tom: what is this for citigroup, qe 6 or 7? the fed remain on hold for now and is waiting to see the eyes of a trade deal. tom: you crack open the books, you go out to wisconsin, you crack open further books, and where we are right now is none of your textbooks? tom: no, -- dana: no, it isn't. but fiscal stimulus when you do not have a crisis and trade wars, so these are uncharted waters. francine: when you look at some of the risks out there, how does trade war for the next five to 10 years if we do not get the resolution or the backwards and forwards, what does that mean for central bank policy? dana: the uncertainty is still quite strong and we think it will increase. the u.s. may indeed impose tariffs on all chinese imports and if that is the case, then we expect central banks to respond. the only problem is that central banks cannot to lean against the fact that we are going to have fiscal drag in 2020 and other trade war, whether you have a deal or not, are going to continue to weigh on the world wide economy. francine: l

we have some breaking news on citigroup as a jgb market participant.t looks like japan, the ministry of finance is jgbending citigroup as a market special dealer. japan's ministry of finance saying that the suspension follows and fsa action on jgb manipulation. you have to see this as a big deal for such an important global investment bank like citigroup. your thoughts? it is a big story for citibank. they are one of the primary dealers so that will be an issue. be a blow to them. i am not sure it will be a big issue on the jgb markets. matt: it is interesting just coming across, at we will continue to follow the story for you. the ministry of finance will suspend special entitlements of jgb market special participants granted to citigroup, from june 13. definitely watch the stock, differently watch the jgb market. we will keep an eye on what is going on at the ministry of finance and the bank of japan. i wanted to ask you the mliv question of the day. or get the feedback that you are receiving from clients. well the boj restart a race to the bottom fo

citigroup's was not the only one. of comparable level of fraudulent mortgage loans have been seen in all the big wall street banks. and knowing the risk of bankruptcy. banks began to pour vast amount of money to buy more and more mortgage loans and package them into derivatives. the top honor writer in the peak years a few 1005 in 2006 limited growth. at $106000000000.00. lehmann was one of the largest makers and sellers of the the absolute most toxic loans in the entire world lehman brothers was one of the largest fraud vectors in the history of the world. my name is an time valukas. i go by the name tony. in the year 2009 about 3 months after the lehman bankruptcy i was appointed by the federal court in new york to act as an examiner. i was independent of any of the parties in among the responsibilities the court charged me and my team with was to determine how and why lehman went into bankruptcy and when you're talking about the lehman bankruptcy you are talking about the largest single bankruptcy in the history of

joining me is ed morse of citigroup. tumultuous week, prices falling down 20% from the april highs. a big part of that was the inventory, a huge build we saw, the biggest since 1990. is it demand or supply? >> i think it is mood. i think it is turbulence in the markets that is the main driver. you can see it in financial flows and other market indicators. u.s. inventories are building. this ought not to be a surprise. there's an awful lot of growth in petroleum in the u.s. and a lot of bottlenecks to get into the market. the result is a build in inventory. that is pushing up to over 50 million barrels. less than half of that a year ago. we expect it will drive up a lot more than that until those pipelines come into play somewhere in the third quarter. meanwhile, the rest of the world is tight. if you look at the brent or dubai forward curve, oil is scarce. we are moving into a season in which refinery demand for crude oil is growing, somewhere by 300 and 400 million barrels a day between last month and the middle of augu

joining me is ed morse of global head of commodity at citigroup. a tumultuous week, prices falling down 20% from the april highs. a big part of that was the inventory, a huge build we saw, the biggest since 1990. is it demand or supply? >> i think it is mood. i think it is turbulence in the markets that are the main driver. you can see it in financial flows and other market indicators. u.s. inventories are building. this ought not to be a surprise. there's an awful lot of growth in petroleum in the u.s. and a lot of bottlenecks to get into the market. the result is a build in inventory. that is pushing up to over 50 million barrels. it was less than half of that a year ago. we expect it will drive up a lot more than that until those pipelines come into play somewhere in the third quarter. meanwhile, the rest of the world is tight. if you look at the brent or dubai forward curve, oil is scarce. we are moving into a season in which refinery demand for crude oil is growing, somewhere by 300 million to 400 million barrels a day between last month and t

morgan citigroup and so on. the friends extended itself on loans were sought by the public by falsifying their own financial situation on loan applications. therefore the public and banks were complicit committing bank fraud. my name is richard none. i was senior vice president and business chief underwriter for citigroup.

