it is called "the oil etf," not just the oil contango etf.ducts are complex day because of the way you have to roll futures every month, over time, this corrodes returns. use.oh is one people though it is up 9%. julie: you brought us a chart on the bloomberg, a cop chart of the returns of some of these products. we have uso. what are the other two? the white line is crude oil. the bottom line is the triple oil etf. julie: so in order to triple the performance of what you see -- in this case, oil futures. eric: but it only does it daily. over time, because you're resetting the leverage every day, it gets wiped out. and you are dealing with contango in the a futures market. it takes a phd to understand all of this, which is why some of these products need ratings. i wrote a book around -- on etf's. movie ratings on etf. some of these products would be rated r. think -- td ameritrade showed millennials' most traded securities, the vti it was number five after apple and facebook. i think retail investors are in for a surprise. julie: are all leve

it's not always active to passive or mutual fund to etf or hedge fund to etf.ds,ney coming out of hedge funds charge the most. they are risk. even institutions are getting in the game of. consultant institutions, they are tired of paying money and not getting performance. that's why they are scared, they should be. these are pretty mind blowing numbers. active mutual funds have seen $30 billion in outflows. etf's are taking in $39 million. vanguard alone has taken in hundred $15 billion this year. in a year like this, that tells you that money is coming in for some of these places, rain or shine, regardless of performance. until we see in the etf's. the two lowest cost providers have 10 basis points, they seem to percent of all the flows and etf this year. betty: are we seeing outflows from higher cost etf's at the same time? you generally see money coming out of the high-cost stuff. the vanguard s&p 500, this product is slowly building up, it could eventually be the -- i don't know if it will be bigger than spy. but it's five basis points, and get this. it's b

they love this idea, called the spoke etf.n institution will give a company's visions, and the etf's are really easy vehicle for anybody in the pension to invest in privately. invite on any exchange. almost all the assets are for that. it still counts, that's how it's number one. it looks for companies that have boards and board members and executives that are higher percentage female relatively low peers. but keep in mind, the sector buckets, you want to go to heavy. they were saying you get most are consumer discretionary, so you some bands in place. s&p,ves you close to the with a focus on companies that are more driven by women executives. scarlet: i spoke with the chief invested in -- chief executive officer, and they mention initially they put in $150 million into this etf with the goal of expanding and eventually to 200 million. after they see how things shape out or take shape, should say over time. what has been the performance so far in terms of where people thought it might be? eric: it just came out. scarlet: so no

greg: the concept is built within the etf universe. have an gold funds -- have been gold funds for 10 or 12 years. hasgold bullion fund bullion backing. those are physically-backed funds. most investors don't worry about the physical backing. they just want protection in terms of price. our etf takes an equity portfolio and puts gold in it, supported by your equities. vonnie: that's pretty complicated trade for your average retail investor, right? you are leveraging up your betting options. you're not quite sure how it's going to pan out. what kind of interest is there in these etf's? they are often running about a month, right? greg: right. it's fairly straightforward. the idea is, if you have a portfolio where you want to get cold exposure, you might as well take that exposure into a portion -- get gold exposure, you might as well take that that is into a portion already supported by a position, rather than selling out of an asset you already own to put into gold. using capital more effectively, we find those investors are interested

talk to us about these leveraged etf's. what are we seeing here?etf that profit from the decline in stocks, it exceeded the long ones for the first time since 2013, and other the services makes absolutely no sense. you would think that people with the market increasing as much as it is today and with the last it would be the long instruments that are attracting the most money. something keeps coming up, this undercurrent of bearishness. the market cannot get behind this rally. in a strange way, this is actually helping the rally because pessimism is causing people to get short and then have to unwind and cover the shorts, which drives the market. a really interesting attribute of these leveraged etf's is the carry cost is so high that you need to nail it in one or two days. if you are wrong, you lose your money and then you either double up or you cut your losses, which drives the market up. the chart yet from you showed that people are clearly willing to keep doing that. there is conviction here. why are you not seeing that expressed in, essential

very least, the etf has the liquidity to underline and in the case of larger etf's, like big etf's whereactually happening every day is the etf itself is trading back-and-forth and that is new liquidity for the market. we would argue etf's in most markets -- people would argue it is so much more heavy than the underlying securities itself, and that makes them worry that if it falls apart, they cannot get out. >> right. that is in fact liquidity. it means someone is in the market wanting that exposure and to get it at a better rate and a better liquidity in terms of going into the underlying. scarlet: one of your products is meeting close this year but a lot of us worry the gold will not be there if there is a major crisis. what do you say to those concerns? >> there are physicals behind it. anyone wants to see a picture, we work with the world council on that, a terrific partner. there is no derivative there. goes up and down depending on the level. >> ok. -- they areat about cheap but market share from the money in a real hedge fund? >> what you're referring to hear is liquid alternativ

