tony: -- yousef: this is bloomberg. stock exchange on notice. the government says some of the explosions were carried out by suicide bombers, and people have been arrested. major market shifts in major market violence. is trump administration forced to tell five nations, japan, south korea, and turkey, to lower u.s. sanctions if they continue to import oil from iran. the oil would also affect china

and india. they plan to announce on monday that the administration will not do waivers on may 2. former chairman carlos ghosn is facing the most serious allegations yet. he has been indicted of charges of misdirecting company money for his personal use. that will keep him in jail longer. n briefing on his freedom last month after posting to fail, then he was arrested and jailed on new allegations. saudi arabia and united arab emirates are pledging $3 billion. the two nations say they will in the $1.5 billion central bank and then donate the rest for food, medicine, and feel. is billy andung promotional events in hong kong and -- delaying promotional andts in chin hong kong

shanghai. the only test models that have come in have been criticized over their durability. china will accept new applications for computer games today. previews on the group applications will have to be submitted. china's gaming industry was hit hard last year after regulatory approval. let's check back in with the markets for you after what has been a lighter few hours in terms of volumes in liquidity in quite a few of these asset classes. china is online and down 2.3%, coming under quite a bit of pressure. in fact for, crude oil, that is in focus with the potential imminent announcement from the united states saudi arabia oil sanctions waivers, currently up 2.6%. and u.s. calling it a little bit lower to the downside, but that

is some of the heavyweight tech companies in the united states as we gear up for a busy few days of earnings. also quite a bit of economic data coming out over the next two days, including u.s. gdp. we will have another update in half an hour. this is bloomberg. ♪ welcome to "leaders with lacqua" with me, francine lacqua. legal and general is the second-largest insurer in the u.k. and one of the biggest providers in europe with around 33 million customers and 319 billion pounds of assets. mark wilson is the ceo. -- nigel wilson, thank you so much for speaking with bloomberg

and being on "leaders." beingyou so much for being o here. nigel: we have very motivated, highly talented people. one thing we have achieved in the last few years as outstanding people. results, butgreat the results are consequence of great people and the implementation, excellent execution of the strategy. francine: how do you motivate people, that? nigel: we do what we do. we do it with a purpose. we do such outstanding things to make a difference and lots of people's lives. it is not something we make daily or hourly or weekly profits, it is very long-term. economic activities actually

provide solutions for the very a very real sense. francine: are we saving enough for pensions? are not saving enough anywhere for pensions. not only do we need to save more, but we need to do more. we have had to come up with more solutions, which actually align with the real economy and drive in real growth. francine: francine: if there is a pension deficit, who should pay for a? it?or nigel: we as an employer have to realize that we have to step up, also, individuals have to step up. as a business, we have to step up because you have to find investments that deliver good return to people, and educate people on why it is the right thing to do.

francine: how will your business change in the next 10 years? we talk about ai, robots, doing things digitally? when it comes to insurance, what do think is the biggest transformation for you? nigel: i think the biggest thing for us is to be what to do more -- is we will be able to do more things with the same amount of people, because of the application of technologies. and people worry that jobs will get taken away by technology, but activities will get taken away, a lot of boring, mundane activities will get taken away, but lots of great new jobs will are going to be created, and lots of new opportunities will be created. that is what has happened in the last 200 years. every time there is a technological leap, people get very fearful about jobs. the u.k. has got more jobs now than it has ever had in history of time. 32.6 million people, it has got more vacancies than it has ever had in the history of time, but actually, people are still worried about technology. francine: but is it the right job? they can be quality jobs, but if you aren't trained for it, you will be displaced. nigel: that is a good point. we have these vacancies because we simply have not trained

people up to take advantage of these new opportunities being created through the application of technology. we are all short of a lot of skills. when i wander around the country, the biggest issue is that people talk to me about is skill shortages, and if they could get more skills, they could actually grow their business much quicker. but that hasn't been happening for a number of years. francine: whose responsibility is it to either educate, transform, or train the citizens of tomorrow? nigel: it is everybody's. it is a collective responsibility. we certainly have to step up and improve our training. but actually, the universities and the schools need to improve their training, to make people have relevant skills. the world has changed. therefore, you need to change what you are teaching people. and change their attitude towards stuff. the thing that has struck me traveling around the world, is the spirit of entrepreneurship in universities is the highest it has ever been in my life, because they see these wonderful opportunities.

they just sometimes don't have the skills to maximize the opportunity. francine: is that why we see the rise in populism? nigel: that is part of the reason. there are many reasons for that happening. we have not created a model that is inclusive in capitalism. it is all about exclusive wealth. that is not selling well to the wider population, so people are looking for different solutions, and looking back in a very nostalgic type of way at history. the fact that things were better 20, 30, 40 years ago. well, they were not really. but actually, the pace of change has favored different types of skill sets than other types of skill sets, and people are feeling left behind, because they are not well-equipped to deal with modern society. francine: but why? is that a legacy of the financial crisis, capitalism that needs to be rethought? nigel: it is capitalism that needs to be rethought. i don't think it is a legacy of the financial crisis at all. i know we blame the crisis for a

lot of things. it has nothing to do with that. i think there are lots of new skills required. we have not created the infrastructure to create lots of those skills. universities, schools, and employers like ourselves need to transform themselves and create more relevant skills, and more ambition amongst people, so they can see a path to prosperity for themselves. francine: up next, dealing with brexit britain. we talk to nigel wilson about the challenges of running a business in the u.k. ♪

francine: legal & general has operations around the world, but it is a british business. over the past few years, it has contended with swings in the pound, elections, and uncertainty about the outlook what the outlook will be for the nation post-brexit. so, what kind of leadership skills does it take to make decisions for a u.k. business amidst this uncertain environment? nigel wilson is still with me. do you worry that countries like the u.k., but also the u.s., and to a certain extent, and a lot of european ones, have either a south-north divide, or a kind of midwest, east coast-west coast divide? nigel: i absolutely agree with that. i think it is very sad that that has been allowed to happen. we are sitting in this wonderful building in london, the best city in the world to live in, but we have neglected the rest of the cities and towns in britain for the last 30 or 40 years. and part of our mission has been to actually put money in these places and help them grow. and it is the same in america. you know, you have so many

flyover states, and so many great cities, but actually many others have fallen behind. francine: nigel, you are really a champion of a lot of the regeneration in the north. when did you realize that was a necessity? for almost holding this country together. nigel: that was after the crash, when i thought about going back to my training as an economist many years ago at m.i.t. it was so obvious that london had got ahead of everyone else , and everywhere else had fallen behind, and so for the u.k. to really prosper, the cities of the north, and indeed of the south as well, needed more capital put into them. and that capital could deliver extraordinary returns, because there was such a large cache of potential. people had to realize that you could not just sit and wait for the man from whitehall to go north and say we have these problems here, and here is how we can solve them. there are enough problems here for people to solve without going to edinburgh, or

newcastle, or manchester. but we went on that journey and we made a difference. francine: where do you see the biggest problem for the u.k.? nigel: we have a huge infrastructure deficit. america has got a bigger one, actually. the u.k. has 150 billion in housing, 100 billion in energy, 100 billion in transport, a massive education deficit, big and a big regeneration, and a digital deficit. and that capital is all available, but it is sitting on the sidelines. what we have to do is -- francine: why? why is it sitting on the sidelines? nigel: i think because it is new. we have not been investing in these towns and cities or doing these big projects for a very long period of time. america has some great examples. austin, texas is fantastic. boston is doing a great job. lots of cities have been on this journey. a handful around the world that have been amazingly successful, including in china. you know, the chinese have an authoritarian solution to making

this stuff happen. in a democracy, it has proven very difficult, because we have tended to have quite a confrontational, political ideology type of model, which is hard to get things done. and we want very much to have a collabor\ative model, so that everyone realizes we have a common goal. how do we all work together to achieve those goals? francine: how much are you doing infrastructure, housing, so it's like a flatpack you can roll out? nigel: the biggest thing is in infrastructure. we have spent 15 billion already, and we proved the concept works. it has taken 15 billion to do that, but it actually works. we now need to figure out how do we scale that up and use the fact that we have 3200 pension funds and clients that want to do the same thing. they have got a lot of their money into those low-moving assets. how do we move that money into real assets, creating real jobs, improving wages, and creating real skills for people?

francine: how long does that take to see the fruits? that is one of the concerns i keep hearing about that in infrastructure. you put 10 billion, 20 billion, 30 billion, but it takes a long time to see returns. nigel: i don't agree with that. i think that everybody creates barriers for not doing things. it just -- you know, you create a pipeline. we created our pipeline at least seven or eight years ago after the financial crisis. now it is huge, a huge pipeline. we have had double-digit growth, in eps, dps, 20% plus r.o.e., so something says that we are doing something right. it is the fact we have had this very long-term view. and yes, there will be some infrastructure projects that last 30, 40, 50 years, but we have liabilities that are 30, 40, 50 years, and we are matching assets with those liabilities. that results in a great solution for everyone. francine: you started doing this seven years ago. do you think more chief executives are looking at long-term infrastructure, or less, because of the crisis? nigel: it doesn't have to be chief executives. it can be pension funds. it can be the mayors of cities, it can be the chief executives

of councils. you need a critical mass of people who have a common interest. they don't all have to be chief executives, by any means. but it helps. francine: has it gotten worse or better? nigel: it is definitely getting better. i think that a lot of people leaned into brexit. one of the things that surprised everyone is actually employment is at an all-time high, vacancies are at an all-time high, and the economy is growing at the same pace as in europe for the last few years. and people have leant in to brexit, realizing that they actually they can't just sit around and do nothing. francine: what do investors misunderstand about maybe northern u.k., some of these parts that are less known to investors? nigel: they have to get out and visit them. the thing i say to politicians is if you keep living in the london bubble, all you meet is like-minded individuals. you have to walk in the other guy's shoes and go and visit these places and go and talk to people and actively listen.

