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. no one can get out of the

country. it's hard, long lines at the airports. if you look at their economy a bit, the largest export is frankly textiles. and that liquidity position, you not only see exports disrupted, tourism, and capital out for low. but that happened, the central bank governor on location said it won't affect liquidity with that that truly remains to be seen if this continues. david: the main issue of course is the 290 people killed, a terrible tragedy. in the markets, europe closed anywhere you look, down by about seven, the you did have the nasdaq closing at a record, interesting to see whatever followthrough you have their. the dollar, it's a flat dollar story, nothing happening in the bond market, the real action will be in the bond market, levels, over $70

per barrel. i cannot imagine that president trump likes that one. i want to see how he squares this. david: but who could he blame? good to me, like higher prices at the pump. david: china for your morning brief. this is the day that elon musk is going to lay out his plans in palo alto, california. home sales numbers for the month of march and the bank of japan has its latest decision on rates. that's when we get the first gdp growth numbers. and of course, all week long we will be getting earnings with 30 percent of the s&p reporting, including twitter and snap-on thursday, facebook and tesla on wednesday. comcast, andd, starbucks on thursday. alix: time for our first take, we are joined by christine harker and lori shanker.

apparently the administration is anyg to ask in a -- ixnay waivers they have on a run. normally they have to be reduced enough to be continued to borrowing, called the waiver. why? why is he doing this when oil is the same price as last time he granted the waivers? >> he's trying to hurt the government of it ran and he's -- downan and he's doubling on that pressure. if you want to think strategically, it may be counterproductive in terms of oil prices, as you suggest, but that is not necessarily the way that this administration works. david: how does this fit into the larger oil economy question mark is this a good thing or by -- or bad thing to have oil prices going back up? christine: for u.s.t's good

based oil producers, though it's a trade-off. higher oil prices have not been traditionally good for the world economy because it is another input cost. it is bad for the economy of iran and it may be good for some of the other opec countries if they are allowed to make up the difference. what we're hearing is that the administration is going to announce the country's filling a gap. maybe that part of the plan will have a calming effect on the oil markets. i think it remains to be seen. david: we will see if it is a head fake. maybe russia. [laughter] story has tocond do with the mueller report. we were hearing about this all weekend long, and this is what mr. nadler had to say on the question of impeachment. >> if proven, which hasn't been proven yet, some of this, if proven some of this would be impeachable, yes. david: today nancy is meeting

to figure outs this impeachment thing. as a practical matter, listen to your with the president's policy , getting anything through? >> there wasn't much of a chance before the mullah report and there's less of a chance afterwards. i do think that impeachment can never be successful if it's not bipartisan and so far there has only been one republican who gave a full throated concern over what the mullah report found, and that's mitt romney. the rest of the republican leadership once nothing to do or seemingly wants nothing to do with the mueller findings. so, without bipartisan support, impeachment will fail. alix: how does the market need to look at this? christine: the market tends not to care, it seems. politics have had very little impact on the markets erie that's a symptom of the fact that many companies do business in countries that aren't even democracies.

it's a relevant, they care more about trade deals and things that affect their profit look and at this point politics doesn't. so you know, down the road it might. it might be shortsighted not to care about this, there are certainly concerning things in the mullah report about election interference and what it means for democracy in the u.s. going forward, but the markets are reacting to earnings, as you guys have been talking about. tech investors, too. speaking of earnings, we gave a big heavy tech calendar this week. pillar, like outer ebay, intel, all reporting this week. christine, do you feel that we are looking at earnings today? or will it easy recovery that people are expecting in the there islf? christine: always interest in whether it is microsoft in the third quarter or if it has been better than expected, that obviously

matters, but yes, i think that there is a lot of question about the future, whether it is trade or monetary policy, whether it is regulation for the tech companies that i think -- markets are going to be reacting to what they are hearing from the companies, as well as come you know, what they find out about the latest quarter. monetary policy seems to be off the table for the moment. to what extent do companies looking at the earnings have to focus on china and u.s. china trade relations? definitely be focused but we shouldn't forget the fact that europe is a key focus here and to the extent that companies are in the dark about the economic outlook, look, the fed doesn't even know where these companies are going. the forward statements of these companies in their earnings calls is what we should be paying attention to. alix: companies skittish entree do matter the deal because it's not going away, they are attempting capex.

it's regardless of the deal. well, guys, thank you both very much. a reminder, you can find all of our charts for the next two hours on g tv on your terminal. browse, save the charts, g tv . iran oil waivers, they love this, global market strategists asking what it means for economists. this is bloomberg. ♪

," this is "bloomberg daybreak i'm viviana hurtado with your bloomberg business flash. the cofounders of bed bath and beyond a leaving the chain's

board. an independent chair has been named and the board is reviewing the operations structure and strategy. nissan will reportedly reject and integration proposal according to nikkei. time harderlong ship with their alliance instead. the partnership says they haven't been treated as an equal and executives believe that this would make the inequality permanent. tesla looking to acquire in shanghai, with security camera footage right there showing a white tesla bursting into flames. right there. that could add to concern about the safety of luxury vehicles using high density lithium batteries. bloomberg business flash. addd: thank you, it could to concern? my car has never done that that i'm aware of. alix: the liquid that goes around to keep those lithium ion

batteries cool? it can also just a jump on fire. that's kind of a bummer. i don't think you want that going around. turning now back to oil, mike pompeo is expected to announce that the u.s. will not renew waivers allowing for import from iran. here with more on what this could mean is taylor riggs. >> this will affect companies let -- countries like china, india, turkey, who cannot deliver the oil without the sanctions from iran. come to my terminal, you can see that china is the biggest buyer of iranian oil followed by south korea and then you have india as well, with turkey and japan. these countries have already started to make alternative plans to buy the oil elsewhere. interestingly enough we have been looking at iranian oil production and exports since the sanctions and a trump pulled out of the iran nuclear deal a year

ago. the opec supply falling and the iranian supply has been falling, increasing recently, but the lowest it has been since the obama administration with trump taking office and imposing those sanctions and what that of course means for prices, come over here, we're taking a look dubai spread with dubai heavy on crude and that is what has impacted iran the most. you have brent typically trading at a big premium that is declining here, of course, as dubai prices are rising fiserv -- faster than brent given the drop in supply. alix: think you so much, bloomberg's taylor riggs. jpmorgans now is the asset management global strategist. do you like this? do you not like that? david: right now i like that. earlier,re messaging the issue has been with