let's explain what's going on with this etf buying.is the latest stage in the bank of japan's quantitative easing. eric: their buying $30 billion u.s. per year. the total market is $140 billion and they on roughly $80 billion of that. it is highly unusual in a sense. what they're doing differently lately is that they want to customize the etf's are investing in, which makes some sense. instead of taking the popular index, they want the company to come back with something that would invest with companies that are doing, putting money in to hiring people and r&d. remember -- in the u.s., a lot of qb money went to companies doing by backs and dividends. here they are trying to alleviate that issue and funnel money into companies that are actually spending money on the economy. in a way, it's kind of clever. what you have to get over is that number on the screen. 59% of the market is pretty wild by any standard. scarlet: this rings up a lot of questions about the distorted effects of the bank of japan in the market and what kind of difficu

been eighte has acquisitions of etf companies and the past few years. we cover the etf industries.lk about what has been going on. 2015 was a big year for corporate mergers and acquisitions. we have seen an uptick recently. it has been big for the past three years. eight total in the past two years. boxbig one is harper lattice strategies. if you haven't heard of that, it is a small one. no one has. big bricks and mortar's neutral funds companies, these bricks and clicks. etf has been taking a lot of the assets mutual funds have been losing. put them into the ground over the next few years, or stake a claim or the future. buying is easy. they are not buying for the addicts. -- products. what they are buying is talent and industry experience of people who know how to run. passive managers. people who know what they are doing in creating smart data products. -- data products. none of these companies that have -- on the market cap front. julie: what are they doing? is it a matter of getting a slice of market share? even if you beat them, it means going to zero. you will lose money. sm

so it is a global based etf. it tracks a rules-based index. the majority of the holdings, about 75% of the company, are u.s. based. 25% outside the u.s. >> why 25%? and how did you decide well we only want that much exposure to, for example, a very large european or asian retailer. >> being a u.s.-based fund or u.s.-listed on the nasdaq, many of the existing consumer and retail etfs are almost exclusively domestic only. however online retail is a business without borders. so even though exposure is limited to 25% of the companies domiciled outside of the u.s., you see companies lake amazon or ebay that are big players in e-commerce outside of the u.s. as well. so the true exposure is probably closer to 60/40, 5050 when you look at all the kprpt exposure from u.s. companies doing business outside of the u.s. in the e-commerce space. >> the traditional players really boost their presence. draw back the mall presence and twheern talking about more of an online world altogether here. >> yes. now i think that is a great question and observation. ev

i can't speak to the etf, but a lot of times, individual stocks go down as the etf goes down. one leads the other. with that said, i think home depot is fine. my thing about the consumer is this. don't confuse the u.s. consumers, they want to spend with their ability to spend. we know the u.s. consumer will spend come hell or high water. just find yourself in different cycles. >> it was six, eight months ago, everybody was telling b.k. oil was falling and would be fantastic for the consumer. just wait a little bit, b.k., everything's going to be fine. here we are, six, eight months, a year since the oil got cut in half, and the consumer isn't coming back. pre-recession highs, nothing's changed since they're getting weaker. >> this is a totally different thing. >> they're spending on something else. not necessarily retail. >> hang on a second. autos, home improvement, and ecommerce. >> you've got record auto sales. >> used auto sales numbers, they're down. >> no disputing this has been a zombie economy recovery, between low inflation, wages haven't really taken off, even though

julie: we are looking at the retail etf, which is falling among the most of these various sector etf'sy nearly 2%. we have got an april sales for many of these retailers, and they are not looking good. -- the owner of victoria's secret down 11.5% after coming out with a luminary profit that missed estimates, but also talking about a 1% decline. to be veryving disappointing to investors today. some of the other companies coming out with april sales, all of them missing estimates. estimates,e missing whether they rose less than estimated or fell more than estimated, depending on the case. buckle saw a 13% decline. all of them being punished by investors in today's session. there's a ripple effect even among those that did not report anything. gap in particular, not only seeing the stock fall, we are seeing the put call ratio go up today. you are seeing the put call ratio start to pick up. that is bearish puts outweighing bullish aclls, -- calls, leading up to monday's sales report. just wanted to mention dick's sporting goods today, that stock downgraded to an underweight morgan stanley.

the biotech etf, look at.ng the best day in a week helped by that $4.5 billion pfizer deal. there are a handful of names hitting 52-week highs. nvidia continuing to hit new all time highs. lchl brands trading at the lowest self since october of 2014. >>> it's the stadium that pramss to revolutionize the guest experience. the mercedes benz stadium in atlanta may be costing $1 billion to build but fans are going to save big time. we'll tell you how. >>> we're going to tell you this, going to a sporting event these days can be quite expensive for a family not only do you have the game tickets but then you have parking. then you throw-in the $15 bad nachos and the $12 beers, pretty much, you have $100 plus per person to go to a game. but the new mercedes benz stadium in atlanta opening next year and it costed 1dz.abilli $ build, they're lowering the prices for food and drink. are they insane? have they been drinking? let's go mr. blank, one of the founders of home depot, a generally rich guy and owner of the falco