lots of these solutions are not our solutions. many times we walked in and found the vice chancellor of the university has had a dream, this great vision, but actually having the levers to pull to make stuff happen, and the capital to make stuff happen has been very difficult. we have often bought into other people's vision, because it is better than ours, and said, that is a great idea. we will support and make it happen. francine: i have been told in your office there is a bookshelf with many different books. nigel: indeed. francine: what do you have on there? nigel: i have everything. i have all the classics, as well as lots of modern books. i gave up sleep many years ago , and i decided that reading -- but i have always been intellectually curious. the fact that i am intellectually curious has resulted in a lot of people acting as great mentors to me. i feel very privileged to have wonderful people who spend a disproportionate amount of their lives helping me. that is why people come first, because actually i got lucky in life, from my junior school

teachers when i was six or seven until today, people who have been mentoring me. francine: nigel wilson, thank you. coming up, legal & general puts its money where its mouth is when it comes to diversity. details next. ♪

francine: nigel wilson has long been a proponent of shattering the glass ceiling. his business has committed to increasing the representation of women in management roles to 50% by 2020. as the father of five daughters, the issue is a personal one, as well as smart business. nigel wilson is still with me. how have your five daughters actually shaped the person you are? nigel: immensely. because family comes first. and i wanted to be a good dad. my daughters are all very strong willed. [laughter] nigel: they have been very demanding over their life, but actually, seeing through their lens as they grow up, the restrictions to a certain extent on the opportunities that presented themselves to them, it meant i had first-hand experience of what it is like in

, in effect, to be a woman trying to get on in a modern world, and all the barriers you have to overcome to get to the top. that is in part why we developed our 50-50 by 2020 program. francine: and that is 50% of senior managers being women by 2020. nigel: yes. francine: how do you actually attract talent? is it inside, outside? nigel: it is all of the above. but actually it became a great message and a powerful message internally. in fact, one of the most difficult management challenges i had was i wanted 12 of our senior women to be role models. i wanted a photograph and a little narrative on them and put it right across the firm, trying to persuade them to do it, they all went, other people are much better. whereas, if i asked the guys, i would have 50 of them pounding on my door telling me that they were the guy, that they wanted their photo. it is a totally different approach. but seeing the power that that has got other people to the top -- you know, we have seven divisions, and the head of four

of those divisions is a woman now. francine: will that change? do people actively try to work for you because of that? nigel: i think that is true. i think we have become a magnet for talent. lots of women see l&g is a great place to come and work. and we are not just an actuarial firm or a fund management firm. there are lots and lots of different jobs for people. francine: do you see that changing the industry as a whole? if you look at insurance, it is probably one of the industry's is most behind when it comes to modernization, in many ways. that is fair, isn't it? nigel: oh gosh, i don't think that is fair at all. francine: really? nigel: i think we have moved on dramatically. our biggest divisions, related divisions, are also run by women. some of our best actuaries are run by women. francine: that is legal in general. dear really think the industry -- nigel: i think the industry is changing. what is interesting, the pension risk transfer business in the u.k., which is a huge business, the three leading companies are all now managed by women. and nobody has ever notice that.

i won't even mention it to competitors, but they are run, and very successfully, by women. so we have changed already. i don't think we have shouted loud enough about the change that has gone on in our industry, but we had this goal, and we are on track to deliver that goal. and it is very exciting. francine: who has mentored you? who has been your most important mentor in your life? nigel: i have been very lucky. people have been kind to me since i was very young. i met my primary school teachers , who taught me for three years, when i was very young and really coached me in lots of different ways. and it was a wonderful, moving experience. i hadn't seen her for many years. but she came to an event and asked me to guess who she was. i hadn't seen her in about 50 years. [laughter] nigel: so it was a very long time since i had seen her, and it was just wonderful. she had followed my career over all those years. but i had some very interesting life-learning experiences.

i worked very closely with bob shiller when we were at m.i.t. together, and i realized very quickly that one of us would get the nobel prize for economics, and one of us wouldn't. [laughter] francine: are you still in contact? nigel: not really. i realized in the academic world , i was better suited to working in business and actually i should go work in business, because i wanted to see things happen quicker. i did not really want to write dull research reports. i had tremendous commercial experience when i was a group commercial director, dealing with issues around the world. i worked for mckinsey, so many of the partners took a real interest in my career. i was the first phd from m.i.t. they had hired. i think they had a curiosity as to what this person to contribute towards the firm, but i got a lot out of it. francine: who is the person you admire the most? nigel: i don't know if i have a single person that i really admire the most. i admire different people in different situations and different walks of life who have made a bigger contribution, who have the right values and

behaviors. because some of my heroes might be people who don't necessarily have the right behaviors, or similarly, people have made a huge political difference, but , again, they might not have had the right behaviors. so there isn't a single person who at this moment i say, wow, they are so inspirational. francine: what does it mean being a leader in 2019? is it different to being a leader in 1999? because of the changes we are going through? nigel: absolutely. i think the world has changed, and i think the command and rule authoritarian approach that we saw in the past, and silo-driven organizations, is gone now. you have to form an organization that is about collaboration, it is about teamwork, it is about visible, shared accountability. and people want that accountability and responsibility. and you have to have a real purpose. i think businesses will struggle if the people who work for them

can't be emotionally engaged in what they are trying to achieve in their purpose. and bloomberg is a good example of that, where you are the dna of business. francine: but how do you translate that dna to your employees? nigel: i visit every office in the world every year and maybe try and meet everyone who works for us. everybody has an opportunity to talk to me and see me physically. it is not just a corporate video going out -- we do that as well, of course, but i wanted that engagement. and i want people to listen to what i have to say, but also question me and put me on the spot. so that they have that visible, physical discussion, and people feel therefore that they are being listened to, and we then listen to what they have said and actually make better outcomes for them at work, and actually for society as well. francine: what is the best piece of feedback or advice you have received? nigel: i think, about actively listening.

i think the m.i.t. mckinsey background made me a little bit intellectually arrogant. and i have turned that into intellectual curiosity, which i always had, but i am much more tolerant as a consequence of that. and i engage better than i used to. and so -- because there are lots of ways of looking at things and you need that diversity, and over time, we have created a lot more diversity in the workplace, and as a consequence of that, you can become a better leader by listening to others. it makes a difference. francine: is there something you don't like about your job, or a particularly difficult day you don't want to happen again? nigel: i think the regulatory burden of financial services at times can be slightly overwhelming, because that is really the legacy of the financial crisis. and there is a huge regulatory burden put on us, but we have to become a trusted industry. i think that legal & general is

a globally trusted brand, but we have to be a trusted industry. and we still have some way to go on that. but once we solve the pension crisis, the housing crisis, the infrastructure crisis, and actually help to create lots of real high-paying jobs, then trust will increase exponentially. francine: what do you want your legacy to be? nigel: i don't really want to have a legacy. in a sense, i am happy with everything that legal & general has achieved, but actually, i never think about my legacy at all. i would like people who work for me and work with me to say, it was great working with nigel. if people remember me as a good person to work with, then that would be fantastic for me. francine: would you ever go into politics? nigel: i am always asked that. i have been asked that question since i was 11, actually, when i used to go knocking on doors and canvas, as this midget 11-year-old. i think people used to find it

very unusual. you know, i was chairman of the youth club at 12. i sat on the village hall committee at 12 and 13. francine: so you are telling me yes, you were made for politics. [laughter] nigel: no, i am not made for politics at all. i am made for business. but i like to have engagement with politicians. politicians have very difficult lives, and they don't have a lot -- don't have enough levers to pull. i have lots of levers to pull, and that can make a difference. i think we have made it very difficult for politicians to do that. so i have no interest at all in being a politician. but i have got a huge interest in helping politicians and others deliver better societal outcomes. francine: nigel wilson, thank you so much. nigel: thank you. ♪ you so much. nigel: thank you. ♪

>> this is bloomberg in dubai. these of the first word headlines from around the world. the number of people killed by a wave of bombings in sri lanka has risen to 209. early investigations are underway until further notice. the government says some of the explosions were carried out by suicide bombers. one of four have been arrested. the attacks on foreigners and churches are a major shift in the many years of violence. and a new bloomberg survey suggests the bank of japan makes policy moves and further easing. only a small minority expected to move this week. half of the comments we spoke to

expect stimulus measures becoming slower as inflation remains stagnant. a vast majority of those surveyed think that banks are going to tighten. a team ofning investigators to china after a --ort on social media claim show a carppears to bursting into flames. tesla iconology is some kind of acknowledges there is some kind of incident. we have a lot of liquidity assets that we are coming back from the easter weekend. russia is returning back to the trading session. a broader team here dominating is setting the tone with what is happening in crude oil. we're expecting an imminent

announcement from the united states. surveillance coming up in half an hour. ♪ francine: italy's campari is a major player in the beverage business. the companies portfolio includes skye vodka, while turkey bourbon -- wild turkey bourbon and it , has seen the meteoric rise over the last few years. it started in 1860. its drinks are now sold in 190 countries. its products have become staples around the world. today, on "leaders with lacqua"" we meet bob kunze-concewitz. the chief executive of campari

group. thank you for joining us. when you look at what people drink around the world, how has taste changed in the last five to 10 years? bob: pallets have evolved, more refined. a much more open for spices and bitter. bitter taste. campari is having a renaissance. 15 years ago, we were flat as a pancake. now, we are growing high single, low double digits. a lot has to do with coffee, which changed the taste buds of people. francine: is that marketing? people find it a cool drink again? bob: marketing, yes, but if you don't taste good, they will not drink it. francine: how do you see the trend, the changing palette? bob: we especially see it in the u.s. in terms of palette, if you think about our business, it is

