july 2017. the illness has cap to away from the senate this year. the canes family says he has the expectations for survival but the progress of the disease and the advance of age render their verdict. president trump has canceled mike pompeo's trip to north korea. he wrote there hasn't been sufficient progress in talks aimed at denuclearizing the korean peninsula. he said pompeo will go to north korea after the u.s. trading disputes with china are resolved. israel is criticizing the european union over financial support to iran. , benjaminn lithuania netanyahu called the aid a big mistake and a poison pill to the iranian people.

giving $21 million in aid as part of a package aimed at keeping the iran nuclear deal alive. a spokesman for zimbabwe's ruling party said the inauguration of the president the be sunday after constitutional court upheld his election. today's decision said the opposition failed to produce sufficient and credible evidence of voter fraud. >> the underlying premise in the established bys evidence. there was no evidence. the court found there was no evidence. >> last month the vote was the first election after the end of robert moog abe's rule. twitter, in 120

countries. i'm mark crumpton. this is bloomberg. caroline: live, i'm caroline hyde. scarlet: i'm scarlet fu. caroline: 30 mitts from the close of trading. stocks near session highs. posting the biggest weekly gains since march. scarlet: the question is would you miss? the fed chairman reinforcing the path of rate hikes in the speech at jackson hole. one voting fomc member will oppose a hike that would import -- invert the yield curve.

and passing the buck on the california wildfires. companies are likely to find themselves footing the bill for the damage in years to come. >> passing powell. the federal reserve chairman gave his first keynote and use the chance to applaud one of his predecessors, alan greenspan. throughout the retreat bloomberg asked what they thought the ideal rate path would be. be moving toward neutral, three or four increases over the next 9-12 months. moving in september and december is consistent with that. >> i would rather not be calling rates accommodated right now. i think the structure of rate is lower. i think we are at neutral or close to neutral. >> the economy is doing well.

i think two more rate hikes could be appropriate. >> the case for raising interest rates is compelling. we have low unemployment and inflation at our goal of 2%. >> there is no reason to challenge the yield curve. objective not our metoo manage the yield curve. we use it as a signal. by matt forned now more insight. the dollar deepens the selloff. bonds rising. what are you interpreting? >> two things. short-term interest rates are up , not just from the speech but the other interviews with the fed presidents we saw. on that the total package suggested a slightly more

lenient direction. one of the ways we saw that manifest was higher short-term investors seeing price the end of the tightening cycle is getting closer. one way you can see that, there was an in version in a portion of the yield curve that speaks to this. what we have is the short-term interest rate two years from now is not below the short-term interest rate a year from now. scarlet: did i pull up the wrong one? i might have. keep going. is expected to continue raising rates. two years from now may be rates will be slightly lower. that speaks to the skepticism. you can see this is negative for the first time since 2007.

that curve in version is creeping closer and closer. that speaks to the skepticism investors have to this idea that the fed is going to keep raising rates. >> we talk some at about the inversion of the yield curve. to investors outside of the u.s. the same way everyone inside the u.s. does? >> this is a debate the fed is having. a lot of them are pointing to reasons why long-term interest rates might be lower than they were in the past. tell whether that is the case or not. it shows them raising rates up to three and a quarter percent. with the 10 year yield below 3%, it kind of makes sense. i think it is going to be more difficult as we get close to that neutral rate to parse these

explanations. caroline: we are going to be hearing from bostick. what do you expect in terms of where we see different views, and defense? >> we are going to have to see the yield curve invert for people to really become more anxious about this. it is not clear if the fed continue to raise interest rates that wouldn't boost as well. they're are laying it out as a hypothetical because it is getting closer. whether it happens or not is yet to be seen. part of that dynamic, does economic growth stay as strong as it is now. probably won't have an inverted yield curve. if it starts to tail off you might get that validation that the yield curve is sending a message about medium-term growth

expectations and people will be more worried but at this point it is off in the horizon. scarlet: how will we judge? gdp numbers? the readings we have been getting this year are not sustainable. >> exactly. it is going to come down to that gdp growth. that is the first step in the chain. gdp growth, that affects unemployment and then inflation. if we have continued strong gdp growth there will be this bias to keep tightening because they will be worried that will push unemployment too low and then inflation will get out of hand. you can see that dynamic here. the blue line is the cbo rate of natural unemployment. the white line shows the actual unemployment rate which has fallen below that. the core inflation rate has been picking up a little bit. if that white line continues to

fall as the fed forecast you will be seeing a widening gap between those numbers. the fed is going to be nervous about that. scarlet: setting up for a lot to be nervous about. thank you for this on this critical fed week. coming up another megadeal. the cigna express scripts merger and what it means for the rest of the industry. this is bloomberg. ♪

haveet: cigna shareholders approved the merger with express scripts which should close by the end of the year.