manufacturing and investment spending. the last time we went through something like this it was a higher oil price that got things .oving in the near-term it's good, in that longer-term it's a bit concerning. there is a view out there that the consumer is going to have to be the main driver of growth this year and obviously of oil prices get too high it will impact the trajectory of consumption. david: is it also a concern that we are depending on the whimsy of the decision-making of governments? these are not fundamentals, can people invest on that? i would be focusing more on shale and fracking. these are the guys who have been supply andhe overall demand dynamic over the past few years every time we see oil get past 70, the shale guys start pumping like crazy and for them it is much more of a volume business than it is an earnings business at the current juncture , so i think that rather than watching the political side of

things, which can obviously have a short-term impact, watching the response to higher prices by producers is probably the right approach to take. take off on, if you iranian crude, where does it come from? they don't have spare capacity in the long-term and libya is a mess with venezuela also a mess. based on that, if prices are more sustainable, do you want to buy big oil? what's the right way to play that in the energy space? david: the big oil angle is interesting because these smaller companies are not necessarily profitable so as we get into the later stages of a cycle with ipo and m&a activity picking up, the trend could potentially continue, making it more of a big oil story, the big guys picking up the little ones rather than focusing purely on emp. we have got a lot of

earnings coming this week including the oil and tech with consumer products. alix: caterpillar. david: exactly, industrials. to what extent does this affect other readings? david: when manufacturing activity picks up, it's often good for the rest of the world. it's not necessarily great for the u.s., but it's better than it was 20 years ago and this is a morgue global growth story. one of the big issues for tech has been the strength of the u.s. dollar, so if we can get the global economy firing on a few more cylinders, not necessarily all, but more than it has been up to this point, it takes wind out of the sails of the u.s. dollar. to me that makes earnings from these more globally exposed sectors like technology, it makes the outlook better than it currently is. alix: on the flipside, margins on the s&p, looking at david's terminal, they are already coming down. with wages rising higher and input costs moving higher as well, what is your outlook on

margins and what sectors have better pass through? margins other risk to the broad earnings story this year. take what happened last year with a bit of a grain of salt. there was an accounting error and it led operating margins to drop like 2%. that doesn't usually happen. we are tracking 11% down from 12% in the earnings season thus far and i think there is room for margins to come lower and i don't think we are heading to 9%, 8% on margins. frankly this is an environment where companies can still make it. david: earnings are down dramatically, the most in a long time. did they overcompensate? david: on the earnings side, they defend we did. one of the things we picked up beatsfar is that earnings are their all-time high but revenue is at an all-time low. i think that what happened here is that analysts ran a sales model and said they think that sales will be x.

they got nervous about global growth, brought down margin assumptions and earnings assumptions but what they should in was slower overall topline growth, not the gross -- the growth and costs alix:. bottom panel -- costs. alix: battle -- bottom panel, not even half of 1%. what does it mean for the back half of the year? david: people were concerned about the fourth quarter but i think the big risk is in the second or the third quarter. highar-over-year, it's a water on earnings and that is when the comps will be difficult . there will be a bit of a tail in the fourth quarter and if we struggle i think there is room for a bounce back and i think it's shortsighted to get too focused on what's happening in one q. david: could china save us? if the stimulus really kicks in, could it have a profound effect?

that's interesting, growth in china has a better impact -- greater impact on europe than growth in the u.s.. your point, does it get capex firing at a higher clip? if so, it brings the manufacturing sector into play and it keeps the earnings going for the foreseeable future. beid: ok, david is going to staying with us. coming up, one of asia's deadliest terror attacks in theaters, multiple explosions in sri lanka on easter sunday. more on that, next. this is bloomberg. ♪

toll from theth vicious coordinated attacks on easter sunday entry lock up is approaching 300 now. for a report on what we know, we welcome on the telephone from new delhi iain marlow's. -- marlows.

what are the facts? >> close to 300 people have been killed, there is around 500 injured, the worst terror attack in years. later this afternoon, the government in sri lanka blamed the attack on the national group that actually very few people had heard of this islamic group. it's a local group, the government now is investigating whether the group had any international links or assistance from known terrorist groups and they are reaching out to governments around the world as they look to investigate this. the event is puzzling in a couple of ways for those of us that don't follow sri lanka the way the you do. its muslim, not hindu. this is not the civil war that we talked about for many years. and it looked to be domestic. it was such a sophisticated attack it was a suspected to have had support from outside.

iain: the original speculation had centered around two groups, buddhist extremists or known for attacks on muslim groups with injury lockup the other is that it would be some sort of islamic returnee orey -- group with international ties. even groups that follow sri lanka and fair politics and security issues, most were hard-pressed to add details to what was coming out. not many people had heard of this group before. there were a lot of splinter groups and over the last few years the leadership has been divided into different groups and a lot of people were not sure who was responsible, whether it is the group that was named or people just loosely affiliated with it. there is still a lot of confusion. iain marlow, new delhi, thank you. alix: broadening out

specifically, in the bond and equity markets for etf and yen, is it a buying opportunity question mark are we fully priced here? what do you see? david: e.m. is coming back nicely, so perhaps a bit of a pause is warranted. longer we still like the fundamentals. we think that the demographic growth story of the emerging a tacticals, from standpoint, i don't think that it's necessarily the reason or the time to run in the opposite direction. you are again seeing the underlying fundamentals getting better, the growth story getting better. importantly, the fed has had a dovish pause and it looks like these companies are getting breathing room. they won't compound at the pace that we started the year. particularly if the dollar remains relatively campaigned or even softens against those individual names. david: segment, a little bit?

david: we would be much more interested in what's going on in southeast asia for a couple of reasons. one, the stimulus of the chinese economy. the latter is a preference on manufacturing over commodities. looking at latin america there is a lot of political instability closely tied to what in commodity markets. we kicked off 2019 with enthusiasm around places like brazil, not so much mexico. you have started to you flip up where things in mexico won't be as bad as we thought and while brazil might not be off to the races the way that people anticipated, a lot of uncertainty in that part of the world keeps us with a preference. related to china. how much more juice can we get out of chinese stimulus? david: exactly. there is an element where investors are conflating what

happened in 2016 with what could happen today when the dollar was so strong and energy prices were cratering. what the china do? they went back to their old tricks, they got manufacturing going. the stimulus this time around is much more on the consumer side in terms of tax cuts, bank lending, and lower interest rates. it's not going to have the same big bang impact from a growth standpoint, it will be more a wind at your back as opposed to push forward. david: all right, david will be sticking with us. -- alix: all right, david will be sticking with us. coming up, a first look at u.s. growth in the work quarter with tech and oil results. this is -- in the fourth quarter with tech and oil results. this is bloomberg. ♪

alix: this is "bloomberg daybreak. softer volume across the board, a bit of weakness in the u.s.,

