business can invoke religious objections. the majority opinion is that the issue must wait for further elaboration. >> basically said people are not free to be in the marketplace here this is their aversive that. >> the fact that the opinion is written by justin kennedy -- justice kennedy makes it a little more -- he stood up for equality in the past and it is shocking he did not today. loss.a narrow a limited loss. >> justice ruth bader ginsburg dissented. the united nations nuclear says it is ready to ration specials with north korea

within weeks. the international atomic energy announcement precedes next week'summit. between president trump and north korean leader kim jong-il in singapore. on improvexpecte p on the tenet position of thend korean peninsula. been allowedve not in north korea since they were expelled in 2009. the pentagon's inspector general had an investigation of the white house dr. jackson, who withdrew his nomination to lead the -- leave the department of veterans affairs in april after allegations of former colleagues raised questions about his leadership ability. allegations include claims that he was drunk while at work and that hprescribed medications. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is number. -- this is bloomberg.

♪ julia: live, i'm julia chatterley. scarlet: i'm scarlet two. joe: i am joe weisenthal. julia: the nasdaq trading at record highs. , atstors woke say on data least for now. joe: the question is what did you miss? >> president trump has to pay -- for a showdown at the upcoming g-7 summit. apple is more than just an iphone maker. they announced changes at the worldwide developers conference. arianna huffington attended the conference and joins us on this hour. the labor market could be too hot. -- how did they

do with the data? seemed unfazed by retaliation for global trade partners. this morningmp taking aim at cultural experts on twitter here and they have not been doing well for 15 years. mess the's candidate, china, and others say they treated them unfairly. that will change. trade against u.s. bonds and other businesses will finally be broken. this comes ahead of president trump's meeting with other g-7 members this week. leading the u.s. economic policy coverage. great to have you with us. once it only imagine what kinds of comments you will get from the other g cyclic -- g six leaders, but it is all quite interesting that one of the key concerns here are the

agricultural united states and he is tweeting toward them. >> yes. we have heard from which an and he- finance minister heard from steven mnuchin who basically landed at g7 as the deal for aluminum tariffs have been announced and he had a real earful. at the end of the meeting on saturday, he punched it forward to the g-7 leaders meeting. trump remains to find. we heard from sarah huckabee sanders thanks is confident in his decision. it is the hope that they will back down when it comes to the coming weekend, that they will to test that there were still be time and they will be able to vince trump to climb down from these tariffs that are imposed right now.

>> described to us the degree of within the g-7 and how .nusual that is historically >> he shows up described as g six plus one of the weekend. obviously alienating your allies. trump went out of the iranian nuclear deal. at iran for some business opportunities in jeopardy, all of this happening before trump close to north korea for the plan summit. you would think this would be a time when especially rtant things are happening were trump would want have -- want to have his friends surrounding him. the reaction was a prime example of how except -- how upset canada was.

the level of retaliation, 13 from the.s. dollars u.s. is a true indication of really how angry the allies are right now at the u.s. >> china says it will cancel any agreement for five u.ss if effect.ffs go into q us a sense of how the visit to china went. is there a follow-up -- follow-up scheduled to go back to anytime soon? round ofs the third negotiations. the media and the public, we have gotten very little information. have gotten iswe that the talks were friendly and frank. we believe at some point he is briefing trump about what happened. every time the meetings take place we are reminded by trump administration -- officials that

they stopped with donald trump. even if they come back and say they agree, we know that trump has gone his own way. ofhink once we get a readout how that was, we will know that happened. we are talking about agriculture and energy purchases for china. that is what we are expecting on changes for the emy. >> in other words, the president could move the gulf coast -- again. any idea about the timing for cars and car parts? it is something the administration has floated but we did not hear anything after that. >> for the auto import investigation, it has angered america's allies. canada, japan. top sources of car imports into the united states, i think the outcry has been

loomingbut this is also over the come she's -- the countries and the allies. keeping this tract out as a threat for many months. see how it plays out. there are public comment periods that and july 20 i think. we will hear probably a lot of opposition from car companies who have cross-border operations. we will probably get a little more information as the comment time rolls out. julia: the -- perhaps he is seen as a soft touch around the world . also really it seems like he wants to do a deal. more hardline members of the u.s. administration. how do we think it plays with

president trump? he has taken a firm stance or do have steve a playersg act and other like jerry kushner, at times also they want to facilitate a deal. >>re is a recognition that steve mnuchin does play a modern role in the administration. it is our understanding that the talk andried to sweet get their message to trump and go easy on them. it is true when he appears in makes, we hear that he arguments to the president and that the end of the day, he has been someone who has been loyal to trump and gone forward with messages that trump once said. is helped with tax reform and sanctions cases.

