i think those are attractive names in the small-cap space and it is under follow. scarlet: under followed right now, and small caps doing well on this date as well. mastec -- nasdaq up by two 2.7%. big day after a couple of days of the rally -- we rallied straight up into the close. em had been in the red for much of the day, reversing the pattern that turned green by the end. scarlet: only verizon finished lower. 25 out of 30 members of the dow. caroline: biggest move we have seen since january 4. adding a cool 500 billion in

terms of market cap. dive deep into the action with our markets reporter, mike. mike: real estate, they have really been stealing the spotlight from technology this year. the best performing sector of the s&p 500 yesterday, up about 18%. the rally pushed the dividend yield to less than 3.2%. fallen soields have much that rates were still less than 10 year note. the weakest group in the s&p 500 today, 27 of 32 real estate companies falling, pushing tech back up to the best performing sector your today. eits was led by a in medicalnvests

facilities. about a 2% discount to their last close. timing is everything and they clearly time that perfectly. sarah: i want to take it one step further as you look at reit s and real estate or it -- and real estate. investors looking at a 10 year treasury yield, yields moved a bit today. bonds selloff today still around 2.1%. equities are looking that much more attractive take a look at this chart you are looking at the 10 year treasury yield and also the s&p 500 dividend yield. the relative attractiveness of bonds yields over that of the s&p dividend yields is wider. we have seen it come down forcibly this year as we have seen bond yields drop. now you can see that relative

attractive this is pretty much flat. for those equity investors, especially those focused on dividend, now might the time for them to switch over. scarlet: retail investors and utilities, the worst performers today. thank you so much. let's rejoin our guest, david of ankara, and bloomberg's loop talent. -- bloomberg's luke. what about the big social media names or big players like facebook, apple, perhaps amazon or alphabet. given that the government seems to be tight its regulatory grip around these guys. seen this movie before, whether it is called at&t, general motors, now social media. markets tend to solve themselves. having editorialized on it, i think amazon is still a name you

can own. too many of these bank stocks are priced -- i see less appeal there. you were just talking about dividends. i think that is less appealing to me. add in not just dividends but dividend growth and i think you have a good formula for adding in revenue in the next couple of years. joe: they just got clobbered in may. trade was a part of it. to add insult to injury, they got smashed yesterday. what is the market view of tech as of today? ofthe days of kind ,verything trading like global those are long, long gone. -- ifs interesting to me you look at the one-month implied volatility, it is trading below realized.

one month now encompasses that end of june meeting we are supposed to have between president xi and trump. people are saying, we think this is over, we think the worst is in the rearview mirror. caroline: we are waiting on sales numbers to come out. you were saying how important fundamentals are. looking at fundamentals of businesses and the underlying economy. >> salesforce has just come out, first quarter adjusted eps. $.61.sus estimate was for we are not sure if we are comparing like for like because that is a pretty good -- pretty big jump. $3.68ts were looking for billion. right now, the initial reaction in the market was pushing salesforce higher by about 2%. i'm not sure they were comparing like with like. caroline: this is a stock that

90%.d but struck up about billion to $3.95 billion. analysts were looking for 3.94. caroline: near-term noise, and that its revenue growth and execution are intact. joe: the stock was up 4% today. still a very good day overall. caroline: to a certain extent, this is a l whether for what companies are doing. thed, your point of view on fundamentals, we have brian monahan saying we don't need a rate cut. businesses look strong. what do you think? >> i don't think we need a rate cut. fundamentals, i will give it a b. margins still at record high levels.

