rhetoric. president trump says the u.s. will stop wargames. kim jong-un will work towards complete denuclearization. investors want details. it will only take one member to bump the fed to four hikes issue. test, 15 amendments head to the house of commons for debate. onemost important is the that gives parliament the right to vote down the final deal. david: welcome to "bloomberg this tuesday, june 12. alix: t markets took it in stride. on details, but the fact that it happened and there was a statement is a huge win. david: there was the question whether they would have a written statement. they laid out at least

principles. alix: they shook hands. david: eventually they smiled. alix: markets still. the latest read on inflation today. nothing dramatic came out of the summit that would spook markets. -dollar up modestly. at 2.96.ar yield .rude lighter get the opec report in the next h. vid: president trump is about to leave singapore, but before he departs, he gave an extended news conference. kimy meeting with chairman was honest, direct, and productive. start a newred to history and write a new chapter

between our nations. there is no limit to what north korea can achieve when it gives its nuclear weapons and embraces commerce and engagement with the rest of the world. this could never take place. it is now taking place. it is a very great day. it is a very great moment in the history of the world l be stopping the wargames , which will save us a tremendous amount of money. this is complete denuclearization of north and be verifiable. we signed a comprehensive document, and i believe he will live up to that. they want to make a deal. that is what i do. my whole life has been deals. i do great at it, and that is what i do. david: we now welcome juliette saly. were going to put up those bullet points. you said they made a deal. what is the deal?

exactly. we heard a lot of rhetoric from president trump. missing from this record were those keywords that m pompeo said were somportant, complete, verifiable, and irreversible. they did sign a pledge towards peace and we have had positive tary from world leaders in the region, particularly china and south korea. the south korean president saying president trump has achieved what no other world leader has been able to deliver. china alsogratulating the pair. the singaporean prime minister saying today's summit was important and congratulating the pair. it all went off without a hitch. they met at 9:00 p.m. here in singapore. the body language very positive between the pair. a lot of commentators saying

president trump seemed more at peace with a dictator than he did g7 over the weekend. there has been a lot of criticism as well. we know this is being played out on twitter. saying, did we just buy the same horse three times? market reaction muted in asia. south korean stocks closing slightly lower. yesterday, we were talking about that uptake in construction stocks that seem to come off today. and the pairig day have met and shaken hands, but are we going to see anything? sayingnt trump sing do denuclearization will take some time. jong-unht we saw kim heading into a nightclub less

than 12 hours before he was ,eant to meet president trump so it has been an extraordinary turn of events. there has been some historic pledge made towards peace. alix: what will happen next? absolutely. this is what everyone is asking. president trump had a lot of rhetoric in his press conference, saying denuclearization will take some time, but everyone wants to see firm analysis. will we get access to north korea? ll we see these nuclear sites broken down? it seems these two have pledged towards this. the u.s. said they will keep sanctions on north korea until they are certain there are no nukes, but this is just the first step towards what we hope will become denuclearization and the move towards world peace. you so much.

juliette saly reporting from singapore. president trump said in his news conference that at the core of his discussions with kim jong-un was the commitment to denuclearization of the peninsula. welcome now sam nunn. he joins us from washington. welcome senator nunn. great to have you with us. we want to talk about what it means to denuclearize and that process, but first or overall reaction to this summit. >> i think winston churchill observingif he were that this was the beginning of the beginning. this is not anywhere near the completed agreement. be attackedy can from the right and the left. if you look at where we were six months ago heading towards possible war with hundreds of thousands if not more killed and

you look where we are now, i think there has been progress. i think there is hope here. could it breakdown? yes. do we have gaps to fill? yes, we do. president trump learned a great deal of implementing this type of agreement. there has been a lot of educational process in the last three months. have we made some concessions? yes, has north korea made concessions? so far i would call it a faith-based, trust-based agreement, but i believe we are making progress and have moved away from the precipice, and hopefully the momentum can continue him up but there are large gaps. david: give us a sense of what comes next. you have been through this process of denuclearization. that process get

started, how long does it take, what is the process? >> step number one is to agree on the definition of a nuclear station. it is not clear what the north koreans mean. i think it is clear what president trump means. the second thing is we have to , a declarationry of the weapons of mass destruction that have been produced, the nuclear weapons, the nuclear material. aird, i think we need verifiable agreement to stop the production of usable nuclear material. fourth, we have to have a comprehensive verification process. quick,ll not be easy or but we have to understand that everything has to be verified if we are going to have confidence in the future and there is going to be at peaceful korean peninsula. david: take one of those items. the inventory of weapons of mass destruction. that should not take long at all. they should know what they have.

what they willw submit to us, but do we know it is accurate? that gets into verification. i think we have to have some cooperative work. sponsored legislation that helped bring about a great deal of reduction in the former soviet union, including three countries getting rid of all the new killer weapons. it is a lot of hard work on the ground. one of the mossuccessful parts is cooperation, having people help the north koreans. thepeople who produce weapons need to be the ones who lead the way to take them apart. we need to monitor and verify it. we have to make sure we have the right to expect places all over north korea that may be suspicious. they have a lot of underground work. we will have to make sure that the weapons that are taken apart , the material coming out of them, are secure, and we have to

moving awayend down from weapons using nuclear material to uranium, much lower in rich, and we have get rid of that in the long run. we also have to tackle the emical and biological problems there. wereurse the north koreans a huge conventional threat before they ever had a nuclear program, so this demilitarization is beyond denuclearization, but it will take time and is step-by-step. there were also have to be as sequence between the north korea aspiration for relief on sanctions and our goal of getting rid of nuclear weapons and material. here again, the approach can work, because in that sense we pay for performance. they perform, destroy, get rid of things, and we verify. that is the process i see ahead, if things work.