something we can get done or estimate. it seems like it depends on who is hitting the airwaves and how we taking cues on what is half and with the impending trade war. it is hardor almost anyone to get clues on what is happening. there are often confused a pentium on the last person this book with with what they think will happen with tariffs or on traits. >> all right. our reporter joining us from washington, thank you. coming up, arianna huffington will be our guest on the apple developers conference. our addition to technology. this is bloomberg. -- addiction to technology. this is bloomberg. ♪

>> a series of tools to combat technology addiction today emily chang is in san francisco and will review one of the biggest advocates of unplugging. >> thank you, scarlet. i am joined by arianna huffington who was at the presentation today. i know you also got a first look at what at all and they'll. how satisfied are you with the new tools to combat tech addiction? >> these features have blocked andfication, geolocation, also give us clear visibility into how much time we are spending.

new featuresese are being integrated seamlessly from the operating system. you know how hard it i change behavior and what is so exciting about the announcement is it will be much easier to use them. we know we all need to set boundaries in the relationship with technology. we are having a hard time doing it. we are becoming increasingly addicted. even in the convention center here with 5600 developers from when different countries, these changes were announced, there were applause from the developers. she talked about being able to set up limits decide how much time to spend on the apps. there are people making a living

from that. it shows how far the country has changed. >> the irony is rich. at the same time, apple is releasing features that make this type knowledge even more addictive like emoji's and group facetime. just be turning off our phones? is it on the company were up to us? >> being in power, knowledge about how much time we are spending on our phones, a lot of people do not recognized how much time -- and also, apple announced important parental control.

with one touch, you can limit how much time you're trying to spend. going much deeper in this very important area. we know how difficult it has been for parents to navigate the there isy and we know an increase on mental health problems, mental excited, so this is really a moment when we need to risk on what is happening. >> at facebook today, announcing foralerts to protect users companies like facebook, as new york times has a report about the relationship to device partners going deeper than what we thought and we gave them more

data than was perhaps disclosed. how concerning is this that the data controversy only continues? >> i think this will be a very big issue. we are all coming to terms with just a much data we're giving leaderd we have been a in the u.s. data. today, they announced more features to make it easy and protect data. >> in the meantime, you are announcing a new chief -- product officer to stay. general manager, talk to us about your vision for the product given all of these conflicting input.

a for life, particularly leader for san francisco, amazing technology given how many more women and leadership -- right now, create all of these behavior micro center's to monitor witho technology and reduce stress now. they are not unrelated. and when we are occasionally it --nected, when we make it will be much is your to have a wide adoption.

all of the 80% of users are going to adopt. one billion devices on which ios 12 operate. >> we would love to get a couple of status updates on a per. for a long time, and still has not happened yet. progress on the board share. >> he has been very focused on that search because obviously it has potential in 2019. spending a lot of time on it but

frankly, often ceo's's are pressured by the board to make these decisions and that should not be the case. i'm glad i waited and pick the right one. exception of quality you need for the tough job. >> a big decision was made a few weeks ago to allow women to andue sexual assault cases yet it does not go far enough in some cases as part of a transaction and if they have other times of complaints, this to have to go into force arbitration. what you say to those think it is still not enough? >> there strictly unprecedented.

to eliminate all the confidentiality restrictions and be able to speak out about what ens the announcement that uber is also going to release real data, that is also unprecedented. see the level -- of other areas. it is incredibly significant. >> great to have you on bloomberg. thanks so much. scarlet: thank you emily chang. from new york, this is bloomberg.

♪

there has been reporting that they will be putting hello fresh in its giant store, giant grocery stores in the night states. a number of them, the wall street journal reporting that nearly 600 of those giant food and stop and shop stores. have in some of these moves recently, votes of confidence on the one hand, or, you could look at it as

potentially speculative interest in these companies. the story was all of the competition is really bad now, something good is happening anit is like well, at least someone likes the meal kit. >> it is amazing in that is exact way what is happening. s went up today the german company, blue apron shares were up today. announced it is buying home chef, the third-largest meal kit company in the u.s. for $200 million. the shares of all of these different companies went up as well. an analyst from the national bank of canada said this legitimizes the industry and illustrates the appetite of large-scale grocers for entering this space. so indeed, we have transformed that kind of environment now are the classes half-full instead of half-empty. >> are there a lot of shorts on a print? this is not an ipo that did