equities nasdaq futures are off, 100 at a record high get again on thursday. i wanted to point out that russian equities were up by 5/10 of 1%. wrubel and equities are up, did you know why question mark pop quiz, who is going to buy? where will it come from? probably russia. david: i was going to guess that. alix: what is bad for iran might be good for russia. on the dollar is a mixed story with oil at a six-month high. 18 basis points, the vix is not really going anywhere. steady as she goes. there is the meantime, a lot going on outside the business world. for that we turn to viviana hurtado. one of asia's deadliest terror attacks in years, nearly 300 people were killed in the easter sunday bombings at churches and luxury hotels in sri lanka, attacks charging

christians and foreign tourists. says that two dozen suspects have been arrested. it's no joke, ukraine elected its most-watched comedian to be president. getting 73%lenskiy of the vote in a runoff against incumbent petro poroshenko, voters venting the frustration over the xo beat republic lack of progress since revolution five years ago. in paris it was the 23rd weekend in a row for the yellow vests protests, plus the fire at notre dame failing to keep demonstrators off the streets. the protest began as a response to rising gasoline taxes. they have now developed into a wider protest around the cost of living and the emmanuel macron governing style. news, 24 hours per day, powered by 2700 journalists and analysts in 120 countries. i'm viviana hurtado. this is bloomberg. violence,excuse for

but they did have a point, they said they could raise $1 billion for notre dame like that and what are we doing for the poor? alix: and it's not exactly apples to apples, but the idea is pretty glaring, spending all that time, all that money on that and they have been protesting for 23 weeks and it seems like each week is getting worse and worse. are a lot of government issues there, but the fundamental and underlying issue is the lack of growth. a lot of people were feeling better about where things were , friday weh is true will get the first to read on u.s. gdp growth in the first quarter. taking us through what to expect, welcome michael mckee. still with us is david level wets. davidid level wets -- leibowitz. growth inte of gdp st. louis, flat because it only comes out once a month.

the white is atlanta, look, it went way low and then came up way up high. new york was like 1.4. the atlanta fed is a in a. how did we get this kind of range? [laughter] mike: there's no real agreement and the disbursement in the forecast is very wide, 1% to 2.9%. of partly because of two factors. way the growth has been constituted has been a big inventory build a because of the trade pressures that are starting to be worked off, it appears, and then there are questions around how strong the consumer is, but the data had lagged. we are not really sure where we are. the trade data is coming in better than we expected, pushing atlanta up without as much of an impact on the new york numbers. we don't really know where we are going to come in here. the other thing, and i brought my own chart to show you as well -- david: these are all your

charts. gdp: this is a chart of over the years and on the left side it tends to start, we know this, low, with residual seasonality problems that people are working on, trying to figure why trying to figure out this happens every year, we start out low and we catch up in the second quarter and it goes on to do whatever it's going to do in the rest of the year in general and moved higher. why? we don't really know, but the forecast are that we will see a relatively slow first quarter, but 2.9% would be pretty good and that's the jpmorgan forecast. david: it is the jpmorgan forecast and i think it's interesting, we came into the year with people concerned around the trajectory of growth and where things are headed into your point inventories have almost set us free in the sense that they are providing a nice support to the overall growth figure. there are questions around what the second order looks like, right? the inventory dragged could

finally materialize, but i would point out that the consumer finished the first quarter with positive momentum. howquestion then becomes much of the inventory weakness can a consumer that kept us out of recession a couple of years back, how much heavy lifting can the consumer take on question mark hopefully more than was the case in 2015 giving -- given that labor markets are higher. with thet do you do equity rally that we have seen? do you want to sell? hold on? what do you do? you want to't think sell. i think you step back to take a look at what's happening and understand it. the move came from growth figures signaling a recession and the fed could allow markets to move higher. the fed not hiking rates can allow multiples to expand, but i don't think it will expand in a sustainable kind of way. we want to look at the sectors financials in particular

are more attractive. taking that a step further, we are also looking for the sectors that provide more income relative to the broad index. we think of it as bubble wrap in portfolios. withink it will be bouncy the path of least resistance for stocks being higher and we don't want to be exposed to what we perceive to be fairly broad swings in equity markets and the remainder of the year while maintaining an element of cyclicality. some people look to small caps. what do they tell us? mike: that there may be a problem out there, we don't know, but again we have another chart to bring up here with matt bailey. he points out that the russell 2000, the white line here, tends to lead the s&p 500 and he noted that the russell had peaked a month or so before the s&p 500 and then both went down.

looking on the right side of the chart, seeing what's happening, the russell has gone way down and the two have diverged and that this could be a problem unless the russell turns around. thean't seem to get above average. the concern is that the russell may be forecasting a real slowdown for stocks. people look at it as a possible forecast for the economy was small caps being largely domestic and often heavily leveraged. so, the leverage ratio is much higher than the s&p 500 and if they aren't performing well it may be assigned at there is some sort of problem out there. when we think about valuations, they look like they will be challenged to expand and any sustained fashion, meaning that earnings growth will be key. looking at the russell 2000, something like 35% of the companies in that index have negative earnings and what that is sending a signal of his hey

we need to focus on the areas of the market for cash flow is actually generated. this can of rising tide that lifted all ships thus far may not continue. alix: you may want to take a implied small caps and ask -- what do you do with the bond market, then? the kerry still looks attractive, sitting in the high yield to clip your coupon without taking on too much incremental risk. the one part of the credit markets that are worried about is the private space more broadly. something like 80% of leverage loans were covenant light and the bank of england estimates that $1 billion were issued in wereand of that 60%, they used for m&a and lbo transactions. there's a weird synergy between private equity and private credit and we prefer to stay in the traditional bond market. talking about mentions,

you're are starting to hear a lot more about leveraged loans. you are really starting to hear about it now. david: everybody talks about it, but nobody does in a thing about it. how much of it was the fed responsibility? mike: none of it is the fed responsibility. it doesn't fall within their purview. david: is that part of the problem? mike: it may be part of the problem, we have a very diverse regulatory scheme here. there was a debate about a month or so ago about this, it's that it is going to make things maybe worse if we have a downturn, but it's not systemic at this point. so, we keep our fingers crossed. alix: to that point, bringing in the fed, what does the fed do to mess up what we have right now, which is like a slow melt up, no

big selling, no huge biting, everything relatively calm? mike: the only thing that would do that would be raising the rates. the idea that the fed went on pause isn't signaling that they know something we don't. everybody knows where the economy is, people are not going to worry about them saying -- we are on positive and waiting. they might worry if the fed suddenly shifted gears and said we were worried about cutting , becauset probably not we will know with economic data that things have turned down if they do. david: this all sounds pretty good with the possible footnote of leverage loans, but are we worried that its low across the board? is that make you nervous? it does and i think it's related to the fed's dovish pivot. i know i could be last man standing with this view, but i

