing worry and risk with all the devices. do you have an echo? joe: no. julie: for that reason. elsewhere, "what'd you miss?" -- truckers in brazil continue a multi-day strike, saying a temporary cut in diesel fuel prices was not good enough. the ripple effect, shortages of goods and services spreading through the country. joining me is bloomberg's

brasilia bureau chief, from rio today. give us background on the situation. why are the truckers upset about higher diesel prices, and what can the government potentially do about it? >> it is happening around the world, fuel prices going up everywhere. but the problem here in brazil, it has been compounded by a weakening currency at the same time. brazil wasn't exactly accustomed to prices that fluctuate with market forces. so for the past year, diesel prices have gone up by 50%. truckers get paid the same they did a year ago. they are upset. margins are pinched. they go to the streets, the government ignores them, totally underestimated the strength of this movement. hundreds of thousands of people, paralyzing large parts of the economy. flights are in danger. potatoes, tomatoes, carrots, you name it at supermarkets are running out. it is a disaster. joe: can you clarify what you meant, when you said

historically diesel prices did not fluctuate much? was that a function of government subsidies that set a cap on price? why is this a new thing? raymond: that's absolute be right. for the better part of the last decade, about 13 years under the left-wing government of lula and president dilma, they set a cap, not all that time but much of that time, they set a cap on fuel prices. people got used to that, and only -- over the last year have they been fluctuating. that is a novelty. people do not have the purchasing power people do in europe or the united states, so it weighs heavily on people's pockets. scarlet: petrobras said on wednesday they would cut the price of diesel by 10% for two weeks. congress is also looking into eliminating some of the taxes on fuel. but ironically, did they actually get to vote on it?

apparently some of the lawmakers had to rush to go back home, because they were concerned they cannot make their flight. raymond: that's absolutely right. they put the country before their own interests, quickly got on a plane and flew home before they could vote on anything important. but basically it has been a fumbled reaction. petrobras said it is going to cut diesel prices for 10%. it got punished immediately, got pummeled today by investors, share prices falling as much as 15%. the government having to given as well, cutting taxes which were cost them billions that the government doesn't have. the lesson, don't underestimate a strike. scarlet: the reason the senators had to leave early for their home states, the planes only have sufficient fuel to land, so they were in a big rush. julie: what happens now? any hope of this thing getting resolved? raymond: the union has been quite clear. if the taxes do not disappear, they stay on strike. lo and the hold, congress is

reconvening. people are flying back from their home states tonight in an attempt to try to make the wrong good again. they will try to vote on something. we will have to see tomorrow morning. joe: and there's no buns at the mcdonald's? [laughter] raymond: i knew you would ask about that. [laughter] among other things, there are shortages, yes, but we will get around it. scarlet: probably the least of their worries at this point. thank you so much. bloomberg's brasilia bureau chief, joining us today from rio. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: "what'd you miss?" -- u.s. stocks fell, but recovered nicely after the announcement of the canceled meeting with kim jong-un. coming up, university of

michigan consumer sentiment at 10:00 eastern time. joe: and durable orders for the u.s., 8:30 a.m. scarlet: see if anyone is around two trade them. and jerome powell speaks alongside mark carney, augustine what -- bed then coueure. don't want to miss that one. "bloomberg technology" is next. joe: have a great evening. this is bloomberg. ♪

emily: i'm emily chang in san francisco and this is "bloomberg technology." president trump cancels the summit with kim jong-un. state of plays with a former u.s. trade representative. plus, highlights from paris as president macron gathers the biggest names in technology.