particularly well. >> know, the short interest is about 26 percent of float overall so yes, it is relatively high short interest. been makingit has some progress. if you take a look at the chart, thetock tumble from the ipo was about 80% and reached a record low on april 4 and it has gone up 80%-90% from those levels. the percentage gain was lot easier on that race. in the company's most recent sayings report, it did after boosting spending on marketing, it had made some progress. 786,000 customers at the end of march, an increase of 40,000. people are spending more on meal kits as well. in newer issue is that jersey where it had operating problems, it has now fixed of those problems and it has an automated system there and analysts have been confident on the progress made there.

>> there is always that. the pressure. >> julie, thank you so much. the market closes next game ins of u.s. stocks with a dow of 175. this is bloomberg. ♪ what's a gig of data?

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>> stocks are in the green, we have record highs. >> i'm julia chatterley. i'm scarlet fu. >> and i'm joe thought of all -- and i'm joe. let's begin with the market minutes, gains all around for u.s. stocks. the nasdaq is that the record high. if you look at the other major indexes, they are also scaling new heights. s for the s&p 500. givingonday which is tech shares a lift giving microsoft getup. -- github. >> people are loving the tech stocks. right back to their old spot on the leadership. >> if you look at the individual

names, apple as at a high as high -- at director a record high. 47rosoft is buying github $.5 billion. it is using it appreciated -- or appreciating currency to fund that spirit -- funded that. some negative news on the test study front for nektar. >> westech a look at the bond market in the u.s.. rates are inching higher. to year yield is up to 2.51. perhaps carry through after the strong dobbs -- jobs data on friday.

2.94 on the tenure is below 3%. it is still well off recent highs there. -- well offse and recent lows as well. calms.ing italy is below 1% and a spain is lower as well. people are more -- >> yeah, you can see the dollar reflected in the euro-dollar which briefly broke above the 117 level as well. it's wilting right now, trading below that level. you can see swiss losing ground over the euro as well. here,e you a comparison dollar is also in focus. it is slightly lower versus the canadian dollar. joe will talk about the weakness in all prices as well. we continue to watch those headlines as well as nafta is concerned.

did get justin trudeau saying the country was moving toward possibility and giving the united nation -- united name in the dairy markets. kudlow had larry overreacting to tariffs. try telling him that face to face. of the had the governor central bank saying he is encouraged by the investment despite the nafta uncertainty. it is clearly a challenge. sense, as far as e.m. assets are going on, or currency markets, is a mixed bag. the mexican peso tells a story. this is the last five days. i will give you a one-day to give you a sense. peso is still underperforming. not quite as dramatic. >> wow. >> and, finally, let's take a look at the commodities. oil continuing to be week. texas intermediate went below

$65 a barrel. is going to ease some of those production limits is the feeling now. there could be expansion of production. also, more anxiety about the u.s. and limitations on expansions. scarlet? >> oil is actually in a correction. >> we were in the low 70's a few days ago. this is a pretty notable pullback. and gold is selling off modestly. those are today's market minutes. >> let's bring in michael, the chief global strategist. we will just talking about how the nasdaq is at a record high. hubrosoft purchased git propelled that. it seemed like everyone got over their concerns about big tex. >> if you go back -- big tech. >> if you go back to a cambridge analytical and the scandal, it brought the storm clouds to the center. those have steadily faded away. when you go back, you look at

the charts, look at the xl k or the qs over the xps. all those charts arehowing, just like amazon is eating up huge amounts of retail businesses, tack is eating up the market in a way. it is my view that the way the markets have been configured, so sbx. tech, so goes the >> this yeabeen characterized by episodic bouts of topic specific anxiety. inflation in february, cambridge and the lithic, trump tweeting about -- cambridge analytical, everything.ng about been good yet, markets have been shrugging them off.

is the markets a real story? >> i think it is a bit of both. signal and noise. when you look at the vix as a way to measure this impact, it is below 13 right now. tariffs or news on tariffs and trade war is only continuing to be higher. you have to measure the pace of actions here as it relates to the escalation of second order, third order impact from trade. that is a process time. muchix has to react in a shorter, sharper timeframe than that. -- no knows the answer one knows the answer on how these will play out. to me it is like brexit, a big scary headline, but the process that brexit has done, takes months, quarters, years. we don't know. that is a hard thing for the markets. they are being complacent, but what are they going to do?