think it's premature to write off the fed hiking rates this year. i think if equity markets continue to creep higher, despite them not having an explicit mandate for financial stability, we know its front and center for them. we know it's part of what caused them to change their tune late last year. year.dismiss the fed this maybe the calendar works in our favor, maybe it doesn't, but this is a very different fed today than what we are used to, this is not an academic fed going back to tinker with models, this is them taking -- taking and making decisions in much more real-time than we are used to. alix: is the bar higher or lower for a cut or a hike? david: i think the fed is more likely to hike rates before they cut rates. mike: i think that's the general consensus on wall street. if we go up from the first quarter, and there is a feeling that we might, you may start to see talk of a fed rate increase

creeping back in, but it will probably have to show itself in inflation with the fed being really focused on that right now. this week we got the michigan inflation focused on expectations. so, they will watch the breakeven's and the consumers and see if anybody is starting to see inflation is a problem. it's been going the other way, that has been their concern. if that stabilizes and starts to rise, maybe you see more talk of a increase. alix: you know what helps? oil prices. it's,l mckee, david level guys, thank you very much. well, coming up, it's a relationship in desperate need of couples therapy. it may also be passed that point. elon public did -- elon musk public dispute with panasonic. this is bloomberg. ♪

alix: i'm alix steel. david westin, this is your bloomberg's newsflash. you never get to read this, this is exciting. south carolina, shoddy production. "painting a skewed and inaccurate picture of the "the times" code said that metal shavings were often left inside of the jets.

. david: and a french company -- cool. and targets in france are medidata solutions, the software focus for a clinical trial. they're looking to settle offers for software and services industries ranging from aerospace to life sciences. widenjpmorgan looking to the use of blockchain technology , the bank inviting financial tech companies to develop a platform and last year 75 of the worlds largest banks joined the intro bank information network. that is your bloomberg business flash. they all have to be in the same spot to work. david: sounds tricky. alix: it is tricky. turning to wall street beat, first out, the ubs banker in the mullah report. wall street executives may have noticed of one of their own, the vice-chairman making an appearance. carlos ghosn's indicted on new

charges, facing the most serious allegations against him yet. and elon musk takes on panasonic. who is he not taking on? he's in the midst of a public .ispute with panasonic one analyst's recommendation? go to couples therapy. david: joining us now, peggy collins. talk about the mullah report. ubs made it important and not necessarily in a good way. lixalex said, the vice -- a said, he was contacted by a senior kremlin official soon after trump was elected. said, it's an unusual name to pop up in the report, showing how the ubs executive in the investment banking unit that work on russia in the dealings for them, essentially a basically looked like he reached out at one point

to the trump campaign, saying -- hey, potentially i have a way to set up a meeting for you. when questioned by the mueller team he said it wasn't between trump and putin directly, it was between a russian presidential aide basically trying to see if the trump campaign or trump could speak at an epic -- economic forum. david: when i was at abc news someone from another government, not russia, said the you know anyone from the incoming administration we could be introduced to? alix: but then he tried to get a job with that administration? david: he did. alix: talking to russians to get it? whatever, i'll be nice about it. looking at carlos ghosn, that poor guy, did you read that article in "the journal," the wife talking about the conditions being kept owned or? -- kept under? heat, nothing to write

with. yeah. $5 million was apparently funneled to him from the sun. and it seems to be getting worse. there are reports coming out about the japanese legal system and the time he spent undergoing, but when i read the story, the fact that these were the serious charges makes it seem that these things are heating up. this is now saying he may have siphoned off some money from the company and send it directly out for his own personal use. important to note that he's it vigorously denying the charges and saying these on it tech it -- saying that nissan executives are plotting against him. david: third story, tesla. we have got elon musk out there car,a self driving

earnings later this week, and in the meantime having a spat with panasonic, who makes his batteries and at one point he said that tweeted -- he tweeted capacity that is supposed to be given, panasonic, this is a mess and it's your fault. alix: and it's unusual, talking about japan, this is a japanese company. they are not usual suspects were getting in a public spat like this. and certainly when you get into tensions with elon musk, who sends to take it twitter. -- intends to take it to twitter. tolooks like -- he tends take it to twitter. it could be creating some additional temper tantrums, there. as you said, it is interesting to note that one analyst in the story said that they basically need couples therapy. the relationship is breaking down. alix: we will be talking to the

analyst in the next hour about that. bringing up the factory and atl isartners, the china the biggest battery maker in the world in you wonder if there is also that sort of competition going on as well. it is hard to build the batteries, it's not like an easy job, to be clear, but i wonder if that is a part of the situation. david: also -- iain: -- peggy: also an indication over the spat that tesla hasn't been able to reduce as many cars and panasonic had to 10% there reduction. david: the core of the issue, it looks like they will not be able to produce as many as we thought . there is a question of demand for those models and if it gets out that they cannot row as fast as they thought they could, it will be tough for that stock. alix: but does it matter? about robots driving cars and a look at this cool

from a stuff. let's not wording of that worry about earnings in a couple of days. top of acar in the missile and shot into space. alix: isn't there like a lawsuit now? peggy: no matter what, they will have to report earnings on april 20 for -- 24th, so there will be other details to dig through. ofid: the discipline earnings. many thanks to peggy collins, thank you. coming up, are you a u.s. citizen? the controversial citizenship on the census question gets its day in court. alix: if you have a bloomberg terminal, check us out online. on your to tv terminal. you can ask us questions there. this is bloomberg. ♪

david: ok, some very important breaking news, now. the semi official news agency in

iran is reporting that iran would close the straight of hormuz if they were present -- prevented from using it. that's fighting talk, as you note -- you know so well. firstwhen sanctions were imposed on iran, they also made that threat to close the straight, but they did not wind up doing that. this would cause a disruption of epic proportion to cross the oil world, adding shipping times and cost. you have to say that secretary of state pompeo has got their attention. it can't the a coincidence that they were about to come out an hour from now to say that they wouldn't remove the waivers from big countries like china and india to import from iran. if it happened, it would really hurt iranian oil production. and apparently the actual water is a separate territory but you go so closely towards iran, large tankers could be open to attacks.