morgan citigroup and so on. the friends extended itself the loans were sought by the public by falsifying their own financial situation on loan applications. therefore the public and banks were complicit committing bank fraud. my name is richard on. i was senior vice president and business chief underwriters for citigroup. at the time citi group was the largest bank and. it was my responsibility to make sure that the $90000000000.00 a year that we were purchasing were going to loans that were originally aided by other banks and mortgage companies these map our policy standards. in early 2006. i discovered that over 60 percent of these mortgages did not meet our guidelines they were by definition defective when i discovered this in this was june of 2006. silly me i thought it was my job i started issuing warnings because i was supposed to make sure that these met our policy guidelines. and i sent an e-mail i put it in my weekly report i made committee presentations i mean i'm not a shy guy i cornered people in th

citigroup is saying the s&p 500 is heading for a full-scale bear market.d news is the fed could still write to the rescue and if it does, we could see new highs. how asymmetric are the risks in the u.s. equity market at the moment? aret: we think they symmetric. you have valuations especially with the rally on friday now approaching the recent highs. the earnings picture does not look particularly compelling. we think risk reward is high. on the risk side. manus: who is under more pressure to do a deal, you had the question that the data perhaps is a little exaggerated. muchhe chinese under that pressure to do a deal given what you heard? guest: the chinese have the capability to deploy stimulus rather quickly. they have shown that capability. they are believed to wait to cars there. the big level would end up being fiscal and that would take some time so if a deal is not forthcoming, the americans would take some time to get stimulus into the pipeline. that means growth will suffer in the near term. nejra: goldman says we could go on theseven -- seven yua

tobias levkovich of citigroup.interest rates, is this any way to run an economy? this is bloomberg "surveillance," live from headquarters in new york, nejra cehic in for francine. john bolton is scheduled to speak in jerusalem at this hour, an important set of comments. nejra: absolutely, especially in terms of the response from iran that talks could be suspended forever. those tensions in the middle east are reflected in the oil prices. that has come off a little bit of a pause. tom: the president indirectly going after the stridency of mr. bolton. with our first word news, here is viviana hurtado. viviana: tehran is rejecting the new u.s. sanctions against the that actions say shut off the path to a diplomatic solution forever. john bolton says the next move is up to iran. >> the president has held the ,oor open to real negotiations to completely and verifiably eliminate a run's nuclear -- iran's nuclear weapons program, at support for terrorism, and other malign behavior worldwide. all iran needs to do is walk t

citigroup is the most diversified.ll have some measurable impact, but it will be mitigated by the diversified geography sector by sector, and by loan types. citigroup,jp morgan, bank of america, their books will hold them in good stead. guy: what about the regional banks? how do you expect them to go forwards? what i am looking at is a big cap index and a russell that is not. if i look into smaller or medium-sized enterprises i would be talking bigger than this when it comes to the russell. thertheless, how is regional banks story developing? jon: they are stratified right now. the large banks benefit from the economy to scale, and the durable deposit focus. the regional banks have fewer levers to pull. that is why you saw the merger between bb&t earlier this spring. that was the largest transaction to occur in the last 15 years. some of the smaller banks are not tiny, but the medium-sized ones are looking to combine their energies and go for some economy to scale to fare a bit better in a lower rate environment and do

certainly with citigroup, it is a familiar story.hing they got into a lot of trouble for in the u.s. a while ago. it regulators around the world have been having a hard time getting a crackdown on this problem. in japan particularly, they won't be able to participate in a number of options. they are the 12th underwriter of corporate bonds there, so this is pretty big. david: and it is illegal in the united states. but i never knew that big banks spoofed. i thought these were the guys in the back office, some hotshot hacker. there are traitors that do that in big banks. i didn't know that -- there are traders that do that in big banks. i didn't know that. sonali: they were million,y about 1.2 and it is only a one month suspension, but still, it is not a great sign, especially for citigroup, which had such a big global operation. they have a big asia presence. alix: just don't do it. david: there's also compliance issues. viking.rn to there's some intrigue going on, where there is a shakeup with the co-cio. there's a little bit of a ba

that is the title of citigroup's mid-year outlook and if you're thinking of taking some money off the, you may want to think again. joining us now is steven whiting from citi private bank i had all these questions prepared for you and you muttered something as we came back onto air which was if you were out of the equity market for two days in the past year -- >> if you look at the last 20 years and you took out the best two days on average -- >> every year? >> every year. just miss two days on average out of those years, you would have gone from positive equity returns in the united states market of over 7% to nearly negative 3%. >> okay. so if you tried to time the market and you sold stocks and bought back stocks and you missed the two best days of the year every year for the last 20 years, instead of getting 7% per year return positive you would have lost 3%. >> that's right. >> so you need to be in the market all the time. >> you do that by -- >> don't leave >> well, that's exactly right. but you combine some safe fixed income in a year like this one where we have seen bonds rall

our chief asia-pacific economist from citigroup global markets.clusive coverage on tuesday and wednesday. the morgan stanley australian summit in sydney. we will be joined by the australian ceo. you are watching bloomberg. ♪ ♪ welcome back. let's do a quick check of the latest business flash headlines. -- may be about to acquire a semiconductor maker. people close to the deal say an agreement could be announced as soon monday. they are willing to pay $23 to $24 per share, a premium of more than 50% of the stock price last week, when bloomberg reported that the chipmaker was considering a sale after receiving takeover interest. -- have submitted final bids for gaining a company. it comes froms kkr, bain capital, and others. tencent was widely expected to join but did not admit a final bid. and -- will receive a 51% stake in the group as the government tries to develop a global industry leader. paymentnot involve any as the government moves to speed up restructuring industries at overcapacity. after the agreement, they will own 45% of the listed com

