trial of derek chauvin, the former white police officer from minneapolis charged in connection with the death of george floyd last may. those deliberations have sparked a nationwide debate over police use of force. president biden: they are a good family and they are calling for peace and tranquility no matter what the verdict is. i am praying the verdict is the right verdict, overwhelming in my view. i wouldn't say that but the jury is sequestered now. we talked about personal things. mark: in a video that went viral, officer show been had his knee on george floyd's neck for about 10 minutes while he was handcuffed. his lawyers as the viral video does not tell the whole story.

russia is said to have moved 150 thousand troops to its border with ukraine, the largest buildup ever, according to the european union. that buildup raises the possibility of further conflict. meantime, the united states has warned airlines to exercise extreme caution when flying over russia and ukraine. the challenge from china's president xi jinping calling for greater economic integration and urge the united states and its allies to avoid "bossing others around." he didn't mention the u.s. by name but said that one country should not set all the rules. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪

>> it is 1:00 p.m. in new york, 7:00 in berlin, 1:00 a.m. in hong kong. welcome to bloomberg markets. here are the top stories we are following on the bloomberg and from around the world. we will bring you what is expected to be an announcement on several new products, and the escalating situation at the ukraine border as russia messes 150,000 troops. harley davidson rise to a three-year high. what is driving shares higher amid the company's most recent earnings report. first let's look at markets. we have big drops on european equity indexes. you can see the ibex in madrid is down almost 3%. the cac 40 down more than 2%. the ftse malan index is down 2%.

in austria, down 2.4%. investors are pointed to a lot of things including earnings but also virus fears renewed as well as vaccine concerns, and of course, risk assets have moved incredibly high. may be a selloff is due. in the u.s., not nearly as bleak. those european indexes are off more than three standard deviations away from their 30-day average. in the u.s., you can see the s&p down about .8%. investors are buying bonds, the 10-year yield following two 1.560. bitcoin down marginally to 55 ,830. all eyes certainly on the west

coast on apple. there virtual spring-loaded event kickoff moments ago. i want to bring in technology host emily chang who is covering the event. help us get a bit of what we can expect this hour. i know that we talked briefly about the fact that there is an ipad coming out. what else do you see? emily: eyes are on this event around the world. the event is streaming, so you can watch it from anywhere. tim cook walking through the apple campus now, mentioning earth day at the start, apple's attention -- intention to make their corporate offices carbon neutral. a spring event is not a guarantee for apple, they didn't do one last year, so it is harder to predict what will happen. they did one in 2018 focused on education. today, we are possibly expecting some updates to the ipad line. we know that it's been going gangbusters through the pandemic

as many of us have work from school, children at home, and this was after sales plateaued for several quarters. then in the holiday quarter they hit $8.4 billion in sales, which is more than any quarters since 2014. a huge quarter for the ipad. they are hoping these updates will keep the line going even after the pandemic is over and folks returned to the office, return to school. this is the fifth of virtual keynote. we don't expect them to continue these virtual keynotes once the pandemic is over, but i would expect the next one in june to be virtual, and then in september, were typically iphones are unveiled. of course, rumors and speculations about other things that could be unveiled. maybe some new airpods, these things called air tags, something that you could put on your wallet, keys. matt: i need that.

emily: me, too. matt: i have used the tiles for a while but the batteries didn't last long, they didn't seem to work when they were outside of cell service. if you can get me something that five my lost badge, which i misplaced all the time. emily: can i tell you how many times i have misplaced mine? i agree. matt: for some of us, it's a real problem. we are hearing about services from tim cook, saying the apple card was the most successful credit card launch ever. we will be getting some of the news on some of those as well as products? emily: absolutely. always looking at updates to services, a segment that tim cook has been bullish on since he took over as ceo. it is now the size of maybe a fortune 100 company.