clearly, the iranian navy won't be able to match the u.s. fleet if they were in there, but nonetheless it's not something you want to do. know they have those fast patrol boats and it doesn't take much to damage a tanker. you don't need a big destroyer or aircraft carrier going in there. alix: i am surprised that oil is not moving on the news. a year ago it would have been a strong reaction in the markets. i wonder how much of the disruption is priced in. david: iran might be disappointed. indeed. chief strategist from u.s. mellon, joining us next. they oil, earnings season, right? all across the next week. this is bloomberg. ♪

alix: president trump's hard

line with iran, the u.s. could offer new waivers for iranian sanctions while iran threatens to close the straight of hormuz. taking on insurance sellers, set to unveil plans for taxi fleet. will elon musk attack his lithium ion battery supplier just days before earnings? a recorde s&p 500 at high, when do you want to lock in those gains? as alix steel just said, we got a report moments ago reporting that it was the commander of the iranian revolutionary guard who is saying that they will close the strait of hormuz, but this is not the first time we have heard this. quite as, it happened bit in 2002, but any kind of actual disruption there has big significance for trade flow and any oil getting outside. that ramping up rhetoric, who is

going to win? and in the meantime oil is at a six month high. joining us now, alicia levine. alicia, what oil price can we handle? alicia: the u.s. economy is in the happy place between $50 and $75 per barrel. anything over $75, you start to hit the consumer. to the extent that we need consumers to push the gdp, then we really need oil prices not to get too high. so, we are ok now, probably another $10 in the bag, but after that it's a pain point. it's interesting, president trump agrees. david: what's interesting to me is that with all of this news, it is not going up that high. if you are president trump, you're not worried at the moment, are you?

alix: obviously not, but i think what doesn't make sense to me is that it's the same price it was six months ago when he issued the waivers because he was worried about the consumer around the midterms. david: but can shell make up the difference? alix: no, the quantity you are getting from iran is heavy, u.s. shale is light, so our prices are so much cheaper but we can't make up the difference. but you have got russia, saudi arabia, plenty of nations willing toeady and sell oil. we had this conversation a few weeks ago about how opec would like russia to do the dirty work for them and now the u.s. is doing it by supporting prices, by making sure that the waivers don't go through. so as it's happening, i don't see a supply problem here, but there is dislocation of the market in the short-term and in the end higher oil price is

better for investment in this country. in the last five years the u.s. has done better with a higher oil price, but there is a pain point over $75 a barrel. for investment and for the consumer. and you want to get the balance right. so, in the markets overall you are seeing a bit of weakness , down by eight without a lot of liquidity or volume coming in. ,he dollar is kind of mushy crew standing out there. this or putin is more happy. -- mr. putin is more happy. david: we will keep watching that. the s&p 500 companies performing earnings this week. taylor riggs has a roundup of what we have seen so far.

taylor: tech outperforming the broader s&p 500 market up more than 20% year to date, like microsoft, reporting this week. industrials focused on the second-best performer with .oeing and caterpillar of course, we are looking at consumer staples and we are getting news crossing from kimberly-clark and they are gaining on the top and bottom shares up 5% in premarket, the ceo stating that we have made excellent progress in driving higher selling prices with headwinds looking at cost savings of about $115 million and share repurchase is with dividends. of course, we will take a look at whirlpool after the bell, looking at the top line revenue in decline, cuttings earnings estimates with slower sales and

unit shipments that fining 8% below the original 5% forecast they had previously estimated. losing market share following the reset of tariffs as competitors continue to ramp up domestic capacity. david: thank you so much -- thank you so much, taylor riggs. alicia is still with us. what do you like? what do you not like in the middle of earnings season? david: -- alicia: last week we saw cyclicality that we were expecting for 2019, the story is intact. if you believe that, you have to financials, investment technology, and industrials because you still have cyclicality and a growth story there. the message was filtered through the market last week. when the financials came in ok netdidn't get into by the

margin, it should show that we are ok. david: the difference between feeding on revenues and earnings per share, there is a big diversion's so far. we are on the terminal here, it's a show here on go, analysts to get down the bit, maybe too far. where is it telling us that analysts were wrong? what we know about you q1 and q2 is that -- is that business overseas is weak. lower revenues on the bottom line, we know that. the interesting message we would like to get is to continue the rally and to make sure that we can continue to push through the old times with march through february, february through january. even though january, the first order is probably going to be not a great quarter and

negative, even with what we got, do we see something linear there? is there a gradual progression in businesses? we shouldn't be surprised that revenues are week. we know that the global economy is in tough shape and there is plenty of hard data to tell us that. the question is what happens going forward. if that is right, is it really a china question at this point? looking at global growth? lead to chinads and we need global growth to make sure that we can stabilize at the very low 3.5% for 2019 because 40% of revenues come from overseas. we have gotten the message that there are green shoots in china that will stabilize emerging asia. and eventually it should stabilize europe. severald all take

quarters. if you believe that the recovery is underway and even if it's just a stabilization, you should believe that earnings are stabilizing. alix: so, you buy the meltdowns? the risk is to the downside. meaning that there is a lot of risk priced in already. stocks are pricing in green shoots and ignoring brexit. we are just ignoring it. we don't know what to think about it, so we are ignoring it. here,d say that the risks after a 16% melts up, or to the downside. as you pointed out, 30% of the s&p is reporting this week and to the extent that there is noise in the tech earnings, you could see a selloff, they are up 25% this year alone. if we kept going at this rate on the s&p it would be like

70%, but that's probably not going to happen. what is the number you would expect for the year? we don't put a number on it, but i would expect this quarter to be fudging around. david: sideways. alicia: it's going to be sideways. we are at high multiples over the five-year average and we are certainly over the 10 year .verage in the multiples europe is a -- is up 17% this year. even with that horrible data. we are not cheap. we have been working on the multiple because central bank seven handcuffed. the question is either you have to move up earnings or you have to get multiples going. a chinese trade deal removes tariffs to do that. you wouldove them, increase the multiple moving higher.

alicia will be talking to us about what she calls the kitchen sink quarter, next. this is bloomberg. ♪

viviana: this is "bloomberg daybreak" and this is your bloomberg business flash. iran warning that they may shut down the straight of hormuz if they are prevented from using it. iran has threatened to block it on numerous occasions. that would be retaliation for sanctions targeting its nuclear program. the u.s. has said they would try to stop any attempt to block the straight.

a victory for activist investors, the bed bath & beyond cofounders are leaving the chain possible and and there will be five new directors with an independent chairman, forming a committee to review their structure and strategy. it's no joke, ukraine elected its most-watched comedian to be president. getting 70%lenskiy of the votes against incumbent petro poroshenko. voters venting frustration at the lack of progress -- rock -- lack of progress from the revolution five years ago. david: when will the next recession come? >> no ceo thought that we were going into a recession. reinvigoration.