are giving a free cash flow yield of close to 6%. a 40 stock value evident. in the past month, values have gone marginally higher, not lower. good capital allocators, and from the good backdrop micro that will be a determinate to get the market backup higher over the balance of this year. on friday.eport luke: it has to be. what else is there to look for? now that we have powell, i think that is a sickly it. that will be the data that either substantiates or rico right back to pricing and rate cuts. it will still be probably the key focus of the bond market. scarlet: gamestop reporting

results as well. this is the videogame retailer. this was an unexpected first quarter profit. first quarter comparable sales down 10.3 percent. analysts were looking for a drop of 6.4%. the stock nevertheless higher because it sees comparable sales down 5% of down 10%. perhaps the sales numbers are not what is driving the stock price reaction but the unexpected profit. caroline: salesforce boosted adjusted earnings. year adjusted earnings per tore, up from two dollars 54 two dollars 56. clearly, there is movement, second-quarter revenue as much as $3.95 billion, beating the estimates. scarlet: we want to thank our guests, david and luke.

that does it for the closing bell and for me. taylor riggs is standing -- is stepping in for "what'd you miss?" ofinterview with the ceo wealth management. this is bloomberg. ♪

♪ caroline: live from bloomberg's world headquarters in new york, i'm caroline hyde. here is what you missed. a snapshot of u.s. stocks closing higher. the best rally we've seen since january 4. joe: the question is, "what'd you miss?"

caroline: rate cuts as global economic headwinds swirl. tech titans still bracing for a protracted antitrust fight. aboutwarning authorities citizens coming to the u.s., citing frequent robberies and theft in america. we've been hearing from some of the most influential, innovative figures and investing. they gathered at the bloomberg investor summit in new york to discuss the challenges and opportunities of a rapidly changing financial landscape. >> two thirds of all the recessions since world war ii have been caused by some fed policy. some fed policy of either being too slow or too fast in one direction or the other. will is hard to say if we have another cycle with interest

rates, where they stand now. we might. >> the key is to be prepared. paul -- politicians are walking along a ridge line. externalities as well, things not in their control. one is the trade disputes with china. you connect all the dots around trade tensions, potentially a technology cold war between the countries, economic growth could be impacted. >> trade and reciprocal openness of markets. i think progress ultimately will be made. caroline: joining us now, another top executive in attendance, catherine from mellon wealth management. welcome. what is the number one question from your clients?

catherine: i think they are focused on the issues we just discussed. the yield curve. two months with a portion of the yield curve inverted. they were happy to hear chairman powell today. they are focused on trade as we all are. we were busy calculating the potential impact of a trade war and it could be quite significant. have a percent to a percent of gdp. we also tried to keep them focused on long-term trends because that is really what matters to investors. if we think about where we see some of those trends right now, we don't see them all that dissimilar to what we see at the beginning of the year. we see an economy that, absent the externalities, seems to be strong enough. we see consumers that seem to be confident enough, earnings that seem to be good enough to

support the markets, and we see inflation seems to be low enough we try to keep the focus on the trends while we still evaluate things that could impact them. taylor: you are lowering fees to remain additive. i think my question is, when you're charging zero, you are basically saying your business isn't worth anything. how are you remaining competitive while also making the case that you can add value? wolf -- inand the the wealth management industry, there are a number of disciplines are investors have to be succeeding at. there are balance sheet disciplines. our clients are wealthy. we have to think tediously for them and help the men the balance sheets. -- help them manage their balance sheets. spending is a discipline we help them think about that.

managing for after-tax return. our clients are taxpayers. we think of the fees for what we do have to be aligned with all the work we do. fees are lower today than they were 10 or 20 years ago and that is a very good thing for clients. joe: this has been a year of major ipo's. it has been some disappointing ipo's, companies come to the market and fizzling. a few years before this, we saw excited about buying into private equity, stock of these companies. there was a view that people were perhaps overpaying. they were sexy names, not going to market as much so maybe there was a perception of lower volatility. has the performance of uber and lyft cooled that? catherine: when we look at

private orchids, we divide them up in two two categories. the first is private equity and the second is venture capital. when we look at the private equity market, there are signs of maturity. larger buyout in the u.s., 11 time. in that market, we are always underwriting. a liquidity premium and make more than in public markets. entry points matter. where you see lower multiples today is in smaller companies. the lower middle market segment of private equity. venture capital is a very interesting asset class. we talk about disruption all the time. venture capital is the asset class of disruption. it is not sensitive to cycles.