are you just going to look at this as inching up to the markets, you might wait for a long time and for a lot of ups while other factors are driving the boat. >> two great -- driving the vote. >> even with the latest announcements, the canadians particularly is the obvious one, they buy a few more weeks opportun here, does a point at whichto see countries imposing tariffs han talking about this. do then start to reprise? i don't understand the point at which markets will react, if at all. >> i think you can look at ceo surveys to get a sense on how you want to look at the markets and how they are reacting to it. there's obviously some concern across a wide variety of industries. until they get really worried and you start seeing it really -- how are they are looking at to outlook, then it is hard

get to actionable about things. there are plenty of other factors to get actionable about, but i'm not sure if this is one until you see the white of the ice. >> we talk about oil price -- white of the eyes. >> we talk about rices, now it is below $65 a barrel, it does not seem like there is anything to hold the skids on that one. how much does this change the equation for big caps versus small caps? of inflation not being generated by rising oil prices. >> from an inflation factor point of view, if you look at the five-year, 10-year, the correlation with oil prices are red hot here. a few weeks ago, when you are thinking about $80 oil, wti was a very pricing -- the price target, and that was an upward factor for yield. i'm not convinced oil bears are

going to yield. it's interesting to look at the rud ratio. it seems latethey have been lad oil prices. >> yes, for a long time. >> you mentioned right in the middle of a recent rate not as high or low as it has been. what we'll push them in one direction or another? the data has been solid. this would be the type of thing a couple weeks earlier might have caused the scare. >> the 10-year has been consolidating this range things to italy. if you look at the various factors that would drive a 10 year treasury yield, you can look at the hiking trajectory, you can look at the two-year, you can look at the inflation breaking even and the term premium. normalizing.rs are

--you look at the last the term premium is extremely low. when you talk about what will make rates go up in a scary way for the markets, keep your eye on premium. up focus given tax plans. it has been negative. i have been -- i have a theory about why that would be the case but that would be a key factor, say the term premium gets up to 100 basis points and you at that on to where we are in the yield, that will create a lot of volatility across that. julia: great opportunity elsewhere. and europe if we see an end to qe, perhaps? >> and it will make everything a lot happier because that shift back to the normal is aggressively upon us. julia: michael, thank you so

much for joining us. coming up, the presidential pardons may continue this time. president trump teases the possibility of pardoning himself. ♪

>> i'm mark crumpton with first word news. the trump administration renewed its call for the organization of american states to send venezuela and otherrs to step up pressure on the country to restore constitutional order. mike pompeo made u.s. edition clear today at the meeting in the general assembly in washington. >> there's no rich accounts

today than the full-scale dismantling of the smuckers he -- democracy. will the united states help the unjustly imprisoned hold family, our venezuela has become unchanged. the venezuelan foreign minister -- the charterating imposing sanctions. german chancellor angela merkel said she condemns a tweet from i run -- iran leader. she pledged to increase pressure on tiran. netanyahu called it "quite extraordinary."

the canadian prime minister push to legalize marijuana should ke headway. imposed and expected to pass in a final vote this thursday. nt official thatrom a canadianmakers would not adjourn for the summer until they h finished the parliamentary process. promise hassted billions in ation. will join themp president at a white house reception this evening for gold star families. those who had loved ones killed in military service. the last public appearance was may 10. tonight's event is private. global news -- global news, 24

hours a day here and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, it will be blue -- this is bloomberg. but toutive privilege the test as president trump raises the stakes in a crash course with robe mueller that could add and end. president trump took to twitter to say he has absolute power to pardon himself, not that he needs to. up, rudy giuliani had an they said that would lead to an almost immediate impeachment. circumstances, that would be a pretty extraordinary tweet from the president but rudy giuliani had a more interesting response. >> are you suggesting he might

have been talking to the president of the television? he would not be the first. some people suggested that the lawyer might be communicating geomet -- communicating a message to him through his tv appearances. this whole issue started when this memo over the weekend between trump's lawyers and mueller was leaked. that is where we got a glimpse of this broad, wide stretching the president's legal team has been making about presidential authority and why the president did not have to and howuestions to them he wouldn't obstruct justice because he is the nation's top on forstmann official and has executive powers. we and appear today with the president letting everyone know he has the power to pardon himself. that is a legal argument that has not been resolved. >> the legal merits of the

assertion aside, what are the strategic rational for bringing this to the public? why do you think they needed to make this public now? especially since trump and giuliani said it would be a bad idea. the whole issue of president to pardon came out of this memo. why this memo, this 20 page memo -- toaked to gaynor times the new york times, i don't know and i don't know who would have leaked that. i can give context on the timing. for the past five months, they have been negotiating terms of the president. has been adding this growing list of demands that mueller steam -- mueller's team would have to meet.