we are also expecting an update to the podcast service, a podcast sits christian service. they have been dabbling in original podcasts but it is not fully built out yet. i am watching, as you are -- and we are at the beginning now, but it is anyone's guess. we don't know if there is a particular theme. our colleague has been pretty happy about the updates to the ipad and imac line. for those going between home and work makes sense, but if you are working from home forever, you may want a more permanent machine. expectations that that could do wonders to boost apple's mac line going forward. matt: absolutely. i'm a fan of the home computer and mark gorman's reporting. i know there is expected to be a

big push into internet of everything, the home appliance side of apple products. looking forward to that. in terms of podcasts, what exactly are they talking about? i am an armchair listener expert, i don't feel like i need anything else, but his apple bringing out new content, are we expected to pay for those? emily: they are working on these original podcasts that you could subscribe to, but it is early days. to my understanding, they will not be a ton of content at the start, but as with apple, it is not necessarily the first, but they will effort to be the best. the aim would be for the content to be good, and the way that air tags -- tiles have been out there for a long time, they are a little thick, don't work all

the time, so maybe apple can come up with something lighter and more integrated. watching some live blogs from our colleagues talking about what they are unveiling. they are unveiling a new purple iphone to join the lineup. a new color is always fun, available for pew order on friday -- preorder on friday. much more goodness to come, we assume. the event normally lasts one hour. i will be listening in and will give you an update later on in the hour. matt: thanks very much for joining us. appreciate your time. emily chang, host of bloomberg technology, will come back later in the hour for a further recap. if we get anything beyond a purple iphone -- looks like we are getting some air tags to find some physical items. time for stock of the hour.

ibm has but its future on its hybrid cloud strategy, dominated by its red hat unit. first quarter results show that that may be paying off. riddick a group to has a look at them for us. >> its biggest jump in revenues going back to 2018. it marks a year since the ceo took the helm. he has made good on the promise to return the company back to some growth. the first quarter of growth after four consecutive quarters of decline. we still had just 1% year-over-year growth in sales. if you take into account currency adjustments, we are down 2% year-over-year. that is one caveat to bear in mind. all in all, a good turnaround plan and majorly down to that big bet on the cloud. that has driven up those sales,

particularly the acquisition in 2018 for red hat. the ceo has been selling off assets that were formally big parts of the company. matt: it had a year now to make an imprint. our shareholders excited? ritika: this has been a turnaround but let's not get too excited. shares are up 20% in the past year, but the s&p 500 is up 50%. the tech sector, 60%. this really puts it into perspective. what they'll be wanting now is how sustainable these numbers are. are they going to continue? this is not the first time ibm has surprised to the upside, so that is what they'll be looking for, going forward. matt: thank you so much, really good group to.

used to call it big blue, not sure anymore, but at a time it was the dominant stock on the dow jones industrial average, when i was a young highschooler. growing tensions at the ukrainian border. we will discuss the latest on the developing situation as russia amasses about 150,000 troops outside ukraine, sets up military hospitals, and lines fighter jets on the runways. this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. now to something that caught my eye this morning. russia is said to have built up 150,000 troops at the ukrainian border, the most ever, according

to the pentagon. here in germany, the chancellor angela merkel expressed concern, calling it extremely tense and very worrying. we have seen reports that there are medical hospitals being set up along the lines. dow jones says there are fighter jets lined up on runways. joining us for the latest on the excluding situation is jake. this is something that seemed to get very serious without drawing a lot of attention in markets. when i saw this story this morning, that there were more troops amassed on the border than ever before, including in the previous conflicts, it was not among the most read stories. why is it kind of flying under the radar? >> first i want to correct you, the eu revised down the figure two 100,000, which is still unprecedented amount, but

slightly less than the 150 you cited. putin rattling his saber is nothing new. i think what happens is, when you rattle your saber, it is like the boy who cried wolf. if you send 50,000 troops one time, the next time you have to send more to get people's attention. i think the market may not be reacting so much because this is not the first time there have been escalations the ukrainian border. there is a simmering conflict that pops up every once in a while. it is not at all clear that this is going to go any further. one school of thought believes if you are going to invade a country, you don't want to advertise it first. that will maximize your casualties if you let them get prepared. on the other hand --

