maybe should. we are seeing what the fed will do. scarlet: we have the closing scarlet: we have the closing bell. what is interesting is volume has picked up today. joe: there was just so much today. a lot of things to talk about. one of the things that is not on the list is that this was the official kickoff of the trump campaign. if you look back, when did the anly start, it might be thing to note. . way,et: nasdaq leading the by 1.4% on higher than average volumes. joe: let's dig deeper into the market action. ma: we have talked a lot about

tech today but one of the best performers has been going. -- been boeing. it seems the paris air show has been good. it is having its best day since december. someast few days, adding $15 billion to its market cap. the company said it was open to rebranding the 737 max jet. today's announcement, they have iag, 737 max jet customer, the parent company of british airways, signing a contract catapulting the company into one of the biggest customers of the jets. it is a nice paycheck for two days work in paris. sarah: cyclical shares may have led the market higher today but

that is a change in contour since may 1. the best sectors have been the likes of utilities, health care, real estate, staples. you are looking at a graph of relative price performance of defensive versus cyclical. or performing at near relative decade-long highs. they say that it is at the highest, in the top quintile in 1990'sing back since the . the s&p 500 has returned 18.6% on average in the next six months. defensiveness is potentially a reason. romaine: thanks. let's get back to what has been going on in the market, still with michael regan and dan suzuki.

go back to you. we have this bank of america arrow lynch survey that was showing that the most crowded trade right now is long treasuries. i know that is somewhat of a backward looking survey, but what does that tell you about market sentiment. everyone thinks the fed is cutting rates. spencer: i think it shows in --mike: i think it shows investors are as nervous as everyone else. almost every investor will take this as a contrarian signal. themost bearish since financial crisis. most people will view that as a sign that this is as as bearish as people will get and sentiment can only go up from here. at anally when it is

extreme like that. that a contrarian signal that extreme pessimism -- often things that are like, that's contrarian, you are down 20%, everyone throws in the towel. dan: when you look at that survey, i think a lot of people don't realize the investor base is non-institutional investors. the dates may overlap with some of the mexico stuff going on. maybe there is a short-term bearishness over political issues. it doesn't jive with the anecdotal comments i'm having

with clients in the field. the other survey, the wall street indicator, which indicates wall street bearishness and bullishness, has been choppy of late but coming off an eight year high. morenk that is a indication of it. scarlet: within this survey, another takeaway, managers expect the fed to cut rates. they expect president trump to to omprehensive trade -- seek a trade deal. do you think he will come out and make an announcement? >> probably a better question forhis psychiatrist than me. i just mentioned that trump

kicked off his reelection campaign today. there's a clock running now. from here to election time next her, he's got to engender good market performance, gdp performance. i think up until now, people are giving him too much -- saying he focuses a lot on the market. use it when it is doing good. with itsadobe is out earning courses, revenue coming slightly74 billion, above the estimate of $2.7 billion. we'll get you more details on that any moment. scarlet: the president speaking. he says the china talks are working out as he anticipated. this follows this morning's tweet in which he said he had a

phone conversation with xi jinping. the big meeting at the end of the month. joe: we've got to check those after hours futures soon to see how they are doing. i just want to talk a little bit more about the fed tomorrow. one thing i feel like, listening to the different analysts and strategists, everyone expects everyone else to be disappointed. they can't live up to expectations in which case, maybe those aren't really the expectations. what are people expecting and what will constitute a disappointment? cost i don't think it will jerome powell anything to open the door to a potential rate cut in july. people will sort of go in with what they want to hear 10 to -- what they want to hear to hear and tend to hear what

they want to hear. for them to more explicitly signal that the doors open for a july cut. romaine: we have had people talking up em, cocking up chinese stocks. talkinghink china is -- up chinese stocks. dan: the idea that their profit cycle will be picking up. bestare probably the candidate for growth. on profit, liquidity, and sentiment. china is probably trading at a multiple point discount to the u.s.. are they going to cut or aren't they? from a profits perspective, they are still slowing, but vast amount of stimulus they are doing to increase spending.