the other is ishares turkey etf. after may, it is down 10%. is having some issues, overall a good year for turkey. we have been talking about this all year. gtx up 85% until may. it is now down 11% or 12%. the triple leveraged gold mine etf is up to 70% until may, but down 40%. scarlet: this is nothing to do with what is inside the etf's but the momentum leading up to may. what it could be at least we are seeing in these areas because they all have that commonality and having the lehigh run-up. maybe someone is looking up for folios and saying, where can i make some profit? primen turkey, the minister was resigning. we also have the fed. any hawkish fed talk will spike gold. there also fundamentals for all three that you can make the argument. eric: all the things that you mentioned were very heads up p. one little catalyst as opposed to a bigger broader market etf. scarlet: let's look at some things that we can talk about. there are etf that you can tie into it so far as industries that would benefit or would be hurt by either of those leader

instead of institutions holding onto risky bets, they are turning to etf's.wicz joins me now. what leads to the popularity of these, and why are some is additional investors turning to these? lisa: first of all, there's a lot interesting going on in fixed income desks. let's be clear. there has been a big shift in risk it. since the credit crisis in 2008 where you have seen banks reduce balance sheets, readers riskier "bloomberg businessweek holding, reverse riskier bet holding. instead of going to the bank, an increasing number of both investors,al headphones, and others, have turned to etf's because the shares traded daily like stocks, even though they own, riskier, potentially, and less liquid cuties underneath. so, that has, sort of, then trend underneath. so, how exactly does this work? a client gives money to a dealer of a high-yielding bond -- to buy a high-yielding bond? lisa: hold on a second. what we have seen recently has been something of a mystery -- we have seen flows in and out of this big etf that have been so volatile. some days they have bee

wildcard,ne is the high volatility etf.c: put options are the most volatile stocks in the s&p, yields 11% or 12%, a little more risky but an alternative option. is thisric balchunas guy, our etf guru. we will be back with more bloomberg markets. ♪ . . live from bloomberg world had careers in new york and london, i am vonnie quinn in for betty liu. mark: i am mark barton. you are watching "bloomberg markets" on bloomberg television. matt miller is in the newsroom. in canada mays become the most expensive catastrophe in that country's history. the blazes cover an area or the new york city. more than 80,000 people have fled the city and 8000 had to be airlifted. insurance losses may total more than $7 billion. legal gridlock has come to an end after brokering a deal in parliament. the prime minister won a second term. he will be leading the fastest-growing economy in the euro region. since he took office in 2011, i respond returned 92%. pope francis is announcing what he calls selfish interests that led to european governments

if you look at the biggest gaining etf year to date, it is a minimum volatility etf.is important that investors know that it can affect dynamics when people are fleeing to these safer products. david: we are still in earnings season. there has been a lot of disappointment. what do you expect? now, investors are still expecting a little more than an 8% decline this earnings season. so it's still not looking great. and then when you pull that out to next quarter, they are seeing a 4.8% decline. that's considered that's -- that's compared to a 3.7% growth we saw a earlier this year. analysts don't have a great the coming up here. so we may be in for more disappointment. david: thank you so much. that's it for "bloomberg markets." would you miss" is next. ♪ alix: we are moments away from the closing bell. i am alix steel. joe: and i am joe weisenthal, scarlet is not here today. ♪ [applause] [opening bell] alix: u.s. stocks wiping out 40day's gains, in a nearly months rally could be on a shaky ground. joe: "what'd you miss?" uighur factory readings in the u.k., and a drop

it is little changed but we should point out among the etf's , youhe sector it -- etf look at what is it down, gas out with preliminary earnings that missed estimates. sales down 7%. bit here down a little that company reports earnings thursday. downgraded today and jcpenney which reports its earnings friday, options heaven very active on that stock and that indicates pessimism going into that report. why isn't it down more? the slide is always interesting. these companies are also in it and doing well. amazon at a record today. todaydvisor, it is hired has a groupon. the composition of the etf's does matter. if you look at the one-year chart, it is down by about 12%. we have seen it underperformed the broader market. i also want to point out and reiterate a data point we got today in the wholesale inventory report. it is the inventory to sales ratio. , 1264, the here inventory to sales ratio is the highest on record. when you see a lot of sales signs in your local stores, it is because they want to clear out the inventory, not good news for gas. it would seem to have negative invocat

i look at flows at the etf for each of the rebounds. was injected in october, and $9 billion in september, and it is only $3 billion right now, a 15% rally. joe: thank you so much, great things as always. alix: headlines from jack lew, from the global concert -- institute in los angeles. talking about puerto rico investors as well as japan. stress,ico in economic he is saying they have a need for urgent action. also saying they need some oversight in restructuring that needs to work, but does not see work on the issues there. he is confident that a deal can be reached, but it cannot be done in a piecemeal fashion. in terms of japan, jack lew, the treasury secretary saying they need to use all of its policy levers, but also says it has adhered to international foreign exchange policy. remember, the u.s. treasury unveiled the criteria they would use to label certain countries, saying japan has adhered to the policy pledges. in terms of investors, he says the treasury will look at the tools to curb investors. lots more coming up, we will b