of course, there is a long way to go and as president trump said there will have to be other meetings and we will have to have a delegation of authority, the top lieutenants from north korea and from the united states. we have two most of all keep our allies close. know what's have to going on. our south korean friends need to be in on every step. the united states must have a concept of cooperation that agreement as to the endgame , and we need to get the russians involved too, so this is a global effort. , notll affect the security only have korea, but the whole region. david: as you say, the beginning of the beginning. senator, thank you for your time today. that is senator sam nunn. now, much more on this top story in first take next. this is bloomberg. ♪

david: now for the bloomberg first take, the three stories we are watching force first. trump, second,t cpi and the fed, third, the brexit bill. guests.us now or our just heard from sam nunn who said it is the beginning of the beginning, but it is the start. they made progress. >> the things in the declaration were things north korea said before and never followed up on in previous agreements. uib.statement is a damp sq

there is a lot left undone and unsaid. a lot of recognition for kim jong-un, sits down with the president, gets guarantees on military exercises, but to see what the u.s. gets out of it just becomes said something had happened for the first time does not mean it is historic. we will have to see if there is something lasting out of it. you can say donald trump did not blow up the world, and as winston churchill apparently jaw is betteraw than war war. strong oil demand earlier in the year, 1.6 million barrels, now they are saying they do't have a good read on how much demand will be added. they see a window of 1.7 million barrels a day to the upside or

downsi, which makes their call on opec have to pump in the back after the year uncertain, and oriole takg a leg lower on that. saudi april oil demands had the biggest drop ever recorded, so there is feedback into higher prices and demand. much more on this throughout the show. really interesting headed towards the opec meeting next week. demand uncertain. next topic withne the fed. inflation expectations and where the fed is positioned, peggy, how will the markets be prepped for that? >> i think the fed moves are priced in for a hike after tomorrow's meeting. seell question whether we four rather than three rate hikes this year. i think investors are ready to look ahead.

this will move rates for consumers on loans, student loans, housing loans, car loans. bond funds take a dive so far this year in terms of consumers panicking as rates rise, but we will see whether that changes as rates increase. alix: mike, the talk one to four rate hikes this year? >> the markets could read it that way. we get new economic projections from them and they raised inflation expectations. you can also see a market move. doesn't look like lower unemployment will have a lot of effect. another thing to watch is for guidance. they have been saying the level of interest rates will be below the median target and accommodation will continue for some time. if they drop that, that could be significant, a move that signals

they are getting closer to neutral. david: let's go to the u.k. for a third story. they are debating in parliament. i think they had a live shot of them debating. these are the two big issues. number one, do they stay in the customs union? theresa may is dead set against it. the other is they have to bring a final deal back for approval. that amendment was inserted into the brexit bill by the house of lords. theresa may very much against it. control ofwould take the negotiations if they vote down the agreement she has put together, and that takes power away from her. it is very controversial. alix: they are really debating. it is almost a lot like our congress. alix: that's true. usually they are all feisty. out,, the data the came

the unemployment picture still go in the u.k., but wages sappointed. >> we saw the pound reverse on that news earlier today. it is interesting to watch. europes like a summer of with italy and the negotiations around brexit. i can't believe it is two years since the brexit bill came down. theresa may seems to be walking a fine line between pro-eu lawmakers and pro-brexit lawmakers, both of which have the power to oust her. david: thank you very much. coming up, the showdown in parliament. alix: theresa may fighting for control over the brexit rule. the sterling cable rate 1.33 is how we print. this is bloomberg. ♪ is bloomberg. ♪

alix: voting begins today in the u.k. with the brexit though returning to the house of commons.

that is a live shot. days of debates. the main amendment is number 19, known as the meaningful vote amendment, which gives parliamenter to take control of brexit if theresa may's deal is voted down. joining us for more is bloomberg's brexit editor. can you walk us through the things they will be voting on them why they matter? admin meant is important because as proposed it hands parliament an enormous amount of power to direct the negotiations if when theresa may comes back from brussels with her divorce bill, if parliament rejects that deal, it would be up to parliament to decide how to proceed. may said this would tie her hands and that it would encourage the european union to give the u.k. a bad deal. the brexit supporters feel they awaytheresa may to walk

without a deal if negotiations come unstuck. this amendment would stop the government from going for the chaotic no-deal brexit. that is why it is important. to say i feeling like there was also questions about theresa may's leadership. is that in question again? where are we with that conversation? >> if she loses the vote, then it is a blow to her authority, but also from the point of brexit supporters, if she loses the vote or makes concessions in order to not lose the vote, that will incite the anger of the pro-brexit fraction of her party because they feel strongly she should be able to walk away from a deal. if she loses, questions will be raised about her leadership. many questions have been raised over the last year and she does struggle long. last night, they did come to a last-minute agreement on the

customs union. they found some language everyone can line ehind you so that fight has been postponed for another month. alix: thank you so much. today we might. joining us now from chicago is cio. brown, northern trust as an investor, you have to make calls based on a ftse at a record high and cable stuck in a range. what do you do? >> we have cut back in our international developed equity positions, including u.k. and european equities. we are slightly overweight, but preferred u.s. assets. prefer to take those investments and put them back into u.s. high-yield alix:. something we have seen has been the rally in the dollar, causing

sterling to take a leg lower. if the dollar has topped outcome is there a relative value to be made? >> i would not say it has peaked. we expect the dollar trade range as a broad-based index will be well behaved. looking at international equities and factoring a large currency component is not time well spent. it will be a range and not as important as relative earnings advantage that u.s. equities have over the rest of the world. case has been the global synchronized gr recovery and that no matter what , thens with brexit stronger trade universe will support equities. what do you think about that thesis? does the globalized synchronize story still hold for you? >> that is more the story from

the last couple of quarters behind us. the synchronized growth story when there was still momentum there will be positive for all risk assets. the way we look at synchronize growth around the world and would assign a low risk of a recession to europe, the u.s., or china, that that bodes well for all risk assets. be view is you want to overweight global equities with a preference for u.s. assets. you will beowne, sticking with us. the fed's two-day meeting, what investors should be looking to as a service as yields need to rise to 3.6%. this is bloomberg. ♪ . ♪

alix: it is an historic day when it comes to the u.s. and the markets are pretty calm. the nfib sitting at the highest

-- second highest on record. that could bode well heading into the fed meeting today. european stocks pretty much flat, the ftse up by .5%. the german investor expectations valley and again. i feel like there is a rotation of a little bit of hard, weakness in that data. david: so many adverse headlines on trade right now. alix: in other asset classes, it is also pretty calm. 3, 5 auctionong the other day. 43 basis points is the difference. conflicting headlines will be dominating that currency pair. the south african rand in there as well. always a good idea to keep in mind what em currencies are doing. crude off by .3%. opec is uncertain how much oil

the market will need from them. are uncertain by 1.7 million barrels a day. david: talk about volatility. what ist an update on making headlines outside the business world. emma chandra has business world -- news. president trump and kim jong-un have signed an agreement promising peace but so far there is not much detail. there is also no timetable for north korea to denuclearize the peninsula. meanwhile, president trump says economic sanctions will stay in place but is scrapping the military exercises with south korea. >> this -- essay us a tremendous amount of money unless and until we see the future negotiation is not going along like it should. president also said kim agreed to return the remains of

u.s. soldiers killed in the war. larry kudlow has been hospitalized following what is being described as a mild heart attack. a white house spokeswoman says that he is doing ok. kudlow is 70 and has been playing a key role in the trade talks with china. a dispute in opec on whether to increase production is getting wider. iraq has joined in iran and venezuela in opposing the proposal. opec and its allies may resolve the issue when they meet indiana. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. the federal reserve begins its two-day meeting today and it will only take one member to bump up the median. this year to four. the white line is for 2018,

almost 3.5 hikes. the yellow is next year, 1.5 hikes. joining us now is stephen stanley, one of the most hawkish on the street, calling for four this year and three next year. bob browne is calling for only one this year and one in 2019. stephen, make your case for four this year, three next year. >> you have been on implement rate below 4%, growth will be strong in the second quarter. the fed needs to get to neutral pretty quickly. they have been very easy for a long time and it is time to get back to neutral. i don't think they would accelerate beyond what they have called gradual. i think four is the cap for this year and next. alix: bob, make your case. bob: we think the economic growth we are seeing over the next year it is the strongest over the next five. we acknowledge the strength in

the data today but we look at where the environment will be a year from now. when we look out one year and encourage the fed to look at one year -- and i'm sure they do -- we think inflation will be moderating, growth will be lower, the fiscal st off and the rest of the world will also be in what we call a lower growth channel. if you look over the year it is hard pressed see the fed being aggressive the on what we expect them to be doing. david: that is a year from now, what about today? moreve cpi in a little than one hour from now. if they are robust, isn't that running pretty high? we went for years with inflation below the target. people like charlie evans and others have rightly pointed out that seeing numbers above 2% for a few quarters should not be viewed as a threat to one of the fed's mandate of stable prices.

it should not be seen as a ceiling but basically a target. we get a couple of prince of 2.25, 2.5, that should not be an issue. certainly is not for the bond market, when you look at how flat it is and where the 10-year is trading one year from now. clearly, the bond market is not worried about long-term inflation. i think bob is right, it inflation moves about 2%, the fed will not pull the fire alarm right away. but there is a key distinction. ,f the inflation number say 2.2 and they expected to stay there, not a problem. if it continues to accelerate, i think it becomes a problem. i would also say, to bob's about the market -- point about the market, talking about 2.5 inflation, that is a low interest rate, which is part of the problem. the monetary policy environment

remains very stimulative. david: shouldn't the fed be concerned that they have not seen all that much yet, there nflation? bob: that is one of the issues made byds to be decision makers. whether or not the stimulus will create this virtuous, sustained cycle beyond 2018. we think it's premature to be that optimistic. we think the stimulus impact will be most felt this year. when it is really doing is extending the life of the cycle as opposed to adding to the magnitude of it. we think over the next five years economic growth will be in the low twos. just to reiterate, the best growth is going to be this year, not a lot of momentum going into 2019. alix: i think when you are both in cap to learning is at the heart of the debate for the fed. if you code into the bloomberg, that is where we are.

the blue line is the fed funds target rate, the white is neutral. is that i'm going to go above neutral or stop at neutral? that is a brainerd versus bullard type of debate. need to be there for the fed to go along? bob: i don'we are ving this debate. we have already overshot. percentage point below e fed says the ng run on appointment is. how do you get unemployment that have equilibrium level you to move into restricted's territory at some point. the other issue is where is neutral. there is a fair amount of disagreement on the committee about that. i would certainly tend toward the higher end of the spectrum. to 3%. says it is closer i'm not sure that's high enough. there are others that think it is lower than that. that one, the answer is

empirical. we will know when it is neutral when the economy starts to slow down. david: we are admittedly at really low rates. the absolute rate is really low historically. the fed has a fair amount of leeway if they want to increase rates, given where we are with financial conditions. if that's true, don't they want to get it up a little higher for the next downturn? stating thatsay rates are low is a relative observation, relative to history, relative to the rest of the world. where rates are in europe, japan, switzerland, u.s. rates are actually quite high. the fed's mandate is to focus on the u.s. but it cannot ignore those feedback loops that will affect the u.s. economy where higher rates in the u.s. start to create issues overseas.

stephen a good point about what is the neutral rate. the fed has to go through this discovery process. we will not know unt after the fact that rate was. people will be using empirical data five and 10 years from now. but from a public policy perspective, do they want to be that adventurous and find out in an environment of structurally low inflation -- from our point -- that that rate is actually lower than everybody thinks based on historical experience? our view is inflation is structurally low, they should be really thoughtful about the application of the phillips curve. if the phillips curve was a true theory, japan has violated it numerous times, let alone what is happening in the u.s. i would encourage the fed to be prudent and deliberate and to be cautious about being too aggressive in this cycle. david: stephen stanley and bob

browne, thank you both for being here. coming up, former honeywell ceo david cody says he is kiss -- ready to kiss 100 frogs in his new role at goldman sachs. you are coming in today, listen to our col tom keene and jonathan ferro. tom week, lisa will be with keene from 7:00 until 10:00. live from new york, this is bloomberg.

emma: this is bloomberg daybreak. coming up in the next hour, bob steele, the perella weinberg ceo. now to your bloomberg business flash. analysts say the chinese smartphone giant xiaomi could end up being twice as expensive as apple wanted goes public. morgan stanley says it should trade at a premium because of market share gains and faster growth trajectories. morgan stanley and goldman sachs and the company could trade at more than 30 times is projected earnings, roughly double apple's valuation. the debut of the world's biggest maker of electric car batteries has produced its third billionaire in today's. the chinese company known as catl rose 10% in its second day

of trading. that pushed the net worth of shareholders pass the billion dollar mark. the founder and his top aide became billionaires monday. publishers around the world are stepping up the criticism of a new facebook will see. they are urging mark zuckerberg to reverse his decision to categorize the promotion of news articles as political content. publisher trade groups say that lumps third journalism with thank you. alix: turning now to wall street beat, three things that wall street is buzzing about. david cody totaps lead its acquisition and deals. says he is prepared to kiss 100 frogs. second is the big bet on boston. striker approaching boston and finally, president trump says the beaches are beautiful

in north korea, has a lot of potential for real estate. david: he knows real estate. he is a developer. joinus now is jason kelly, david cody, goldman sachs. beat is like wall street writ large. david: david cody made a name for himself making acquisitions a lot of companies that were overlooked, and really built honeywell up when it was not in great shape. him, and can we say, this is a ceo's dream job. he does a good job, they retire, they leave their position, and goldman sachs cause you up and says that stuff that he used to do, do that for us. we will give you an office, all the money you want. we will raise money for you. $600 million. it is a little bit like warren buffett.

he is not looking to take them over as a private equity guy. he is moving into family companies, keep them in. >> i'm glad you mentioned private equity because this is a private equity-sih bottle. ish model. there have been a whole series of people. seeing goldman get into this business is fascinating. david: specifically in industrials, which david knows, and he says they are underpriced right now. alix: how can he compete with pe 's? there is so much money being raised in the space. it is the long-term peace and also this ibility factor of the combination of cote and goldman.

they are backing him with all the assets, literally and figuratively, that come with goldman, and the dealmaking expertise. the global reach of goldman, being able to tap into those relationships to get the deal done. the globalthe one tricky thing a noncompete through 2023. apparently he needs to get a letter from honeywell anytime he goes up against something that threats to their business. alix: our non-competes even real? david: he is a straight up guy. alix: it is not like he is going to go and ruin a competitor or anything like that. let's talk about somebody else that is in the now, a traitor that bet on a boston scientific striker deal before the deal was reported.

he or she bought some call options on boston scientific and made bank. >> i read this and i thought, are we watching the movie "wall street?" what is happening here were people would think, nobody will notice if i buy all of these options. the fourth day on that chart was when he was among the options. friend andgy is your not your friend in these cases. there is not a lot of patience or understanding about the sorts of things. himd: is in the sec calling right now saying, why exactly did you buy this? >> i have to think so. dealoston scientific reflects that we are still in a very robust period for m&a. david: let's return to the big story of the day, north korea, the summit in singapore but specifically our president has spotted some prime real estate. listen to what he said in his press conference. >> they have great beaches.

you see that whenever they are exploding their cannons into the ocean. wouldn't that make a great condo ? couldd of doing that, you have the best hotels in the world right there. david: some pretty beaches. we see them when they tested their missiles. to be clear, that was the president of the united states, not alec baldwin playing him. when you set that headline around, you said rightly, that is a blooper headline. alix: literally, trump tower sign on the beach in north korea. that is basically what he is saying. that is not out of the realm of possibility in the next 10 years. trump'sng aside organization presumed ambitions here, this is a potentially huge market. this is the ultimate frontier market. david: don't underestimate the market -- the idea that this may

sell to kim jong-un. he may think this is not a bad deal. alix: he lmaker. >> you have to think other dealmakers are looking at the similarly. part of the pitch apparently that trump made to the leader of north korea himself directly was look at what your country can be. david: set him down and gave him an ipad. alix: here is a video that i made for you. >> sizzle reel of what we can do. alix: coming up later today, more and dealmaking. the nice hedent of will be with us at 11:00. we will be talking with bob steele about m&a coming up. oil falling after opec highlighted uncertainty in the demand monthly report. and it did increase output as well.

if you have a bloomberg terminal, check us out on tv . this is bloomberg. ♪

alix here is what i'm watching. oil, but a good reason. opec was out with its monthly report highlighting some demand uncertainty in the market. oil is taking a leg lower on that. joining us now is our chief energy correspondent. talk about this demand uncertainty they see in the back half of the year. >> it is very unusual because usually what opec publishes every month is a number for how much the cartel thinks there is demand for its own production. this time it's giving a range of uncertainty. theap is huge, 1.7 million barrels a day. productionombine the of libya and qatar together and you don't feel the gap. what is new report will do is

give ammunition for the countries that support production increases. they will say it is too early to know, we don't know what will happen in the second half of the year for our own crude oil. we should not do anything at this upcoming meeting, we should wait and see. that is what the report is indicating. alix: even a few weeks ago i was highlighting the differential between what opec sees in the demand and what the iaea sees. what caused the shift, economic slowdown, higher oil prices? >> a combination of both and more production coming from the u.s. remember, this is demand for opec production. if the u.s. is pumping more oil, there is less for the countries to produce. there is also a huge uncertainty on how it will be the second half of the year. we have the beginning of a potential trade war between the u.s. and several countries, and all of that is making opec more

cautious on the outlook for the second half of the year. alix: if you come inside the bloomberg, this is a look at the russia supply and opec total production output. we also learned that saudi output was over 10 million barrels a day for the first time since october and there are reports that some russian companies are starting to cheat on the deal. >> we have seen rosneft telling higherrs it was testing production. they were able to put 75,000 back into the market. saudi arabia told opec this is their own production. 10 million barrels a day for the first time since october. i think we have two very interesting meetings coming. one is the full opec and not opec meeting in vienna, but this week in moscow, their opening up the world cup.

russia is playing against saudi arabia, and that is giving an opportunity for the energy ministers to watch the game together. i don't know if they will be talking abouhe oi market, how much both countries are interesting -- increasing production. probably the latter. alix: thank you very much. great to see you, javier. bob steel will be joining us. his perspective on how the summit will affect dealmaking and how business sentiment will be affected, going forward. this is bloomberg. ♪ rd. this is bloomberg. ♪

>> people thought this could never take place.

it is now taking place. alix: light on details, heavy on rhetoric. president trump says the u.s. will stop korean war games in kim jong-un let us to work toward complete denuclearization . investors want more details. from three to four. four this bump toone member to year. the markets will learn the fate of the at&t-time warner deal. what it will mean for other vertical mergers. david: we are taking a look at president trump as he, a short time boarded air force one to return to washington, d.c. he is loving it. he went on and on in that press conference, he asked if he could keep going. he was there for over one hour. he is very proud of what he accomplished. he is at the center of the world

stage and does not mind being there. alix: a fist pump. david: welcome to "bloomberg daybreak: americas." i'm david westin. alix: the markets are pretty calm. today. meeting starts investors are overweight u.s. stocks for the first time in about 15 months. there is some optimism on the sidelines. euro-dollar pretty much flat. at 2.97.ar a little bit of a selloff. the 30-year is where we will see a selloff today. crude a little softer after questions about opec demand. david: time for the morning brief. 8:30 this morning, we will see the cpi data for the month of may. , $14 u.s. treasuries billion in 30-year bonds. and after 4:00 today, a u.s.

district judge will announce his decision on whether to approve or block at&t's purchase of time warner. alix: david has been waiting for this for months. president trump has l singapore to the united states. before he departed, he gave an extended news conference going over his discussions with the north korean leader and all that he believes they accomplished. timy meeting with chairman was honest, direct, and productive. we are prepared to start a new history and we are prepared to write a new chapter between our nations. there is no limit to what north korea can achieve when it gives up its nuclear weapons and embraces commerce and engagement with the rest of the world. that really wants to engage. people thought this could never take place. it is now taking place. very great day. it is a very great moment in history of the world.

we will be stopping the war games which will save us a tremendous amount of money. this is complete denuclearization of north korea. and it will be verified. we signed a very, very comprehensive document and i believe he will live up to the document. all i can say is they want to make a deal. my whole life has been deals. i have done great at it. that is what i do. alix: joining us from singapore is juliette saly. walk us through what is next. president trump was saying that he is sure it is going to be complete denuclearization but everyone is concerned about is what he called that very comprehensive document, which is 426 words, mrs. those complete , verifiable, ate reversible. the age of national community

now saying what does denuclearization north korean world? we know that what kim walked away with was being treated as a world leader, tread like a rock star in singapore. will stopaid they those south korean games, and we know he has been invited to the white house, but what are they getting in return? they will be working toward that historic pledge peace. that is what they site. what does the new irritation in itself mean? that is what we want to know. they also signed, saying they would commit to the return of pow's and mia's. the president said the discussion of japanese abductees was relatively brief. so the world now saying, will we see a breakdown of these nuclear sites? certainly, a historic day here in singapore. the body language between the pair incredibly strong. there has been strong commentary coming through from world

leaders. south koreans president saying president trump achieved what no other leader have been able to do. however,commentators, have said, did we buy the same horse three times? it was a very brief document that was signed. alix: thank you. david: t world watched as president trump met with kim jong-un. now the world begins toout what it all meant. to help us begin the process, we have b he brings the perspective of both the private and public sectors, having served as ceo of , as well as undersecretary for the treasury, and of being married to michael bloomberg. so we have to treat you nicely. >> that would be unusual but i appreciate it. david: give us your initial thoughts. we have seen this unfold, we have an outline of what they agreed

what is the significance potentially of this? bob: let's pull back a second and think about this. it was always identify that north korea was one of the knotty as problems we had. if what you read is true, departing president obama handed the baton to incoming president trump, then he identified this as really a challenging issue. factu stop and accept the that the two have met, there are conversations, there is an outline on how to go forward, then it has to be better than where we were. the first bottom line is this is a positive and we have to before it. keywords,dentify the verifiable denuclearization, and all of those things. we will have to see how that spools out. it is not set, it is not in lockstep but it is a significant positive that we should be pleased about. david: one of the questions

being talked about is what did kim jong-un really give and what did he give that which he had already agreed? are there questions about who came out on top? bob: i think trying to parse iss as a relative gain game not helpful. i would default back to what said. at tn this is good for america. they are engaged, there is an better prospect for a path forward than before the meetings. david: at bloomberg, we focus on business, financial markets. they don't seem to be reacting at all. is that as you would expect it to be? unfold overwill time and this is a long-term issue and will not be reflected , but will develop over time. at the margins, it has to be positive. it feeds into company sentiment, business sentiment, i want to show you capital spending intentions in different areas of the u.s.

they are all starting to roll over. what are you hearing? bob: when we speak to companies and executives, people are in general, forward leaning. the business environment is good . this year we will have a about 3% gdp growth, interest rates are low. so ceos are leading into opportunities at the margin. affectssee how this capital spending but when you have the conversations with ceos , they want to talk about ways to get on the front. there are times when people are on a neutral or back foot, but today people are moving to their front foot. david: is that anticipating a growth in demand? basically, ceos invest in capital plan equipment when they think the demand will be there. do they anticipate that the man will be there for them? bob: i think it is that. as you know well, they have a $2.6 trillion windfall from the tax bill.

next$2.6 trillion over the five years comes from three sources, repatriation, lower tax rate overseas, and lower tax rate in the u.s. that also encourages people to be forward thinking because they have more cash than they had. alix: wheu talk about front foot, what does that mean, bold on acquisitions, organic growth, does that mean being price competitive? bob: it will be a juicing to get your reaction, too, because you visit with people regularly. onre are two new issues people's minds talking about corporate strategy. one is how do i get in the right position with regard to innovation. the last time i was here i used a phrase, it used to be that innovation and technology was a vertical. it is now a horizontal affecting all business. look to change their business model, ask how they can

become more innovative, look at technology. number one, innovation is on their mind. number two is sca how can i have more access? this relates to the first issue of innovation, data, knowledge. the more ways you can be connected, the return on that is high. innovation and scale are the two ideas i hear mostly in the minds of ceos. david: when you say innovation, i see tech. ceo's notalk to specifically in the tech business, is a defense of our offensive, can it be both? bob: most of the conversations are offensive. you could pick any one of 10 sectors, let's take retail. what is it going to be like in 5, 8? we will have to see but everyone knows that there will be more knowledge about how things work. some companies have done well. sometimes you to bring in new people to give you a fresh perspective. alix: all i hear is amazon right now. david: bob steel will be staying

with us. coming up, the fed begins its two-day meeting. what investors will be looking for when fed chair jerome powell old his news conference this afternoon. tomorrow afternoon. live from new york, this is bloomberg. ♪

emma: mrs. bloomberg daybreak. they federal judge is expected to rule today with her can buy time warner for $85 billion. the ruling could affect how millions of americans get access to entertainment and internet. the justice department sued to block the deal, saying the transaction with the two consumers paying higher prices.