they said they want to see all the documents on an fbi informant before that. it seems this interview is coming to a head. this memo is really lading -- laying out why the president's legal team did not think he should be in an interview. this isthe context coming out right now. >> it is part of a regular drumbeat right now. out of the investigation, they said we are playing the games despite the fact that they believe it is unconstitutional. this information by congress to shield robert mueller. where does it stand? >> that is something that has a lot of support in congress. here's a much bigger issue than firing robert mueller. and ao report to indicate

lot of people sent to the contrary, the president is not looking to fire mueller. even though that is something he ,as raised in the past especially in moments where he has gotten frustrated with this investigation, the bigger issue at play is the deputy attorney general and the attorney general denting wind of this huge -- getting wind of this huge back and forth. and i would go on between the president and the jeff sessions. jeff sessions has recused himself, that attorney general would oversee mueller's investigation so theoretically he could box mueller in or have more authority over what he does. now, rod rosenstein, the deputy attorney general oversees him. trump could move and has raised

the idea of removing rosenstein. --hink >> shannon, thank you for your inside. >> bloomberg white house shannon, they you for your inside. sayseaking news, starbucks howard schultz is down as executive chairman and they named the next chairman. melanie hopson as the vice chair of starbucks as well. stepped down as ceo last april leaving that role to kevin johnson. this is more of howard schultz ing his ties. >> starbuck's shares down because of it. >> coming up, facebook is

embroiled in a fresh privacy scandal. we have all that the chills -- we have all the details. this is bloomberg. ♪

>> facebook is did disputing -- is disputing a report how it between apple and samsung. it is the latest controversy as facebook and internet companies grapple with backlash over the extent of how they handle user data. for more details, sarah frier, has been following from san francisco. this is an incredible addendum to mark zuckerberg's testimony before congress and before european lawmakers as well. talk us through exactly what the article of facebook does and

whether the massive collection is illegal in any way. >> what the article says is that while facebook told us that, in 2014, they stopped any data sharing with third parties, remember, that is how kindreds analytic a scandal happened, they still maintain these these devices including apple, samsung, amazon, around the world. that's allow the world -- allowed in them direct access to facebook data to allow them to make facebook experiences. if apple wanted to build a facebook app, they would be able to. those are legacy contracts from before there were app stores when the device makers wanted to still be able to make a facebook experience on what they offered. you know, the times has said this could be in violation of the ftc consent degree that

facebook had that said they would not share user information without explicit consent. it paints a bad picture about the zuckerberg testimony that said they had solved these data sharing ways in of 2014 in many which they shared this data with third parties and users were not fully aware of them. joe: the new york times article said beyond the integration of the app onto the phone and friends and friends of friends data made the cambridge analytical stuff so controversial. is there any evidence that any of that was used? that the headset makers exploited that or is it a theoretical possibility according to the times that they could have? >> it is a theoretical possibility. that is the part of the report facebook disputes. they say they had these 60 plus

partnerships as device makers over that, but they never shared any information with those manufacturers beyond what people said in a privacy setting -- in the privacy settings was ok. we've seen this before, facebook rebels with detail in the story that, overall, the thrust of it is, there are still trust issues with facebook, privacy issues with facebook, and, to answer your question, this is an issu who not exactly know what happened. facebook does not have direct visibility again to these servers to be able to see whether they share the data with any third parties. we don't have evidence of that, the times don't either, and facebook says they have not seen any examples. the fact it could have happened, that raises alarm bells per the same issues that lawmakers

around the world are asking about. >> can we pull a chart up really fast? really have 10 seconds. issues andrust concern issues. look ae rally we have seen in the facebook share pre. not big ones. sarah fry, thank you for that. this is bloomberg. ♪

crumpton with first word news. the supreme court today set aside a colorado court uldn't make a wedding who cake for a same-sex couple but the court didn't decide the big issue in the case, whether a business can refuse to serve gay and lesbian people. just as anthony kennedy said in his majority opinion that the issue, quote, must await further elaboration. president trump will visit with north korean kim jung unin singapore next week. they plan to talk about denuclearization and better relations. james clapper tells bloomberg the focus should start with the basics. >> rather than thinking about some grand bargain on