on have other things going in terms of use in the etf. , matt you showed us and etf of -- that was the. clearly, there's something else going on. keep in mind, is like the rolling stones song. we have seen outflows violently out of hyg. this happens all the time. it could beck in, around the fed or some fundamentals. it is not unusual. john: it was one of the most read stories on the bloomberg terminal. great to have you with us. our bloomberg intelligence analyst. stick with us, we are counting down until the market opens. we are four minutes away. we had a disappointing payroll report on the market. the dow futures are down 69.6%. the open, here in new york is next. ♪ show me movies with romance. show me more like this. show me "previously watched." what's recommended for me. x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity. show show me more like this. s. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away. call or go online and switch to x1. only with xfinity. jonathan: mrs. bloomberg

check out some of the bank etf and the spider etf.ir best day in almost a week here. financials one of the best performers. wells fargo, jpmorgan, bank of america. citigroup all moving higher tore. check out pnc, bb&t, suntrust among some of the big leaders. financials, one of the best performers. ty, back over to you. >> there are two stories i wanted the talk to kevin o'leary about. one bears on ef etfs which you w a heck of a lot about. mary said she was potentially looking at stricter or different kinds of ways to regulate etfs based on liquidities and hitches that caused many to go dark there i guess it was last fall, last late summer. >> i'm going to speak on it. they're based around indices we work with the ftse russell on. we want transparency. the issue around etf that everybody should understand is it's a wrapper, a low cost wrapper. it's the underlying stocks or bonds they're made of you should be concerned about. it's the underliar. i prepare to take it. the average market cap waiting. i don't have problems with that. you

people piling in etf. do you think the surge in low volatility is this of people want market exposure to this going up but they wanted in some way they feel they are protected against the downside? >> absolutely. when you talk on the street there is a different sentiment where yes people are getting some lower exposure. they get the long s&p contracts. see whether it is retail clients, somebody who they haven't really moved those positions but it has definitely gone up. to get into aant volatility etf because they know it moves inversely to stocks, that is a big part of the population for these funds. it's one of the most popular and yourum volatility space to point. joe: thank you for joining us. scarlet: data release shows shows of existing homes increasing to a three-month high. mark: let's get to first word news. a lockdown at the white house has been lifted after police said a person was shot in downtown washington. president obama is not at the white house. the shooting happened at 17th and e street.

we talked about the environment for high-yield and what it meant for the etf.ce whereoshua: we are in the market is in a very different structure compared to what it was during the financial crisis. this consists of the daily funds andof mutual today that is a quarter of the market and the market is bigger. alix: that is why we heard that the mutual funds were not going to give you back your money for a while and he thinks that we can see more of that. mark: the etf market is a two way market and so while there may be retention, there may also be people who want to step up and by. you are likely to see -- up and buy. thatre likely to see when energy is heading south. but where the energy market is stabilized and where oil is we thinkrly stabilize, we will see a step back, and i will point out that that one etf is not representative of other balance flows. joe: we have seen this pickup in the price of oil in the last few weeks, but the defaults continue, so do you see that trend continued to worsen as they rise in prices and they try to stave off the defaults th

the two lines of the top are to leverage etf's. leveragehe triple shares. the one going up is the leverage pro shares drop rope short s&p. even know we have seen as big rally in the market since february, we have seen more money flow into the ultrashort etf as opposed to the long one. if you look at baltimore -- look at volatility, investor cash positions, all the underlying data shows skepticism and this is just another example. people are more inclined to be betting ultrashort that ultralong. yeah, gold. despite the overall rally. one thing that is not supporting the market is by backs. we have talked about how there is a huge source of demand in the stock market. the s&p 500 is approaching the when your anniversary of its record high here. pku, that is the white line. what you'll see is that it trails the broader market. low it hasfebruary continued. it has been fairly consistent with these by back he's trailing the broader market. what is the takeaway? the extra boost that by backs are supposed to be earning is not into perspective in masking weaknesses

xrt, equally weighted etf for retailers. you don't get piggish here. take your profits.a bounce. i think you want to see this back toward 42, 43 before you get back in on the short side. >>> up next, the "final call" from the options pit. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade. i'm spending too muchs for time hiringnter. and not enough time in my kitchen. (announcer) need to hire fast? go to ziprecruiter.com and post your job to over 100 of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. (announcer) over 400,000 businesses ha