. >> good to see you >> on the financials, particularly if i look at citigroup, 10% in the last coupleks, bank america underperformed it. i think bank america gives you opportunity now to start matching citigroup >> and you're optimistic on banks? even though rates are low? >> everything has been against them they've gotten nailed in anticipation in my opinion of what's to come i find it hard to believe they're going to hammer them much more. >> i like novartis looking for a bit of a place to hide, but numbers are a little messy from outcome spin, but outcome spin is behind them, 18 pe, i think they have a strong pipeline good technology. >> good to have you here as well today. >> there's no premium in baba. >> walmart >> that stock is ripping up 1.5% again today. great weekend. "the exchange" starts now. >>> thank you, scott hi, everybody. here's what's ahead of us. tensions escalate, ten minutes from striking iran when the president called it off. we have the latest from washington, and why the market seems to be shrugging it off. >>> and a story that's never been told before how the

citigroup said that if yields fall below 2%, high-yield spreads have always been materially wider in post taper tantrum period. walk me through what you think the relationship should be here. we have had 2% treasury yields a couple of times before. we have seen this level many times. should there be a natural relationship between where the two year yield is and where high yield spreads should be? lale: it is focusing on the two-year because it is focusing on the funding cost, indicating some sort of pressure on the economy. rates are important to watch but this is the problem in this new regime we live in, where there are all sorts of geopolitical risks, going into election cycle, and the treasury keeps issuing on the front end. all of these different factors that are changing the dynamics. taking one data point and extrapolating is not right. is high-yield cheap? no. you do not buy high-yield until it crosses another 75 basis points. but i don't think, to krishna's point -- we have an aging demographic. the need for income is amends -- is immense. you cannot tell people that they ju

meanwhile, citigroup initiated lyft a a buy. it likes the concentrated focus in the u.s.to lyft shares were down a fraction to 59.17. french automaker renault is now delaying a decision on the potential merger with fiat chrysler after an activist hedge fund wrote to renault's board opposing the deal that the proposed $35 million rose, it rose t 13.33. box shares fell following last ght's results which showed slightly better than expected earnings a a full-year revenue outlook. the company blames longer than expected duration of closing deals with new larger clients and that comes with s longerre cycles. it fell more than 4% to 17.18. mattel and joining&p the 500 while mattel will join the s&p mid-cap 400nd the move will be effective before trading opens on friday. it fell a fraction, and mattel's stock jumped for the hello kitty brand rising % to 10.78. after the bell omsalesforce beat estimates thanks to an increase of customers to its flagship sales cloud business. the company also raised its full-year guidance and the stock initially rose in after hours trading and clo

they were ricocheting from the likes of citigroup today saying we could enter a full steam bear marketee the extra tariffs on china. they see the s&p 500 falling down to 19,350. joe: the gap between where we are right now and still the ongoing concerns of the various headlines and warnings out there about recessions and trade wars continues to be a striking feature of the market. really, it felt like that way for a month now. wall is alimbing the good technical term there. let's take a look at how technical groups are performing. chipmakers. adi getting a double upgrade from goldman sachs. components.uto you got your cyclicals, growth companies doing well. on the flipside, you got some more of the safe havens like utilities, telecoms a drag on the index. joe: yes. caroline: a drag on europe as well. scarlet: if you look at how the performance of the index has fared, we got a pop at the open. there is the pop at the open. even though we have come off our highs, we are still well above. joe: still solid gains. scarlet: above friday's close. we are moments away from the close in the u.s.

citigroup said that if yields fall below 2%, high-yield spreads have always been materially wider, typically of 500 basis points in the post-taper tantrum period. walk me through what you think the relationship should be here. we have had 2% treasury yields a couple of times before. we have seen this level many times. should there be a natural relationship between where the two year yield is and where high yield spreads should be? lale: it is focusing on the two-year because it is focusing on the funding cost, indicating some sort of pressure on the economy. rates are important to watch but this is the problem in this new regime we live in, where there are all sorts of geopolitical risks and tariff issues. we are going into the election cycle, and the treasury keeps issuing on the front end. all of these different factors that are changing the dynamics. so just taking one data point and extrapolating is not right. is high-yield cheap? no. i don't think you buy high-yield until it cross-ice another 50-75 basis points from here. to krishna's point, look, we have an aging demographic. the need