>> a bounceback going into the second quarter is going to be strong. if the fed doesn't react to that, which i don't think it will, it probably pushes the recession risk further into the future. >> we are so different than we were when you had the manufacturing boom bust economy. a bit market feels top-heavy, if i can use that term. it doesn't mean we will have a recession or a bear market, but it certainly doesn't feel that excitement or enthusiasm. >> it's not as good as it was a year ago. at it has got a good footing a lower growth level. still with us is alicia levine. the question is, where is the u.s. economy right now with another prescription coming up friday. putting up a chart here, this shows that atlanta, new york, and the st. louis fed, you can see the white number that is

atlanta, which has shot way up. new york is the blue one. st. louis sort of only does it every month and it's a bit more flat. why do we have such a wide dispersion on what people are expecting? for this think particular quarter we have a structural problem and a data problem. the structural problem is that .1 is notoriously low so, if the fed has been working on different data collection strategies, this quarter we may not actually have apples to apples comparison with the year before. the second thing is that the data has been all over the place. we had horrible retail sales numbers in january and february, bouncing back pretty genetically in march, making it very hard to calculate, because you may not be sure the numbers are correct. think we are between 1.5% to 2% for the quarter. having said that, there are some data measurement problems that

we don't know about a priori. question, youmy put together some data problems, and in the meantime the markets , lowncredibly calm volatility. kleptocracy like a good solution. -- that doesn't seem like a good solution. banks, globally, are out of the picture. as you showed in your clip, we are kind of in a nice spot because if you can bring in 2% growth with quiet central banks, in many ways that's very good continuing the expansion and also for markets because you are not giving a blow to it one way or the other. i don't want to call it goldilocks because that feels like a moment everything will isn if you say it, but there this sense that slow and steady with quiet central banks is a nice prescription.

but to tickets -- alix: but to tip it off of david's stocks, is an president trump right? aren't we seeing a better export market with trade businesses narrowing? we also saw the consumer bounce back in march. there have been suspicions about the labor market report. february there was suspicion over the retail sales number in february. there is a sense that maybe it is not capturing what's going on and i think that what israel is that the 20% selloff in the fourth order had a real detrimental effect on the ofnomy in the first quarter 2019 and i think that that is definitely filtering its way on and and as time goes the markets reversed themselves, that will dissipate, but you can't escape what happened in the fourth quarter and how it real economy has households are now more exposed

to equities of them a our real estate for the first time since the late 1990's and the fed knows that. there was a real quashing of economic activity in the first quarter. david: some people think that arerussell 2000 small caps an indicator and we will put up a chart that shows that they are trailing off and diverging from this. is this something that should give us cause for concern? i think it something to pay attention to. when markets turn and the small caps go running, the interesting thing is that it tells you that investors are assuming global growth is going to pick up and are more willing to look at industrials, cyclicals, and thatnational corporations could get a pop as you get better growth than the rest of the world. doesn't have to be germanic change, just a stabilization to get it moving again. i think that is what the russell is telling you, that there is an expectation the global stimulus

is actually working. david: despite what the imf thinks. [laughter] alicia: in a funny way, the imf is sort of late to the party. you know? they kind of let you know what you already know. like what's going on in europe. terrible data last week, but the markets did not selloff there. we knew it was coming and it's here, ok, what's next? go.d: there you alicia levine will be staying with us. coming up, tesla and panasonic in need of couples counseling. that's according to our next guest. this is "bloomberg." ♪

david: time now for the bottom line, where we took it -- take a look at three companies worth watching. the ceo of nomura saying that

they will remain an independent volker with a turnaround plan going quickly. he's laying off a lot of people, but it's not a good sign in general for the ceo says he's going to remain independent. talking about lagging, halliburton has lagged all of the oil service companies, but a be that's about to change, up over 4% in the pre-markets and they are saying that the worst is over for service pricing and that the prices have eventually bottomed. we knew that the activity had trough, but the question is the prices that have trough and apparently that's now with rising oil prices. david: that's got to be good news. exactly. and with the wells that are drilled but uncompleted, that's good for halliburton. the third company we are watching is tesla.

for more we have craig erwin, the managing director and senior analyst at rauf, who has a neutral rating on the stock. i'm particularly delighted to have you because we have been quoting you all morning long about the couples counseling. why do panasonic and tesla needs couples counselee's -- couples counseling? >> it's always disconcerting when two big companies have a public argument. to carry some of the blame of the shortfall for the model three and i understand that panasonic is unhappy about the losses in the vat and the want for that to end in the near-term. david: does this is like it's been a bad deal? >> know, it has helped to identify them as the world's

leading battery company from a supply chain standpoint and has done good for the poor of their battery business. just try and thing overall is a company. it's good for panasonic. obviously, tesla chose the world's best group and electrochemistry. it has given them what is needed win-win so it has been today, so i just think these are growing pains. any chance that we will see tesla switch battery suppliers? other names in contention here? what do you think? >> you probably don't recall, but i released the news that qualified to be a supplier that was confirmed by both parties, back in 2013. i understand they have the capacity to produce 2170 cells

and they would be of similar polity. not expect asian manufacturers to pick up volume in the short-term, given the long timelines for qualification outecessary quality cells of asia. real: real quick -- alix: quick, what does this mean for earnings this week? >> everyone knows it will be a week quarter, what is really important -- a weak quarter. what is really important, in the second quarter, looking at the units, wall street may breathe a sigh of relief in the rally. if we are looking at flat to modest growth, something like 70,000 units, you will probably trading sideways and down as people have concerns about cash and the other broader issues for the directors that resigned on friday.

alix: looks like we now have confirmation now that president trump will not reissue the iranian oil waivers that were set to expire in may. it's now official from the white house, they won't extend any waivers. david: they are asking allies to go along and they are tied to the destination as a revolutionary guard corps last saying they found them to be terrorists and that they would cut them off. alix: which would really put the screws on iran. exports were down so much under obama. already. david: that's a mention european allies. alix: right, right. much more coming up on oil and tech earnings. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i am alix steel. european markets are closed. softer in the u.s.. the news has to do with the oil market. the white house finally issuing

a statement saying president trump will not issue iranian oil waivers. they are said to expire may 2. they are waiver for six months that say you have to reduce oil enough to keep importing from iran. that means countries like the uae and saudi arabia will supply enough oil to the market, and russia will supply enough oil to the market, that is why you are seeing equities move higher. market,the bond volatility going nowhere. crude getting another live tire. 3%, the market worries about the quality of crude in the market and whether you can have saudi arabia make that up. david: if you are pressure you have to sell more and you can charge more for it. not bad for vladimir putin. alix: kind of a win-win. david: sounds pretty good. robert mueller's report became public on thursday. one thing seems unquestionable

-- the role of social media in russian attempts to influence the 2016 presidential election. critics said the internet research agency carried out the earliest russian interference operations identified by the investigation, a social media campaign designed to provoke and amplify political discord in the united states. welcome marty schenker, bloomberg chief content officer. i did think the one clear loser was facebook and twitter. we can see how many times they were mentioned. : part one of the report was a step-by-step explanation of how the russian government sponsored entities infiltrated social media as early as 2014 tos so -- as early as 2014 sew discord and support president trump's candidacy. david: you also have india lal

actions -- the also indian elections going on. there are issues with social media. marty: after their terrorist attacks the sri lankan government closed down whatsapp for spreading misinformation and enabling terrorists. we have the story on the 11omberg that there are employees in a room trying to legislate what goes on in the social media. david: they speak only a fraction of the number of languages in the country. marty: it does speak to the human problem of this massive amount of content and trying to police it. at the same time, social media does do good things, and balancing those things is a challenge. alix: watch the last season of "homeland" and that is how you will figure all this out.