cutting seniors investment banking jobs. since february the bank has dismissed about 26 directors and managing directors. the cuts have mostly been n.cused in london and the soldarent of mercedes-benz 770,000 vehicles in europe. the good news for daimler is the cars will only need a software fix and not a more expensive hardware replacement and the company avoided what could've been crushing signs. thank you. the federal reserve begins its meeting today. the central bank is expected to hike rates tomorrow. the question is whether it will keep its forecast for a total of three hikes this year or bump it up to four. economists expect at least three. the white line says it is about year, the yellow

line before that is what they expect for next year, which is a little more than 1.5. ob steel, pereinberg c you had a senior position in treasury, you ran a big bank. what would you expect to be reasonable to expect out of that tomorrow? bob: we have a consensus perspective. i don't feel like i have any special insight but the perspective we would have would probably be that maybe at the -3,er end of the range of 2. not 3-4. the consensus seems to be that we will see a lift, we will see how it unfolds from their. it also depends on how the economy shapes up for the rest of the year, what happens with trade. if this were my job to guess this, i would want to collect

more information before i had a guess. the economy shapes up for the rest of the year, what happens with trade. david: looking at it from the ceo point of view, s depends on what the growth expectations are not just for 2018 but into 2019. some people we talk with say they are concerned the tech stimulus is a sugar high as it were and we will come back down. concerned about the back half of 2018, into 2019, 20? bob: i think they are concerned but i would stay with the idea that people are forward leaning in on the front foot, they are interested in making investments. my perspective is when ceos think about fed hikes, it is less about the actual specifics of a hike or two hikes but the overall level. the level we are talking about is still pretty manageable and understandable, is not one that creates lots of excitement, i think. 2.96, something like that. if that trends higher, our view is that is not on its way to

four. at current levels, people are not uncomfortable. double negative but on purpose. curveas the yield continues to flatten, what will be the 10-year that winds up disrupting companies, costa capital. what do you see that level as? bob: i don't see that coming. we will have to see. alix: it would have to get to 4? bob: 4 or higher would be a bit of discomfort. up, it is david's vorite topic, decision day for at&t and time warner. affect ruling could dealmaking for years to come as well as antitrust conversations. this is bloomberg. ♪ is bloomberg. ♪

big storying to the we are watching today with analysis from bloomberg opinion. it is at&t and time warner

decision day. we welcome carol a chapelle who covers deals in media and telecom. what are the we could see a ruling today? through aso it is, could get blocked which is the most unlikely scenario, or we could see some conditions which seems to be the middle ground affair, the one everyone is expecting. those conditions will be heavily scrutinized by bankers and lawyers after 4:00 today to see what it means for other deals in the pipeline potentially. alix: what makes this unique, it is a vertical integration. in. or should not be any antitrust issues, so the ruling has big implications for other m&a. what names are you watching? >> comcast. as the ruling comes out, comcast will be poured over the details from the decision, looking at do they bid this week for fox. we have heard they're interested in doing so but this ruling is significant for them because we don'tnow how the government

would view comcast getting that much bigger on the content when they control some much of the broadband and cable tv market. alix: thank you very much. david: still with us is bob steel, perella weinberg ceo. i want to talk about the m&a business overall. there is the perception that if at&t goes away -- some people think it should go -- and that would release the floodgates. you are involved in at&t -- we're not talking about that at all -- but is it a record you' already? this isa has it right, an important case and it has a lot mplications, so people will be watching. it is an important client for us, something we are focused on. we have had a good start to the year in m&a. is ifrspective we have you look at the industry broadly there doesn't seem to be any change in the offing. people are still looking to be on the front foot. they are looking at this portfolio, what i like to get

rid of this, added this? the idea of making changes to adding innovation or adding scale are the drivers that we see all the time. sometimes the scale is expanding sometimes itlane, is geographic, but adding more scale. there was a perception that we understood how antitrust laws work. right now that is sort of thrown up in the air. ceo's thinking they don't know exactly where this justice department is? said it right, we are all watching this. investors do not like uncertainty. this is a new issue of regulatory uncertainty. clear, thenmes more people will hopefully have more confidence in how to prosecute their ambitions. regulatory uncertainty is no different than other uncertainty. you are the antitrust lawy -- david: years ago.

it would be a major departure from what it has been for the last 30 years. do a compare and contrast with this and europe. europe has a verassertive competition authority over there. difficulttively more dealing with the eu, looking at an m&a deal? would say both geographies have challenges uncertainties. it is not dramatically thumbs-up or thumbs down one way or the other. we are busy in both venues, adding people to our business france, we are, very strong in germany. we are getting things done. but i believe there is more discussion with regulators in advance to make sure the runway is clear, as opposed to taking the regulatory risk yourself. alix: our company changing the way they finance and pay for deals?

bob: no. we talked about $2.6 trillion in cash, the fact that stock rises are high, and interest rates are low. people have lots of lex ability to figure out how they want to finance it. david: a fair amount of uncertainty about trade after g7, nafta, china, lots of issues like that. is that affecting the way ceos look at mergers and acquisitions, do they tend to go more domestic because they are worried doing cross-border? bob: i have not seen a presentation yet but there is no question trade wars are and uncertainty that would be unattractive. i think there is a difference -- i would want to distinguish between trade wars and trade resets. in some cases, if we want to the administration and listen to some of the vocabulary, they are talking about more of a trade reset, which is different than a trade war. the idea of trade resets, i don't think is a negative,

whereas all the trade wars would be. david: if you could draw a generalization in the boardrooms, see suites, are people more receptive to what president trump is doing on a trade front and maybe we give him credit for? bob: i think people are holding their opinions. said, isiews, as we this more of a reset, or is this a dramatically different policy? this is an unconventional president with unconventional negotiating styles, so pulling out the old playbook and saying how this compares to help other people did, i'm not sure is so informative. alix: where do you see the most m&a in terms of sectors and regions? think health care is clearly one where there is a lot going on. also in media, telecom, off the back of the decision that david said, and then looking in europe, looking to gain scale. alix: so europe the most

activity. is europe getting harder because you have more nationstates? we talk about the banking sector. alix: and no financial union which makes it harder. bob: it will be an interesting time. if you look at financial services in europe there are a lot of moving pieces, discussion about whether we are on the edge of a new time of actual consolidation. steel, such a pleasure to have you on set, thank you. we are minutes away from the latest raid on u.s. inflation ahead of the fed's policy meeting tomorrow. sarahl break it down with house, wells fargo senior securities analyst. this is bloomberg. ♪ retail.