mostly a vodka market. right now, you see spirits with a lot of taste growing very fast, bourbon, spicy bourbon, tequila, 100% agave. even amari. believe it or not. we do extremely well there. francine: this is because people want experiences, cocktails? do you first try something in manhattan to see whether it goes domestic. bob: there are two polls for us. one is san francisco and one is new york. you have to go to the bars and talk to the mixologists to understand and see what is happening. i will give you a case in point. in the early 2005, our managing director was meeting these mixologists. they were talking to him about bourbon and the bourbon renaissance. if you look at the data, bourbon wasn't going anywhere. lo and behold, five to 10 years later, the cool kids are drinking bourbon. we had the same phenomenon, the mixologists -- they were mixing themselves negronis. and give us insight to create the renaissance of campari. francine: how much do you spend in marketing to push these projects out? bob: it is not a question of money. it is a question of people activating the products. francine: you speak to a young mixologist who drinks bourbon,

and he says in two years that is what people will drink, so you want to buy a bourbon? bob: we tried to buy bourbons, contacting people. they would not sell. we tried to buy liquids to create our own brand. as you know, we bought absolut and had to divest the wild turkey brand. we went in there and won the auction. it's been history since. francine: are there other iconic brands? do iconic brands still sell, or do people buy more local? bob: what people are looking for is not necessarily local, big, small. they are looking for a brand that is authentic and has a true, distinct story to tell. that is what makes a difference. you can't just invent something and make it artificial. if it's not true, it's not going to work. francine: did you ever doubt it would take off the way it has? bob: no, no, because when we bought it, it was a small brand in the northeast of italy. we understood everybody there was having five drinks a day, believe it or not, and that drink was this, so that was a big moment. we said we are only going to concentrate on one drink. the previous owners were concentrating on other drinks. only one drink. the drink was missing one thing,

glamour. it came in little glasses like this. it wasn't really exciting. to glamorize it, we decided to put a cocktail -- it was revolutionary at the time -- to put it in a big, large wineglass. francine: this was when? bob: 2005, 2006. francine: it became more desirable? bob: yes. more liquid, more glamour, and the bar owner could price it up. it became even more profitable for them. it is a win-win-win three times. francine: how much do educate the barmen? how many bars around the world do you sell to? hundreds of thousands? how do you get your message across?

bob: that's why take so long to build the brand in a given country. our teams have to educate the

bar staff to create the perfect drink, the right class, the right proportions, the right amount of ice, some soda, not exaggerate. here in the u.k., they have a huge issue, they put the right measure then fill up the rim with soda. they dilute the whole drink. we have to keep on going back and educating, educating, educating. we have hundreds of people doing that every single day. francine: are tastes global? do people in the u.s. drink the same things as the u.k. and italy? bob: everything starts in the u.s. mixology, all of the trends start in the u.s., then europe, then asia. francine: what is the most surprising thing you have seen in the last couple of years? we hear now of craft beer.

especially in emerging markets. would they rather drink their own brands than the older, western brands? bob: people are drinking less, but want to drink better. the second thing is they want to show off. as soon as you make some money, what you drink is who you are. that is why they go for premium western imports. francine: coming up, the importance of building relationships with mixologists and how celebrities like matthew mcconaughey are buying into the -- are vital for the beverage business. >> thank you. francine: much more from the chief executive of campari next. ♪

♪ francine: campari's growth has skyrocketed through acquisitions, including a purchase in 2003. the firm dips into the bourbon business, snapping up the wild turkey brand in 2009. so, what is next for campari and how does the company decide what will be the next big thing in spirits? bob kunze-concewitz is still

with us. how do you teach people to drink responsibly? bob: you have to message it constantly. in our case, we really believe in the mediterranean way of drinking, which means when you drink that you accompany it with food so you can tone down the negative impacts and take time with it. it's not about getting drunk, but enjoying an amazing cocktail. francine: is it up to chief executives or governments to educate the population? bob: everybody, governments, companies, bar owners. we have to work across the chain. francine: what do you make of the cannabis trend in the u.s.? bob: it is an interesting trend. i studied in the u.s. it is not a surprise to me. i think it is good they legalized it. you get the illegal activities out of it, collect tax money, regulate it, but it needs to be treated like a spirit. you need education on how people

use it responsibly. francine: could there be something in it for campari? bob: no. we have a very different tact. in our industry, there is a lot of excitement. some of our peers are buying stakes in large cannabis companies. we think, fundamentally, spirits and cannabis are two different businesses, and we don't see any synergies. first of all, in terms of what we are trying to achieve, cannabis is for small intimate gatherings getting together and winding down, so probably more in the area of beer and wine. we are about bringing more crowds together, winding up, getting ready for the party. it's really two different pairs of shoes. there is one fundamental difference, history might prove us wrong, but we don't believe there is opportunity for

branding in that area. look at in holland, it is widely available for 30 years or more and there is not a single brand there. it will be more like wine, very fragmented. in jamaican from this hill, versus colombian -- i don't know what. we would rather let other people work on that. we don't like the idea of mixing cannabis with spirits. francine: how do you build your brand? does it have to be through celebrities? bob: we used celebrities when it makes sense and there is a perfect fit with the brand and when it is authentic.

we have a wonderful collaboration with matthew mcconaughey, it came spontaneously. we got contacted and got into it with him. he did not just want to be the celebrity face. he refused to do that. that was our first idea. he really wanted to get involved into the development of the campaign. even development of a new line extension. francine: for what, cocktails? bob: the wild turkey brand. we just created a new variant called long branch. it was his inspiration. he is from texas. his parents met and got married in kentucky, and they wanted to find a connection between the two, so the idea was to take some mesquite wood from texas and use that as the charcoal filter for the bourbon. he actually got in his car in texas and drove all the way to the distillery, and it is not close by, and spent days with master distillers to come up

with the right blend. it is his passion, and he lives it. he incarnates the brand. francine: are you looking for more brands to buy? it seems we had big consolidation, now petering out, but you have a model that would adapt? bob: our industry is fragmented. the top 10 players have 15% to 20% of global volumes. a lot is still in family hands, and a lot of national brands and regional brands. there are not many global brands in our industry. we are interested. our business model is based on half of our growth from acquisitions and half from organic growth. we actually designed the company to be able to absorb more acquisitions. francine: which means what? bob: we have developed a scalable model. we have the infrastructure, i.t., the supply chain, the sales organization, which can flexibly absorb additional brands. francine: talk to me about your supply chains. a lot of the factories are local. where the drinks are made. that prevents you from wild gyrations in currencies. is it natural hedge?

bob: we do have a natural hedge. bourbon has to come from kentucky. our scotch has come from scotland. it works wonderfully. francine: do you worry about tariffs? bob: sure we do. at the end of the day, it would only hurt the consumer. francine: can you increase prices? how do you deal with that? bob: if tariffs come in, we do pass it on to the consumer. francine: up next, the future of the beverage business, how trends, tastes, and marketing have changed during bob kunze-concewitz's time at campari. ♪ ♪ francine: the beverage business

is driven by trends, and what consumers and bars around the world want to drink at that

moment. and the man who has guided the styles is bob kunze-concewitz, who joined campari as group marketing director in 2005. he has overseen the changes in what the hippest mixologists create, and how and spent has moved from traditional media to smart phones. what kind of leadership skills does it take to thrive amid big changes? give me a sense of how many healthy drinks? i'm going to be an a bar in six years and ordering a nonalcoholic drink? bob: it is an interesting trend where we are quite active. we had this amazing brand in italy, it is a non-alcoholic aperitif. francine: only known in italy? for now. bob: we have been testing it in holland, belgium, germany, switzerland, and austria. and it is resonating.

we will expand that internationally. we're also working on new brands. francine: can you give us a sense of your ideal drink, a non-alcoholic vodka? bob: the non-alcoholic vodka is called water. [laughter] bob: there's not much of a margin. francine: do people, how has the asian market changed? do people want the brands they wanted 20 years ago? bob: the asian market is a very particular market dominated by very large local brands. if you look at china, it is 99.5% of the chinese spirit consumption is one company that went from two dollars to to $2000. western imports in most of asia are high in cognac and high in

scotch whiskey. that is what the older generation is doing. as asians are traveling and discovering mixology and cocktails, that is an emerging trend. if you went back three or five years, i go back to china regularly, i would have to go to the bar in a western hotel. if i wanted a negroni. now, i can go to shanghai and choose from 12 different phenomenal bars with excellent bartenders. francine: how does that happen? do you contact the bars and lobby for them to sell your drinks? bob: no, the bartender community, the mixologists, is a tight international community. they know each other.

they love to travel. they visit each other's bars. they do guest appearances. it's very finely tuned. today with social media, instagram, etc., it is live. francine: how has that changed? originally you were a marketing guy. how in tune are you with social media? has disruption gotten faster? bob: it has. above the line classic media, classic media is only 20% of what we spend above the line. francine: billboards, ads? bob: tv or anything like that. most of it is digital. you can target a lot better, but more important than that, you can fine-tune your message, because you get immediate feedback. the speed of things has become tremendous, and old dinosaurs like me, we are just shocked by that, which is why the profile of our marketeers is changing. francine: will we ever go back to the way it was? i know you still do calendar. bob: we have moved away from the calendar. for three years now we do short movies because we are able to express ourselves and communicate much better, and give more feelings and emotions

in a movie as opposed to a calendar. francine: you will never go back to a calendar? do you think people will hearken back to the old days of something tangible? bob: things are cycles. probably at a certain point we could do a vintage calendar or something like that, but currently, it is much more exciting to have the moving image, and we can leverage it better via social media. francine: bob, who is your target client? is it different in italy than the u.s.? is it different depending on the age bracket? bob: age is not that relevant. it is more psychographics and taste profiles. it will very from brand to brand. gender can play a role.