matt: if you have an opponent, it will maximize your casualties. it doesn't seem like the west can do much about it. angela merkel says it is worrying but is still finalizing a pipeline that will funnel billions of dollars into putin's coffers. what is the west really willing to do? >> we have definitely seen that europe is not going to take any harsh measures against russia. the u.s. has used harsher rhetoric, but if you look at the market reactions to the sanctions announced by the biden administration last week, the market brush them off. in fact, the anticipation of the sanctions was worse than the actual -- once the sanctions were leveled on russian sovereign debt. it is fair to say that none of

this is really spooking the markets. matt: biden is going to give his big talk tomorrow. this is the four-hour event. it also seems like -- i'm sorry, not biden, putin. it seems that he wants a summit and doesn't want to jeopardize that. it seems neither side is going very far, but you have the alexey navalny situation simmering in the foreground. we are hearing that he could die in a matter of days. how serious is that situation? >> navalny is the x factor here. he is on a hunger strike in a russian prison. his lawyers are getting very little access to him. his doctors are not allowed to see him as of yet.

he has been on a hunger strike for three weeks. what happens with navalny is really an x factor. will they start force-feeding him? will he die? if he doesn't die, the u.s. has promised there will be consequences. europe has also come out strongly condemning his detention. it is hard to imagine, if he does not make it, that there wouldn't be harsh reactions against russia. putin's state of the union is tomorrow. in the past, putin has used this to project russian might, brag about how powerful his country is. what is in store for tomorrow is anyone's guess. he does like to announce major changes. last year is when he announced the constitutional changes that would let him stay in power until 2036.

matt: great to get your reporting, jake. thank you for correcting us. the eu has revised down to 100,000, but still the pentagon says it is the most they have ever seen on the border, so a tense situation to say the very least. still ahead, a little bit lighter but not very much. harley davidsons are incredibly heavy, but shares are rising like helium to a three-year high. we will discuss the earnings beat that drove them higher with james hardiman of one brush securities. this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. harley davidson shares, higher again today. the motorcycle maker reported better first-quarter profit, raised its sales outlook for the year. joining us to talk about hog is

james hardiman of wedbush securities, who hasn't out rating on the stock. why has harley been doing so well? they have a lot of new product out, they had a ton of marketing from a long way up. is that where this drive is coming from, the diversification? james: not at all. i would argue the bigger context here is this is a company that has been struggling for years. they have lost market share, they are in a five or six-year run of negative retail sales. 2020, i would argue, was a very good year for them. brought in a new management team , reset the business, reset the story, reset the pipeline most notably. but you really didn't see a lot

of benefits in the actual 2020 numbers. it was more in terms of inventory cleanup and the like. the first quarter of this year was the first quarter we really started to see all of the benefits of the wheels set in motion a year ago or more, and they have been on pretty much every metric. retail sales were better, pricing was better. margins were substantially better. their finance unit was through the roof. matt: it is a big shift to turn, arguably. i guess it takes them a while to get around it. interesting they have had these market share losses. i have a sportster 48 which is fun to tool around on, but if i want to do some real cruising , i get on myducati, which came

into the market as one of the first european challengers to big harley v twins. are they able to grab some of that marketshare back? james: i think they will, and i think 2021 will be a start of that. they were not in a number of categories that were outperforming the rest of the market. venture touring, if you are familiar with the category, was one of them. they are addressing that with the new pan-american bike. that is one piece of it. the other piece of it is a lack of focus. they were trying to be too many things to too many people. they put a lot of time and money and effort into the entry-level bikes that never really performed from a proper perspective. they refocused their geography, and i think they'll be doing better in the bread-and-butter segments. matt: what about the pandemic?

i go into bmw shops, ducati shops, and they are selling like hot cakes because of pandemic. has that been a huge boost? james: this is one of the activities that people have felt are a safe, fun, socially distant activity. may not have seen it in their reported numbers last year, but it has really helped him to clean up a lot of the issues they had. matt: james, thank you very much. we will have to get you back on with more time. coming to us from shaker heights, in the great state of ohio. coming up, a possible bidding war in the railroad sector. this is bloomberg. ♪

it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today.

wanna help kids get their homework done? well, an internet connection's a good start. but kids also need computers. and sometimes the hardest thing about homework is finding a place to do it. so why not hook community centers up with wifi? for kids like us, and all the amazing things we're gonna learn. over the next 10 years, comcast is committing $1 billion to reach 50 million low-income americans with the tools and resources they need to be ready for anything. i hope you're ready. 'cause we are.