turning now to earnings, here is a tech who is who. amazon among the companies reporting this week. joining me is economy -- and still with us is alicia levine. james, talk about what you're watching. james: which of these tech companies can continually optimize yield savings for consumers and which can increasingly serve as a point of access for content aggregation for consumers. when you look at that, amazon continues to lead as a bellwether. they had the blip last quarter and i think the direction enforced of the trend continues to move in their favor. at the end of the day, there is still no real alternative save google. twitter is still going through an identity crisis trying to

figure out what they are. be cautious. alicia, talking about social media, there may be regulatory overhang but i do not see it showing up in number of users or dollars. in terms of using social media for advertising, it is the best platform out there for businesses for advertising. that is not going away. the uses are not going away. the real issue is whether there is some kind of political will for the democrats and republicans for different reasons, but ultimately to regulate the social media space. is, youresting thing may have to shut it down to regulate it. how can you actually control content? it is impossible to control content. either you get no regulation or you get something drastic. if you get the thing that is

drastic, obviously the multiples will be compressed. and: all of this we know talk about yet the markets do not seem to care. the white line is the tech sector performance. the blue line is price to cash flow. the impetus has still been i these names to matter what the headwinds. will it be the same thing this quarter? james: there is no place else for the dollars to go, and that is the problem. when you look at the regulatory issues, it boils down to privacy. what is the privacy debate? it is about the fact that all of our networks are blending together. what used to be a work network, your friend network, your store network are all in unison. with regulation is, you talk about the robert mueller report, we need transparency. if you can understand how the data is collected and coming from and how the data is being used, you can determine for yourself on the validity of the information you are receiving,

that would do wonders and consumers can make the decision on how they want to spend their time and which platform they want to reward. these platforms are powerful for advertisers. amazon share of advertising dollars online has been growing dramatically. still relatively modest but could be taking from facebook. alicia: they certainly could. amazon is the most consumer friendly platform. you know if you're forgot into a store to try to buy something in person, you think, why am i not using amazon? we all think it and we have all had that experience. just get back to the regulation issue, i think it might be impossible to regulate this. i think you other shut it down completely -- i do not think you can regulate this. there is no way to do this and keep the business running as it is. in a funny way, there is talk

about it but the more i think about it it is too hard to regulate. david: particularly when the lawmakers got elected using social media. they would be the last people to shut it down. alix: totally right. thank you both very much. great to see you. coming up, sustainable investing. trillions of dollars of investment needing to combat global warming and we'll find out how much goldman sachs is investing. ofdman sachs head environmental markets joins us today in following the lead. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up later, an exclusive

interview with honeywell ceo. alix: time for follow the lead. a deep dive into stories making headlines with key industry veterans and insiders. today we are taking a look at sustainable finance. todman sachs committed leveraging its role as a financial institution to drive impact, 100 $20 billion in clean energy financing and investment by 2025. goldmanme on set is sachs head of environmental market and managing director. thank you for being here. there are three ways in which goldman is trying to get this done. can you lay out what they are? >> one of the things we do is harness the market to help influence key societal issues including climate change in the environment.

today is earth day. we do this across each and every one of our businesses. it is a way we can better serve our clients and also generate growth and value for our investors. you mentioned the 100 $50 billion -- the $150 billion in clean energy. when you think about climate change, energy is the largest contributor of ring house gas -- of greenhouse gas. it is also cap intensive. that is an area where we can lean and. in.line in -- can lean we can expand the capital and be able to innovate and drive capital efficiency to help address climate change. we do this across many different areas and social markets as well. if you just take a look at

green bonds, that market has been growing exponentially but is a fraction of the overall bond market. how do you grow that market? marketh: the green bond is no different than traditional fixed income instruments. reason it has been growing quite fast is because for investors who are really trying to do more yes g and responsive investment -- do more esg and responsive investment, it is no different than conventional bonds. said,growing, but as you capital markets are a small faction. a lot of momentum behind how to grow it. investors are doing more esg investing. there is also momentum behind issuers who want to do more around responsible investing and show the overall capital

allocation is aligned to their core strategy that is becoming more sustainable. main governments are leading it in many places around the world, trying to provide incentives to governments like singapore, hong .ong, and japan subsidies for the cost of issuance of green bond. there also taxonomies and clarifications around what constitutes green that the european commission is working on that should provide the mentum -- the momentum for green bonds to grow. david: here in the united states, but around the federal government. the state of california has rigorous requirements in place for 2030 and 2050. how much of your business is being supported by requirements to reduce greenhouse gases. kyung-ah: policies play an important role, particularly in early changes of different technology.

federal policies, as well as many different policies around the world. right now, i would say the market momentum is first and foremost compelling economics. the compelling economic competitiveness is what is , in additionarket to invest desire to do more sustainable investing and look at clean energy as more traditional long term investment opportunities. alix: david solomon has come out and been committed to sustainable finance. he said he had to think about what matters not only in the short term but over the longer term, also for our people, our community, and our environment. when does it get profitable. energypanies want clean and they are but they cannot get the kind of margins and return they can with oil and that puts them in a tough spot. kyung-ah: it depends where you

are looking at it from. for us it is a commercial imperative to serve our clients. the blows opportunities in front of us, clean energy is a double-digit growth market opportunity. conventional energy is either anemic or in some places shrinking. for us it is a growth opportunity and it is all commercial. billion is not philanthropic, it is commercially driven. the question you're asking is big energy. existingto the business, how does renewable energy stack up? the question is where does the growth come from. how do you think about leveraging the innovative technologies to position yourself for the future, not just the near term? you are seeing beat oil companies reposition themselves with big energy, making strategic investments to clean energy, charging stations, and in some cases requiring direct

retail utility companies, for example in europe, because they see the strategic growth opportunities coming from that and they need to be able to diversify and also position themselves for a future where there are going to be increasing carbon constraints. alix: it was a real pleasure to see you on earth day, thank you for a much. kyung-ah: thank you for having me. alix: oil at a six-month high and the white house says president trump will not reissue iranian oil waivers. we are awaiting remarks from mike pompeo. more on what i'm watching, next. this is bloomberg. ♪

alix: we are waiting for secretary of state mike pompeo, who is speaking on iranian sanctions. let's listen in to hear about the white house stance. >> be sure i make my announcement -- before i make my announcement, i want to address the terrorist attack in sri lanka. what was supposed to be a joyful easter sunday was marred by a

horrific way of radical terror and bloodshed. that aeartbreaking country which has strived so hard for peace has been targeted by these terrorist. one -- some ofed the victims were indeed u.s. citizens. this is america's fight, too. i spoke with the prime minister of sri lanka this morning and their embassy. the u.s. government are offering all possible assistance to americans. in sri lanka. we also stand with the millions of sri lankans who support the freedom of their fellow citizens to worship as they please. we take confidence in knowing not even atrocities like this will deter them from respecting religious freedom. today our nation grieves with the people of sri lanka and we stand committed and resolved to confront terrorism together. now turning to iran.