i think that economics 101 would suggest that is going to turn to growth. , they could be a secondary beneficiary. having thet flexibility to do that because they don't have the reserves that china does. dan suzuki, thank you so much. mikwe want to thank our own e regan as well. coming up, the crew will be looking into cryptocurrencies and how it could change the space. this is bloomberg. ♪

bloombergive from world headquarters in new york, on romaine bostick. how u.s.snapshot of stocks closed today. the s&p 500 and the nasdaq moving higher. central bank bonanza. president trump has words for ecb president mario draghi and actions for fed president jay powell. facebook's next act. rolling out a new cryptocurrency platform. some are calling it a watershed moment while others are not so sure. than a a silicon peak valley. taylor: it is the first day of

the fomc meeting and the white house has grabbed some of the spotlight. bloomberg has learned that president trump explored the legality of demoting fed chair jay powell. this all comes amidst major fed scrutiny. bank's await the central next move. bloomberg'swelcome crossed assets reporter luke matt in fed reporter washington. calm.uity markets stayed there weren't a lot of big movements. please tell me we are taking this in stride. luke: trade headlines seem to very much move the market but this does not. i don't know whether this is seen as a much less likely thing that transpires or maybe it is just a notion that the fed is

strong enough as an institution and it would not be enough to tip the balance of opinion. joe: fed decision tomorrow. what is the thing more than anything you will be looking for? dots are goinghe to be the first thing we are looking at. we get those that 2:00 p.m.. dotsuestion is, how many ing down the need for a rate cut. do we see more people join them? that is really the key question. there is a bit of a question out .here the question is, if they think there's a need to cut rates, why not go ahead and do it now?

that is why the dot plot will be so important. romaine: at one point, we weren't talking about any rate cuts, then we were talking about a quarter-point. now they are saying the fed needs to do 50 basis points and call it a day. >> there's this notion of ammunition and that the fed only has so much they can spend. i think the thinking behind this, asymmetry is the name of the game. you don't want to go back to near the zero lower bound because you think policy is less effective at that level. you want to try as hard as possible to stay away from that. that means in this case, get out ahead of it to avoid the

downturn. i think that is how the case is made. i want -- taylor: i want to get your thoughts on the vice-chairman. we hear a lot about jay powell. this story that came out, that jay powell would not be removed from his appointment, if he were, richard kurt -- richard claret is pretty similar. rich claret is another trump appointee. he has been making dovish arguments on interest rates. they did hike rates in december but since then, you've seen a real pivot at the fed. it seems like rich claret has been an important voice in that pivot. he's quick to give jay powell credit to all of that. conferencemuch at a

a few weeks ago that was focused on the fed framework review that richard claret has been spearheading. there's definitely a lot of soul-searching. taylor: we are going to thank you. we are going to have to get to the president making comments now. pres. trump: a great career. west point, harvard, tremendous talent, just named acting secretary of defense. he was secretary of the army. i got to know him very well. who is ahanahan, wonderful person, is going to take some time off for family matters. i want to thank him for his service. he's a terrific person. it's a difficult time for pat but he's going to take some time off for family service and

working things out. i think you know about it. is going to be outstanding and we look forward .o working with him >> did you ask him to withdraw? pres. trump: i didn't. he said it is going to be a rough time for him because of what happened. i did not ask him. he presented me with a letter this morning. that was his decision. yesterdayd about it for the first time. i didn't know about it yes -- i didn't know about it. i heard about it yesterday. it is very unfortunate. we have a very good vetting process. take a look at our cabinet

something that came up -- our cabinet. this is something that came up over a short period of time. pat was acting so that gives you more flexibility to do things. too bad. >> will you apologize to the central park five? they have been exonerated. there have been videos about the case. you came out with a full-page ad? pres. trump: why do you bring that question up now? you have people on both sides of that. they admitted their guilt. fairsteink at linda and some of the prosecutors, they think the city never should have settled that case. frankly, this could happen very quickly for esper.