merger caused carl icahn to halt his opposition. great to speak with you. you call this a defensive deal. we know that the deal will be immediately and highly accreted from a financial's -- financial standpoint. what could it do better now that it could not a year ago? >> the landscape is transforming. signal -- cigna is making a bid to be one of the big four, if not the big five. unitedhealth group, they have shown the way with an integrated performance scale. they are five times the size of cigna with the medical and pharmacy benefits manifest -- manager. they are moderating health care costs, getting outside share

gains. we have at night in a bid to .erge with cvs that is a big deal cigna has to contend with. anthem is building out an in-house pharmacy benefits manager. we will have again a platform at scale across medical and pharmacy. cigna is a $45 billion company. something. to do investors hoped they would buy or merge with humana. the antitrust stance was unclear. express scripts gives them a different angle and platform across medical and pharmacy. they know only have at scale but huge cash flow. six and a half billion dollars a

year they can use to buy other assets going forward. caroline: as these companies start to streamline they are becoming bigger. their bureaucracy may slow them down when they need to be nimble. they had amazon biting at their heels. have amazon coming into that part of the business. thishese big for tackle competitor? flex the investor base has been skeptical about the value of pharmacy benefits manager's. you have new interests that are disruptive and then you have the hhs organizations with trump and secretary a's are coming in trying to reform the drug pricing, eliminating rebates and so on. we think pharmacy benefits managers add a lot of value. they are managing formula

replacements. they do step therapy. they are into prior authorization. , they are aligned more with their end customer base. is moresiness model aligned with moderating costs like employers want, and the government wants them to do. there is the issue of nimbleness. the fact is at the end of the day amazon is unlikely to want to go into the level of clinical integration between medical benefits and pharmacy benefits in our view. it creates a barrier to entry against disruption. scarlet: there are questions about what amazon or any of the potential disruptors good do down the road.

, you hada consultant several senior roles. what is the single most important thing existing players need to do to defend themselves against the onslaught of amazon and other disruptors? great question. amazon can come into the drug supply chain. they can come into drug distribution. they can build out a broader drug distribution capability. we are hearing they may be entering and trying to build up retail clinics. they have hired a senior executive from a primary care player in medicare. as of today there was an announcement around them hiring a cardiologist from one of the leading academic medical

centers. their aspirations are big. bestbeing said i think the play for the incumbents, for the managed-care companies is to have an integrated platform of medical and pharmacy benefits. we have that with unitedhealth group. they are buying physicians across primary care and other specialties. we have humana in home health and hospice. we have anthem in home and community retail care centers for complex populations. cigna, they need to do something as well. aetna and cbs are building out retail clinics on their distribution. through tele-dock and pharmacies

it is important these players create those various entries. they are obviously very ambitious. caroline: disruption knows no bounds. we thank you for your insight. they for the bloomberg business flash. job cut's from the biggest lender, wells fargo. mortgagecond quarter fees fell by a third. the lowest in five years. .hares of papa john's rising the struggling pizza chain has hired bank of america to help stabilize. there is no sale process underway. the founder resigned as chairman over using a racial slur. that is your bloomberg business flash. surgingd software maker

today reaching an all-time high as it is benefiting from its corporate i.t. spending. can we appreciate how you said's block -- splunk. an $18 billion company. this was play as an acquisition target. away.ial buyer backed basically doubled since then. a lot of this is the machine learning space, a fancy way of saying software that scans for corporate data and find anomalies that could detect cyber security breach or other anomaly. reported earnings did well. the maintenance business of 40%. caroline: talk about the broader

issues. many are looking at focusing on cybersecurity. also at the corporate level. >> the first issue is i.t. spending is rising. there is a lot of transition from old systems. i lot of which operate in the cloud. that is a big part of why's nkanche is benefiting -- splu one of theng contracts was a deal with the u.k. government to protect them over there. goldman sachs seems to things this would be a huge driver of revenue going forward.