citigroup and jpmorgan rallying. alphabet really boosting. microsoft up 1.6%, helping the tech space. investors buying these high-quality names after the big decline that we had in the month of may. if we look at the chip sector, this is where we have had outperformance. leading the way going back to last week. sessionslast six gaining nearly 9.7%. the chips tend to lead with those components used in everything today. if we go back into the bloomberg, let's look at various aspects of the risk continuing. a very busy chart, but each aspect is important. in yellow we have oil, in white , in orange,segments the shanghai composite, in blue, the s&p 500. in purple, we have copper. in april, some of these key segments started to turn down ahead of the s&p. keep an eye on those. the bigger question, now that we have many of these areas consolidating down to gains of 15, 20% on the year, pretty extraordinary given the volatility. copper, usually a tell on the economy, about flat. of course, we will be watching and reporting as time goes on. vonnie: t

citigroup said that if yields fall below 2%, high-yield spreads have always been materially wider, typicallyth of 500 basis points in the post-taper tantrum period. walk me through what you think the relationship should be here. we have had 2% treasury yields a couple of times before. we have seen this level many times. should there be a natural relationship between where the two year yield is and where high yield spreads should be? lale: it is focusing on the two-year because it is focusing on the funding cost, indicating some sort of pressure on the economy. rates are important to watch but this is the problem in this new regime we live in, where there are all sorts of geopolitical risks and tariff issues. we are going into the election cycle, and the treasury keeps issuing on the front end. all of these different factors that are changing the dynamics. so just taking one data point and extrapolating is not right. is high-yield cheap? no. i don't think you buy high-yield until it crosses another 50-75 basis points from here. to krishna's point, look, we have an aging demographic. the need

if there's one to trade it's that one >> sea group, not surprisingly here i'm going to fade citigroup and the banks, that tray traded horribly today, but we had a pretty big steepening them >> can you not explain >> you fade it and if i want to trade what what doesn't make sense is people are concerned that the fed fed is stepping in and they're -- city bank of all of the that's the one i can stand on valuation and i'd trade it >> bonus round time. >> campbell's soup having its best week in, get this, three decades. >> sold to guy >> i'd sell it back to you, guy. >> three years, but i think you take what you got in this thing. you take your soup and put your saltines in and put money on the table and absolutely fade this sucker you've been given a gift after three or four years of a downswing, fade, fade, fade. triple fade. >> that is an amazing move in campbell's soup. >> you can't buy that. that's a spike and a flag pole right there. >> coming up, another stock that's soaring this week and one of the traders said it's gone too far, too fast. >> carter worth called him thi ek and you

are higher you're seeing a steepening of the curve and in general that's playing out for the banks citigroup up 4.5%. >> but you're also seeing a rebound in the trade stocks, a rebound in consumer discretionary. i guess the question is was it just oversold conditions that's leading to a bounce or has the picture changed somewhat >> so i think it was an oversold condition that led to the bounce but as i said before i think the fed is the most important thing. but you look atting financials financials topped out in '08 and they topped out exactly where they topped out. xlf specifically where they topped out recently in the last couple months. that to me is saying that the financials are not the key that's where you should not be at this point. i think the fed is actually panicking. so we'll talk about that a little more during the show. but the fed should panic they have no real ammo here. they can't cut that far. >> they've got a lot more ammo than other central banks around the world. let's get to our reporters who are covering all of the stories for us bob pisani's here at the exchange with

still with us is tina fordham, citigroup chief global political analyst. who will succeed her?a: according to your survey of analysts, it will be boris johnson. he is clearly the favorite. whenever i see that much consensus around a single candidate i start to get concerned that it is not going to be that person. he is the candidate to beat. we are about to go through a painful few weeks were few months, where the conservative party membership, not the country at large, chooses a successor to mrs. may. guy: in terms of how this will work out, how is boris johnson change the narrative on brexit? he is talking about the fact that he will ensure by halloween that the u.k. is going to leave the european union. i'm wondering how he gets there if we still have a parliament that does not believe in a hard brexit. tina: i suspect whomever is the successor will have a pretty short-lived premiership. as you have suggested, the british parliament has found itself unable to agree on any of roots of brexit. the results of the parliamentary election, and the support of the conservative party

citigroup saying the downside risk is greater than the upside risk.bank also experiencing a more -- a warning from j.p. morgan chase. j.p. morgan saying stop the tinkering. the bank index in general had a .5%. day in general down all eyes are on the trade war between u.s. and china. crude oil today down another .2% in new york. gold futures higher by almost 1%. the yen is also stronger today. the commodities index is down .2%. we were at the cma earlier and our trader told us it was going to be a better month of june. let's look at how we are faring in the united states right now. the s&p struggling for direction. it is positive now. the 10 year yield backup to 212. chipotle was one of the companies that came out and said we are going to see a hit from the u.s.-mexico tariff. $15 million worth of hit for the moment. aaa also facing higher avocado facing --aa also chipotle also facing higher avocado costs. muchrs not buying so chemicals at the moment today. today is the first day of trading post spinoff from dow chemical. that is a look at markets righ

citigroup came out and said it these brent surging to $70 this summer.ct a further crude rally. you can find by chart on the bloomberg at gtv . vonnie: very nice, jessica summers. guy, beat that. guy: i will beat that with iron ore. if you want to see the star performer in the commodity space, you can forget oil, you can forget gold. where you want to focus is and what is happening in the iron ore market. what i have is a chart of inventories. this is portside inventories in china. they've been falling for the last 11 weeks. we have not seen that for the last four years. what we are seeing is a real squeeze on inventory in china. that is going to be manifesting itself in terms of the price. this is why a lot of analysts are expecting iron ore to be the outperform or this year. you also have supplied concerns feeding into this. you have demand story and supply concerns. is already downgrading its expectations for iron ore production. we have seen the issues in brazil this year. it has already downgraded its expectations for iron ore production. this w

citigroup saying gold fever has struck. up. poised for a big move it has already had a big move and as we noticed, gold rallying to the highest since 2013. the chart has flipped the precious metal back on investors' radar. toward 1400, and again, speculators jumping in, boosting the calm x futures contracts by 16% this month just in terms of volume. take a look at oil. a different story there, and that again has to do with the middle eastern class. there's concerns that it may heat up. trump's tweets about retaliation did not help sentiment but it did boost the price of oil a little bit, and many believe that will carry the day for at least a while going forward. paul: are there any on wall street that believe the fed's move gives dollar bears a green light? two take analysts are making noise about that. let's go to the bloomberg quickly one more time because dollar strength has been significant going into this as yields have stabilized. hedge widely followed fund manager believes the slump under the 200-day moving average sign

even citigroup saying it cannot be valued so poorly.n, howard hughes is looking at options, including a sale. swiss shares will be barred from trading in the eu as of monday after switzerland failed to make progress on a political deal governing the relationship. it looks like it is being withdrawn. bosleyrgs catherine joins us now from zurich. do you think we will see equivalence withdrawn and this will come into force on monday? explain. catherine: the commission said that at the moment they saw no reason to extend equivalence, but that clearly let the door open for an 11th hour deal. however, there was an off-the-cuff comment by the swiss foreign minister saying the countermeasure they had, which would effectively reroute switzerland,nto that that would take effect on july 1. what does it mean for someone in france or germany who group?stle, ubs, swatch catherine: it means trading of such companies will have to happen in switzerland. it cannot be done on it eu trading platform. deutsche bank has said there are moving various stocks.

posted that question to the citigroup market strategist, ing at the top of the hour.d not seem to agree. we can't always cut our way into inflation, right? to causethe impact is demand to bring supply and demand into equilibrium, but the fact is that because of globalization, technology and the lingering overhang of the financial crisis and the solvent crisis and what, is going on in china, there is too much capacity to make stuff and not enough demand to buy it. when you have too much supply and not enough demand, you get more inflation. and that is what we are seeing. guy: i guess the question the market really wants to answer is , can central banks senate best can central banks generate growth? that is not what we are getting signals at the moment, cameron. we have a bunch of stocks that her trading -- that are trading strongly. is there in hint that these central bank cuts will deliver growth? what is the market signaling about what it thinks central bank policy action will actually deliver? presumably, not very much. at best, the status quo? cameron: i think you

vonnie: our thanks to christian schulz, director of european research at citigroup. at where european stocks have settled. germany coming back in a slightly different position. up .9%. the ftse 100 chart looking like you did yesterday. a pop higher and then a tight race throughout most of the day. we have not done much during the auction process. a little higher for the right-hand side of the chart. dax.0 trading up with the the swiss market going into record territory. if you are done with the trading desk and want to get in the car and drive home, you can carry on with the market coverage. jonathan ferro will be in new york, i will be in london. we'll be on dab digital radio. the cable show at the top of the hour. this is bloomberg. ♪ guy: from london, i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is the european close on bloomberg markets. let's check in on bloomberg first word news with courtney donohoe. courtney: president trump is attacking a familiar target. he said the federal reserve interest rate is too high, adding "they don't have a clue.

morgan stanley raising its dividend by 17% to 35 cents a share and 6 billion dollar buy-back citigroup by 13% to zcents a share and announcing a 21.5 billion dollar buy-back guys >> thanks for that i think we also are getting the goldman sachs one crossing as well relative to expectation their capital return is ahead of where people thought 8.8 billion versus 6.3 billion last year but expectations this year for 6.7 it is a couple of billion ahead of expectation most of that going to 7 billion buy-back and 7.81 billion in dividend and dividend kind of a little bit more in line where some of the other have been over last year or two not seeing a big reaction there in the share price. >> close to 10% of the market cap two the buy-back. >> difficulty for the quarter coming up is quite big and i don't know if they will see people rush in to get it on that timing. >> they are all up after hours to your point, nothing explosive. >> it's all kind of confirmation what you're hoping for it's optimistic and positive so we are getting nice 1% in the sector as opposed to make or break moves for any

we are joined by tobias left of ovitch oftobias levk citigroup.obias: there was movement towards taking the usmca agreement had trying to ratify and we got the tweet from the president. irrevocably. it is nothing is irrevocable. we do have some erratic behavior in terms of how these tweets come out, and then we see pullback. for example, we seen the auto tariffs with europe for fears around auto tariffs kind of get extended and extended from last july. in that sense, things can change pre-much on a dime, and in that respect, is this more of a political rhetoric? is it more appealing to the base and trying to force other negotiations? we don't know, to be fair. vonnie: obviously you are focusing on the equity market, but you got to be taking a sideways glance at the bond market these days. the 10 year yield got down to 2.07. is the market taking it a lot seriously then are equities? i'm not 100% sure on that one. the bond market is a function of and we hadnd supply, continuous flows all year long. that money has got to be put to work. because of wh

citigroup's global earnings revision index. it does not look too good.is heavily into negative territory. in terms of earnings, is the trade war starting to weigh on things globally and in that contact, perhaps overvalued? oliver: it could be and time will tell. estimates that they are low for first turning -- first quarter earnings compared to first quarter 2018 ended up being just shy of a half a percent year-over-year viewed they came in much better than expected. sales numbers came in at a robust 5.8% for the quarter. that is a rise year over year. right now, we are looking at a flat second quarter but we will see what happens. that is the dilemma for investors and market strategists like myself. we are at a point where we know data is deteriorating. we know the world is slowing down, but there were still enough momentum and wind behind us that can carry us through. you don't want to take any rash actions right now. -- the smallthe caps. the russell probably the worst performer of the day, off one third of 1%, but still up 12% on the year. do you lik

shares rallied as much as 24% but analysts from citigroup says they are worthless.hares were effectively worth nothing on may 17. at the time, that prompted a 40% selloff in one day. shery: salesforce slumped after announcing plans to buy tableau software, valley that more than $50 billion. the takeover will be salesforce's biggest acquisition to date as it chases the annual revenue of $28 billion. tableau turns raw data into more understandable dashboards and charts. it has almost 90,000 customers, including verizon and netflix. paul: audi is recalling its first all electric car in the u.s. over fears of battery fires. a voluntary recall of 450 e-tron suvs because moisture could seep into the battery cells because of a glitch in the wiring. audi says it has no knowledge of any fires or injuries. it went on sale in the u.s. in april amid a wave of new contenders challenging tesla. shery: coming up, the governor of the bank of japan tells bloomberg they have plenty options on monetary stimulus if needed. our exclusive interview with governor kuroda is next. this is b

some of the banks, even ubs or citigroup came out and said they don't think there will be a rate cutg back on the ammo, the analysts are anyway. what do you make of that? >> i think the yield curve is telling us a very different story than the fed or any of the banks right now. this dramatic shift in rate policy from last fall to right now is one of the worst telegraphs, moves by the fed in recent history. i think we get a cut, if we don't get it in july, we'll get it later this year. i definitely think we'll see the front end come down from the fed. cheryl: they took the word patience out of the statement. what did you make of that? >> their attitude is if we don't get a deal with the chinese, the economy may need the rate cut, at least by their lights, we had a weaker jobs report in june. it means nothing, one month, necessarily. if the pattern persists, they will cut rates because they feel a need to support the economy. so they took the word patience out, in the sense they're imminent, unless we get news that dissuedes them. i'll say one thing about powell in this respect. he's b

citigroup expects a banking fees to drop into the midteens.lyst joins us for more. fromdid you take away these warning signs? the last few weeks have been quite hard. i am not surprised and consensus is not far away from where they are guiding. .he question is for europe i suspect, in some cases, it has gotten worse. for some of the european banks, equity trading has gotten worse as well. look at barclays. if they have a bad quarter and a bad equities quarter, i am fairly certain he will resurface. matt: which banks do you think will be hit the hardest? , the sort ofank catching a falling knife analogy. last quarter, they were down 25%. a year ago, it fell 25%. i would not fancy having a stab at that one. gmp and barclays. anna: you also said m&a had been lumpy. looking at that side, where is the pain? >> the investment banking side has been weak. and that is not a great quarter for m&a. i suspect they were already looking for a dull quarter. it is probably equities trading that is key. we know rates are going nowhere. i think most should have

citigroup is saying they're less cheap. so possibly a chance to buy some oil and gas stocks, matt.ll right, thanks very much. anne marie. up next it's the $50 billion food company. percent. pass in we'll find out christian's stock of the week. this is bloomberg. ♪ >> what is at issue here is the total lack of trust in the legal and criminal system in the mainland. if this law is passed, no one in hong kong will feel safe. >> everybody, every association in this society every's against it. and they still want to ram it through. >> i think -- either she's crazy or very evil. if you look at where hong kong today globally is as a financial center, we are the new york or london of asia. there's no question about it. and that part of position is not a given. it has to be earn and constantly earned. >> this government like any other responsible government when faced is such a huge opposition. e need time to think about it. >> some of the views from bloomberg's guests today as hong kong braces for another mass march against the china backed extradition bill. carrie lamb with strong words.