he's very experienced. he's been around all the things we are talking about for a long period of time. trust yourmericans administration to tell the truth about what is going on with you ran -- with iran? pres. trump: we been talking to various people on lots of different sides. we will see what happens. we are well configured. we have a lot of things going on . thiske with president xi morning of china. we will be meeting at the g20. china very much wants to discuss the future and so do we. the relationship with president xi is a very good one. we had a long talk this morning. >> immigration officials say they don't know anything about a

planned roundup of millions. pres. trump: they know. they are going to start next week. when people come into our country and they come in illegally, they have to go out. mexico has been doing a very good job the last four days. i appreciate the job they are doing. guatemala, likewise, is much different than under past administration. with all that being said, the democrats should get together and solve the asylum problem and the loophole problem, also very easy to solve. this came up -- this just came up. i did the nomination. it just came up and i think we did it very quickly. .at shanahan was acting

we put mark esper in. he is highly experienced. reporter: [inaudible] federal reserve. pres. trump: let's see what he does. i can tell you draghi, with the eu, the euro, they have a much different stance. as you know, he did something dramatic. was very we will see what happens. they are going to be making an announcement pretty soon so we will see what happens. i want to be given a level playing field. so far, i haven't been. allowed to speak to him very easily. i speak to him anyway.

reporter: [inaudible] pres. trump: most likely, that's what i'm thinking about doing. pretty soon. iran, we have at a lot of things going with iran. we are very prepared. we will see what happens. we are very prepared regardless of what goes on. you look at what has taken place , and i'm not just talking about over the past week, i'm talking about a long period of years, they've been a nation of terror. romaine: we were just listening on his president trump way to his rally in florida, giving a wide range of responses to iran. we are going to turn back to the markets now and particularly talk about the wave of ipo's. it is another big year for tech.

joining us now, becker, the ceo of silicon valley banks. welcome. one of the reasons why we pay so much attention to your bank is that you are at the heart of so in silicone see valley. given how fast and furious things have been going, is that still sustaining itself? are we seeing any slowdown in that? we haven't seen a slowdown. 2019 will be very similar. the market, both private and public, they are looking for growth, big market opportunities, differentiation. the private companies represent that in obviously the ipo's represent the same thing.

the most high-profile ones haven't done that well -- joe: the most high-profile ones haven't done that well. when companies are looking whether they want to go public or flip to a public company, this anything in that concern you or does that look healthy and sustainable? greg: it really doesn't concern me. when you look at the money given ,ack to venture capitalists that is a massive amount of capital. that capital is going to flow back to the private market. i believe it has been really healthy. there's more unicorns that are slated to go public. it should be healthy and really give a runway for many years to come. taylor: how competitive has it

been to compete against private equity firms? we have heard there is too few cash chasing too many deals. why would i come to you instead firm./e e. -- greg: p.e. and venture capital are really two different animals. we've been doing this longer than anybody else. we understand the industry very well. they must be just in silicon valley. more touch points with venture capital firms and with innovation companies than anybody else. when a news company comes in the door, it is not just about the capital, it is what can you do

to help me be more successful? introductions to capital , helps, other ceos, cfos these companies which are really about speed to market. that is why we believe they will continue to come to us over time. to a lot oftalk start up ceos and they are sort of seeking out alternative areas of financing whether it is getting credit or just doing other types of things that are outside the traditional bounds of banking. they do that not just because they need it, but they sort of have an ethos that we don't want to be with the stodgy old bankers. i wonder how you see you're fitting into that ethos? though i'm wearing a tie today, that is not one of my

normal outfits. i'm probably one of the old -- one of the only bank ceos that wears jeans or casual clothes to work regularly. it is very different. when you talk about traditional banks, i would say that is not us. we are the antithesis of that. we are all about helping startups scale up. once they go public, helping them even after that. of the companies who have gone public this year, more than 50% have been clients of silicon valley banks. interesting orhe exciting areas in terms of startups you are seeing now? greg: it is a long list. we did a survey with the most 1400 of our clients in the u.s., china, europe, canada. we asked what they are most excited about now and what they think it will look like in five years.