>> thank you so much. we have another stock moving quite a bit. rising as much as 4% on a reuters report the company is in talks to discuss offers for the entire company. specifically entertaining offers for the entire company. this is part of a broad review that should be completed in the next couple of months. second-quarter earnings at the end of last month. the decision to break away from construction pushes further towards aerospace market. now they discuss offers for the entire company. doubts. have this could get interesting and drawn out. they know that it is for cell

right now. keeping up with cook. the world's most valuable company. from new york, this is bloomberg. bloomberg.

caroline: tim cook's anniversary. dozens of other executives are crucial to running the company. joining us now from adelaide, he said himself, handing over the baton carefully. is something they have been working on for the past few years. lining up successors the board of directors and people below him. the coo, the top executives.

we take a look at apple's next generation. thatcked up 13 of them could be successors to people. coo successors, all of the important people to watch. scarlet: what structure does apple have? when steve jobs was there he was the man in charge. everyone helped him execute his vision. same.ok is not the how are things prioritized and delegated within apple? >> apple is no longer a one-man shop. there is an executive, the vice president of global operations,

he and his team are very involved designing new iphones because they have to build the machines on a daily basis. the head of product marketing schiller. lots of people working at the top. haven't picked up the head of burberry. how does it go for diversity at apple? >> as great as she is, we were focusing on the level below. she is fairly well known. the want to highlight people who are not namebrand executives. she is one of the top women at apple. there is also susan prescott. .ennifer bailey runs apple pay

there is some diversity there at the top as well. scarlet: sticking true to our show name. what'd you miss. the market close is next. record highs for the major indexes. this is bloomberg. ♪ this isn't just any moving day.

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in the s&p 500 at a record high. 10 of 11 sectors in the green. i'm caroline hyde. scarlet: joe weisenthal is off for the day. live, from 4:00 to 5:00 eastern. we begin with market minutes. the speech by jay powell occurred. stocks hit a record high. the dollar declined. coming from beijing to one of the central banks, it is interesting. scarlet: that is ait is low-vole august.

you the three major indexes making new highs. outside moves there as well. foot locker sinking and falling as much as 14%. concerns about cost pressuring profitability and outlook. a lot of doubts perhaps that the locker can execute on its full-year outlook. jeffrey says the guidance is still achievable. it remains in reach because they see momentum building in the heat" buildsas " around 90 products. perhaps -- nike products. several analysts are raising their price targets on renewed optimism over the transition to the cloud-based subscription model, the recurring revenue. shares increased 14%. we're also paying attention to gap. after the market closed, the

at theore sells fell 5% gap stores themselves. overall sales did better than expected, but the mainline brand of gap, not so much. it's interesting that our reporter earlier said the federal reserve was somewhat hawkish but with a two-year yield unchanged, the deal -- the yield dipped below. now, it is back at 2.81. it does not seem to elevate risk on overheating or inflation. he said he will do whatever it takes if expectations stripped materially. this really caught my eye. we're seeing it selloff today and yields are up six basis points. it seems the market is shrugging off this amazing story that the bloomberg had showing in fact, in terms of italian press, they

are saying donald trump called the italian prime minister -- told the italian prime minister that they would be willing to buy italian products next year. that was a very generous offer by the president. let's turn to the commodities. across the energy complex. wti is rising for a sixth day in seven trading above $59 per barrel. this marks the first weekly gain for wti in a month. there are side of tighter supply for the north to the middle east. because, it is back above the $1200 level. if you look at the performance, you can see how important the 1200 level is and how psychologically important it is. prices took off after it reached that level. with the game today, we have seen gold post its best day in 2015.ar since

caroline: not only did you hear the fed being a little more dovish and the speech from dave powell, but you got the pboc starting the day tweaking its nations currency. three hours later, you get powell saying there is little inflation. theas really -- it fell for sixth time in seven days. i want to look at the euro doing. it is up with the dollar weakening, but we also have weakening, but we also have strong information coming out of germany. the aussie dollar was really hit this week amid political lows -- was -- woes. the new prime minister is taking over vowing stability. there has not been much for a while.

six times they have seen the new prime minister since 2007. let's finish lastly on what is happening to the u.n.. the dollar was we can -- was weakened. the pboc acted. check out the correlations in stocks on the second bar. we are seeing ramping up of correlation between their currency and commodities. when the pboc acts, the market follows. scarlet: and is that things off this morning. those are today's market minutes. caroline: they are indeed. scarlet: "what'd you miss?" positive they on wall street after -- a positive day on wall street after jay powell highlights the strengthen -- highlights the strength in the economy. powell ise from jay pretty much what we expected and a little more dovish than maybe

expected. >> i think people are turning over rocks looking for the dovish elements. there is a really interesting tension in the market that cameron had pointed out that the stillot four 2019 is seeing about three rate hikes. if you look at fed funds futures, and we have a chart to pull up, they are pricing it much less than that. a little more than one rate hike. there is this disconnect between what the market is pricing in and what the fed. is saying. there's a few reasons for that. the market thinks it will get more dovish, maybe the new voting members are on the dovish side. the other possibility is the market is wrong and they are not listening to jay powell and they don't get the message that he is saying. the letter issue is where the