quickly, we're going to look at the 20-year treasury bond, etf.e have a chart of the ten-year treasury yield. just look at that. look at it over the last ten years. it tells you something structurally has changed here. if we get a 25-basis point raise, whether in june or july or september, i don't think this economy can handle meaningfully higher rates at this point. and that chart is telling you everything all about it. to me, the trade sets up kind of interesting in the tlt. that is the 20-year. it's not that chart, but we also have the tlt in a massive uptrend, off of the lows here. i think that's going to continue. so when i look at the options trade in tlt, it sets up pretty good looking out in my mind to september to do reversals here. i think there could be room to the downside. maybe the mid-120s here. maybe it's a one and done, maybe they just get dovish again because of global conditions. so to me, i look at the tlt when it was trading at 130 today. the trade is a risk reversal. i want to sell the september 126 put at $2.50 and i'll use

treasury by the etfs. rates aren't going anywhere.oming increasingly convinced the fed isn't going to increase rates again. >> 100%. >> again. so you can buy these things -- >> again ever? >> look, if that's true, then there might actually be hope for the energy space. there might be hope for oil and there might actually be hope for gold. so -- >> gold is up. >> the bullish bet we decided to take money off. but what i'm saying -- look, we're going to have to have a rate increase at some point. you're going to see that increase when you start seeing meaningful inflation in places. that's when equities will roll over. they will not roll over before then. if i seem a little tepid in general that's the reason. >> well, okay, basically the only person who likes this trade is carter. >> apparently. >> all right. i just want to get that clear. >> it's not going to decay that much in one week to the next. if you're going to get the move you're going to get it relatively soon and not risking a lot. >> importantly, of course, we've had ten sect

he is talking about the utilities -- the sl you -- the utilities etf.u should short this etf and look at mortgage rates instead. if you look at that mortgage up. etf, it saw a it is up number 1% today. why is he making these calls? these are groups that benefit when our low interest rates, and he says normally they are correlated. here is a similar chart what he brought up at the conference. these are the same etf's. the mortgage one is down here. the utility one is down -- up here. usually, the correlation is closer, but because utilities pay higher dividends, for example, they have been preference over the mortgage reits, but he says you should buy the mortgage reit and short the slu. in terms of the other commentary, jim chanos is not scheduled to give his presentation until after the close of trading in about an hour, but he did give a preview in comments to cnbc, and these are the sexiest shorting. -- stocks he is shorting. he did reiterate shorts of tesla, solar city, alibaba, and valiant. we did see some reaction. tesla under pressure on bloomber

etf has become a popular to that, and that includes brexit.g us about how investors are positioning themselves? and if you want to get in the game, how can you do it? eric is here to discuss it. tell us, if we wanted to that, how would we do it -- if we wanted to bet, how would we do it? derek: we are seeing the most shares with $2 billion, about $400 million a day, so it is the lion share of the u.k. category, but we are seeing short interest and it has tripled about what it normally is and there has been a spike in the past week. most people are betting against it or for brexit, but you have to member that sometimes people that on rumors -- sometimes people bet on rumors, and we saw that would result, people bet way before the impeachment and after, it went down, so there was a lot of hot money, but ew you straight up is probably the most popular way to go, long or short. david: we put that interest rocketing up in a chart, but what i am perplexed about is it seems that the momentum is the other way right now. eric: that is right. i think th

on top of it is the smp spider etf. this line is tracking the 30 day historic volatility., you are putting your money here. youave is february 11 low might be tempted to say, i'm going to put my money in a fund that doesn't move too much. look what happens as a gets more popular. this blue line is tracking minas as a -- net asset value. we reach a peak. over here, we see the low value volatility etf gets more volatile -- volatile than the s&p 500. investors get more than they bargained for when they are putting this money into one of the most popular style strategies. grew fromvolatility february, you are saying people started selling out? >> what happens is this mess asset value, the background one is basically the popularity of the etf. these two lines are tracking the volatility. this switch at the end shows volatility getting more volatile. betty: how about you, mark? sterling has clawed back all of its losses were the year. the pound is the comeback kid. since the february lows, the 2009 lows, sterling has reversed 6% of losses. it is because of rate expectations comi

if you look at the etf holders, for gold, remember what happened were so left, etf and right on gold.r, that hasn't happened. alix: they differently had that retail watch out. mitch: the etf's have stayed constant on the silver side. if you look at the coin side, that was the big story in the survey camming out -- coming out a few weeks ago. the other thing that comes up when i look at silver and minors in general are these streaming companies that pay the to minors to lock in price. stream buyers are on a search for output growth and minors are theirg for a way to lower production cuts without having to issue stocks or bonds. words you access the market for capital? mitch: we have used streaming financing as a way to help finance the construction of mines. what i have seen on the streaming site is a much more competitive market, a much more efficient source of capital for the operating companies looking for capital to expand. fairlyed to be a expensive form of capital. now it is more competitive with more traditional forms of funding. royaltyreaming and companies are underwriting ret