like never . and it's connected technology that's moving companies forwarst. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. alix: this is bloomberg daybreak. i am alix steel. , marketsseconds away

slipping into slightly negative inritory but a good rally italian equities. it is a miss to dollar story, and it probably feels weaker with the margin -- with the emerging-market territories with a curve, slightly steeper. the latest read of inflation is out, and the core cpi year on .ear in my with estimates, 2.2% the headline cpi at 10.8%, no prizes. cti month on month coming in 2% and core, 2% as core, overall, year on year coming in at two point 2%, so solid inflation as the fed heads into their meeting. yous interesting because inch higher and u.s. inflation is the highest paste in a six-year high and we are still talking what gradual means for the fed. david: there is no surprise here

because some people were concerned it might spike up and prompt the fed to have to move more quickly, but as i look at these numbers, it does not look like anything herwould surprise the fed, much less spooked us. the shelter category that makes about one third of the cpi, that rose .33, so a steady increase continuing. owners equivalent rent, tracking rental prices, up .2, and hotel and motel rates up on list 3%, the highest since august. all in all, they continued steady increase in inflation but nothing spiking. for more on cpi numbers and how we havets the fed, sarah joining us from south carolina. what is your take on the numbers/ sarah -- numbers?

sara: we know the core is slow moving around that underlying trend, so we would not expect to see a giant spike up, but overall, we are seeing cyclical pressures emerging. if you look at the isn surveys, both show backlogs of orders that highest levels they have been over the expansion. and a survey this morning showed prices increasing at a faster pace so we are seeing those cyclical pressures emerging that i think should make the fed more confident inflation mostly at 2%. as you indicate, it does not look likely will see a spike higher that will force the fed up the pace of tightening. alix: what is int are seeing a little selloff across the curve. basicall you are looking at the biggest selling in the belly of the curve. what does that wind up telling you? sarah: i think what we are looking the is the longer-term inflation expectations or at

least in the medium-term, once we get past the worry in the spike of ene prices, we will look for a small boost on the headline. they are still not terribly ied of a long rate of inflation getting out of control. david: i am curious about the meeting that we will hear the results of tomorrow with the fed , announcing their decision. it is three versus for this year. -- it is three versus four this year, how will the fed decide that? sarah: we are in the camp of four hikes this year, coming we have seen that inflation pick up faster than what the fed outlined. pc could get up by 2% at the end of the year. the fed is at 1.9% and wehink it will hit 1.9% women get them main numbers for pc. when we look at their expectations for inflation, we four.that tilts us toward

when you factor in how tight the labor market is, by many indicators, we are looking at the labor market as tight as it has been in years, so it seems that more wage pressures are coming down the pipe. businesses are not necessarily wait around to raise prices in an environment and the like to get ahead of that. we think the fed will to getahe. they will be monitoring the globalspecifically the risks, and some concerns about emerging markets, but right now, we think they will be focused on their primary domestic mandates of u.s. inflation in the labor market. alix: sarah house, thank you. just to recap the data, a slow and steady wins the race, what we sell at inflation, so core cpi coming in at 2.2% and s&p futures trying to get into

positive territory but you have the belly of the curve up by two basis points and the yield up and continues to flatten. thed: let's broaden discussion and look at the global economy and how it is developing. we are seeing some divergences. these are pmi's, and the yellow line going down is europe. the blue line going up dramatically and worldwide, you end up relatively flat, talk about this and how it relates to and for that, we talked to mr. gurria. talk to us about the growth patterns in what we are seeing with an increasing number of traits, if i can call it, disputes. jose: what you have our trade tensions.

they don't help the multilateral system and it has ways in which to deal with these. specificle, on the example of steel, which triggered the tariffs, we created in the g-20 the global forum on steel excess capacity and to deal with it, not the manifestations. these and you get retaliation, but you really have to talk about how do you actually reduce capacity in order to solve the problem so this will not be a recurrent issue? we created this in the g20, and we confirm this in hamburg last favorso we should fi the mechanisms that we have created ourselves through multilateral approaches rather than through tariffs. erik: as you say, nationally david: as you say --

david: as you say, we have a president who says that he is not a fan of multilateral and he likes bilateral. if the president persists in this direction, what affected that have on trade and global synchronized growth? how dothe question is, you deal with international issues?f not global investmentdeal with flows is not through the multilateral mechanism? you deal with climate change if not through a multilateral mechanism? how do you deal with cross-border issues if not the multilateral? definition, by their nature, have to be dealt with multilateral he in order to have a chance of being successful. .avid: let's turn to germany

you just met with the chancellor of germany, how concerned issue right now about the development with respect of the relationship with the united states and germany? angel: germany itself is doing very well, the economy growing upwards of 2% for this year and .ext year the unemployment numbers are low, but it is not just angela merkel. everyone was worried about the outcome of the g7 meeting in canada, and of course, because you are looking at two of the pillars of multilateral governance, one having to do with g7 for the most developed countries, the other with 220. -- with g-20. moment ofot a good international cooperation, and

we really have to get back on the right track. again, multilateral as though way go, sometimes the only way to go in many of the issues in the international agenda. corporation -- cooperation is the best response. alix: i want to show you a chart which looks at german service expectations, the white line, now in negative -- now moving to negative territory. yoargue it is forward-looking. how do you explain that? is that youhappens cannot base policy on the expectations of the day or the month. some of these graphs, or where you take the temperature of the mood, is recurrent. sometimes, it goes up. sometimes it goes down. i would say the german economy itself is doing very well. well.jective is doing

they are getting what exports. they are selling more. they're importing more. the only question is, yes, germany is a large, open economy, which depends to a great extent on how open the rest of the economies are, to the extent there are pressures of protectionist sentiment and then expectations suffer. alix: to wrap up the last wouldon, a week ago, we have been talking about italy and the ramifications there, what do you see going forward for italy and how big a concern it will be in the eurozone? angel: what happens with italy is one more manifestation. it took seven months to create a government in the netherlands. it took five months to create a government in germany. we have this result in italy. we had the result in the recent

in thethat indicates -- recent events in the case of staying, great fragmentation in of thethe cases political preferences. you have brexit, you have -- and then you have uncertainties having to do with the mexican andtions and brazilian malaysian elections, so all over the world you have a lot of dissatisfied and angry people saying, i do not like what i see there. i do not like what i got. i do not like my share in this. i would like to change the system. it gets worse when like an brexit, 16% of the youth -- 60% of the youth did not show up to vote, which i'm sure they it is not only that they like the system, some are giving up on it and that is dangerous. we have to deliver. a globalization has to deliver, and multilateralism has to