tension would get dramatics -- dramatic. risk assets would not three that as the best news. we will have to see it was right. someone is wrong. either the market or fed. caroline: cameron was also pointing out that maybe this was not so much the market ramping up on the back of the fed, but actually from what the pboc said. michael: a lot of people i said -- i talked to said the fed to not get in the way of the rally today. the actions of the pboc, it is a complicated thing with the way they fixed the currency. it is called a countercyclical measure and means if the market is leaning to push the currency weaker, they will lean the other way to strengthen its of it. pushback it's a little -- push it back a little. circle or the the

currency bottomed last year, that is when they did this last time. it did create a bottom in the currency for the time being. that is really the bottom we have seen since then. andar as trade tensions go any reprisals from beijing, the currency is front and center of concerns. the question with this is, does it decelerate the drop in the yuan or give it to bottom? this chart suggests it gave at the bottom. i think that gives people slide in the this chinese currency may be gets arrested here. caroline: a bullish case for stocks and commodities indeed. thank you, michael. let's get the first word news. mark: bloomberg has learned new york state prosecutors have

taken preliminary steps to open criminal investigations into president trump's former lawyer and possibly the president's business. new york's attorney general is said to be launching a tax program into the lawyers activities. theces also say that manhattan district attorney is looking into whether to pursue criminal charges against the trump organization and two top officials. australia's new prime in a still -- prime minister is claiming to bring stability after mao comfortable was moved -- malcolm coup.ll was removed in a there was a determined insurgency from a number of room,, but in the party and backed by the powerful

voices in the media, if not bring down the government, certainly bring down my prime minister ship. mark: morrison is australia's sixth prime minister and 11 driven bypheaval inciting between moderates and conservatives in the liberal party whose own members have fallen ahead of the scheduled election in may. the world health organization says ebola has spread to an area of high security risk in congo. health officials say the virus is endangering the safety and health of medical teams. there are more than 100 confirmed and likely cases in the outbreak declared earlier this month and 36 confirmed deaths. health officials also expect to see another wave of new ebola cases. -- billnton spoke clinton, smokey robinson, and others will be among the speakers at aretha franklin's funeral next week. franklin and clinton were longtime friends. see -- she sang at both of his

inaugurations. robinson and franklin grew up in detroit. she died last week of pancreatic cancer at the age of 76. her funeral will be held in detroit next friday. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. caroline: thanks, mark. coming up, one voter vows to curve --hange the euro yield curve. that's next. this is bloomberg. ♪ is bloomberg. ♪

>> i'm live in jackson wyoming where the symposium is underway. joining me now is raphael bostic. he's the president of the federal reserve. you have the private -- prime spot this morning. everyone else was cold. >> the definitely froze my hands off. >> let's start with the chairman's speech. he was right down the middle. some people want us to raise faster and some slower. i vote for let's be cautious, risk management, slow, gradual pace of increase. there youn their -- disagree with? >> his speech near exactly my lines. half the people are saying you need to slow down and the other half is saying we are about to overheat, speedup of it. we get pulled in all different directions.

for me, it has been helpful to say everyone has their view and perspective and i have to bring it all together. on balance, the slow, steady, taking action and see how the markets respond approach is one that makes a lot of sense. michael: you've said you are in the camp of let's get to what we think might be neutral and then pause. what do you mean by pause? one meeting goes by or is there a time frame? >> for me, and i can only speak for myself, pause means weight until you get a signal the economy is going in the direction we are not comfortable with. wait until you get the signal the economy is going in the direction we're not comfortable with. we want to make sure the economy has legs to stand on its own. i think we are there. we are getting a lot of signals to suggest that is true. if it is, we can stay in one position and really wait until we get some signal or

directionality in the broader economy. michael: the signal for many people would be inflation start to accelerate -- starts to accelerate. how concerned are you that that would happen? raphael: it is something that i am watching. we talk to -- when business contacts, we are seeing more businesses and lawyers saying we have increased wages because we struggle to find workers to fill the positions. this is not happened before. i'm talking to people who run hotels, run restaurants, and they are also starting to feel wage pressure. to the extent this is broaden and we see an acceleration of wages which translates to acceleration of market prices, i will be concerned. michael: people you talked to in your district were not seeing evidence of tariffs in the data. what are ceos and companies doing in the atlanta district? raphael: our business leaders

are definitely feeling it from an input price perspective. we have people who use steel as an input, lumber as an input, and they are telling me they are facing a higher price point for materials they need. some of them had orders for features so they had locked in a price and did not have to respond to the higher price so immediately. but, today and now, i'm hearing many businesses saying the pricing pressures are real and we are going to start to think about how we transfer that into good pricing. michael: do you think they will have the pricing power or will people have to take it when we see this is salaried -- this accelerate? raphael: we will see how consumers respond. my guess is market segment to market segment and we will have to do some aggregate accounting to get a sense of is this going

to translate into measurable inflation suggesting a higher rate. michael: what about business and placement -- business investment? are anybody -- is anybody pulling back? raphael: a lot of people are holding back. one thing i expected out of the tax reform was using the written full -- the windfall to invest in new approaches to increase productivity and out put -- output. we have not really cnet. we do surveys -- we have not really seen that. we do surveys and we have gotten the data that says most businesses are stepping back to wait and see how the rules check out and to see what the ultimate feel will be and then make a decision of capital investment. the other thing we learned is that my expectation about media response probably was not right.

a lot of businesses when they think about capital plans, they do it in a five to seven year. . if they are well into that, they are saying that is too far down for us to scrap it and start again. we may start to see the investments happen further down the road then we had initially thought. michael: how did that affect that input? your forecast for growth over the next 12 to 18 months. raphael: it introduced uncertainty. me toecast, it caused think that growth will be higher out here than it would otherwise. as we returned back, most of my models have us returning back to productivity level and alpha steady state for long ime were in the 1.9 range, think we should start to expect and the impulse

from the stimulus will cause enough to push out when we get back to the state. we wind up going back there to 2020 or 2021, or even 2022. michael: does it raise the so-called neutral rate? raphael: we will see. dot of this will have to with to what extent does it change expectations on inflation and in terms of production. a lot of the packages that were passed have a temporary aspect to them so there is the potential that, some point down the road, consumers will say this is a short run thing. then, i will return back to what i was doing for -- before. michael: i want to ask you about the speech they pledged not to do anything deliberately to send the yield curve into inversion. how do you know your move will necessarily do that? raphael: we have been trying to really take apart the aggregate

--l curve and understand aggregate yield curve and understand which component affects which economic changes. the you curve has a risk adjusted projection about the path of our policy and then there is a term premium. our staff has done analysis to suggest it is the risk-adjusted part that is the most important thing to track on the yield curve. that part of the yield curve is not as flat as we are seeing in the broader marketplace. -- hasemium has shown shrunk.remium -- another thing i would say is, i talked to a lot of businesses and ask them all the time what are the things you are worrying about, what weaknesses do you see and do you think there are

changes and challenges on the horizon that people are talking about. me, ititely think, for is important to look beyond the data so we can do policy in a timely fashion. michael: by doing that, are you and giving the bond market to power over the fed decision? raphael: i don't think so. what you see in the marketplace is an aggregation of a lot of points. i read all of these things is a summary, statistic of the sentiment in the marketplace, but we have to do a lot of other things to really be sure about the trajectory of the economy and policy. we just released a blog on the yield curve a couple of days ago, i think yesterday, and in that we say clearly it is a signal, but one of many we look at. there is no one statistic that will determine definitively

where policy is going to go. whatel: if i ask you effect the president's tweets about the fed have on your decision, i know what you are going to say. we will do what we have to do. do you worried the president might be trying to set the fed up as a fall guy for a cyclical downturn? raphael: i don't think about those things that all. i try to focus as much as possible on the job at hand, what the data is telling me, what my contacts are telling me so that we don't get to a fiscal downturn. we're going to try to do all we can to continue the robust growth of the economy that has happened in the last nine years. when we get to a downturn, if it happens, i will deal with that and face that when we get there. michael: rafael bostick, president of the federal reserve bank, thank you. scarlet: great stuff out there.

up, -- caroline: "what'd you miss?" it is buds and booze. canadian marijuana is stocks -- marwan a stock climbed high today -- marijuana stock climbed high today. let's welcome a bloomberg reporter from toronto. we have already seen big booze players get in and purchase these companies, who is up for grabs? constellation brands have the big investment in canopy last week and cores have done a joint venture in the space. a craft brewery owned by heineken is also looking to do cannabis beverages. there is a quickly growing interest in this. in terms of the canadian companies being targeted, there is speculation today that a free ya --ld be a major one fre

freya could be one. there's a clear connection between a free -- afria. another small canadian company can has another executive and marketing officer coming from diageo as well. this industry is pulling executive to the realm -- executives to the realm of the canopy world. the second biggest player after canopy is another target. they stated they are intent in entering the cannabis infused beverages space. scarlet: everyone is looking for growth and they see it. do we have a sense of what kind of growth numbers these our call players who might anticipate? has anyone done the quantifying on this? kristine: that's a good question. any numbers of the state are pretty speculative because these drinks -- they are from very

small brands. this is not a widespread market yet. recreational cannabis is not a widespread market get either -- market yet either. one executive i told -- talked thcays he believes the infused beverage space could become as larger category as any of the major alcoholic categories. as large as largest beer, wine, spirits. theome point in not-too-distant future, he believes these could be comparable category sizes which would be an amazing growth trajectory given they are starting from nothing. caroline: excuse my ignorance. does it taste good? what is the upside of having a cannabis infused a drink? kristine: that's a good question. just because we are talking about our call companies creating these drinks, we don't talk about to be are also having thc. that would be a pretty potent combination.

generally speaking, these are often water so they have no flavor at all, but to do have thc in them were sometimes they have a true juice type flavor -- bridgers type flavor -- fruit juice type flavor. the question -- the big question is how quick it hits you. they're looking for something drink a thcrson can infused drink and there but he drink a wine or something and they pick you at the same time. a lot of scientists are working for ways to hit you faster like our call make it a direct replacement for the category. scarlet: i'm kind of stunned. christine oram in toronto, thank you. united airlines is moving its ticker and is listing to nasdaq

effective september 7. this is bloomberg. ♪ xfinity mobile is a new wireless network

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mark: i am mark crumpton with first word news. the united states announced details of limited new sanctions against russia over the march poisoning in the u.k. of a former russian agent and his daughter. the restrictions released by the state department target remaining sources of foreign assistance and arms sales to russia and deny any u.s. credit to russia including through the export, import bank. >> under the statute that triggered those sanctions, we are obliged to conduct a 90 day ,eview to see if, in this case the perpetrator, russia, discontinues chemical weapons programs and satisfies

inspectors. mark: he made his remarks in kiev and added he told ukraine's president that the u.s. is ready to cooperate with his government to prevent russia from interfering in the ukrainian elections. the european union and warning italy to refrain from issuing threats in the migrant crisis after a prominent government ember said rome would withhold part of its eu payments. an eu spokesman said the eu operates on the basis of rules, not threats. from barred some threats ships over what it's saying a sluggish of other countries -- sluggishness of other countries to help. oneinauguration of president will be on sunday after the constitutional court upheld his election win. today's unanimous ruling said the opposition failed to produce "sufficient and credible evidence of voter fraud."

>> the underlying premise in the nature andon of the effect is a step this -- is established by evidence. last month's vote was the first election after the previous 37 your rule marked by regulations in zimbabwe. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market action. record highs for the s&p 500 closing up 6/10 of 1% at 2874 overall. you had a green day across global equity markets. caroline, this is something you have been pointing out.

the dollar slumped after jay powell make comments that sounded dovish, but it goes further back to china. caroline: pboc is really moving in to find the bottom in the yuan. and it helps any asset class across the board. commodities have driven the winds into the sales of the stocks. it's amazing how global the market is. scarlet: appetite for risk is coming back for today at least. "what'd you miss?" the wildfires that tore through -- for through northern california are now 90% contained. the focus shifts to paying for the damage. california has spent about 400 $5 million of emergency funds to contain the blaze. million of -- $405 emergency funds to contain the blaze. isbreak down this law caroline and she co-authored a book on this. the key for utilities and who

paid for the damages has to do with a law or rule called inverse condemnation. why does this play a role? >> this was a unique situation to california. inverse condemnation stems from the california state constitution and is related to taking. when private properties are taken or damaged by a public entity, they are required to pay the owner compensation. the courts have said that utilities count as public entities, investor-owned utilities, and wildfire damage is just the type of damage that you have to provide compensation for. for wildfire started from equipment, they can be held liable for all of the property damages through inverse condemnation. ist makes this controversial it operates as a strict

liability regime meaning the utility has to pay for all of the property damage whether or not they were negligent. if you have bad weather, it is really hot, high winds blowing something into the line, and it is not the fault of the utility, but they are required to pay the damages. caroline: this is something pg&e well.all too can you paint the picture for that particular company and how they fight the costs coming their way since 2017, and whether this marks a shift? carolyn: cal fire has determined some of the fires were started by utility equipment, so they are facing possible damages that they are responsible for of at least $2.5 billion. some have given estimates of $210 billion and beyond. $10e are small -- up to billion and beyond. these are not small numbers for the company. we have seen drops in the stock prices, they didn't pay their

dividends for the first time, which is unusual. there are concerns about these costs. the fires this year were not caused by utilities, but really drove home the point that wildfire risk is increasing. we will see really high levels of damage. scarlet: the wildfires in california are an annual occurrence. the last two years they have worsened. pg&e has said it may face big if they-- bankruptcy don't sort out the costs. california now says they will let utilities finance the cost of bonds. if inverse condemnation were to change, of the stakeholders involved, who has the most incentive to try to change this it along to something that does not place all of the burden on pg&e? carolyn: i think this is something that investor-owned utilities are quite concerned about for exactly the reasons you lay out. the huge liabilities they could be facing.