one measure of that is that during the current rally in the there have been less inflows into etf thenuring prior increases in stock. you have the various rallies in the stocks over the past he does he or's and in mid-2014, we saw 35 billion in the rally we saw current areas in the rally, only 3 million, and that indicates a lower level of confidence. groups are rising today. we broke a four-day losing streak. the game is up one third of 1%. fourth the u.k.'s against supermarket chain. a second straight quarter of sales growth, .7% ahead of estimates, signaling the change made by the new chief executive, who stabilized the business after a four-year slump. sold -- unprofitable stores, it is still a highly competitive marketplace. shares are trading up by 2.24%. thethe luxury carmaker, engine maker, trading so far this year has matched expectations. restructuring plans are starting to work and full-year earnings are waiting toward the second half of the year. chief executive reiterating the 2016 will be a challenging year overall. it is transitioning between products and responding to w

ofthe weird phenomenon that has emerged the past month or so in what is known as the low volatility etf day ratio of realize volatility. what you are looking at here in the past month is when this white line goes above one, you are getting bigger swings in the low volatility etf which is not supposed to happen. this is supposed to insulate you from swings in the market. typically, lower volume equates into stuff like staples and volatility which we know as of late have gotten very expensive. people try to move into those with a value play and they are subject to bigger swings on those key levels. they get a little more jumpy and ,hey are heavily weighted almost twice as much as they are in the s&p. been hearing so much about this because so many people are going into those etf's, but i guess volatility is back. what do you have for us? have debt on my brain today. greece has 320 billion euros of debt. it will receive 10 billion euros of aid, but that is a lot of debt and it desperately needs some debt relief. thatt me thinking, what is relative to gdp? fair against the other big valved

a great tips etf is what you buy when you want to buy inflation. there are signs in the market that people think inflation might be coming and want to protect against it in another sign is derivatives, which protect against inflation, are getting a lot cheaper. but are we actually want to see it in the data? market versus events think it might be coming. scarlet: we will be asking that question later on today to the chief international economist. we will be getting his take later on. alix: coming up next hour, bill gross says the next step in big on extremist efforts may be helicopter money. Âi alix: welcome to bloomberg markets. vonnie: here is what we are watching this hour. stocks trade down as the latest economic data paints a mixed excerpt for the united states. there are signs of weakness in the job market. oil is trying to get back on track while gold is dipped from its highs. the path to the republican nomination is now clear for donald trump. john kasich about two quit the race. before we get to the markets, more breaking news on politics.

etfs will invest. angie: mostly down. what impact will this have on the stock -- these stocks?tephen engle: alibaba in the last six months is down 3.7%. it is up 33 percent since february. we have one quote from the chief executive from one of the exchange traded fought -- funds. who said u.s. investors are a low chinese adrs valuation because of the china risk. would be full inclusion hopefully a global investors will be able to buy them as part of their mandate. that is the hope. another question in june, which mayns tomorrow, the msci include a shares. the mainland authorities have been trying to do to restore confidence in those because of the turmoil and trading halt, because of all of the missteps. they are limiting the ability for chinese companies to halt their stock for reasons that are undocumented. relaxedfebruary they some restrictions on foreign funds investing in the mainland. angie: takata has ruled out bankruptcy as a way of reducing their exposure to liability from their worldwide airbag recall. sources tell us the company is seeing buyers take a controlling st

when you look at this etf in particular, what really makes up this etf is over half of it is micro capadian companies. and when you look at what has been driving the performance, it's really been this massive consolidation and these companies have been beaten up. they lost about 90% up until the end of last year. it's been the winners doing well. and they also had a lot of tail wendz helping them with the canadian dollar. but that consolidation phase is pretty much over. the winners have won. there really isn't a tail of it anymore. when you look at valuations, they're incredibly overvalued. they're trading at like 43 times forward earnings. >> so stay away? >> i would say stay away. i think it's done. the run happened. it's over. >> all right. boris and aaron, thank you. find more market insites on our website. >> when a woman says it's over, it's time to listen, folks. >> move on. >> if you flown recently, you probably waited in a long security line. up next, what needs to be done to fix the problem. stay with us. looking for balance in your digestive system? try align probiotic. for

the anti-etf. talk to me about it. there's clearly a very large interest for an etf investing.investing, low-cost investing is very much a viable tool for many investors, particularly those that have many years ahead of them to invest for their retirement savings. once you get on the other side of the investing hill, it is appropriate to look for risk management strategies like ours. any kind of passive the vehicle approach, you have to understand you are driving a car with no airbags. that is the purpose we provide. amanda: how do you manage that strategy back ? abhay: the multi-asset strategy -- it is an equity portfolio with fixed income, high-yield, reserve management and a bit of gold. it is meant to provide equity like returns with not quite the risk of an index. the full cycle return should be close to an index or even better but much less swinging up and down. i know matt miller wants to jump in. looking at your allocation, the , conceptually, you don't have a problem with it. it is just how it is being used? cost concept is valid, but if you look at the holding period