, afterone year ago withdrawing from the iran nuclear deal, president trump implemented the strongest pressure campaign in history against the islamic republic of iran. the goal is to deprive the regime of the funds it has used to destabilize the middle east for four decades and incentivize iran to behave like a normal country. up to 40% of the regime's revenue comes from oil sales. it is the regime's number one source of cash. before our sanctions when into effect, iran would generate as much as $50 billion annually in oil revenue. today, we estimate our sanctions have denied the regime north of $10 million. the regime would have used the money to support terror groups and continue its missile in defiance of un security council resolution 2231. it would perpetuated the

humanitarian crisis in yemen. our goal is to get countries to see supporting iranian -- to cease supporting iranian oil entirely. last november we granted exemptions from our sanctions to seven countries. this was to assure a well supplied oil market. today i am announcing we will no longer grant any exemptions. we are going to zero. zero across the board. we will continue to enforce sanctions and monitor compliance. any nation or entity interacting with iran should do its due side ofe and err on the caution. the risks will not be worth the benefits. we have used the highest possible care to ensure market stability. the united states has been in constant discussion with allies and partners to help them transition away from iranian crude to other alternatives. we've been working with major

oil-producing countries to make sure the market has sufficient volume to minimize the impact on pricing, both the impact of saudi arabia and the uae have ensured us they will ensure an appropriate supply for the markets. the united states is now significant producer as well. i can confirm that each of those suppliers are working directly with former customers to make the way -- to make the transition away from iranian crude less disruptive. we are doing our part in the united states. in 2018, crude production increased by 1.6 million barrels a day over the 2017 levels and the u.s. energy information agency produced in addition of 1.5 million barrels a day in 2019. with the announcement today, we have made clear our seriousness of purpose. we are going to zero. how long we remain there depends on the islamic republic of iran's senior leaders.

we've made our demands very clear to the ayatollah and his cronies. end her pursuit of nuclear weapons, stop testing missiles, stop sponsoring terrorism, pulp your picture detention of u.s. halt the detention of u.s. citizens. the pressure will continue until iran is willing to negotiate. these demands are not just coming from the united states government. they are similar to what we hear from the iranian people themselves. i want the iranian people to know we are listening to them in standing with them. we will not appease their oppressors as the last administration did. our hopes are for a better life of them and all people lifted by the regime's violence and destruction. i'll now take a few questions. >> good morning, mr. secretary.

on iran, are you really interested in renegotiating the jcpoa or something like that or are you just looking for -- are the steps you are taking aim at getting them to change their behavior without getting anything in return? if you can address a report about comments you made to -- you allegedly made to iranian diaspora leaders in texas. sec. pompeo: what comments? >> that you're not interested in any military intervention and it is economic, diplomatic pressure and some kind of comment about the mek. sec. pompeo: let me try to take them in reverse sequence.

we have not supported any outside group. we are supporting the iranian people. i get questions all the time about outside iranian groups, including the mek. anyone,me i engage with this was a meeting with folks who often had family inside of iraq, i want to make clear where spring the iranian people, not any particular group. that is the u.s. administration policy. with respect to our objectives, we are happy to get the outcome however we can achieve it. the president has always been clear. we have made it clear to iran's leaders that if americans are attacked we will respond in a serious way. i do not think there should be any doubt that it is required for us to take an action in response to something the does, we willship respond to that in a way that is appropriate to protect american interests wherever we find them.

with respect to our goal, we laid them out. there are 12 things we're looking for. when we get those things, we are happy to reengage with iran as a normal nation. if they're prepared to renegotiate under that outcome -- other than that, the campaign sincehich we have engaged the decision to withdraw from the jcpoa, that will continue. we worked with golf state partners, israel, lots of countries working with us. you see the european with increasing risk from the assassination campaign taking inside the country. we walk -- we watch as iran continues to try to have a role in protecting nicolas maduro in venezuela. the islamic republic is something that threatens citizens across the world. this is not the united states alone. it is a true coalition working to achieve the ends we have laid out. >> good morning.

have you detected any change in the iranians behavior, with a few exceptions you mentioned cashe, which is short of and maybe not giving oil to the syrians. talking about syrian leadership, do you have any of put -- any thoughts about the new leader? he has been praised as a hardliner anti-u.s.. sec. pompeo: we have watched iran have diminished power as a result of our campaign. their capacity to recall around the world has clearly diminished. i talked about it with respect to his blog not being able to make pulled -- with respect to hezbollah not being able to make payroll. with the designation of the irgc a couple weeks back, each of

these things will continue to support the iranian people so they can get what they are so desperately seeking. i do not have any comment on the than yountment, other described him as a hardliner. it is the case that every iranian leader, that includes the president and the foreign minister, has accepted the notion, the fundamental notion of the nature of the regime itself. they accept the islamic republic of iran is the appropriate method for iran to engage. once they've conceded that, these distinctions are often insignificant. if you are supporting the efforts in iraq, if you are supporting the efforts of hezollah and the underwriting of hamas, that is working against

what america has laid out as our objective. >> hello. i want to ask you about the timing of your announcement. oil supplies are tight given a lot of oil has come from venezuela. discussions -- china said the u.s. had reached beyond its jurisdiction could what assurance do you have from saudi arabia and the uae to supply the market in a timely fashion? icond, do you believe -- think it is the five largest importers of iranian oil will abide by what you are asking of them? sec. pompeo: to your second question, we have made clear. if you do not abide by this, there will be sanctions. this is what we are laying out. , and toa requirement

conduct these transactions one almost always needs to participate in the financial market. we do not lay down sanctions we do not have any intention of encouraging countries to cooperate with. i will lead others to talk about the details of what the saudis have agreed to, but i have had conversations with these countries and they have committed to making sure there is sufficient supply in the markets. i'm confident we will achieve that. i'm confident they will support this policy that is consistent with their objectives. go ahead. >> thank you. quickly, you said you are at zero level today. is that effective today? sec. pompeo: it is may 2. the current waivers expire