mark: i'm mark crumpton with bloomberg first word news. we begin with breaking news. one person is dead, two people

were wounded in a shooting at a long island, new york was restored. police say the person killed was a 49-year-old employee. shooting reportedly happened inside a managers office. a couple hundred people were inside the stop and shop when the gunfire broke out. an iranian official today characterize the ongoing vienna talks over a faltering nuclear deal as positive and cautiously hoped for understanding to be reached by all sides. the iranian cabinet speaker told reporters, it is too soon to express optimism or pessimism about the final outcome of the negotiations, but we are sure we have chosen the right track and are moving in it. he insists sanctions must be lifted before any possible agreements. afterwards, iran would come back to full compliance with the deal if it can verify the removal. high-level talks are aimed at

bringing the united states back into the 2015 nuclear deal with iran. the president of chad has been killed on the battlefield in a fight against rebel versus. he ruled the central african nation for more than three decades. he had been reelected. it was not known why he wasng t. the military says a traditional council will be headed by the late president's son. in the u.k., employees entering offices in major cities rose to 34% of pre-coronavirus levels, up 3% from the previous week, according to data which measures occupancy rates. the numbers have been in the single digits on number of times during the last year. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪

amanda: i'm amanda lang. welcome to bloomberg markets. matt: i'm matt miller. we welcome our bloomberg and bnn bloomberg audiences. here are the top stories we are following from around the world. it is potentially going to be the biggest railroad deal in decades. the latest on cn rail's $30 billion bid for kansas city southern, topping canadian pacific. and the latest headlines out of apple's first product launch in 2021. we have seen updates for podcasts, talks about its credit card and a device that helps you find stuff that you lost. and manufacturing, a now or never moment. we will speak to katy george on their findings about the biden

infrastructure plan and why it is critical to bring jobs back online. amanda: a little bit of weakness out there today. nasdaq leading the broader markets lower. it is the tech groups and the faang contain groups in the s&p 500 showing up as the weakest spots. rate sensitives doing ok today but no help from energy, industrials. overall a fairly weak picture. even as the 10-year yield, 1.55, off of its recent highs. we have also seen energy as a weak spot, on the one-year anniversary of course of the west texas futures market going negative. for what it is worth, you mentioned, cn rail offering $1 billion for kansas city southern, trying to win over its

rival cp. not only is it a significant premium over what was agreed to between cp but it would mean the investors would only us. that may actually fit with what they want. matt: i think the interesting thing here is just the assets themselves. if you want railroad assets, new network, you have to buy it. they are not making them anymore. it would be prohibitively expensive and possibly express -- impossible without using some kind of imminent domain to build on a railroad line. you have to buy them. the question then becomes how much are you willing to pay? when you get into a bidding more like this, it could go high. amanda: the ceo of cn rail was on bnn bloomberg and bloomberg television earlier.

have a listen to what he had to say. >> this would be a time to crystallize value for their shareholders. the court has decided that they are willing to do a transaction. transaction and a strategic partner in the railroad. this is something for cn to consider. number two, it's about the economy. our vision has been to create a solid network, a network that can capitalize on the economy post-covid, also, usmca, renewed recently. that bodes well for manufacturing goods and consumer products movement between the three countries. finally, there is also an issue with china that is challenging, labor costs on the coastal parts

of china, higher than in mexico right now. we could see some supply chain moves. finally, cn's balance sheet is solid. we kept our powder dry, so to speak, for the past two decades waiting for a transaction to come around. from an economy point of view, we are putting our best offer this morning, calling for them to partner with us in what will be the railroad of the 20th century. >> why is this business worth 20% more to you than your arrival? >> we have a bigger mode. you look at where north america is heading right now of overall economy, the consumer service sector is the biggest part of the gdp. that mean people have good paying jobs, disposable income. therefore they consume around

the home, they buy goods, byproducts from abroad. that is really the big future of freight railroads in north america. moving large quantities over a large distance to people that live in big cities, to people that consume, but also people living in smaller industrial towns. the mode here is basically, north american economy, where the economy is going, and what kind of freight it will generate. >> i don't think we are arguing the actual fundamentals of the deal, it is the timing and the price. now you could enter a bidding war. you offered 20% over. if you had offered something for kansas before canadian pacific did, you may be in a different spot. can you walk us through while you were late to the game? >> i'm not sure it would have changed anything.

kcs decided it was time to crystallize value for their shareholders. we may have been in the same situation. combining railroads has a lot of value, so you want a good geographic fit. in the case of cn, we have the balance sheet to offer the real value of what these railroads combined together would be. the timing is partly set by the board of kcs. they decided it is time to crystallize value. the real value of the company will become transparent. amanda: we want to bring in lee from bloomberg intelligence. to me, the most interesting steps are not with the kcs board thinks about this, but what the surface transportation board thinks of it. both canadian railways have taken a run in the u.s. market and failed attack in early. will this be different?

>> with kansas city southern, there is a bit of a difference because they were exempt from some m&a new rules that went into effect in 2001 because of their size. they are much smaller than the others. the real question is whether the officials will allow the waiver to continue or this merger, whether with them is the standard. combining cp and kansas city southern, you are still creating the smallest platform. when you combine cn national and kansas city southern, you are creating one of the largest. they don't really overlap on their networks. they meet at one place in kansas city. whereas cn and kansas city, it is very small, about 1%. cn can probably work with them

about ways to ensure competition will not be impacted with the merged entities. the hurdle rate for a cp/ksu deal-- matt: when i think of railroads, i think of hobos, train robberies. basically, american history class. now, in 2021, is this an industry that is going to see real growth due to may be green concerns, more amazon shipping? >> for a number of years, the last 10 years, the story of the rails is their ability to take out cost. they have now implemented what is called position scheduling

railroading. it is really about operating as efficiently as you can. kansas city southern was one of the last to adopt that. you are seeing their margins improved pretty dramatically over the last couple of years. that being said, the growth for the rails is focused on the intermodal side. you see those containers on railroads which also go on trucks, multimodal type of transportation. it competes directly with trucks. as more companies lower their carbon footprint, as esg becomes more important, intermodal will continue to outpace probably the growth in gdp, provide a growth area for them. that being said, other segments have been big moneymakers, like coal, is in secular decline.

the growth they are getting from intermodal is offsetting the decline they are getting from other commodity types like coal. amanda: not a lot of time but do you expect cp to come back with a higher bid? >> they think they have room in their balance sheet to make some more aggressive bids. the big difference is the difference between cash and stock between the two of them. the transaction value and stock for canadian pacific is more. that would mean, at the end of the day, when the deal is done, kansas city southern shareholders would own about 25% of the entity versus 12% at cn. that may provide them with more upside for the future in terms of the share of the spoils that they may get with the cp/kansas city southern deal. matt: thank you for joining us. bloomberg intelligence senior trepidation analyst talking about what looks like could develop into a bidding war.

if you have a bloomberg terminal, ron t live go for a conversation between mohamed el-erian and what happens after reflation. that is happening right now, should prove fascinating with such a couple of intelligent, experienced market personalities. coming up, apple's spring-loaded event. bringing us new products, new services, talk about credit cards. this looks like a tracker. is that a tracker? so, you can find your lost stuff with this. like tile but apple's version. this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. apple out with all new products at the spring-loaded event, a virtual event. nonetheless, announcing hardware like new chips, new apple tv, a gps location device for lost keys and wallets. with us now for more is the host of bloomberg technology, emily chang, has been keeping an eye on the event. they did come up with the airtags. not terribly expensive, $29, four for 99. are they going to work better than tile? emily: we don't know, and i'm sure tile is not too happy about it, but you are looking at them right there. circular fobs that you can

attach to pretty much any object. $29 apiece, 44 $99. i need these, and badly, especially with children carrying my things around the house. a big developing over the last 20 minutes has been the new computers and new ipads. all of them are built on the new m1 apple-designed chip that david working on for a long time. this is a huge shift for apple and the tech industry in general away from intel chips that formally would have gone into these devices. that means there can be more seamless integration between the new imac, which you are seeing here, and the new ipad. they also unveiled the new ipad pro. better camera resolution, better graphics, better battery life. all of these things coming together. you can start and email on your

phone and then continue that on your computer. you can use iphone and ipad apps on this new imac. matt, you said you like a stationary device. this would really rejuvenate the mac line. it depends on your habits. are you taking a laptop to and from work, caring around the house, or do you always work in one place? apple is providing a family of devices that work for a lot of different use cases. amanda: sadly for matt, the airtags are not available to attach to his bitcoin wallet, which is lost. every time you think, what else can apple do? are they doing it, -- i guess the m1 would be the new thing, a new chapter for apple. emily: tim cook called it not an

upgrade but a breakthrough. i think it is a significant hardware and software and technological development. we can only buy these devices now, but apple has been working on this chip technology for a decade. now you are finally seeing it come to life in the hardware itself. they also unveiled a new apple tv set-top box, 4k video. better graphics, better resolution, and they spent a lot of time promoting the new season of "ted lasso." i know we have some fans of that show. coming out july 23. definitely a validation of their original content effort. matt: but no car. emily: no car yet. apple does keep surprising us. i am surprised that we are seeing this many new devices at

a single event in the spring, which i said earlier, they don't have a spring event every year. you never know quite to expect, but some pretty massive updates that we are seeing today. amanda: and you always have it first. emily chang, thank you so much for that. we are back after this. ♪

amanda: this is bloomberg markets. i'm amanda lang. according to mckinsey, it is a now or never a moment for american manufacturing. what needs to happen to make it a golden age of manufacturing? katy george is with us now. this is a pivotal moment because there's a lot of spending coming. what needs to happen to bring manufacturing back in a real way in america? katy: as we have all seen through the covid period, semiconductor chip shortage in

auto manufacturing, it's critical for the u.s. to have a strong manufacturing base. that is important to jobs, to economic growth, and also to supply chain resilience. what the mckinsey report found is there are several things that have to come together to support the sector's growth. one of them is upscaling our labor force around stem skills and technology. this is a high tech industry, not an industry absorbed. we need new capital infusion into especially some of the sectors that have very high capital investment requirements like semiconductors. third, we need to pay attention to the small and medium-sized manufacturers that supply the supply base or the manufacturers and are critical to the resilience of the sector. matt: what about education? back in my day, bruce springsteen graduated from high school, got his union vest and started working at the factory.

as you point out, we need people that have more training that you don't always get with a liberal education. doing need a new kind of schooling for those? katy: we are seeing thousands of programs between individual manufacturers, vocational schools, and universities to ensure the curriculum we are providing students going into the sector is modern, provides them the right skills. we also need a lot of upscaling and training in our manufacturing company to support their workforces and communities. finally, we are seeing some exciting applications of technology, like augmented reality, that actually enables the workforce to expand their skill set and capabilities by giving them digital prompts. amanda: one of the reasons we

have seen manufacturing decline is cost. do you worry about rising cost, if we see a higher base of manufacturing? katy: manufacturing sectors that we prioritize in the report are not based on labor cost arbitrage, but based on innovation and technology capability, access to r&d. these are areas that we should be competitive income including cost competitive. matt: it's a really fascinating report. thank for sharing it thus. katy george is a senior partner at mckinsey and company. for amanda lang, i am matt miller. happy 4/20. this is bloomberg. ♪

mark: one person was killed and

two others hurt in a shooting at a long island grocery store. the police say the person killed was a 49-year-old employee. the shooting happened today inside a manager's office. a couple hundred people were inside the stop & shop at the time. the gunman is not in police custody. the eu drug regulatory agency says it found a possible link between the j&j vaccine and extremely rare blood clots. it also added that warning should be added to the label, but experts reiterate that the benefits outweigh the risks. those findings come after a small number of vaccine recipients in the united states reportedly developed blood clots. earlier, j&j posted better-than-expected first-quarter results. india imposed a lockdown in new delhi due to a surge in covid-19 cases. this is to prevent the collapse of the health care system. they say may