denuclearization which i don't think is going to happen, it would be useful and i think a win-win for both sides if they simply established normalized communications apparatus. mark: the summit will be the first time a sitting u.s. president has met with a north korean leader. "politico" reports director gary cohn withheld jobs numbers from president trump until close to the release. he didn't share the numbers because he was concerned that the president might comment on them before they were made public. president trump roiled the mast week by tweeting the numbers of were going to be favorable. larry kudlow, who took over, follows the protocol used by former presidents and gives mr. trump a day early. in guatemala, the death toll from the country's volcano fire, as it's called, now stands at 62 but is expected to rise. more than 3,200 people have been evacuated from its

homes. the community's disaster management agency say many remain missing. it erupted sunday. global news 24 hours a day on air and at tick to be on twitter tock on twitter powered by journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. >> let's get a recap of today's market action. technology shares help leading the nasdaq to a record high. small caps, the russell 2,000 at an all-time high. the dow adding 170 points. the s&p .5%. we at word that starbucks chairman schultz is retiring from the company. he had already stepped down as crowe last year and gave the way to -- i should say paved the way for kevin johnson to become c.e.o. so now he's stepping down at chairman of the board and michael formerly of jcpenney will take over as

chairman of the board. you can see starbucks shares down on this announcement. no word on what he's doing next. >> "what'd you miss?" -- it didn't take long for the 10-year yield to deep dip back. our next, for more i want to work george magnus who joins us by phone from oxford. george, thanks for joining us. you have a new piece you think long-term rates are headed back up. what are the underlying forces that will push yields higher? george: well, a couple things here, joe. good to be here again. i mean, i think first of all, as everybody knows, the u.s. economy has some pretty decent forward momentum anyway. got some good numbers coming through really on capital spending which is encouraging. the tax cuts are a late cycle fiscal boost which

are going to -- should give the economy i think a bit of momentum. i mean, it's been very kind of twoish for a long time. i think it will pick up some speed during the course of this year. and then of course at the margin we have a number of things which are kind of -- they kind of smell a bit like higher inflation. i know it's not very fashionable and people are really getting used to the idea this time it's different and we are not going to get inflation pick up but we also never had such a threat to the fragmentation of trade and investment. and i think this isoing to raise capital costs and think at the margin it's going to lean a little bit towards higher inflation over the next six to 12 months. just from macroeconomic point of view, i think those are kind of the key factors that will drive yields a little bit higher first. it might be the federal reserve a little bit kind of anxious. joe: i want to hone in on the point you made the

relationship between trade and inflation because on the one hand, yes, capital goods cost theoretically increase. you have new inefficiencies, bottle necks might be built in the market. with the slow of the ony, it would be stag flakesary potentially. what does it mean for long-term plates particularly with the federal reserve? george: well, i mean, so what i was kind of describing there really hen i say a cyclical impulse. there have been structural fact ures which have weighed down -- fractures which have weighed down on the risk premium which we would normally incorporate into, let's say, the 10-year treasury yield or longer maturities. e come about in the form of demographic changes, reduce labor force participation, stagnant

changes, low productivity and so on and so forth. so these things have really been very powerful depressants on interest rates actually for quite a period of t both in terms of the long-term interest rate but also on the -- you know, what people regard as the eek hich libry up -- equilibrium era. i think the longer this expansion keeps going, the more likely it is that we will challenge those assumptions. for example, you know, if you look at the demographic changes, i mean, it's true that obviously agingeans that labor force participation rates should be on citizensably a little bit -- on citizensiblely a little bit lower. gradually you run into labor shortages and skill shortages and higher wages that will come about prodick -- productivity.

i don't buy the idea that productivity is dead and we will never see a further rise. so if this expansion can keep going into 2019, 2020, which i think there's a reasonable chance that it can, then i think w reese assumptions about why the structural causes of interest rates are so weak. joe: george, you're sounding optimistic here which is pretty interesting because you and i, we had an interaction on twitter last week regarding the prediction from george sorrows about the world being at risk of another fina crisis. that was -- soros about the world being at risk of another financial crisis. hat was said differently by another. you are worried about a crisis in the coming year. what are the -- what would be the drivers of that and how do you square that with the sort of optimism that you are expressing right now on the cyclical front?