as you point out, it is so much easier for investors to get exposure for etf. a cap on how much the actual miner price can rise? you have tominers, remember that they have the operating and financial leverage the gold price. what you saw at the end of last year particularly was a very slow correction to the downside. from the we have seen a number of cases, it's a recovery. -- gold recovery up on that up from those highly suppressed levels. it's the impact of the leverage on the balance sheet. plastic feels like a different product. is it a currency? is it not a currency? it seems the flip-flop. palladium doesn't have that kind of vibe. >> they really are. the big fundamental, with platinum especially, is a lot of the analysts think the problem that diesel is having -- guy: used in the -- >> in the catalytic th fusers. if that is going to be the case, is there a need for platinum, if we are going to take energy-efficient cars to the energy space? matt: i wonder how much an investment that could be for currency reasons. the same as gold. you will not see anywher

there is a big what is known as the minimum fault etf. my colleague had a great story today kind of looking at what happened in this part of the market. white wine is the ratio of that low purported volatility of stocks through the s&p 500. what you are basically seeing is that when the number jumps over one, the volatility actually in the lowball is now surpassing that of the overall stock market, which is odd. highlighting to other things here, basically the move in some of these value type names that have gone pretty expensive, the consumer staples and the utilities here, these are typically kind of value plays that as we know have gotten pretty pricey. trading high on the left side of 8% screen, this is an etf relative to the s&p with 4% utilities and double staples as well, that could get more volatile and if you are there for lower volatility, it could be disappointing. >> that's a great chart. we have some breaking news from hewlett-packard, reporting results for the second quarter, $.42 per share matching the analyst estimate. $2.

blackrock ishares but carpet bond etf's. -- corporate bond etf's.rest in the fund climbing by more than 80% since mid april. this coming from the analytic firm. bureaus, 150 news populated by 24 -- 100 desktop to 400 journalists. anna. anna: let's stick with the market action over in asia. juliette saly has the latest. not a pretty -- not a pretty picture. juliette, what did you do? juliette: absolutely. i am not on markets next week, but we have seen a lot of filling coming through. japan coming back online. .25%.y it is not been a great week for japanese investors. the market was only open on monday. and on friday. in between that come we saw the yen have three sessions of losses. higher against the dollar again today. the dollar weaker so that has pressure coming through on japanese equity stocks. buying -- andod also the go stocks today. a story of risk off appetite ahead of the usa nonfarm numbers. elsewhere the markets that are -- thee have been seeing sink on compass it down by 2% -- the shanghai composite down by 2%. the hang seng holding on

>> tdx is a goldminer's etf. when the gold price goes up, the manufactur manufacturer, the companies specializing in manufacturing gold, digging out gold tend to go up even more than the gold price. so if you're bullish at gold you tend to make more money by actually buying to cover the manufacturer digging out. so personally, i think the gold price, there are a lot of people who love gold and who will always love gold. i think long term it's an absolutely terrible investment. and i think you're better off buying things that pay you rather than paying for the investment. >> we're at a peak now, 1296 was the high from january 2015. inflation hedge? >> we've heard all this when gold was actually going down. the gold price hasn't been much different in 1250, plus or minus for a year or two now. and if you remember, kind of a few years ago when people got mad, mad gold disease, when the gold price was 1600, 1800. >> yes. >> and you had bad news every day, the gold price was actually falling. so i still think, on a lo

etf's were being sold left and right. silver, that did not happen.t 50 and then sold off, they definitely have a retail washout. >> but etf's state constant. , one of the big things that came out, all-time record demand for coins and bars made from silver. silver needsfeel to get over $20 an ounce for your company to take a leg up in the stock, or is it stabilizing enough? >> stabilizing is more than enough. our plans were predicated on much lower prices. alix: what price? >> $15 silver, $1100 gold. all of this is just a tailwind to the top. this is just the results of the harbor at our guys have done over the years. david: up next on bloomberg markets, hillary clinton claims a razor thin victory in kentucky. is there any chance democrats can come together to fight trunp? theld trump just released 11 names of the people he would consider to be his nomination to the supreme court. ♪ david: this is "bloomberg markets." i'm david gura. it is time for the bloomberg business flash, a look at the biggest news in the -- stories in the news right now. linked

the etf purchases have made it a top 10 shareholder in about 90% of the nikkei 225.loomberg colleagues dug through the documents and wow. that is the reaction. the fact is policymakers in japan don't disclose how them buying etf translates into individual stakes in individual companies. the fact is we can estimate, and that is that we have done for their own record, regulatory findings by companies and also etf managers. john: it is state capitalism weirdly from a new direction. we are used to the old days were governments used to own companies, and now we have other things where they have privatized on the one hand, others have talked about a strategic direction. this is not strategic. they are just buying them and ending up with it. it is a very weird new version of the bank of japan capitalism in its own way. tracy: embattled drugmaker valeant is getting a new chairman and ceo as the other one leaves to help execute a turnaround after a series of scandals last year. is this more about him leaving, or is he really up to the task? drew: perrigo, he had a pretty spec