deliver. erik: -- gurria, thank you from berlin. now, an update on first word news. emma: in singapore, president trump and kim jongun has signed an agreement promising peace, and there is no timetable for north korea to carry out its promise to do nuclear rise the peninsula. the president says economic sanctions will stay in place but scrapping the military exercises with south korea that north korea has objected to. president trump: we will be stopping the war games, which will save us a tremendous amount of money, unless and until we see the future negotiation is not going along like it should. emma: president trump also said kim agreed to return the remains of u.s. soldiers killed in the korean war. white house economic adviser cutler has been hospitalized for

a mild heart attack -- kudlow has been hospitalized for a mild heart attack. they say he has been doing well. he has played a key role in trade talks, including with china. a split in on whether to increase oil production is getting wider. saudi arabia and russia are trying to gain support for lifting output limits. iraq has joined iran and venezuela in opposing the proposal. opec and allies may resolve issues when they meet on june 22 and be in a. -- june 22 in bnf. in vienna. david: coming up, president trump and kim jong un have agreed to the denuclearization of the peninsula. -- what impact will that have on the entire asian peninsula?

as you commute, two men your radio to listen to tom keene and lisa abramowicz. it can be heard in new york, boston, the bay area, and all across the u.s. on sirius xm radio. this is bloomberg. ♪

emma: this is bloomberg daybreak. i am emma chandra. andng up, mark meadows republican representative from north carolina. david: president trump and north korea's leader have pledged a commitment to peace, including

denuclearization of the korean peninsula. the question is how it will affect security in the asia-pacific region?for insight , we welcome from london kevin rudd, the current asia society member. let's start with south korea jae-in isesident moon speaking as we talk now and some headlines across our that president trump told him that kim jong-un is a great conversation partner. made foundation for world peace, so he seems to be encouraged, president moon, our south koreans likely to regard this? kevin: i think president moon will be delighted. it was president moon who wanted to rescue this when it looked like it was falling over a cliff about three weeks ago.

he quickly had a second summit to tryand john -- summit and rescue the situation and put back ontoore summit an even keel. the result of all of that is in the politics of south korea, president moon is now riding high. tire summit process.ofs as for the results, it is vague, but in terms of the general commitment to denuclearization, together with a process which follows, anchored in the secretary of state pompeo, then i think from moon's perspective in the south korean perspective, this is heading in the right direction until we run into a roadblock. so far, so good. david: fo what struck me was the fact that president trump in the news conference after said

they will stop all military exercises in south korea. will that make moon j-in and the south korean community nervous? is that concern about the u.s.' continued commitment to military defense in south korea? kevin: on thso-called war games -- the big win every year between the north and the south -- sorry, between the south and the americans, that is the one which causes the greatest anxiety in pyongyang. that is the one that they will call a temporary halt to. as president trump said today, until, and unless, they find there is no progress in the negotiations on denuclearization. moon's from president point of view, that is a-ok. that will create anxiety. the broader question about

long-term military commitment by the united states to south korea , that is i think of much more mixed question. for the first time today, we had a president of the united states opening up publicly on the question of his desire to have u.s. troops pulled from the korean peninsula altogether. that is what the north ultimately wants, what china would want, and will the south koreans want that if they have an uncertain outcome with the north? not so sure. alix: i want to get your take on what happened in relation to japan. here is president trump speaking on japan's big issue of human rights. president trump: it was discussed. it was discussed relatively briefly compared to denuclearization. obviously, that is where we started and ended. of kicking off the human rights issue, what to expect japan's reaction to be to all of this? kevin: i'm not sure.

president trump and that part of his press conference was referring specifically to the long-standing japanese concern of abductions of japanese nationals by north korean agents, and people being forcibly taken to the north. prime minister abe has said this is a core priority, a big one within japanese domestic politics. president trump raised this with kim jong-un and expected to see action. will the japanese be satisfied by that? don't know. again, these things will be tested in reality. you can send factory american hostages to the united states from the japanese point of view and they will look for an accounting for a large number of japanese who have disappeared into the north. return to china, something you know terribly well. we have a statement out of the foreign ministry in china, which says we believe the security

council should make efforts to support the current diplomatic efforts and contribute to the political settlement of the rean pinsula issue. in my reading too much into it to think this is china same we do not like it united states is doing it on their own, we would like back in the game and let's go to the united nations? kevin: i see it slightly tly in this sense, the bilateral relationship with north korea has been determined to point out to everyone watching that kim jong-un has beenchina twice and if you detail, thatthe was a chinese civilian aircraft to brought him all the way down to singapore, but the bottom line is i think what the chinese may be indicating through their proposal for action by the security council is it is time in china's view to start taking

the pressure off the north koreans in terms of the existing range of sanctions. president trump is unwilling to do that and in my view, rightly so, and he said as much in his press conference. this is the beginning of early diplomatic maneuvering by the chinese to push the security council in a direction away from sanctions. you, always, thank good to talk to kevin rudd, former australian prime minister and asian society policy institute president. emission, the diesel scandal continues to troubled german automakers. this is bloomberg. ♪ s bloomberg. ♪

david: i am watching cars, gm having their annual meeting, starting now. we have news out of germany about car manufacturers that diesel emission thing keeps going and we have the tale of two companies. daimler announced they had a

recall, 744,000 cars, not good news but it avoided fines. you can see that their stock is up. vw, on the other hand, adui is audi by vw, but the ceo of is under investigation, they raided his house, with the criminal investigation. alix: you have that and also potential tariffs coming from the u.s. on car imports, so how does angela merkel deal with that? david: a lot of cars today. suisseoming up, credit chief equity strategist will be joining jonathan ferro. that wraps it up for bloomberg daybreak america's. this is bloomberg. ♪

from new york city, i am jonathan ferro, this is the countdown to the open.

coming up, investors shrugging off the foreign-policy and looking ahead to a string of macro events, u.s. inflation as the a six-year high beginning of the two-day policy meeting starts. the merger between at&t and time warner. about 30 minutes away from the opening bell. we are up about three points on s&p 500 index teachers and the euro dollar down to 1.18 and yields higher back to 3%. president donald trump and the north korean leader signing an agreement, seeking complete do legalization of the korean peninsula. investors shrugging off the theatrics. >> the market cannot even make up its mind whether these are real issues. >>