the financials i hesitate as i say that they have been dead money so long we smirk when i say that citigroup and goldman sachs. the buy-backs are below tangible bo book value the only thing that could go wrong is if you get a material deterioration in trade tensions and then interest rates go lower than what are expected and economic activity contracts. i don't think that's what's going to happen. i don't know that. i think you will have a rational outcome and the stocks will perform nicely. >> there's a view if the fed is embarking on a rate cut cycle, that you get a steep er yield curve. that would reverse some of the negativity around interest rates and the overhang on the banks. >> that's right. of course, you have to hope it doesn't go too far and easing cycle -- i hope it's maybe one or two and done. >> it's a cut. >> i like positive things like that what down the want is we're headed in a recession, cut like crazy. that's good for no one. >> speaking of banks, goadmldmas your pick. >> 250 >> you sure about that >> i love you. >> if there's a market calamity, this will go down. barring

citigroup sees gold hitting as much as $1600 an ounce over the next year. it is at $1401 now. a six-year high. over in the chip sector, micron technology leading the philadelphia semiconductor index down today. jpmorgan lowering full year estimates ahead of results next week and cut its price target by $14 to $50, citing a tougher memory chip environment. the other issue facing investors today is the u.s. curve on companies that do business with huawei. the chinese telecom accounts for about 13% of sales at micron. >>> to one of our top stories today, the retaliatory air strike called off. tensions certainly running high in the middle east. why did president trump stop the strike against iran after it shot down a u.s. spy drone? here's what he said in an interview earlier today. reporter: did you green light something or had you said if we do it, i'll do this? what was the order? >> nothing is green lighted until the very end because things change. i said how many people are going to be killed. sir, i would like to get back to you on that. great people, these generals. they sa

morgan, yes, there is a global franchise there and it's not the same effect as citigroup which is much more dependent on their global franchise and it's a strong domestic base and to the extent that you do get tariffs rolling into inflation, and a steepening yield curve may be hard for them and financials may be more of a safe haven than we can imagine and huge amounts of regulation and huge business change and huge capital structure change and that's really interesting especially where valuations are today. >> finally, rich, we had a 30-year auction at the top of the more and it is softer as a result whether or not it actually hurts the way that they do business, the financials trade ter usually in this low-rate environment and each though jason is staying we might have a steeper curve, what if we don't? >> clearly, the market is pricing in one, if not two discount rate cuts later this year due to a weakening economy. the curve should steepen at that point, but it's anybody's guess. you know, i mean, at this point monetary policy by itself, and what goes on with the tariffs. >> amen.

followstanley's ceo citigroup's chief saying business is tough but demand isn't a problem for elon musk. tesla shares jumping after-hours. ♪ nejra: good morning. welcome to daybreak europe. let's take a look at how the u.s. equity market might look. futures pretty much flat after the may benchmark closed flat yesterday. the 10 year yield slipped a little. taking a look at how european equity markets might open in just under two hours. three days of gains for european equities. we are slipping on futures after the swiss market index hit a record in yesterday's session. oil on the back foot, plunging a bit after we got some signals on rises in inventories from the api data. the turkish lira slipping a touch of ahead of a rate decision today. bloomberg economics expects no change to that benchmark rate. let's get a check on the markets in asia. juliette saly has more. we are seeing red on the msci asia-pacific index. what's going on below the surface. -- surface? juliette: the stock rally fizzled followed what we saw on wall street. have a look at hong kong. these protests continuing. down

citigroup upgrading to neutral. next oppenheimer keeping its rating on zune video.stimates but it needs time to grow into its valuation. jeffries raising its price target on eons me. the company remains one of the best stories recommends waiting for a pullback. this is a company that continues to rule. substitute that keeps impressing wall street. this company seems not to be doing any wrong. it seems as though not only do the numbers live up to expectations but deals, the hope of future deals for the restaurants look good. >> i think what we saw yesterday was they have put forward these are the minority estimates in their security styling the ipo. they even blew the doors off of those. the revenue is slightly higher than expected. indulgeows investors to in the excitement around this category. there have been so few avenues for growth and hear these new products look like they are gaining traction and will be a growth business for a long time. >> the narrative is appealing. it is disrupting the meat industry. you take issue with the valuation because with a current