one of the changes, a couple of things that we observed in venture capital as we compare this cycle to prior ones is that companies are staying private longer. if you think about the 1999-2000s, maybe it is five years, maybe nine years now. therefore, it is about getting in in early stages so you can realize that value. taylor: thank you. that was catherine keating, ceo of bny wealth management. sky works coming out, cutting their forecasts. cutting their forecast given the impact of u.s. actions on huawei . we know they are a key supplier of apple. something we are definitely looking at, trying to take a look at how the stock is reacting. chip know the stocks and acres have been recovering today

and leading the gains. it looks like we are finally getting some hard news. again, sky works is cutting their forecast citing the impact huawei.action on caroline: you look at splc on the bloomberg, getting about 5% of revenue. sky works is hugely dependent on huawei. coming up, more tech. the u.s. government gearing up to go against silicon valley potentially. tech giants brace for sweeping investigations into their businesses. this is bloomberg. ♪

joe: top u.s. antitrust officials and lawmakers targeting silicon valley's biggest names. galloway.o scott scott: all the free marketers out there, the answer is not more regulation, the answer is competition. we need to oxygenate the marketplace. those stocks, the aggregate values of those companies and shareholder appreciation here is substantial as independent companies as opposed to conglomerates which over time has proved to be less innovative. joe: joining us now to discuss more, barry lynn, open markets institute executive director, a

proponent of aggressive antitrust enforcement. obviously, anything that happens is in early stages. read,sed on your early what kind of things would you expect the government to really be looking at with respect to some of these big companies? barry: i think the government over the coming years will be can't just about every aspect of google and facebook's business, as well as amazon. it is not just a little piece of the corporation here, it is every single part. if you look inside of google and facebook and amazon, you see monopolies. this is going to be a discussion that lasts for a long time. it will be very thorough and get inside of every part of these

corporations. caroline: i wonder what you think the recipe should be. we look across the pond, europe has tackled with a view to be into competitive behaviors by google. big fines doled out. see breakingant to up of these companies, you target the data. think it will be a combination of things. ishink margrethe vestager right that we have to look at the data. margrethe vestager will learn that the biggest fixes breaking up parts of these corporations. these are incredibly large conglomerates. don't need totes exist. we don't need to have these various pieces tied together.

with google, 10 or 12 obvious monopolies including chrome, android, youtube, search, mapping. do these things need to be tied together? absolutely not. these are not natural monopolies. once you break them up, you still have a problem of how you regulate the natural monopoly. how do you get regulation to ensure these operations are neutral? taylor: i want to touch on that regulation a little bit. i wonder if wanting to break these monopolies up comes from the fact that they are maybe to bake regulate themselves -- maybe too big regulate themselves? we had a great bloomberg article coming out today saying it is not illegal to be a monopoly and these companies aren't breaking any laws by searching for monopolies. these companies are providing

free services to us. facebook is free, youtube is free, sort of. what is the case that they should be broken up? barry: dealing with google and amazon, there were pieces that don't need to be together, that are locking up sort of value if you are looking at it through the eyes of investors, but that are power concentrations that are unnecessary, that harm the public. the other thing that is important to understand is that there is a real radical change happening today between the competition policy discussion in the united states and europe, and we are moving away from this idea that free is good really fast. the issue is, are these corporations dangerous to our democracy? increasingly, we are seeing this in congress, seeing it among enforcers, increasingly the answer is yes that they are

dangerous to our democracy and we must do something about it. joe: when we see headlines like, this company is going to be howed at by the ftc, doj, should people interpret that distinction in terms of the path of an investigation and any action they might take? barry: what we are seeing from these headlines in recent days about sort of a divvying up of authority by the ftc and doj over google, amazon, facebook, that is really just a resource issue. sharing of resources between these two enforcement agencies. there's a limited number of people, limited amount of money. getissue is, how do you these enforcement agencies able to deal with this in an effective way? lynn,: that was barry open markets institute executive director. coming up, the world bank says

global growth continues to weaken. more next. this is bloomberg. ♪

crumpton with bloomberg's word news. the trump ministration is imposing major travel restrictions on visits to cuba by american citizens. it will ban stops by cruise ship sand and a heavily used form -- ships and end a heavily used form of education track -- education travel. it is cracking down on cuba for what it calls providing a communist foothold in the region and propping up u.s. adversaries and laces like venezuela and nicaragua. iran says it will continue to

resist political and economic pressure from the united states. the u.s. byrring to name, the supreme leader told a crowd of thousands today that "standing against an enemy that uses bullying is the only way to stop him." prosecutors say the florida deputy who failed to confront a gunman during last year's parkland massacre has been arrested on 11 charges. scott peterson was on duty during the shooting at marjorie stoneman douglas high but never went inside. he faces charges of child the collect, culpable negligence -- of child neglect, culpable negligence, and perjury. retracing the steps of american soldiers from world war ii, soldiers from the u.s. army fourth infantry division walked to commemorate

the upcoming d-day anniversary. the fourth infantry landed on utah beach on june 6, 1944, fought through france, and were the first infantry division to enter paris after its liberation. >> this was the most monumented us -- monumental amphibious inault, monumentous day military history i can think of. when we think of a day all made a difference and the world came together, they usually think june 6. mark: people dressed in u.s. army-like uniforms from the world war ii era. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. federal reserve chairman

jay powell signaled the possibility of an interest rate cut if necessary. increasing -- they will watch increasing trade tensions closely. >> we do not know how or when these issues will be resolved. we are closely monitoring the implementations of these -- the implications of these developments and as always, we will act to sustain the expansion with a strong labor nearly 2% inflation objective. taylor: trade targets contributing to downside risks. the bank sees global growth falling to 2.6% for 2019. let's welcome a guest from the world bank group. you heard that there from the chairman. trade seems to be one of the risks. in the last 30 minutes, the headline is "

substantial risks seen." would you agree trade is a major risk? >> yes. ourownload -- we downgraded global trade growth forecast to 2.6%. this year, we are projecting trade growth will be the lowest since the financial crisis. of course, deep in the ongoing slowdown we are projecting. one of the characteristics of the economy over the last several years has been the u.s. outperformance. even though no one is doing that great, the u.s. has done better. with the u.s. at least being a major player in the trade tensions, does the u.s. risk losing its own underperformance and could we see that cap close with the rest of the world? ayhan: for the u.s. economy, growth is still at a healthy

level this year around 2.5%. next year, we see a slowdown of 1.7%. irrespective of what country you look at, these trade tensions will have implications through trade channels, through confidence channels, and through commodity markets. i think, at the end of the day, expansions further escalate the projected slowdown we see will likely to be deepened. caroline: in the statement you put out, it says the drags are anticipated to wayne and global trade growth is expected to recover somewhat. why? ayhan: this is very important. this is a good question. we have this baseline that trade tensions will not escalate and we will not see further increases in tariffs or goods

subject to tariffs. under those conditions, we see a slight recovery next year. as we discuss in the report, there are multiple risks. one of them, the major one, trade tensions. the other one, synchronized slowdown in major economies, financial stress in vulnerable emerging-market economies. you take all of these together, of course there are a lot of caveats. taylor: earlier today we also heard from the ceo of bank of america merrill lynch highlighting leveraged loans as something that could be one of the next catalysts for financial crisis. you also talk about that levels. have we delivered enough since the financial crisis -- de-lever ed enough since the financial crisis? ayhan: prior to the global financial crisis, these

economies had lower debt levels and budget surpluses. now they have much larger deficits and much larger debt levels. in an environment of low interest rates, maybe it looks attractive to go out and accumulate debt but there are risks to accumulating debt in a short time period. we basically tell this very simple message. lunch. no free it has consequences and those consequences present themselves when you need the financial markets the most. a persistent shortfall in total aggregate manned. trying to figure out how we can get more businesses to invest more money, create more demand, activity. after 10 years, there is a perception that traditional

central bank are not as effective as may be something having to do with the zero lower bound. do you have any fresh ideas in terms of addressing this sort of persistent demand? should government's and central banks adopt different tools to deal with this. we discussed this issue, weakness in demand around the world. there are multiple reasons for investment weakness. why we see this weakness in .nvestment, and environment to need to create an business, that is not subject to high policy uncertainty, that basically facilitates goods for businesses to function. ultimately, this will require structural reforms,

comprehensive policy solutions, and this will require these economies taking care of their own houses and then looking outside for growth. ultimately, the slowdown can be addressed only if policymakers rise to the occasion and undertake the necessary measures to reduce uncertainty with confidence. caroline: great to get your analysis on a report that has just been released. ayhan kose from world bank group, downgrading the outlook for global growth. let's turn to the view from wall street. our next guest says while the trump and ministration is a good steward of -- the trump administration is a good steward of economic growth, we have ian black interviewed by david rubenstein. into an up0 years

cycle. at some point, the music is going to stop. at the same time, we have an administration, like them or not like them, but they have done a pretty good job extending the economic growth and consumer confidence, and kept inflation down. therefore, it is very hard to say whether we will have another cycle with interest rates where they stand now with the growth and inflation numbers where they stand. we might. it probably won't be until the next election. that is not that far off. the key is to be prepared. hundreds of credits of the industries we like and study every part of their capital structure and know at what prices we want to start buying the debt. you are right, we have the benefit of now 30 years or 29

years of doing this and so we do have a lot of conviction and it is a very useful value investor pathway to finding great value. public aur firm went few years ago. any regrets about going public and why go public? ian: great question. i think it was something i looked at long and hard. a dozenut and went to people i had a lot of respect for. milken, carls mike icahn, lloyd blankfein. i talked to loads of people i was friends with and i said, what do you think? half of them said, of course you should do that.

this is a way to monetize your equity, a way to grow, an incentive for compensation you can add to the list to get better people. the other half said, are you out of your mind? why do you want to be in the regulatory fishbowl with the focus on you? so that wasn't very helpful. what i ultimately decided with my partners was that if we were going to just stay in private equity, probably it wasn't the right thing to do. on the other hand, if we wanted to build a global alternative asset antigen company in terms of credit, real assets, insurance, private equity, it was probably the right thing to do. regrets? absolutely. i think the public market does not understand creatures like us very well. they don't know how to value.

incredibly, of us, i would say rare and valuable creatures. , youcompanies out there can say we are very value-oriented on one hand in terms of risk reward and we have been able to prove it in our returns. on the other hand, we are also a growth company. we have grown our fre. we are also a yield company with a 7% to 8% dividend. we also do better in downturns. there are very few companies out there who have all those characteristics. of: that was leon black apollo global management, interviewed by david rubenstein of the carlyle group. coming up, china pulling out a new weapon in the trade war. what it could mean for the trade industry. this is bloomberg.

♪

caroline: time for a look at what stories are trending. terminal users will love reading about the consumer advocate who says larger engines mounted to the boeing 737 max are a design flaw and are calling for the planes to be permanently grounded. they're working on a fix to alter the control system to keep malfunctions -- to prevent malfunctions like the ones that led to two crashes. -- signal, 5g. in one test that limited interference, the superstorm sandy was incorrectly forecast.

have troubley reading natural signals but off by water vapor. tictoc on twitter is reporting that what was once hailed as the greenest car on the road, the previous, is losing its luster -- the prius is losing its luster. all the stories on your terminal, at bloomberg.com, and at tictoc on twitter. joe: beijing pulling out a new weapon in the trade war with the u.s.. tourists. the chinese government issuing a travel advisory for citizens looking to travel to the united frequentying shootings, robberies, and theft. theese tourists provide biggest boon to the u.s. economy than any other, providing $36 billion last year.