if you are talking brown spirits, it is much more male-dominated. if you're talking about lighter spirits -- francine: is aperol a chick drink? bob: it starts as a chick drink. then it becomes a 50-50 drink. the source of business for aperol is beer. most of the consumers of beer are men. one third of social alcohol comes from white wine, sparkling wine, and champagne. francine: talk to me about leadership. what does it mean being a leader in 2019? bob: it is the same as two centuries ago. the fundamentals have not changed. you have to have a vision and know where you want to go. you have to enable people to follow you or translate that and make it happen. leadership is not good if you don't execute. if it's just head in the clouds, you can't get anything to happen.

you need to have your feet on the ground. francine: and go and mix drinks. bob: i do that. francine: how do you inspire people? is it the way you structure the company or being on the ground and talking to your employees face to face? bob: we have very little layers. there is a lot of direct contact. i spend more than half of my time traveling. i practically know by name our top 500 people, their stories, families, and everything else. having a dialogue that is very open. we use a lot of social media. we have an internal channel, and also campari tv. it is back and forth all the time. francine: what do you think your priorities, your employees or is it bottom line, financial? bob: our business is about two things, people and brands. it is the people who actually develop brands and take them to the next level.

my number one priority is really people, making sure we have the right people in the right position with the right tools and the right incentives to do what they need to do. francine: what does that mean? what do people want? bob: people want freedom, creativity. they don't want to be a number. they want to be someone that can contribute. you need to listen to them, give them responsibility, and give them all of the support and the tools that they need to achieve what they need to do. francine: what is the best piece of advice you have gotten? bob: well, i must say it is my father. he told me stay the way you are, be humble, and be hungry. francine: is that advice you actually pass on? bob: yes, being humble and hungry is one of the key behaviors we expect and instill into our people. francine: when you go into a

business meeting, there is a brand you want to buy, how do you choose it? is it perspective or or how you can integrate it into your own -- bob: the most important thing is the brand authentic and does it have a real and resonating story to tell. yes, it is liquids, but we tell stories. it's lifestyle. if that resonates and it is true and distinctive, that is when we get excited about a brand. francine: doesn't everyone have a story as long as you tell it well through marketing? bob: if marketing is an amplifier, it works. if marketing invents the story, sooner or later, it is found out and it loses all credibility. when we buy a brand, we go into its history, into the archives, we talk to the people, talk about what are the stories, then we try to distill it and bring it alive. francine: what is the toughest part of your job? was it a particular day that you had to take a tough decision that you remember? bob: the parts i don't like is when we have to restructure. clearly that is tough. it is tougher if it is focused on people which are probably more on the lower echelons in terms of education or money. we have had to restructure some

of our agricultural fields in jamaica, and that clearly was very tough. so, we put in extra emphasis and created a fund so we could reeducate the people and try to find other crops for them to plant and have a livelihood. francine: we talk a lot about sustainability, which goes back to agriculture. do people care about a sustainable drink? do people ask you where it comes from? bob: very much. not only consumers, but if you attract talent, they only come to companies that have an ethic, integrity, and walk the talk when it comes to social responsibility. francine: where do you see yourself in five years? bob: i don't know. i always say that in campari, one year is worth three years, so the equivalent of 15 years. francine: the change and the pace. bob: we are constantly reinventing the company and

doing things, so who knows. i love this company and i love this job. francine: thank you for joining us. bob: thank you. ♪

♪ tom: this morning on to

collusion and on obstruction, congress considers what to do next. what legal experts say. quiet holiday trading, oil elevates and the fed has it written for the first of may. and sri lanka, more than 200 dead on easter sunday. lisa, just in the last hour, we see the identification of the jihadist group and the death toll of the christian churches in the luxury hotels goes near 300. lisa: a tragedy to be clear. this is who sri lankan officials have identified as the perpetrators but they have not come forward. more updates on that through the day. and over to our asia morning as well. new york city with bloomberg first word news. a localanka now blaming

extremist organization for one of the deadliest terror attacks in years. most 290 people were killed on easter sunday. the attacks targeted christians and foreign tourists. some of the attacks involved suicide bombers. two dozen suspects have been arrested. the most-watched comedian will be president. voters venting their frustration at the expo since the resolution five years ago. and oil rising to the highest level in six months, reportedly eliminating sanction waivers that allowed buyers to import oil from iran. over 500 countries were exempt, sanctionsolton says are meaningless if exemptions are in place. rudy giuliani says there's nothing wrong with a political

campaign taking information from russia. he did tell cnn he would have argued against using it offered as a rebuttal to questioning about the infamous meeting at with people offering dirt on hillary clinton. global news 24 hours a day on-air and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. of the known world is closed today. america very much open. a little bit steepening to the yield curve. the euro doesn't do much. oil of the solid 2%. next screen, please. the return to equities, we may see that lower on the 559 close. me, ups the story for two dollars and sterling below 130.

staffed in london today. enjoying the easter holiday. i was thinking about oil as well. the 10 year yield. in this is sri lankan yields. they have been the best performers year to date. now we're seeing a little pop to the yield. and we need to stop the show. would any of them bring on the yield?kan 10 year i have goosebumps. they deal with a very serious tragedy as well. this is what you do when you have one thing popping as well. this is brent crude. this is $100 a barrel and we got up as high as 110.

comparison leg up in . lisa: i wanted to take a look at what is going on ahead of the u.s. open, the only market open right now. russell 2000t the versus the s&p 500. it lost 1.5% while the s&p 500 gained 4%. indicator,eading that orange line. that is the small-cap. the fact that they are losing is quite a problem. is part of any number of conversation we have had across bloomberg. whether you for or against the president, this is really intelligent writing over the last three days. i thought we would begin with someone in the economics and politics mix. the chief u.s. policy strategist.

i want to go to a column in the washington post that i think is extraordinary to bring back how the mueller investigation fits into people's lives. the soil temperature was 39 degrees. and it needs to climb to the high 50's. confirms thatport he is unworthy of the office, and heis our charlatan did not collude. then we go on to a game of thrones allusion, so it is written. what is next for the mueller investigation? mueller himself will be testifying in pilot -- private, then in public. it will be quite a frenzy to hear him testify.

i think the columnist is right. most americans and democrats have other issues. tom: it seems to me that with all the uproar, nobody really changed their opinion. is it a more divided america? care about health care, they care about education .nd the care about the economy but for the country to go through a year of a very ugly in peach mint is not something that people want. and lest we forget, there are other stories like payments to a porno star or trumps foundation being used as a personal piggy bank.

those are big issues, but impeachment? probably not. will it help or hurt the democrats going into 2020? impressive --n an and aggressive move to impeach as backfired on newt gingrich when he tried to impeach bill clinton. the democrats have plenty of fodder to go after him but impeachment is not the way to go. tom: what is the timeline for other prosecutors to pick up here? is it a more deliberative process? >> i think that there will be more investigations. activeuld still be very as we head to the heart of the 2020 election campaign. noticed in interview after

interview that there is a huge stable,n rates up, rates down. why do we have such a polarized view of what the fed will do? >> in my opinion, this economy could surprise to the upside. 2's, note in the mid- one point something. fed rate cut is absurd. i think there is a decent chance the next fed will move late in the year and it could be a rate hike. president trump has been vocal about the federal reserve. how damaging would it be to the fed reservey if the

hikes again? >> it would hurt the president. punishing the iranians, curving further iranian exports. raise the price of energy and gasoline which makes it more likely that the fed at some point may have to worry about inflation. is the federal reserve being pressured by president trump at this point? >> he wants to pressure them, but i don't think he can. the markets will pressure them but donald trump can. the idea that trump can intimidate the fed i think is overdone. tom: what will you be watching

for this week as you like economics with politics? divisive you forward for the next five days for agf investments? end of the week, we get durable goods and gdp for the first quarter. i continue to think that number is going to surprise to the upside. and if it does, we will have entered the second quarter with a decent momentum. the second quarter could be the high 2's. this is not the sign of an imminent recession. if anything, is the sign that growth will be a pleasant surprise. tom: martin schenker and kevin cirilli will join us as we follow on from three days of mueller analysis. up, we are going to dive into the markets this morning. it is almost like a pause day. and we will be joined about why

you aren't on board with down ? ,500 stay with us. this is bloomberg. ♪

>> this is bloomberg surveillance, let's get the business flash. indicted on new charges of mr. acting company money for personal use. that will keep him in jail longer. he was arrested and jailed again on new allegations. that it plane is plagued by shoddy production.

they say it paints a skewed and inaccurate picture of the program. also says metal shavings were often left inside the jet. tesla looking into a fire involving one of its cars. we take a look at security camera footage and it shows the white tesla bursting into flames. authorities want more scrutiny. that is the bloomberg business flash. tom: lisa and tom here. let's show you where we are at this morning. let's get a more thoughtful discussion about the path forward. greg is with us from bnp paribas. a prettyeard optimistic view of where the economy is going and your base case starts with economists that are more cautious.