there's also been a huge impact seen on the tech etfs. according to morning star, 75% of the tech etfs, they hold apple stock. hulu is developing a cable style online tv service that they hope to launch in the first quarter of 2017. they want to make the company a competitor to some of the more traditional pay tv providers out there. the new subscription service would be streaming fees for a lot of the popular broadcasts and cable tv channels, kind of netflix style. they're owned by walt disney. and 21st century fox. they're hoping to launch in the beginning of 2017 and hoping to see popular uptake given what's happening in the world of tv at the moment. jonathan? >> all right. louisa bojesen, thank you. >>> we turn to detroit where a mass teacher sickout is expected to continue for a second consecutive day today. nearly all 90 public schools were closed yesterday after half of the teachers called in sick in protest after the city said it wouldn't be able to pay them past june 30th. the lawmakers were urged to pass the package to keep the

treasury by the etfs. i'm becoming increasingly convinced the fed isn't going to raise rates again. >> again, never -- >> well -- >> look, if that's true, then there might actually be hope for the energy space. there might be hope for oil and gold. so -- >> gold is up. >> the bullish bet we decided to take money off. look, we're going to have to have a rate increase at some point. you're going to see that increase when you start seeing meaningful inflation in places. that's when equities will roll over. they will not roll over before then. >> well, okay, basically the only person who likes this trade is carter. >> apparently. >> all right. i just want to get that clear. >> it's not going to decay that much in one week to the next. you're not risking a whole lot. >> importantly, of course, we've had ten sectors since 1990, the s&p is now going to go to 11. reits will take on their own official sector, and how you have to relate to that. >> can't get enough options actions? i know the answer is yes. you're i

the etf, trades in the united states and the real. etf is off more, double whammy.e lower and the realice lower. coming from a reputable newspaper in brazil, somehow the acting leader of lower house anuld the impeachment process against the president. this is not confirmed by the spokesperson for the lower house. initially reaching to people in brazil, there was confusion. in theory, the process moved away from the lower house and to the senate. we will keep watching this. it may be it has to go back to the lower house for another vote. the reason the stock exchange and etf move lower, there are reports that the impeachment process was anulled. the vote was supposed to happen wednesday. it looked like a done deal she would be out of office six months during trial. back to you. >> thank you, michelle. >>> up next, recode, our partner has a look or change in strategy. new recode editor dan farmer will join us. >>> and familiar face leaving donald trump's transition team. details in a moment. >>> a new announcement from the trump campaign. >> john, we have chris christ

etf and the metals hand mining etf all weak here today because a lot of people bhig cyclicals, that'sg a little bit. call it the return of the old deflation worry, particularly companies like the metal industry, iron ore moving up aggressively this quarter and yet it's been flobbling and metal names running up on hopes that china would stabilize and have come down a bit. is this something big? not at the moment. 22800 is where were at the end of april on the s&p, 40 points, 2% to the downside. i would say that it's not big yet but cope an eye on whether that deflation worries continue. guys, back for you? >> thank you very much, bob. our next guest thinks market fundamentals remain positive. hank smith is cio at haverford trust and joined by david lafferty with a global asset management company. gentlemen, couple to both of you. david, why don't i start with you. the third longest bull market in the post-world era and may become the second longest. why don't people trust it? why has money flowed more out of money equity incomes than the opposite? >> well, i think risk tolerance has ch

retail etf got as low as 41 today. that's a big move in a couple of weeks.hen you think about the events next week, some of the bad news may be in the stock. but i think obviously this is an options program, we'll talk about ways to define your risk and play what may be a continuation of the trend. >> and mike, arguably some of these names were from the beginning thought to be the stronger of the retail group. >> definitely that's true. first of all, amongst the retail group, especially if you compare it to some other names that haven't reported, the valuations seem compelling when you look at their growth rates. the home improvement retailers as an example, good top line growth. much better eps growth. and there is a lot of fear baked into it. we can see that at the implied moves like home depot. expecting a move next week that's 50% higher than what it normally reports. that is indicative of fear, to me, and might be in support of dan's notion that these things are a little bit oversold. >> speaking of home depot, it is literally the crossroads of home bui

the xlv is the health care etf, the top five holdings, companies like johnson & johnson, bristol-myers things that act very well. i think there's a potential for some of the other names to play a little bit of catch-up. amgen, biogen, some of the stocks that are well off of their 52-week highs versus the ones i just mentioned. a few percent from the 50-week high. pain there's a catch-up trade. >> how much of a weight is biotech? >> that's what's so interesting. traditionally, the real key here is traditionally this is a defensive area of the market. right. biotech has skewed all that. in terms of the -- in terms of what's important here, the top is the big pharma names. what does act well, devices act well, health care facilities act well, managed care, so forth. you need a little bit of play from some of the big biotech names and this thing can -- lift. >> some of those companies actually, if you're taking a look at what the valuations look like, those are actually the cheaper names in the group right now. the big cap names you're talking about, johnson & johnsons, 22 times multiple n