some of the pushback has been among concern that reforming inverse condemnation could take away incentive for utilities to engage in proper risk reduction, but that is not necessarily the case because, in order to pass costs onto ratepayers, they have to go through a process with the california public utilities commission. that's commission only lets them cap on costs if the utility was found to be acting prudently. there is still an incentive for them to engage in proper risk management so they can pass costs on even if we reverse inverse condemnation and move on to negligence. isn if inverse condemnation reforms, they can be held liable for the court system like anyone else who start the wildfire. there have been examples of other human cause wildfires which people were held responsible for the court. caroline: we are looking at very extreme pictures and this has been a sad fact for the state and for many. what can be done to reduce the risk of wildfires?

what is being done and is it going to work you think? carolyn: it has been tragic, the wildfires, the last couple of years and the loss of life and damage they caused. it is making everyone take a hard look at what can be done to better manage this risk. of course, one of the things that would probably do the most help in reducing it is one of the hardest things to think about, where we are choosing to build. to as ae areas referred wildland urban interface where homes are mixed in with fire prone vegetation. there are more homes in this very high risk area in california than any other state. the number has been growing. we are putting people in harm's way which is what drives of the property damage, but also puts people's lives at risk. many have said maybe it is time to step back and say where and how we are allowing development to help -- to go. carolyn, thank you for

your time. in a bull market dominated by large corporations, how do you support small businesses? more on that. this is bloomberg. ♪ ♪

caroline: "what'd you miss?" the economy may be strong, but business dynamism is deteriorating. let's go back to jackson hole will -- where michael is standing by. we are with any economist and 'sofessor of finance at m.i.t. school of management. if you're going to talk about market structure changing, nowhere has it changed faster than in the financial industry. >> that's true. in particular, what i've been --

what i've been talking about of machinee role learning the data has had and is having on financial markets and the structure of the financial industry. michael: it has perhaps to change the way we think about pricing because a diverse away from fundamentals to arbitrage. antoinette: i would say that is true. sense, it proves the ability of arbitrage. what i have been looking at in particular is how it affects the structure of consumer finance. householdicing of loans, mortgages, credit cards, has changed with the ability of bringing much more personalized and fine-grained data to that pricing. michael: and there's a question about whether that is good or bad. before the financial crisis, anybody could get a mortgage.

it all became about the computers, the fica score, and if yours was high enough. is it to extremes? -- two extremes? antoinette: i would say it is the continue would discontinue development. the fica score has become refined and there is much more data going into that score. if you talk to the biggest banks, they don't even use pico that much anymore because they have better data through user data that they have on many different accounts like social media data. there is a lot of additional data we have a customers. what my research suggests is that it has two effects. one effect is that it makes the cost of capital or the cost of getting alone steeper for people -- easier or people who have good credit.

they can say you are a very contentious payor and had done a good job in filling your requirements. then, i can give you better loan terms. that is a good development for sustains, and it also efficient financial markets. but then, we also find with this -- ofration a more data more data, these companies can target the customers on the customer's behaviors on how sophisticated they are in terms of their i go -- finance. some more sophisticated might miss payments more often or make mistakes depending on what type of critical they take on. with all of this advancement in big data, companies can keep track of this much more.

they can then issue you a card or offer you a product that's, in a way, targets your particular mistakes and extract more rent from customers -- rate from customers who are not financially sophisticated. michael: that gets back to the question at the end of the title of the program, the implications for monetary policy. in terms of interest rates, it probably does not have the impact on the federal reserve. had you deal with regulation? antoinette: i would highlight two things. when the interest rate is set by the fed. ist our research suggests that the pass-through of the interest rate to the consumer might be affected when companies charge their customers in different ways. in particular, we find if your customers that are less attentive or less sophisticated about finances, if they don't

understand the cost of capital they're taking on when they take a credit card that has zero present rate right now, but later on might have high late apr, it might actually then respond much more aggressively to the zero apr because they do not understand that capital comes to you later. the fed should be aware of this because this can affect the speed at which interest rates go into the customer. even the amount of leverage that the consumer rate takes on when monetary policy changes. michael: this is a subject we will have to follow and we will continue talking to you. antoinette they do so much for antoinette, the q for

joining us. scarlet: crazy rich asians -- thank you for joining us. scarlet: crazy rich asians are having a lot of luck. how latinos are looking for in the mediareak industry. that's next. this is bloomberg. ♪

caroline: now, a look at bigger the -- some of the biggest stories in the news right now. bloomberg has learned the look into the first monthly meeting of flying cars of the air taxi service in japan. two high-profile share advisory firms have come out against a

cash bid for hotel properties. shares are trading above the offer. deutsche bank once to cough up about a thousand jobs. bloomberg learned most of the cuts -- deutsche bank's ceo promised to cut jobs between april and the end of next year. reportsan newspaper president trump told italy's prime minister the u.s. is willing to help the country by buying government bonds next year. he is said to a told -- two told -- he is said to have told officials about this recently. one official talks about the feasibility of this. >> the us government does not have the ability to buy

sovereign debt from other , even though the federal reserve has very limited capability of buying securities and can buy equities in the u.s.. in the u.s., their mandate is limited. caroline: no wonder yields were higher today. that is your business flash update. scarlet: crazy rich asians is said to top the box office once again and the sequel is already in the works. that success is coming on the heels of black panther setting records with its majority black ensemble. it has another underrepresented group wondering when they will get their moment, latinos. joining us now is a bloomberg reporter. your story highlights what a missed opportunity it is for hollywood not to pay attention to this one group. hispanics really drive the revenue for hollywood studios. >> it has been known for a while

they are a huge consumer of entertainment and hispanics and latinos in the are nearly a quarter of all ticket sales in 2017. that is well beyond the proportion of representation. asian americans last year, one of the first years the motion picture association of america started tracking specifically asians in terms of moviegoing, they attended the movies at a much higher per capita attendance than any other group. while asians by the most tickets, they buy them at a rate below the representation. at representation of latinos or asians or african-americans on the screen or behind the camera in the ranks of hollywood, they are almost invisible. caroline: we are starting to see real success stories coming from accidental makers.

they have won a couple of the last big oscars for the reverend and gravity was a mexican film. it is not seem we are getting them so much in front of the camera. anousha: what hollywood is learning is that when it takes on new, fresh angles, whether it is a black man's take on a marvel superhero, black panther, or whether it is a female take on it will known filmlike wonder woman, they get huge success at the box office. the thing with those three directors who are successful and for mexicans have won the last -- best director award at the oscars, they have been about films that have nothing to do with the community. they are just general pictures and not a celebration of the culture in the same way the crazy rich asians is about asian americans black panther was

about african-americans. sureet: i spoke with all -- the other of crazy rich asians and he was telling me about how some folks in hollywood wanted to change the protagonist from a chinese woman to a white woman sing the fans of the book back to mop -- backed him up. >> 80% of my readers are caucasian americans. every time a mentioned the story of the producer wanting to change the heroine to electro, people screamed. people were telling me why does hollywood -- to a white girl, people screamed. people are telling me why does hollywood only want to see brad pitt in hollywood? they don't. scarlet: we want original stories and we love variety. the other thing people want is stories where they can reach and aspire. you talked to a couple of hollywood producers. what do they tell you about the stories that people respond to whether it is targeted to latinos and hispanics or agents,

or african-americans. -- ora: i spoke to asians, or african-americans. cousha: i spoke with one from lions gate. he said ultimately, if you come to me with a stereotypical story of apartment -- of a poor immigrant or drug dealer, then i'm not interested. people want to see stories that are aspirational. black panther is aspirational for african-americans and africans. it was a celebratory story of their culture as is crazy rich asian. this is something in some ways hollywood is new to. if you talk to geena davis, which he did thelma and louise, people thought women are going to be seen as a power at the box office, but it has taken a long

time. to take risks if movies are risky, so they go with what they know which is leading white actors and actresses. now, they are finding they are having more success when they really give something different. scarlet: absolutely. bloomberg's anousha sakoui. have you seen crazy rich asians? caroline: it's not out in the u.k. yet. scarlet: now that you are here, you can totally do it. caroline: i'm definitely going to go. coming up, what you need to know for gear for the week ahead. that is next. this is bloomberg. ♪ is is bloomberg. ♪

scarlet: coming up, don't miss the day to look at the global trade war when the u.s. releases trade data. caroline: don't miss this. on wednesday, we get the second read on the u.s. gdp. scarlet: that does it for "what'd you miss?" "bloomberg technology" is up next. caroline: have a great friday and great weekend. this is bloomberg. ♪ this is bloomberg. ♪

emily: i am emily chang in san francisco. this is "bloomberg technology." in the next hour, president calls out social media again. this time saying the platforms are silencing millions of people. into autodesk shifts subscription and it pays off. tenure at apple. how the tech giant has transformed since he