>> we will see a slowdown in the second half of this year. the labor market data, the wage or we can do some margin contraction. job ofu do a great linking nominal topline gdp and u.s. equity performance. >> we look at a macro earnings model where we put in things like wages, gdp, and we track how that tends to affect corporate earnings. and if we see the environment, lucy topline slowdown or rising input. we seem -- we see rising wage costs. lisa: what are you telling clients to do? >> with the markets having a rally at the start of this year and a much less favorable environment in terms of corporate earnings --

lisa: what about ipo's? bomb. lyft completely there are lawsuits coming out. pinterest did very well. what is it telling you about the appetite going forward? >> i think generally, the environment where we see some of these ipo's comes to market. of working at the late cycle. tom: what are the pros actually doing? >> the market could climb higher and we have to take some risk. tom: we have single-digit

returns. lisa: for all the people that year --to cash last tom: i am in a triple leveraged cash fund. i feel safe. lisa: if they are coming out and pouring money into equities now, are they going to get burned? risk that if they are forced to push -- put cash to work, it does not feel like a great level for us. it is a poor index. lisa: how big is the slow down? >> we arelooking -- not looking for an aggressive slowdown, but it will trended growth rates. i think it will translate to a more aggressive slowdown in earnings. tom: there was a great chart earlier, the disparity between

big stocks and little stocks. do you stay on big stocks or do you find the smaller stuff? >> the small caps is something that we see accelerating in the second half of the year. we think that there is more valuation with less pricing power. do? what are frost going to has lostout there their bonus into next year and they are up 7% right now. life is miserable. what is that behavior in the next 60 days. >> we have a huge number of corporate's from the s&p. we see more of an environment of winners and losers. we think those who can't can both suffer. small cap versus

large-cap, you think there is an opportunity and small-cap. small-cap. right now, the russell is leading with negativity. >> i will argue that small caps can continue to underperform. we just think it is an -- a leading indicator of the foreign market. profitable valuations tend to be worse. i think what we see from small caps can continue. thank you for being here. sri lanka has declared a national emergency after a jihadist group killed nearly 300 people on easter sunday. more on their deadliest attack in years after the break. this is bloomberg. ♪

lisa with tom keene in new york. we are getting the latest from sri lanka and we will bring you that in a minute. but let's continue our conversation about where we are seeing people take her cash and put it to work. we're lucky to have greg with us. greg, thank you for being here.

we are seeing money starting to flow into u.s. equity mutual funds. there is a question of are we too late in the cycle? what is the big risk? are we looking at just a mild correction? >> we think we can season downgrades. we are looking for a massive collapse. lisa: on friday, we got the biggest one-day inflow that tracks 20 plus year etf's. one of the biggest flows i have ever seen. >> we see a theme of people trying to put money to work. there is a theme of people

trying to put money to work. i think people are squeezed in terms of cash. tom: let's take a representative chart here. this is a company that nobody knows. apple, 15 years, straight up. a linear function, basically. so much is what they will do with their cash. why don't you just on the select group of companies in their position? >> this idea that buybacks have been an important driver, this growth slows. the 4% can sustain the buybacks? more valuable? i have seen citigroup signaled a share buyback. -- signal their share buyback? >> if we see the broader markets in multiple contractions, the

disparity between the two becomes apparent. lisa: thank you for sticking with us. coming up, the aftermath of the mueller report seems far from over. we will speak with todd mariano, u.s. director in the next hour. and we will give you an update on the price of crude rising on the heels of the expected sanctions tightening by the u.s. on iran. all coming out. we have a negative tone and markets ahead of the u.s. open, the one major market that is open given the fact that europe is closed. in london -- in new york, this is bloomberg surveillance. ♪

with i am lisa abramowicz tom keene in new york. francine lacqua has the day off. now for the latest out of sri lanka, where 290 people were killed in easter sunday bombings

at churches and luxury hotels. a nationaleclared emergency. officials now blame a local muslim extremist organization. beenozen suspects have arrested. we want to bring in bloomberg's correspondent ft. sri lanka. give us a sense of what it is like on the ground and what the fear level is. >> there is a sense of unease. yesterday was the bloodiest attack the country has seen the civil war. curfew,rnment set in a put in place for tonight, and

there is a call for emergency, inause they want to bring laws that will allow them to peopleterrorism -- arrested on terrorism charges. this is a local organization, but there is concerned they may another group.y tom: thank you. we will speak again with her. right now with first word news is viviana hurtado. viviana: saudi arabia and the united arab emirates writing another check, pledging $3 billion to sudan. its longtime president was ousted this week. most of the money will go towards food, medicine, and fuel. america's elderly are twice as likely to work now than in 1985,

but according to a new money manager, united income, 20% of those 65 and older are still in the workforce. many cannot afford to retire. the biggest spike in utterly employment goes to college-educated workers. democratic house leaders are making a contention -- consessi on to progressives who want to impeach the president. democrats will discuss whether to impeach. house speaker nancy pelosi is warning of the risks of an unsuccessful impeachment attempt. 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'm viviana hurtado. this is bloomberg. tom: thank you. an interesting morning. american markets open, much around the world closed it with us, greg boutle of bnp paribas. us,martin schenker joins

giving us huge value in london last week and now back in new york it i decided not to read one sentence of the mueller report and rely on experts. it is a cottage industry of experts analyzing and analyzing. have you gotten value out of the experts? martin: i have definitely gotten value out of the experts, but i spent the eight hours on the flight back reading the mueller report. tom: get a life. [laughter] you're supposed to watch "a star is born" for the 14th time. martin: i was tempted. tom: what did you learn? martin: it is an impartial and almost novel-like in its unemotional recounting of the things that happened from prior to donald trump's elections afterwards. lisa: pretty much people who

have read through it say it is not exactly the all clear, no collusion, no obstruction, everything is great kind of rosy picture, but is it enough to carry forward and continue to harp on for the democrats, given the fact most of the american public are sick of it? martin: that is the absolute question for democrats to answer. aside from mitt romney, republicans have not spoken up in condemnation of donald trump and the people around him. without republican support, impeachment will fail, and it will be a victory for donald trump if they proceed with impeachment that will not proceed. lisa: what is the crucial passage in that 400 page report that you perused? martin: as a number of people have observed, his decision

that, while activities that could be construed as obstruction of justice, he gave the president the benefit of the doubt. he couldn't prove there was collusion, and therefore he gave donald trump a pass. up 1974 are not brought and some of the activities then. reports ofcathing the attorney general. what will you see this week of criticism and support of the attorney general? martin: i think you will see republicans line up in support of bill barr. -- ifrved, at the time you can imagine, jeff sessions in that same situation, this is why he got rid of jeff sessions and got bill barr. he got the attorney general he wanted. and barr proved a loyal servant of the president. ina: greg boutle, come on

here. how much are you watching this when it comes to what it means for the economy, for a more profound picture, regardless of the political circus? for equity important markets, but in terms of this specific issue, it will not drive the market in the short term. trot outpresident can a better economy. you push against that a little with a slower economy. but people like greg valliere say is it a make america great again economy, no, but it is in that vicinity. greg: no doubt this administration has been helpful for equity markets. we have seen the move in health care stocks over the last couple of weeks massively on performing -- underperforming. an: is that -- is there

opportunity in health care just because of marty schenker's world? greg: we could see a short-term rebound, but it will remain political football in the second half of the year. lisa: now that the mueller , and it becomes a political quagmire for the democrats, does it make it more likely we will get another four years of president trump? for a frozen moment in time, donald trump is the front-runner. but i do think issues like the economy have become less important. the issue for voters is character. to relate to the candidates. social media, 24 hour news cycles make it imperative that the democrats find someone electable. that is issue for americans. can they connect with that candidate, and has donald

trump's behavior disillusioned marginal voters who voted for him? doeswhat kind of week speaker pelosi have and what kind of week does she need to have? martin: she faces a critical test. work with the progress of party without pursuing impeachment, which he knows can be politically fatal? she has so far been an excellent leader. it will be a challenge for her to negotiate this next week. lisa: marty schenker, thank you, bloomberg's chief content editor. greg boutle sticking with us. coming up, we speak with karen formerformer spall -- small business administration director. this is bloomberg. ♪

lisa: we are being joined -- right now, i am lisa abramowicz along with tom keene. mills, and is karen she is joining us now, former business administrator director under president obama. , ands out with a new book she discusses challenges for small businesses in the lending market and how syntax can -- fintech can smooth processes. we just had all the bank earnings out. we know you spent a lot of time at the sba parsing through these earnings and what they meant for small businesses and tech investment. what is your take away? karen: banks are doing pretty

well. one of the things that you notice is they are putting a tent of money into technology. jp morgan is putting $9 billion into different kinds of technology. but they have the earnings. as long as the economy keeps and lending for four lives are performing -- you have to worry at the end of a cycle if some of that lending is a little more risky than usual, so that is a bit of caution. but for now, they are all steam ahead. they do not seem to be affected yet by the other players, the tech companies, amazon and paypal. but they are on the playing field, and they are coming. lisa: is the fact that banks have not been threatened by smaller players a problem for small businesses? according to your book, the advent of more financial technology and smaller peer-to-peer and other lending

is the future for many of these small businesses. karen: you have to give entrepreneurs and fintechs credit. they busted open the marketplace. lending has not really changed in 50 years to 100 years. you would xerox paperwork and take it to your bank and wait three weeks or three months for an answer. then came the fintechs. you can get your answer in an hour. then amazon and paypal and square came in. for a while, look like the big banks would go away. but i think they will be among the winners, because they have the customers, and they have one other benefit -- low cost deposits. and these fintechs, they were getting their money from hedge funds. the loans were too expensive. i think the banks will do ok. tom: i want to congratulate you book oferd alert beach

the summer. this book is a threat to families from coast-to-coast. for is an exceptional book those in banking and technology. jp morgan spends a lot of money on technology. you have the american economist, john oliver, going after the joke of small business. how do you link small business with big banks that really do not want to do business with them? karen: technology is going to take away some of these frictions that have been in the marketplace. to dodid not want business with anyone who wanted a small loan because they were not making any money. but if they could automate this -- you have artificial intelligence, and you can be the bank of choice, along with all the other services you will hevide, i think jamie dimon,

talks a lot about how much he wants to keep his small business. tom: when we were children, it was chemical bank. there's always that one bank that does small business. do you see evidence that bank of america really wants to do small business loans? karen: bank of america has chosen to put consumer loans first, but brian moynihan grew up in small business. he was the head of small business when i was the head of the sba. he is committed to it. he will come back to small business. tom: and what is so scary here is, on page 115, there is a scatter. chart you cannot show children. lisa: i honestly will never show my children a scatter dot plot, for the record. [laughter] "strategic decisions for banks." much theis not so

question of banks or other private debt investors and -- it is that small businesses are not demanding loans. the demand for loans have not been as robust as many people would like to see. karen: small businesses got crushed in the recession. one of the reasons was it was a financial crisis, and the banks stopped lending. the other reason was that they really lost their markets. recovere very slow to and cautious. we do not have as many business startups as we used to. it is worth worrying about, the small business sector. and everybody talks about small business, but -- i call it the political paradox. nobody does anything for it. how about some bipartisan legislation this year? the small business act of 2019? we could do something. tom: and what could we do?