works at a platform that provides marketing to leaders of the global trend -- global travel industry. talk to us about how significant chinese tourism is certain key domestic u.s. industries. >> it is hard to overstate how important chinese travel is to the u.s. economy. and from the world travel tourism council says 11% of all tourism spending in the u.s. comes from all chinese visitors and they only account for 4% of visitors. ,hey not only like to travel they like to spend. start: i wonder, if they cracking down and not coming to the u.s. -- we are showing here some of the other companies they are visiting like russia, france, germany, but i imagine it could also be a push for them to spend more in their own to

mystic market. domestic market. rosie: i think the asia budget tourism sector is booming as well so there are plenty of places for chinese travelers to go in asia. caroline: we are not only hearing of tourism being cracked down but also students. to a certain extent, this has been a self-inflicted wound by the united states by making it tougher and tougher on how quickly you can renew your student visa and the like. really the viewpoint, they don't want to come to the u.s. as much. we know it is coming from the top but how much is the average buyer decided they don't want to come? asie: education was sort of point of cooperation between china and america for a while. i think it goes broader. one of our reporters at nyu's

hospitality conference today was saying that hospitality execs are concerned that the policies anti-immigration rhetoric from the administration might deter travelers from these countries who might say, i'm not sure i feel welcome there. joe: we have noted that tourism from china had started to decline even prior to this warning. i think it peaked sometime in the middle of last year and has been sliding since then. on tourism, it is a warning. is this likely to get the effect that -- likely to have the effect that people get the message? rosie: i think in the broader trade war -- 20 was the first year that chinese tourism to the u.s. declined since 2003. it was already happening last year.

obviously, these tensions are not particularly new. i think it doesn't help. we often think of travel as a kind of deep politicized thing. politicized thing. in truth, these are extremely political. taylor: thank you. that was rosie spinks. australia's central bank is cutting interest rates for the first time in three years. will it help kickstart the economy? this is bloomberg. ♪

australia's central bank is cutting interest rates for the first time in almost three years in a move to protect against a darkening global backdrop. will the move help revive a slowing economy and tepid inflation? let's take a closer look with

bloomberg's sherry and. shery ahn. we have known that they were expected to cut. was this priced in? shery: this wasn't really a surprise. australia, a few months back, we weren't expecting this at all. they are at 1.25%. the thing is, the markets are pricing in another cut in the next three months. the governor didn't provide any forward guidance but he talked about the intensifying uncertain peace around trade tensions. -- uncertainties around the trade tensions. ,oe: i remember postcrisis australia started hiking rates in late 2009 and 10 you'd to hike through -- and continued to hike through 2010. are they sort of a canary in the other centralhere

banks will go? maybe australia is the early warning sign the cut cycle is here? shery: with new zealand, mainly because they are an open economy that depends on trade, they do tend to be a bellwether. fedn this stance with the and the more dovish commentary coming out lately, we have seen the central banks have more leeway to cut rates. this g tv card -- g tv chart showing that australian growth has been lagging behind after that mining boom. not all economies are the same. south korea, for example, has been underperforming on the economic front against other economies in asia. the pressure on the korean won is really not allowing policy makers to cut. caroline: going back to what that chart was showing, you said it was just a few months ago that we weren't expecting any

rate cuts. the this straits is trillion economy really in, and politics around australia -- in the australian economy really in? shery: uncertainty being diminished, but the problem was that the rba was running out of excuses not to cut. the labor market was one of those factors they were looking at. in the april numbers, they got the unemployment rate at 5.2%, rising, which gave more of a momentum for those cuts to come forward it -- come forward. caroline: for more of these stories, don't miss "daybreak: asia."ia" and "daybreak: president trump meets with the

irish prime minister. joe: the fed releasing the beige book tomorrow at 2:00 p.m. eastern. taylor: our interviews with chicago friend -- chicago fed president charles evans. "bloomberg technology" is next in the u.s. this is bloomberg. ♪

♪ emily: i'm emily chang in los angeles and this is bloomberg technology. coming up in the next hour, why the threat of antitrust elation has silicon valley and tech investors on edge. plus, after a rocky ipo underwritersuber's are defending the stock with bullish calls. chin