more to come, according to citigroup. it's a portfolio diversifier. the money just flowed in. $3 billion flowed in the etf's last week -- into etf's last week. hedge funds are the most bullish since 2018. crude, the most stunning line in the commentary over the weekend from the president of the united states, who says he doesn't care about the closure of the strait of hormuz, because he has oil. that is feeling. you look at wti, adding to its best weekly move since 2016. the hedge funds, raised their long positions by 13%. fear and the fed drive these markets. good morning. nejra: good morning, and welcome back. u.s. equities came off the record high on friday, but futures are firmer today. we've seen seven weeks of declines for treasury yields. the question is, do you want to see that rally ahead of the g20? bank of america saying that the path of least service since for yields is lower -- of least resistance for yields is lower. we'll discuss all these big topics this hour. the dollar stays on the back foot. the aussie outperforms in g10. as well as

we know the base case according to ubs, citigroup, deutsche bank, goldman sachs is all a cease fire, but no deal this week back to you. >> all right kayla tausche on the ground in osaka, japan, for us, at this hour jim, i throw it to you if you come out of this weekend with some sort of tariff truce, no new tariffs for some period of time, six months, three months, who knows what, however many months is that good enough for the market to move higher? >> a simple answer yes how much higher? can't tell you eventually you do have to have a deal eventually. if you get the absence of a cease fire, of a truce we're in trouble. let's use this anecdotally there are stocks i would like to buy today, we will get to boeing later and don't want to steal that thunder, i would like to buy boeing today, but there's no way i can knowing that this weekend is somewhat random, somewhat a roll of the dice. i don't know what president trump or president xi is going to do. very good reporting but what is said one day can be reversed the next day i'm not placing any faith in mnuchin's 90% there comment. i

a look at the recession risks oilng, as we look at the market, citigroup says everybody gloomy. .'s are rising globally, and trade asked is perhaps the torchlight about how pressure. does it have to come to bear on the oil market, which literally smells like a bear market, almost? luca: i think we should not forget the oil market was fantastic for months. i think oil was probably overbought. we think the marginal cost of to $40,ng oil is close 45 dollars, so anything above $60 is pretty high. in the same way that you have withstocks and others issues, everything there is any special about the for the price. what was strange was the rally before we got this kind of correction. i think the level around $60 for us is still a relatively high. if there's any particular message from the oil price, we don't get it from anything else. nejra: and what is the message are getting from emerging markets? before, you were positive on them. emerging markets had a positive time in may. does the selloff in may make them more compelling or is it a warning signal for you? luca: obviously, emerging m

citigroup announcing that it will do a buyback and dividend will be raised to $.51 per share.ard, banks weighing in. romaine: we should point out that the shares of most of these companies are up. caroline: also a bank rally today. romaine: back in america, after the bank rally -- bank of a relic -- bank of america, after the bank rally. joe: general mills earnings missing expectations. we will hear more from the ceo in an exclusive interview next. this is bloomberg. ♪ caroline: consumer crunch, general mills fourth-quarter sales falling short of expectations. more on that and the trade pressures facing the company. we go to colorado, where our colleague has an exclusive interview with the key executive of the company. >> thanks very much. i am here with the ceo of general mills. aboute a global company, 25% of your business is outside north america. how are you dealing with disruptions to the global supply chain? >> for us, there has not been a big disruption for trade. the toughest part has been brexit, or at least the threat of it. otherwise, whether it is what we sell in c

citigroup says one of the topics -- join the conversation. let's get your bloomberg business flash.le is in hong kong. >> thanks. seekingal is reportedly -- they are set to inherit and take over anadarko. wants half of their stake in the company, 45% traded publicly. at&t has named the first woman to lead the company. she has more than 30 years of business and media experience. she will become one of the highest ranking female executives in hollywood. qualcomm faces another eu fight a year after having to pay more than $1 billion. it could be the last u.s. technology firm to get a large antitrust penalty from the competition commissioner, whose term ends later this year. and that's your bloomberg business flash. >> annabelle, thank you. u.s. sanctions against iran's supreme leader mean the diplomatic path with washington is closed forever, according to a semiofficial iranian news agency, after the trump administration slaps sanctions on to ron, further raising pressure on the atlantic republic. >> washington is also promising action against the foreign minister. the iran ambassador

i love with citigroup said about the ecb, to fight back the ecb needs to out-dove the market.es that do to the german curve? there is a lot of discussion of where the curve goes yet. shiftat curve aggressively on an ecb response? john: i mean, they have already had a big benefit from low yield. you have a flattening from the curve which helps lending. i am not as convinced they need to do as much. they are not in the eye of the storm in the way that china and the u.s. are, and they are almost in a bit of a wait and see mode. obviously, they have had a weak euro so unless they saw a sharp reversal in the euro, they are not worried about the level, although they might be worried about the momentum they might get a bit more positive momentum but it is hard to see the yields looking that attractive in europe. we are not as convinced they need to take the action the u.s. does because they are not starting from the same position. does the ecb need to worry about a strong euro, weaker dollar? john: you would want to go quite a long way. i didn't think more and's comments made a lot o