a rebate on yield? what is the tactical execution to "do something"? love taxall businesses breaks. that is one thing. they also love health care. they want to provide health care for their employees. keep exchanges that allow them -- as the affordable care act headed in that direction -- those are some of the things they like. tax credits on investments to make it easier for them to buy equipment. those are part of the packages we have seen work in the past. these do not cost a lot of money. tom: karen mills, thank you. congratulations. i kid about it, but it is a tour de force. i like the end of it. "fintech, small business, and the american dream." this is a huge deal for anyone

in financial -- finance and banking. lisa: and it gets to the heart of some of the questions. also the emergence with suntrust -- the merger with suntrust, how that will play out as well. stay with us. on the mueller report, much, much more. will feature an important morning must-read from professor feldman of harvard. kevin cirilli, coming up. this is bloomberg. ♪ s is bloomberg. ♪

viviana: this is "bloomberg surveillance." let's get the bloomberg business flash. another public battle on twitter for elon musk. this time it is with a key supplier. he is taking on panasonic, which makes the lithium-ion cells that powers the tesla cars. he says it is working on a reduced pace, slowing down production. a french company is seeking acquisitions in the u.s. it is considering targets that include metadata focus.

the company has a market value offeringillion, services for industries ranging from aerospace to life sciences. jp morgan plans to widen the use of blockchain technology. techank invited financial companies to experiment on developing the platform. last year, 75 of the world's largest banks during the information bank network. tom: thank you. may 1, the fed meeting. let's dive into the important consequent -- conversation. greg boutle of bnp paribas. i wanted to show a chart, the fed funds target rate, adjusted for inflation -- lisa: this is not -- tom: negative yields, and up we go from a slow point and number of years ago. and we have gotten to where the fed has a positive real rate

yield. how does that change the analysis of this meeting? greg: the big thing about this meeting is we have this more dovish tone come through, which has helped markets a lot. we think the fed is actually going to be a less important driver than it has been. tom: this is important. given the move by the fed year ago or a year and a half ago, it really did not affect the economy, where now there is a tangible effect because we are adding a positive real rate, right? greg: yes. if you look at the change in tone and the hikes we have had today, the timing in terms of monetary policy should feed through, somewhat, to the real economy. that is what we are looking for a growth for in the second half of the year. lisa: at what point does bad news become bad news? greg: people need to think about the reaction function of the fed there is a higher hurdle rate for economic or market news to

infer -- two influence the fed. lisa: so if the fed is saying we are on hold because the economy is soft, that is bad for the equity markets, correct? greg: as an equity market investor, you should look less at the markets and more at the data. if we see a slowdown in data, the fed may react to it, but that we should be negative. tom: the bad news becomes bad news? that is when the sweaty chocolate egg drops on the fancy couch. the bad news is when it comes under it -- lisa: or when the dog comes in. [laughter] let's go back to the fed now. there are other meetings through the year. is this the important meeting or is is one of the dead meetings? greg: it is an important meeting if they say something the market is not expecting. the macro driver will be more

important in the short term than the fed. lisa: is there a concern that the fed is not as good, necessarily, at surveilling the economy as hedge funds and other investors that are mining the data with all sorts of machine learning and a.i.? greg: i think the fed has a good expertise and skill set for looking at the economy. the market often used the fed for leading the economy. it is one of the reasons that the fed has become more dovish. tom: do you game equity markets into the fed meeting? one of the great ways to not do this, is enjoy losing money off of a dead meeting -- do you game the fed meeting before the call? greg: no. there are times when the fed called is extremely important for equity markets, but we have so many s&p constituents reporting earnings for that will be a bigger driver. tom: organic revenue growth.

that goes back to your nominal gdp thesis. greg: we are seeing a marked deterioration in terms of not just revenue, topline numbers coming through but also in terms of bottom line, earnings. margin compression is one of the key things. we are looking at. lisa: as oil prices rise, what is the yield on the 10 year that has to affect stock markets? greg: the rise in oil markets from here is something that will be negative for equity markets, driven by supply constraints. tom: greg boutle, with bnp paribas. thank you. please stay with us. some important conversation in the next hour. this is bloomberg. ♪ this is bloomberg. ♪

collusion,orning, on

on obstruction, and unchanged america as congress will consider what to do next. what legal experts say and what they write. quiet holiday trading. oil elevates. the fed meets the first of may. it is written. in sri lanka, the government says a jihadist group is responsible for nearly 300 deaths easter sunday. this is "bloomberg surveillance ." i am tom keene with lisa abramowicz. the sri lankan story is moving, off a horrific civil war and then a time of peace destroyed easter sunday. lisa: absolutely, including some foreigners who were killed, raising questions about the tourism industry, but most important, what a tragedy. tom: right now, to our first word news, here is viviana hurtado. viviana: sri lanka is blaming a local muslim extremist organization for one of asia's deadliest terror attacks in years. nearly 300 people were killed in

easter sunday bombings at churches and luxury hotels. of theernment said some tax involved suicide bombers. do thousand -- two dozen suspects have been arrested. it is note joke. ukraine has elected its most-watched comedian president. zelenskiy won over incumbent petro poroshenko. oil rising to its highest level in almost six months. the trump administration reportedly limiting sanctions waivers that allowed buyers to import oil from iran. japan, and five other countries were exempted. john bolton argued sanctions are meaningless as long as exceptions are in place. says there isani nothing wrong with a political campaign taking information from russia. he did tell cnn he would

argue against using it, for partly as a rebuttal to the infamous meeting at trump tower, the trump campaign russians offering dirt on his arrival, hillary clinton. 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'm viviana hurtado. this is bloomberg. tom: thank you. --ities, bonds, currencies oil on the move. the curve steepening. the euro does not give much. 26. vix, 13. and a towel -- closedow with a high thursday. and i would point out, with britain on, like, a five week break, sterling is a notch lower.

what do you have? lisa: i would say i wish we were all british on that month-long break. but sri lankan yields rising attack.ter the horrific tariff it is stemming the biggest -- it is stemming the biggest game for any south asian sovereign debt area so far this year. 10% year-to-date. now are you seeing a break. tom: i am so glad you said that. this goes to the idea of 2 million tourists a year. that is shattered with the terrorist attack as well. are significant to the economy. we have some breaking news with bed bath & beyond. lisa: it has named a new chairman and is appointing five strategy, forming a

review committee. independenting an chairman. we will bring you news throughout this morning in this overall leadership transformation. tom: on the surveillance radar, they're having a transformation. lisa: not good news. [laughter] are you going through a transmission? tom: maybe they will move kitchen accessories. who knows? kevin cirilli did not spend the weekend at a bed bath & beyond, he spent it looking at the mueller report and a lot of good analysis. i decided to not read a single sentence of the report and to really read many different experts across the political landscape. what struck you, in all the analysis and over analysis of the last three days? kevin: first and foremost, the issue of cryptocurrency. this will be an area of nonpartisan consent.

i was speaking with republicans on how the russians used for currency in order to find their propaganda machine. it is a rare avenue in terms of regulatory oversight. second, the social media platforms that were hoodwinked and used by russian propaganda. lastly, the politics. on the issue of upchurch and of justice, no doubt this is the broader take away domestically. this is where back-and-forth will continue. you saw it flooding sunday shows. but honestly, i am not sure that this has much of a long-lasting, political risk for the president. tom: let me bring up noah feldman. bloomberg's bloomberg opinion. here is professor feldman, the true scholar of harvard. mr. mueller judged it would be a mistake to go after the king without killing him. in the real world, no proof of

collusion meant that trump could not be taken down. when the special counsel. could not prove collusion, he decided to take the high road. then he quotes a 19th century giant emerson -- you come at the king, you best not miss. what is the future for mueller? kevin: he will meet congress. he has been called on not just by democrats but by republicans. i would anticipate that sometime within the next four weeks, sooner rather than later. wondering,hing i am going back to russian interference in the election, is there any sense of how involved russia currently is or will be in the 2020 election? there was evidence in the midterm elections that they were trying to utilize the same type of aggression. there is bipartisan legislation to foster security in elections systems. social media platforms have

tried to get up to speed, though they still face criticisms, as we have covered here, in terms of how they have responded to various back-and-forth in global events. this is a real threat. if you look at the dni report from two years ago, if you read the mueller report, all 400 plus pages of it, it is evident that russia had an elaborate scheme to propagandize and influence lowercase d democratic institutions. lisa: there is a lot of focus on how democrats will respond to the mueller report, but what about republicans? are they coming out in a unified voice saying that this clears the president and we are behind him or is it morning was? kevin: mostly but for the exception of senator mitt romney from utah. he has been critical. he says it has made him uneasy, some of the details outlined.