ai, machine learning are the two biggest ones. then you get into cybersecurity, autonomous vehicles. why is ai and machine learning so popular? i would argue that the verticals they are in our huge verticals. as important, they cut horizontally across the market as well. ai machine learning helps cybersecurity be more effective. the combination of the vertical and horizontal creates this massive market for both these industries which we do a lot in. taylor: wonderful. coming to new york and even putting on a suit and tie for us. a quick mention. david rubenstein is currently speaking with the legendary golfer, businessman, and philanthropist, the golden bear, jack nicholas. you can catch the full interview

on the david rubenstein show, peer-to-peer conversations. let's get a check on the first word news with mark crumpton. mark: with democrats voicing concern over president trump's iran policy, senator lindsey graham says the president is trying to stop iran from creating chaos in the middle east. senator graham told reporters, "iran is the problem, not trump." iran continues to disrupt navigation and turn middle east upside down, we would put their oil on the list of targets. we don't want a war with iran, but we are talking about the ayatollah needing to pay a price so severe that he would knock off the behavior in question. mark: senator graham says he personally favors regime change but was quick to say that he doesn't believe that was the

position of the trump administration. army secretary mark esper will be named as new acting defense secretary after patrick shanahan withdrew from consideration to stay on the post on a permanent basis. the defense department just announced it would send 1000 additional troops to the middle east. israeli prime minister benjamin netanyahu is attending next week's peace conference in bahrain even though members of his government -- is praising next week peace conference in bahrain even though members of his government aren't invited. avoided said it inviting israeli issue -- israeli authorities to avoid focusing on political issues. lawmakers in new jersey are pitching a spending bill that would cost $39 billion but it

lacks the billionaire tax that governor phil murphy says must be in effect starting july 1. the governor's new or higher taxes on prescription opioid manufacturers and a $317 million rainy day fund deposit. it added more money to the budget of new jersey transient -- new jersey transit. 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. ♪ facebook shares erasing their initial advance after the company unveiled plans for a new cryptocurrency. the latest developments are undoubtedly being watched by regulators. ofpoke to facebook's head kellie brown about his plan -- of libra about his plans.

way to is the best achieve this. we went the blockchain route because we will have, by the time we launch, 100 global organizations that will participate in the governance. 27 organizations right now. we needed a way to decentralized governance because no one company should control a network that basically is a protocol for value on the internet. joe: one thing that people noted immediately is there's no one traditional bank like we know them. wase the approach door there a reason for their absence? david: i know you want to talk about the company's not here but i think we can take a moment and

dies the remarkable organizations that are already joining us. reestablish, this is very early. 100 by thetions now, time we launch. by that time, i expect to see there.n to see other larger technology companies. geographicalto see distribution and the like. joe: let's talk about the structure of how the currency is used specifically. on anere to acquire libra exchange, what i be able to hold it in a wallet with my own keys like i can do with a currency like bitcoin. david: yes. we are starting with permissions

launching on the note side, but longchain will be open meeting that companies can build services on top of the blockchain. you don't need to be a member to build a wallet. we will have a lot of competition for our own wallets. joe: the wallet could be off-line so it could be something where i could hold my keys or the coin on a computer, usb drive, laptop that is disconnected from the network? david: yes. joe: and then would i be able to transfer those coins to a third party? would i be able to send you those coins via the blockchain in a way that no entity, whether it is facebook or the launching partners, would know about, or are we able to transact in a way that no third party could see it? parties will see it validateodes will

transactions. canne specific party actually see transactions and -- the one thing i want to say, despite the fact that noncustodial wallets where you can manage your key end move money around will exist, the on and off ramps will be regulated, the custodial wallets will be regulated. that doesn't mean we shouldn't enable a form of digital cash transactions to happen on top of this new network. joe: the existence creates all sorts of regulatory issues because, in theory, if i'm able to transact with someone in a way, we could be doing something illegal whether it is evading capital controls, buying drugs. how do you manage that while also dealing with the regulatory

bodies that exist and would be scrutinizing this project? david: it is a great question and i'm glad you asked it. we have decided not to enable crypto primitive on this blockchain that would enable what we call shielded transactions. if you are a criminal and you want to transact on the network, this is not going to be your network of choice because accounts are not anonymous. law enforcement can do their thing the way they are doing it with bitcoin or a theory him. the current -- or ethereum. of moneynt capturing laundering, low single-digit percentages in the world. the reason is the vast geordie is happening in the cash system -- the vast majority is happening in the cash system. enabling people to join a

digital network with regulated on and off ramps, meaning if you want to convert fiat money into libra, you will have to go through regulated agencies and relying onhat, institutions to report think onlys, will i improve the effectiveness of money laundering and is only being done with this in mind. you can have the best of both worlds, enabling people to use digital cash and be their own custodian and at the same time, not only meet the regulatory requirements but improve on the effectiveness of money laundering programs and others. withthat was my interview david marcus, facebook's head of calibra.

ryan. to bring in my first question is, do you consider libra a cryptocurrency? is it in the family of other ones or is it a different beast by its nature? >> i guess to be determined. what facebook launched today was a white paper that claim to some of the underpinnings for how this network could work, what some of the design goals were. they have a consortium of interested parties who will participate initially. ,dding to that 27 member group how they would be truly decentralized and permission list, which essentially allows and exerts some degree of control over the network initially. taylor: what is facebook doing

that others have tried and failed to do? : you can look at what this libra project is by a digital first asset central bank. facebook is 2.7 billion people and we've never seen a company with that type of reach and influence. money has been a natural extension ever since david marcus joined from paypal. sheer reach and ability to coordinate different parties is unrivaled. romaine: when you talk about the biggest development, do you think this adds a degree of legitimacy to it or is this more about the transactional nature of what facebook is trying to do, may be making crypto more toward utilitarian?

ryan: facebook has become a lead blocker of sorts for the rest of the industry. their efforts, just their sheer size. this effort will have so much regulatory scrutiny that it does open up a little more leeway for other smaller and developing digital assets, including bitcoin, by the way. the other thing, i think this is a gateway drug of sorts for folks looking to get into broader exposure of digital goals and assets that might be a little bit more volatile. a user just wanted to work, wanted to feel more comfortable. this almost like finn tech developers. developersineers and , handling user funds, registering in different states. this might be a path for developments on digital asset

technology. joe: i'm impressed by your lack of cynicism. my thought is the opposite, where they could easily go to regulators and say, cryptocurrencies that aren't backed by the banks, aren't backed by big companies, that is really dangerous. ryan: the bet that i'm making is that global regulators are more with morefacebook dominance than they are of leaderless technologies like bitcoin and ethereum. those assets essentially get to hide in plain sight where as we have recently been seeing more heat from regulators as bitcoin started to rally back over to 9000. taylor: is it a good approach to be partnering with these and paypal even though down the line those could be competitors?

ryan: i think this is bigger for cryptocurrencies not named libra than it is for facebook itself. if done right, it should be minimal, 1% if they follow through on what is laid out in the white paper. there are certainly derivative benefits that facebook can capture by introducing the wallet that is more friendly. again, if they do follow through on the goal to decentralize this as is, it is much easier imagining this being an on-ramp to other assets. taylor: thank you. that was ryan selkis. all things crypto. a quick programming note. don't miss caroline hyde's conversation with facebook coo sheryl sandberg tomorrow at 7:00 a.m. eastern. romaine: coming up, what the fed could learn north of the border.

a look at the interaction between canvas labor market and inflation. this is bloomberg. ♪

romaine: some quick breaking news out of canada. the oil pipeline has been given the green light. headlines just crossing the wire right now. it appears canada has given the green light to move forward with the construction of that trans oil pipeline. sticking with canada and the u.s., our next guest says the central bank can learn a lot from its neighbor to the north. for more, let's welcome in the director of research and analysis. thank you for joining us again. i read this piece you wrote

essentially laying out the case for why we can sort of look to canada's employment situation and the inflation situation. i didn't quite understand it. give me the quick layover. >> there's this idea especially in the u.s. that once you get to a certain level of unemployment, we are supposed to get a phillips curve moment where price pressures or wage growth is supposed to accelerate. in the u.s., we have seen some mild wage acceleration but we haven't seen much evidence of price acceleration. one of the counter arguments is that we are not measuring the unemployment rate correctly. things like the prime age unemployment rate. when you look at canada, they toric -- at an historic low on the unemployment

rate but an historic high on the prime age employment rate. joe: in the gold, we have canada here. you can see the employment to population ratio for prime age workers, all-time high. mostistory of canada, the straightforward measure, the labor market has never been this tight. even there, we haven't seen a real pickup in inflation. would think by now in canada, we would see the kind of acceleration and prices that would validate that. in reality, there is not been a sort of hard destination limit by the way labor could increase in canada. then we get the inflation. i don't think that is a useful

way of thinking about inflation dynamics. there proving that will be a weaker case. taylor: in comes the prime age employment measure. you made the case that it is a better function now than in the past, particularly because of the rise of female employment. skanda: the key reason why it is a better measure, if you go through the household survey, which is what we use for the unemployment rate, it is not very good at identifying who is unemployed and who is not participating in the labor market. there are people who respond, i'm unemployed one-month. they go back and forth between the two. when you ask how long they are

unemployed, these inconsistencies -- we would be better off separating it between the employed and nonemployed than trying to find tune who is employed and not. economists trying to find some relationship between employment and the labor market. the key is not to find some level but to look at the pace of job gain. as you point out, maybe that would give over some signal. skanda: i don't want to oversell this at this stage but we do see -- it looks more correlated to growth and here we

have that chart. when we look at the unemployment rate in core services cpi, which captures some of the elements of inflation, not entirely but pretty good, it is in some local correlated, but it is not that correlated overall. if you try to get a more stabilized relationship, the change in inflation and growth could be a better guide. we should be thinking more about see limits -- about speed limits and not a hard destination limit . taylor: a perfect conversation ahead of the fomc meeting tomorrow. thank you. bloomberg ♪

taylor: u.s. stocks rallied after president trump said he would hold an extended meeting with china president xi jinping. i have to admit, it is good news they are having the meeting but you always have to question the substance of that meeting. shery: especially after you had wilbur ross downplaying the talks, saying they will probably be talks about setting up future talks. so talking about talking. at least finally we have confirmation that there will be an extended meeting, that they will have their staffs talk beforehand and you will have xi jinping on cctv coming out and confirming those talks. the china daily and the global times editor, he is now saying this was initiated by the u.s., so that is quite interesting.

things that the kind of that is for domestic consumption? shery: he tweeted on twitter. i haven't verified if he did it on weibo. he tweets a lot on twitter for the foreign audience. he doesn't say as much for the domestic audience. so far, we know the talks are happening. withne: interesting story this idea of the treasury buying. we had that treasury data yesterday. there's also sort of this theory that china doesn't need to keep doing it, at least at the level some people thought. shery: even if they dump treasuries, it wouldn't affect the treasury market that much. and now hold $1.1 trillion you can see that chart where you can actually see treasury

holdings on the dtv charts falling steadily. central banks, really not playing that significant of a role anymore as net buyers of treasuries. with the fed has been doing, dumping treasuries since 2017 and yields have been falling for the past year. taylor: thank you. for more on these stories, don't miss daybreak australia and daybreak asia starting at 6:00 p.m. eastern. don't miss this. the fed announces its rate decision. coverage starting at 2:00 p.m. eastern. joe: economic data at 7:00 a.m. romaine: oracle reports first-quarter earnings after the bell tomorrow. bloomberg technology is up next. this is bloomberg. ♪

emily: i'm emily chang in san francisco and this is "bloomberg technology." facebook's crypto play. the tech giant unveils a new cryptocurrency called libra that they hope will be used as widely as the dollar. skeptics are speaking out. jinpingt trump and xi will meet at the