george: that's a very perspective question, if i might say so. the answer is if i can cobble together something here. there are lots of things that could go wrong in the world. you know, a lot of these ally d are things that are quantify. you know, we have just a couple weeks ago everybody was getting nervous that the euro zone was about to fall off the edge of the cliff because of the crisis in italy. things have kind of calmed down a little bit there for the time being. you know, there is a government and it doesn't look as though it will be quite as, you know, aggressive towards the euro system as people thought. but that crisis is not over and, you know, over the next kind of 12 to 24 months, i mean, who knows. we don't know whether the euro zone will kind of revisit crisis mode and there will be a standoff between an italian government that wants to get things done and a european of brussels regime that actually doesn't

really want to accommodate them. plus, of course, you know, there are other things going on in other parts of the world. so there's by 2019, 2020 we could have a new crisis surrounding brexit that could be, you know, more kind of emerging market prms if the financing of some, you know, particularly vulnerable emerging countries, there are only a handful of them, to be honest. but financing issues, if the dollar keeps rising, if interest rates keeps going up steadily, these will become more problematic for a number of emerging countries. and, you know, obviously, there are inevitable kind of risks that we've been talking about for many, many years, actually, in the case of china, in the case of the united states. you know, politicians that basically go off the handle and so on. so i think my view about soros' comment was the likelihood there will be

some kind of economic crunch at some point in the next two or three years is reasonably good. i mean, there's -- we are overdue in an economic downturn because it's 10 years ago since we had one. i do think there are lots of risks out there. it's just that it's so difficult to pinpoint them and say with any conviction, you know, a time scale which they might happen but if -- and that brings me back to the point i was mentioning about the u.s. economy, because i think the world economy is kind of a bit like the egg, it's good in parts but not so good in other parts. i think amongst them i think the u.s. represents one of the better parts. that's why i think, you know, with a fair wind this is what i think would happen to treasury yields if it keeps going. joe: a nice spot in the cycle but risks abound. george magnus, associate at the university of oxford china centre joining us by phone from od, thank you very much. >> coming up, the c.e.o. of

microsoft talks about acquiring dib hub. from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" -- microsoft acquiring an open source coding platform for $7.5 billion in stock. the c.e.o. of microsoft discussed the deal with our emily chang earlier today. >> if you think what's happening in the world ound us, computing is in everything. it's part of precision agriculture or medicine or personalized education, personalized banking and is driven by software and

every company is digital. linkdin staff, developers in nontech companies like retail, energy, is growing double digits. 25% higher growth rate there than even in the tech companies. that shows we are in the very early innings of what is going to be a set of tools and staff services that are required to empower every developer out there. so that's the real strategic rationale. if you think of microsoft, we have been a developer first company. that's how we got started with the developer tools. now we're all in on open source. and so with that really becoming together github and microsoft makes a lot of sense for us. we can contribute a lot and stay true to the original ethos of github and that's how we'll operate going forward which is being developer first.

emily: github has had issues finding ways to grow significantly, turn a profit. they had $2 billion just a few years ago. what will microsoft do differently to justify this $7.5 billion price tag? >> you know, we feel very, very good about the growth rates github has. whether you are a student, small staup, a -- first working in a large company, to be able to use github as a free service and then they have done a good job having a premium model going from that free service to paid for organizational use. we think we can scale that by first staying true to that service up and making sure it's an open platform for all tools, all clouds, all platform targets as well. so we think we can bring a lot in terms of scale and reach to additional

customers and additional channels but we feel very bullish what we can do for developers just on organically growing github. emily: there has been some consternation in acquisition. some critics out there saying this is a sad end to github's independence and the list of reasons why is endless. how do you reassure them and bring them a lot? >> it's a very critical element to this. we are very committed to keeping that developer-first ethos of github going forward and that's why we have really, you know, between chris, who is the c.e.o. of github and me we decided to run this company independently, even postclose. operate it as an open platform and matt who came to us from zamran has a lot of open source credentials. he will be the c.e.o. postclose. he will be the new

maintainer, if you will, of github and will stay true what the gethub community really has -- github community really has. we have to earn the trust, no question about that. our actions from the recent past should help as every open source developer of what microsoft intends. of course, they should measure us by what we do going forward and hold us accountable. emily: speaking of trust, there are new revelations today about data facebook shared with its device partners. you know, these ensuing controversies could have an impact on microsoft. how concerned are you about increasing tech regulation? >> i mean, overall, i think each company is different here in terms of what their core products are and core business models are. in our case, our entire business model is all about being custodians of data and providi services to both consumers and