but for the most part, the republican party is behind the president. several top republicans are behind the president. they are ready to turn the page. honestly, if you look at polling and here what is coming from house republicans, they are coming -- they are in agreement with the president that there onuld be an investigation the investigators. when the president was having a wounded warrior event, he alluded to as much. this is a president who is really locked not just with his base but is trying to read the political tea leaves. privately, when you talk to advisors of this white house, they say bring it on, in the sense of potential impeachment proceedings. they feel that would be democrats overplaying their hand. tom: kevin cirilli, thank you. we have more coming up. a good time to speak to a general and who links interest union chris rupkey, mufg

bank. please stay with us. this is bloomberg. ♪

viviana: this is "bloomberg surveillance." let's get the business flash. the most serious allegations yet --inst gohn, indicted on we nissan chairman he was arrested and jailed again on new allegations. boeing is rejecting a story that a plant in south carolina is plagued by saudi production. the company says the "new york

times" account paints a skewed picture of the program. the "times" reports of faulty parts have been installed in some 737's. tesla looking into a fire in shanghai involving one of its cars. security camera footage showing the white tesla bursting into flames. that could add to concern about the safety of electric vehicles using high density lithium batteries. chinese authorities want more scrutiny of energy vehicle quality. lisa: thank you. after its recent soft patch, the u.s. economy may be showing fresh signs of stabilization. , wall street estimates are creeping higher. we are expecting first quarter gdp estimates friday. now the question is what will the federal reserve do with

them? joining us now, chris rupkey, mufg union bank chief financial economist. thank you for being here. what we talk about stabilization, what are we looking at in particular and what do you expect in the next udp report friday? chris: it does seem to be a little stronger than we thought. remember when retail sales collapsed in december, we thought the first quarter would be something like 0.8%. now it is up at 2.2%. it will be an important driver in growth. fomc says it will not be a 3% sustainable growth, so the fact that the first quarter will be stronger than we thought, that should raise estimates. lisa: i want to talk housing. this has been a weak spot. from your perspective, how strong is the stabilization in

that sector, especially given the fact that lower rates have given people confidence to go out and take more? chris: it is not like a housing bubble over a decade ago. the problem seems to be the -- housinge puzzle starts have never picked up to be anywhere near where they were a decade ago. i cannot really answer that. it seems to be something to do with the fact that they cannot lower-pricedble, homes right now. it is quite a mystery. it is not adding to gdp like it used to. tom: you went to write where i to where iek-- right was this week. i was reading something that theyd it letter z, catchall variable. everyone has a china warmest

chris: don forget -- don't for get that companies were starting to lay off workers. until day five people, there is no risk of recession. unemployment claims have come down from that job, so the economy is strong. know thedo we really effect of this tech knology on technology on each and every american? fintech -- isike the next generation going to be able to have jobs? all of that takes place over years and years and over the next decade. it does not have anything to do with growth now. may: some aspect that

affect the economy's oil, climbing higher on the news that the u.s. will tighten sanctions on iran. how does that factor in when you talk margins and whether consumers can stomach higher oil prices? all thehe rule is gasoline prices going up caused a temporary soft patch in the economy. but the lesson is, from a decade ago, that consumers can get used to anything. they can get used to higher interest rates, higher gasoline prices. right now, we complain about gas prices on the east coast, but california is paying over $4 a gallon, due to their own idiosyncratic reasons. we can get used to it. lisa has her own -- lisa: what kind of life are you living? the good life.

[laughter] meeting, is the fed and there are other fed meetings after it -- i do not see a lot of focus on may 1. why can they not surprise here? chris: they could -- lisa: they would not surprise. chris: what if the president wants rate cuts. for risk management reasons, they said that downside risks are mounting and will not hit their inflation target, so they are signaling seeing up a rate cut. the markets are a little crazy now. [laughter] lisa: the markets are a little crazy now. that is well done, basically saying the next move is more likely to be down than up. tom keene is looking at vespas on his screen. that is all he is focused on now. tom: i can see you on it. lisa: i can see myself on there

too. from your lips to god's ears. [laughter] chris rupkey staying with us. much more coming up. fed, mueller, and oil prices. this is bloomberg. ♪

tom: good morning. tom keene, lisa abramowicz in four francine today. what we would like to do now is

speak of sri lanka, but not of the immediacy of the tragedy. we are still receiving information, some of 300 dead, mostly in christian churches and some of the fancy hotels in colombo. we have the perfect conversation all ian marlowe, covering policy in south asia. you understand this is buddhist with minority hindu, muslim, and christian, and it goes back to the sonalis buddhism of the british empire, going back to 1948, then independence. who is this majority buddhist population that creates immense tensions with these three minorities? been saying,e have in sri lanka, almost every religious group, at one point or another, has targeted one of the other groups. what happened here -- and when this first happened, easter

sunday, people were speculating that it may have been a buddhist extremist group. there was some talk of the in tamilbeing neighborhoods and some speculation over where there -- whether there was anti-foreign antagonism in terms of targeting the hotels. obviously, the government has come out about an hour ago and blamed a little-known islamic group entry longer. it is kind of a surprise. i do not think anyone thought the islamic groups, which are smaller and have not been known for these widespread attacks, for them to come out with an attack of this sophistication and coordination. it caught a lot of analysts by surprise. am: is this a continuation of civil war after a decade of quiet, or is this something you?

iain: most people think it is something new and something worrying. it is a worrying trend in the sense that it is out of the blue. it is not the classic tamil separatist violence. this is something different. it is a group no one had suspected was capable of doing this kind of attack. the targets themselves are new. several analysts pointed out that in about 30 as of the civil war between the tamils and the majority population, foreigners were never targeted. they never targeted these types of hotels and go out of their way to target foreigners. that theyw, a sign are sending a global message. a lot of people think this will have a serious impact on the economy, on tourism. everyone is trying to get out of the airport. there was even a pipe bomb discovered on the road leading to the international airport.

there is a lot of tension. obviously, this is bigger than the mumbai attacks in 2008, those paralyzed the city and captured global attention. sri lanka is a much smaller country than indiana. this will have a huge impact on the optics of how people look at sri lanka. that i want to go to point. from my understanding, the government did have some warnings about this attack, which does appear to be coordinated and sophisticated. what did they know and what does that say about their ability to stymie an attack like this, going forward? iain: this looks incredibly bad for the sri lankan government. reports indicate that they had advance intelligence warnings possibly from indian intelligence services or another foreign agency. but to understand why they missed all these cues, you have to go back to the constitutional

crisis sri lanka had last year. you have a coalition government of two parties, between the prime minister and the president, that are feuding. last year, the president fired the prime minister and tried to appoint someone entirely new. in sri lanka, the president controls the police and the military. you have a situation where one side is not talking to the other. some people are getting intelligence warnings. others are not. there is some indication that the prime minister was excluded from some of the security meetings. tom: thank you for the meetings. -- briefings. iain marlow. please stay with us. this is bloomberg. ♪

tom: good monday, everyone. "bloomberg surveillance." lisa abramowicz and tom keene. right now, here is viviana hurtado. viviana: nearly 300 people are

dead in one of asia's deadliest terror attacks in years. police in sri lanka arresting 24 suspects after the bombings at churches and luxury hotels. the government blames a local muslim extremist organization. sri lanka's prime minister suggesting authorities received warnings but did not pay enough attention. and the united arab emirates writing another check to bailout a troubled ally, $3 millionpledging sudan. sudan. most of the money will go to you, medicine, and -- to fuel, medicine, and food. america's utterly are more likely to work now. 20% of those 65 and older are still in the horse. and he cannot afford to retire. 20% of those 65 and older are

still in the workforce. many cannot afford to retire. democratschiff says will discuss whether to begin impeachment hearings. the mueller report identified at least 10 instances where the president could have obstructed justice. house speaker nancy pelosi is warning of the risk of an unsuccessful impeachment attempt. 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'm viviana hurtado. tom: thank you. let's begin and continue on their mueller report did we lliere, marty va schenker, kevin cirilli, and now todd mariano of eurasia group. chris rupkey with us as well. if they are needed to be a distraction so no policy would be debated or completed, this must be it. for example, we are all talking about drug prices.

republicans and democrats what to lower drug prices. is that derailed by the mueller report? todd: good morning. yes, i think that is a fair assessment. something like the magnitude of the mueller report so easily sucks up offices in -- sucks up oxygen in washington. legislation is an uphill battle anyway, and when you have something as divisive as their mueller report, the conduct of it, and now, in the aftermath, it really reduces the chances even further. tom: if there is new, enhanced law, is that good for the president of the united states? gridlock, isced that good for the president of the united states? todd: it is good in that it allows him to avoid some tough visions in terms of the legislation we are talking

about. it is less good in that the president has to go out on the campaign trail next year having had, for the vast majority of his term, a net negative approval rating. he needs something positive to sell to the american public. the white house is looking at trade over the next couple quarters as something ripe to bring to the campaign trail. border security as well. but any thing requiring a congressional stamp, this makes that difficult. lisa: you studied russian policy with respect to international ers back when you are at lehman brothers. what does this or do for you? since it is clear that russia eid metal in u.s. -- did meddl in u.s. elections and has continued to since. relations-russian have been on a downward slide for a long time.