organizational customers. and trust is everything. in other words, we have to secure the data and use the data to benef customers because that's really our business model. without it there is no microsoft and no microsoft products. so me, making sure that we live up to the high standards and expectations of our customers as well as the regulations that are already in place. take gdpr. in fact, we are taking the core tenants of gdpr and making it true for customers all over the world with our services. that's the approach we are going to take going forward. emily: you make big buys including linkdin. i was speaking with your chairman john saying he was more supportive of big buys that are as successful as linkdin. will we see you make more buys like this? netflix, given it's the only big tech giant without

a huge foot hold in the streaming face. satya: our first is organic growth and investments. we are big spenders inrd and that is the core. we are always going to look for secular growth markets hether it's mindcraft or linkdin or github. >> and president trump just moments ago tweeting this is the greatest economy in the history of america. next, we'll look at some of the factors boosting and dragging on the labor force. from new york, this is bloomberg. ♪ ♪

>> president trump tweeting about the job market. he said in many ways this is the greatest economy in

the history of america and best time ever to look for a job. let's explore that with matt. no, i want to talk to you specifically about something. the fact that some have drug testing standards and also relaxing restrictions on hiring those with criminal convictions or felons in the united states, talk us through this. >> yeah. that was an interesting antidote in the feds base report they put out last week. we have been writing some writing not only are businesses starting to hire former felons but going directly into prisons and hiring people who are still in prison to work. mostly in manufacturing jobs is kind of where we're seeing this. it's a really interesting trend. some people say tightest labor market ever, right? this is a clear sign the labor markets are getting

tight. this is something we were discussing friday, to what extent is this actually less about like the most demand for labor ever and just more of a story how much policy has destroyed the supply of labor over the last several decades? the first chart we are looking at is from the latest report from the bureau of justice statistics and shows incarceration rates over the last several decades have really surged and are multiple times more than they were in the 1970's. a large part of this was the war on drugs and a lot of stepped up enforcement, various other things. this is something that has really damaged labor supply and especially for african-american men. and so this is one of the things we were looking at on friday, that high elevated nonemployment rate especially for african-ameren. it wanted to show you guys another chart. >> labor force participation rates among african-american men and the yellow line at the bottom here, matt, is for black men aged 45-54.

79.5% compared with the blue line at the top which is for black men aged 35-44. >> yeah. so the bottom line, labor force participation for prime working age african-american men is down a lot from before we sort of saw that major trend start to take effect in the 1980's and 1990's. what you can see, of course, the far end of the chart, these are starting to come up now over the last two, three years or so. this is what kind of what you're seeing is part and parcel of that employers are going into places where they haven't in the past and so that's why we're starting to see these stories them going directly into prisons. of course, as the last chart showed is part ofhe reason if you put everyone in prison, then you might have to go to those prisons in order to find labor once you get to that point. so that's just kind of the big picture there. joe: so even though they've been rising, especially at this stage of the cycle, incredible ground lost in the last several decades?

matt: yeah, the labor force participation rates are low. we start to see antidotes some firms are relaxing standards, starting to look the other way on drug tests, if that's the big thing holding back lake supply and that's the shift we are starting to see that trend has a lot of room to run and could open up a lot more labor supply. >> it reminds you a chart of one talked to us about one in three americans have been arrested by the age of 25. they have been arrested for nontraffic violations. the reason you are looking for arrests or some kind of criminal activity here on someone's resume in the past, when you have stats like that it gets tough to find somebody that's completely clean here. matt: yeah, of course. those labor participation rates don't include people whe in prison but what they do incall the people who have since come out of prison and having trouble finding a job. joe: all right, matt, thank you very much. matt: thank you. joe: and coming up, what you need to know for tomorrow's trading day.

this is bloomberg. ♪

scarlet: "what'd you miss?" -- the stocks rising at record highs. now, coming up, don't miss this, tesla holds the annual shareholder meeting

tomorrow. joe: and i will be watching for the report. see if trump tweets about it. julia: our special cove of the bloomberg investment all day tomorrow including ntities of harlow group. i bet he doesn't, by the way, joe. scarlet: that does it for "what'd you miss?" . joe: have a great evening. this is bloomberg. ♪

emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up in the next hour, apple rolls out software upgrades from the iphone to the mac, tv and watch at the worldwide developers conference and fires a shot across the bow at facebook. we'll bring you highlight and reaction. plus, microsoft returns to its developer roots with its 7.5 billion dollar purchase of github but not all developers are happy. i speak with microsoft