my career has largely coincided with vladimir putin's 10 year at the head of the russian federation. definingar -- the tenure of russia in the 21st century. this does not put u.s.-russia's relation on a better footing. success of that effort to interfere in u.s. elections, to interfere in americans deciding on who their president should be, is something that i think will poison relations for a long time to come. your chris rupkey, from perspective, given the fact that the likelihood of rising u.s.-russia tensions will be on the forefront, based on the interference here, how does that factor in? does that level of tension

elevate, with respect to potential risks to the economy? chris: not yet. there is a lot of fears of political risks back in december, which helped create or the stock market. at the moment, stocks are most sensitive to political risks, threats of impeachment or whatnot, and they do not see any. is close tohas -- 15.9%. abouta little alarmed potentially the iran sanctions -- any country who buys a rainy oil willys iranian be sanctioned by the u.s. that headline was troubling. tom: mike pompeo speaking over the week and got some play. but one thing we have not done is talk about china trade. how do you gauge, how does mufg gauge, the potential of a

negative surprise off what appeared to be ok talks moving forward? is it feasible there could be a big china trade disappointment? chris: i hope not. they have been moving in this direction for a long time now. what can i tell you? it is not just the trump administration who are against china. the deficit -- the amount of exports coming in from china were starting to get and norma's -- enormous. some administration down the line would have to deal with that. but i am hopeful it will be resolved in the next 30 days. tom: what is the update from washington? we are still positive on the chances.

the two sides are certainly getting closer. a chinaink especially deal allows the administration to turn to other items on its trade agenda. first and foremost, getting u.s. congress, onegh of the areas we were talking about earlier that could be impacted and potentially derailed by the way that mueller continues to play in washington. but getting a deal with china allows the administration two, number one, vindicate its approach, its economic war on turned to other things they can present to voters ahead of 2020. lisa: there was a story over the weekend talking about even if the u.s. and china come to some sort of trade agreement, that will not necessarily resolve some of the tensions that have between u.s. and chinese companies that have soured

toward each other. what is the lasting effect of this, regardless of if we get resolution in the near term? and: we have to think long hard about things are more structural in nature and not related to one administration. similar to your question about putin. defined -- defined view of the note states. it is largely due to structural restraints between the two countries. u.s. and china are only beginning to embark on what is clearly a path of both cooperation and confrontation. it is not easy to integrate these two countries. it will not be easy for these two countries to cooperate, even far beyond the trump administration. so a trade deal will not resolve all of those things overnight. signal will do is send a that cooperation is possible. but it will not last for all time. tom: todd mariano with chris

rupkey. we will go to chris rupkey's japan in a bit. on bloomberg radio, we drive their conversation forward on a wage growth, or lack thereof. stay with us. this is bloomberg. ♪

viviana: this is "bloomberg surveillance." flash.et the business a victory for activist investors. has a new beyond independent chairman, and the board is forming a committee to review bed bath & beyond's

strategy. a french technology company is seeking acquisitions in the u.s., considering targets that include medidata solutions, a software firm focused on clinical trials. of $4.9 market value billion. jp morgan reportedly plans to widen the use of blockchain tech. the bank invited financial tech companies to experiment on developing a platform. last year, 75 of the world's largest banks joined the interbank information network. tom: thank you. todd mariano with us from eurasia group, chris rupkey of mufg union bank here. we talk about the japanification of europe, of america. how about the japanification of japan?

nominal gdp in japan. this tells 25 years of work. basically, a flat line in nominal gdp. everyone enjoyed the crisis. then things got better. it works for a while. let's back up to five to eight years ago. what worked for japan? chris: it is a good question. i guess the abe government coming in, changing the tone of the discussion? try to do going to inflation. they have had mixed success on that. the core inflation has come back to above being negative. it is no longer negative. but it is not towards 2%. is everybody walking around, taking a victory lap on a flat nominal -- chris: everyone has a job. sometimes i wonder do we have

the right metrics in explaining how well prosperity is across countries? sometimes we focus too much on growth, and maybe we should not come as a population ages. everyone in japan has a job now. the unemployment rate is very low. there is no deflation. there was only mild deflation anyway. you know how the federal reserve officials are always worried about deflation japan happening here in the u.s. but it was mild deflation in japan. lisa: that is the existential question, how do we measure success and an economy, but certainly economists are looking in japan and are not seeing a bright picture. you can see a rising proportion of economists surveyed by bloomberg, nearly half, expect the bank of japan to ease again, which is mind-boggling. how do they ease? how low can rates go? chris: i am not sure how they can ease anymore. i think central banks are trying to do a little too much with

very limited tools at this stage. once you get interest rates down to zero, you are kind about the end of the line. the bank of japan, obviously, has bought a lot of assets to try to pump up the economy, but never got core inflation anyone near 2.0%. lisa: as we look to japan as a failed story of stimulus, which pretty much people can say, since we are seeing inflation more abundant they are, what policy implications are there for the united states as we try to get inflation somewhere above 2% here? he was saying, you have central banks dealing with conditions that we have really not seen before. certainly, historic, economic conditions that, in the united states, have not really changed, materially, from what we saw as feeding into the 2016 election cycle.

also as he was saying, the difference for voters looking at growth and unemployment rate versus some deeper disenchantment with the washington establishment. the latter is a more powerful driver of voting patterns. and still very much in the mix todemocrats are starting work to nominate a candidate to face off against trump. tom: chris rupkey, your call on the 10 year yield? chris: you do not want to hear my call. it is always well above everyone else's. i want interest rates to be normal -- tom: what is this, 2006? 3.1%? chris: yeah, i do not try to talk about it often. two embarrassing. tom: how do we get there? chris: the fed. they have to reengage, push

operates higher, to normal levels. mr. rupkey with mufg union bank and todd mariano of eurasia group. young, dean y mellon investment management, her strategy on the market is nuanced. the 8:00 hour, i wander over to bloomberg radio and commit conversation for the next few hours. it is written. ♪

i'm lisa abramowicz in new york. francine lacqua has the day off. tom keene has jetted out to head to radio. oil at its highest level in almost six months. this comes as the u.s. government is said to eliminate sanction waivers that allowed buyers to buy iranian crude. joining us now is mike mcglone as well as todd mariano, who is

joining us from eurasia group. foot get the 50,000 picture. why did the u.s. reverse course and say all of you countries that need to buy oil from iran, you cannot anymore. mike: sanctions will not matter unless the waivers are eliminated. it generally means china, india, japan. it came down to this cannot happen, it cannot continue unless we draw a line in the sand. when is the last time we saw crude oil up and the stock get down in yields up? it may be a return -- lisa: hold on. we are seeing crude traded up 2.3%, surging on this news. todd, give us your thoughts on the u.s. changing policy and saying we will illuminate

waivers for those nations, crackdown at a time when the president has talked about how he would like to see lower oil prices, not higher ones. todd: there is a push-pull for the administration. following through on the waivers as part and parcel of the administration's iran deal. leaving the iran deal does not mean much unless you are able to apply new pressure to the iranian regime. clamping down on crude oil exports is an effective way to do that. the conditions that got us to the deal that got -- to the deal and the first place. in, the-pull comes president has shown he is sensitive to high oil prices. this administration, like every other administration, is sensitive to high gas prices for its potential effect on consumer spending, whether that is

psychological or real. heading into an election cycle, it is not something that a president wants to tempt. you have got an administration that is talking about going down to zero iranian exports but is meaningfully constrained from doing so. lisa: that speaks much to mike point.'s we are seeing stocks selloff in response to higher oil prices as people expect the higher input costs to affect margins. from an oil perspective, what are the chances that saudi arabia says ok, if iranian oil is really off the table, we will produce more? mike: typically they do. typically saudi arabia increases production when iran has issues. this is a little different environment. the key thing i see is the market is so oversupplied and opec has to cut so much just to

offset the increase in north american supply that this is what the market needs to go higher. it needs continued issues with geopolitical events. otherwise, it is not going up. typically, saudi arabia will add production when these kind of things happen. lisa: there is a chance that this will take longer because of saudi aramco -- mike: it is a unique time. you need events like this. lisa: i would love to get your sense of how much this ratchets up tension in the middle east now, given the fact that, before this, the u.s. left the nuclear agreement with iran, did not have the teeth that it may now, going forward. todd: this returns us to the tensions, the administration having clearly come down on the saudi side. the u.s.-saudi relationship is not now what it was even just a

few years ago, which they used -- they used to be not much daylight between washington and reasons.or various there is now. you have, especially in congress, a lot of dissatisfaction and outright anger with the saudi regime, despite a multi-decade partnership that has lasted through oil embargo, war, economic downturns. tensions in the middle east are also related to the region trying to get to a new status quo that i do not think it has quite gotten to yet. washington's relationships with countries in the region are certainly in question as well. lisa: i am wondering how high oil prices can go before supply picks up around the world, including the united states and we get the balance again. now ishe next level around $70 wti.

for: people are looking $70. right now, we are looking at now.0 in the u.s. oil prices rising to their highest levels since november. thank you so much, todd mariano of eurasia group and bloomberg intelligence's mike mcglone. coming up, a conversation with the honeywell chief executive. look for that interview at 10:30 a.m. in new york, 3:30 p.m. in london. this has been bloomberg" with tom keene, lisa abramowicz. from new york, this is bloomberg. ♪

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with a run. the u.s. could offer no waivers to iranian sanctions, further tightening the crude market. democrats divided as how to respond to the mueller report. with -- will there be oversight hearings or a formal it impeachment -- a formal impeachment? and the nasdaq 100 sitting at a record high. >> welcome to "bloomberg daybreak." news continues to come in from sri lanka, a devastating attack on easter sunday, upwards of 290 people now reported dead and they believe that it is local , other saying that it is so sophisticated it had to come from outside. alix: what is so start to me is the pictures of all the tourists -- fleeing thehe country, draining a significant part of their economy. david: