kkr is cashing in on tax reform.ublican tax lies behind the switch from a partnership to a corporation. that is coming up. this is bloomberg. ♪ david: this is bloomberg markets balance of power. ery: time now for the stock of the hour. we are looking at avis budget group. this is the poster child of this year's earnings, first-quarter earnings season. it delivered earnings that beat estimates for the first quarter. is, they, what this lowered their estimator. they gave a fiscal year $3.05 tot of $2.90 to basically a higher range than people had forecast. it goes to the heart of the issue. 56% inares had been up the 12 months through yesterday. a prettythere has been big bid up and people are thinking, all right, maybe it is time to take some off the table. david: i did take it back to 2010 which shows it has come down some. why does anybody want to be in this business at all? i we all just using uber and ly ft. lisa: they are trying to modernize themselves and say we will manager cars and they have a partnership with

especially kkr and blackstone and others, have started to dive deeper into how do we get this as a means of distribution? you have to think there is a little bit of that at work here as well. ,avid: talking about superrich we had a change in state laws and new tax laws, but it goes away potentially and they are worried the democrats will change it back again. if you're worried about the superrich is grandchildren -- are you worried about the superrich's grandchildren? jason: to tell you how wealth is trending, heart of this is that the key element here is the notion of the dynasty trust. the reason there is such fervor around it is because this text change could go away in 2025. people are scrapped -- tax change could go away in 2025. people are scrambling. julia: amid a political shift.

. >>> the investment firm kkr makes another bet on enterprise software. that's where we begin tonight's market focus. kkr said it was adding to a series of investments in the tech sector with its latest deal to buy the information tech company bmc software from bain capital and golden gate capital. while the financial terms of that deal were not disclosed, "the new york post" citing one source recently said bmc could be worth about $10 billion. kkr shares fell nearly 2.5% to $21.91. >>> shares of universal display got a lift after it was reported that apple will make several iphone models with oled screens. they currently use lcd screens. universal display specializes in oled display technology. it rose to $103.16. >>> alibaba said it is part of a group of investors who plan to take a 10% stake in zto express for just under $1.5 billion. zto said the investment will help streamline investments and cut costs. shares of alibaba were off to 198 even. shares of zto popped 8% to $20.82. >>> elsewhere, petroleum and natural gas producer sand ridge energy is urg

we own more kkr than blackstone because it's trading at a more depressed price.one is on the edge i hate to say on the one hand but it's a close call. i'm going to say they're going to watch how kkr reacts when they convert and if that does have the positive impact that we're thinking it's going to happen, i think they will follow suit. >> finally, bill i want to bring up emerging markets. some of these currencies and markets have been absolutely hammered in the past few months. as interest rates move up and the u.s. dollar strengthen you know, the old warren buffett when the time goes out, you see him swimming naked some of the countries have their own problems like argentina and turkey but their currencies have been absolutely bashed. l look at the double digit weakness down 22%. the lira down. the rial down 14%. what do you advice investors pouring into etf or emerging market exposure over the last few years on cheap money that has been out there >> sara, i would be disenginous. we were in a large mutual funds and strategy so we -- unless it has something to d

julia: kkr is also health care. does it fit?eady body unit from envision health care as well. in bidace is been potentially at $11 billion. financing ableg times envision ibid. the $11 billion bid, $8.5 billion would be financing. the net debt of the company is $4 billion also. it is interesting when you're looking at the death that this company has. it made an acquisition of amsurg, another emergency care center company. that company had bought another company prior to that. so it got debt with that acquisition and took on debt to do that acquisition. scarlet: causing a lot of prominent investors to short it as well. julie: we have been talking about this one frequently. abu dollar -- abu dhabi's investment. scale. about . is about being able to create a global -- four major sovereign funds. it continues to be the backbone of abu dhabi's investment strategy. by combining the three, we gives us acale that balance sheet that is considerably stroll and gives us the ability to grow and effective way and consolidates an investment s

kkr has agreed to buy information technology management provided bmc software. 8.3deal is worth about million dollars, including debt. from an buy bmc investment group. royce holdings is expecting a sharp rise in the number of dream miners being talks withcause of the maker of its turbines. this comes ahead of mandated inspections at the power unit due to a durability problem. the number of dream miners is isected to -- dreamliners expected to peak at 50 from the current level of 35. fernandez and other officials are being investigated for andgedly taking rides influencing local policy as a result. middlemen to sway government officials on aviation, allegedly. a spokeswoman says he won't be available until june for comment. nintendo stock is rising amid news that new pokemon products will be released for the switch and smart phones. games were unveiled today that are designed to capitalize on the success of the pokemon go smartphone game. in games go on sale november. bloomberg --your that is your bloomberg business flash. manus: thank you. let's listen to what some of the investors a

something underappreciated is something like kkr.r, alternative asset management. has a lot of tailwind, still raising money. kkr is converting to a corporation from limited partnership. should attract a lot more investors. very cheap stock. underappreciated value, oil is saying going up, don't buy automakers, cycle is rolling over, general motors, strong balance sheet, cheapest stocks in the world, ebb tax nice yield. liz: i would say buffett likes it. you're not buying at highs of the year. [closing bell rings] that is why pat kaisar invited back. he gives us idea. dow on pace for the fourth straight record close. the dow around 25,000 mark. 11 points above it. that will do it for the "claman countdown." melissa: stocks surging as trade send shuns beginning to ease between the u.s. and china. still off the session highs, but huge gain in the s&p 500. nasdaq also in the green. it is a new record close for the russell 2000. fourth in a row. i'm melissa francis. happy monday. david: happy monday, thank you for joining me for my daught

>> it's really interesting in that you now have kkr getting into private equity shops.are financing the companies that actually finance the underlying months. it is a good sign that our economy is coming back. a lot of these house clippings are happening in the harder hit areas that are finally making the turn. it's all in all a positive sign for the economy in a good time for the country. >> not a bad return if you're in the game and wall street skidding to that game. jerry, michael, thank you very much. >> find a way to make money. that's for sure. coming up, if he's going to chili's grill and bar, your credit card info may have been exposed to hackers. with the weather week i had come in has the forecast. the u.s. stock market futures all in the green this morning. the dow up 96. s&p up six, nasdaq up 22. you are watching "fbn:am." ♪ ♪ you said you're not like me, ♪ ♪ never drop to your knees, ♪ ♪ look into the sky for a momentary high, ♪ ♪ you never even tried till it's time to say goodbye, bye ♪ ♪ everybody fights for a little bit of light, i believe. ♪ geico motor

the previous financials that i mentioned, morgan stanley and kkr, value act did not seek a board seat in their letter they did analogize this investment to microsoft in which they did get a board seat there 2013. it's unclear if they will push for something like that. right now it seems like they're happy with citi being a boring bank >> we'll find out. i know you're going to vegas, safe travels if you hear anything about a fusionist, we know the world of food and money have he merged. do you have a deconstructed s'more i could use one right now. >> i do. >> thank you >>> the cfo of snapchat is out the company saying he's leaving to pursue other opportunities. he's being replaced by tim stone. snap shares down 44% in just 90 days. >>> tesla stockholders, elon musk is trying to help you out regulatory filings show musk bought another 33,000 shares the addition increases his stake to about 20% last week musk promised to burn those betting against tesla, which has not turned a profit in its 15-year history. >>> investors in hertz are hurting. shares likely to drop today. the car rental c

kkr just came out two days ago and said there's 100% chance of recession in 2020. 100% chance. and this is kkr. >> you're saying there's a chance >> i think there might be a chance i'm not sure i'm going to look into this more the reasoning made sense for every person, i swear you can find two that are on the other end of the spectrum. >> the multiple has come in since the start of the year, earnings projections have gone up since the start of the year right? we're trying to paint the scenario in which what cooperman and icahn are saying. >> go on the fundmals of the market >> the one thing we haven't had in the conversation are the rates, and 3%, we were all so afraid of 3% so maybe it's carl icahn and lee cooperman feeling more comfortable as rates have settled in slightly north of 3% that equities could move higher. we were told 60 days ago, 3%, oh, my god, s&p will collapse. >> big money is also getting more money, according to some new numbers. our leslie picker following that story for us, as always. >> hey, scott. interesting, this may actually be a bearish indicator for

hospital operator hca health care and kkr are reportedly foring up on a takeover bid envision health care. reuters said that the two are working together to create what they hope will a compelling offer even as other buyout firms eye ension. envision has requested that all offers be submitt this month. hca's shares are up to $103.86. shares of envision were at . $43. >>> pinnacle foods has hired everore partners consider strategic partners. janaartners has pressed the maker of dunkin' hines baking mixes to mer with conagra brands. the two companies have reportedly disssed the potential combination in the past. pinnacle foods was off $69.93. >>> world wrestling entertainment has found a new broadcast home. as first reported by espn, 21st century fox's company reached a massive deal with wwe for the "smackdown live" show. it will take ace october 2019. shares of wwe were up to $57.86. >>> restaurant equipment company middleby is buying the ice cream d frozen drink services company for $1 billion. the move comes as united technologies focuses more on the core business while middsby lo t

kkr is seeking a quarter of a billion dollars into a company that buys loans mad to speculators who buy homes, renovate them and sell them quickly, presumably for a profit. these kinds of loans those are not cheap. th command interest rates of between 8 and 12% and often have short 12-month maturities. one estimate has put borrowing by flippers ail $15on this year. that's nearly 25% more than last year. >>> a with investor cash now ruling the market, regular home burs who need a market are at a disadvantage. that's where a financial startup is stepping in and backing home buyers with cash. diana olick has more. >> reporter: in today's ultra competitive housing market, cash is king. they would like to close quickly without dealing with a buyer's mortgage. most buyers don't have cash and that's where a tech based startup ribbon is looking to cash in. >> we have democratize sense of capital to empower consumers to be able to enable any buyer to bid with cash. so buyers can n compete effectively in the open market begins instutional investors, wall street capital and very wealthy individual

jason: one of the best-known private equity firms in the business, kkr and others getting into tryingut how to make money off of people telling other people how to invest their money. david: this is what i don't understand. they say we are going to buy it, fix it up, and sell it or are they doing it as a source of funds? jason: that is a great question. the short answer is yes. i think the reality is they are very profitable. but at the same time, the big especially kkr and blackstone and others, have started to dive deeper into how do we get this as a means of distribution? you have to think there is a little bit of that at work here as well. ,avid: talking about superrich we had a change in state laws and new tax laws, but it goes away potentially and they are worried the democrats will change it back again. if you're worried about the superrich is grandchildren -- are you worried about the superrich's grandchildren? jason: to tell you how wealth is trending, heart of this is that the key element here is the notion of the dynasty trust. the reason there is such fervor around it is b

that has never been kkr's way and that is not the way we are doing our fund.: you invested in lyft before it over exploded. uber exploded. are they losing market share now uber is back? think they are doing fine from market shift gain. what we saw in them was a management team that was very dedicated to continuing to grow a lot and wasn't looking for a quick exit. that has really played out. have had fortunate tailwinds behind us in different ways, but them working with us and other investors to build the business in the long haul was a big piece. about a company like magic leap that has no products on the market yet and it has ?een a few years david: that was a little bit of an anomaly when we started getting into growth three or four years ago. a hugenally there is market and a transformative technology where we might take more of a passive role. that was more of an historical investment. going forward, we would look for things that have better already product fit. emily: if they looked so good, why haven't we seen anything from them? >> what i do know is th

ralph rosenberg of kkr.of the countries largest pension fund, the big push into private equity. coming up next. this is bloomberg. ♪ ♪ alix: this is "bloomberg daybreak," i'm alix steel. does italy have a government? italian stocks, up by 2/10 of 1%, reversing early losses. a potentially weaker open in the u.s. other asset classes. btp, selloff, higher by six basis points. yields higher by one basis point. 3.1% on the 10 year. euro reversing gains. brent holding steady at $80. jobless claims coming in, not a surprise, in line. 222,000 individuals filed claims last week. strong job market, show me the inflation. we wind up hearing, not a market mover, continuing the potential, gradual rhetoric from the fed. david: when do we start wage inflation? return to the largest u.s. pension fund. making the biggest push ever into private equity. the california public employees retirement system is launching two new funds. we are here with ted eliopoulos reporter: the morning. >> tell me about this bush? ush?his p >> we

kkr is preparing a bid that could top $11 billion. those shares trading lower.etail focus is a group of not doing as well after some calls as well asalysts comparable sales for april, the forecast of the company saying it will be at the lower end of the prior forecast. finally watching the yield as well. we have got the yield trading lower, the 10 year yield down by 3% afters points under we had consumer prices rising less than estimated. this is also a thing causing rebound in utilities today. caroline: 19 minutes from the close of trading in europe. check out what is happening in italy. we have a rise of geopolitical threats hitting sentiment here. we have got concerned that italy and iran, and election in malaysia but we have got the upset of italy. will we see the two parties coming together and forming -- give the stoxx 600 at the winning streak and italy is significantly selling off her the blue line is the key supporter. that may be a deal could be performed between the league and a five-star movement. keep an eye on what is happening with italian assets

kkr has bought bmc software. terms of the deal were not disclosed.s owned by a group including golden gate capital. they took the company private five years ago for $5.9 billion. coming up, president trump said he is moving ahead with plans to impose tariffs on $50 billion worth of chinese imports and curb investment in sensitive technology. what does it mean for global innovation? that is next. this is bloomberg. ♪ emily: abc is pulling the plug on the "roseanne" reboot. the president of abc entertainment made that announcement today after the show's star roseanne barr made a racial slur about a member of the obama administration. she later apologized over what she called a bad joke about former obama advisor valerie jarrett. bob iger tweeted there was only one thing to do and that was the right thing. a timeline for imposing tariffs on $50 billion on chinese imports. tariffs of 25% will be given to goods of imported technology, including the beijing made in china development program. i want to get to sarah mcgregor in washington. tell us exactly wh

kkr is buying privately head bmc software for an undisclosed amount bmc was taken private in 2013 byup led by bain capital and golden gate capital for $6.9 billion. >>> let's talk commerce right now. commerce secretary wilbur bross and robertlig lighthizer are go to be traveling to talk on many agendas for the trump administration want to talk about what's going to happen in paris tomorrow, but i want to get it where you think we are with china vis-a-vis where we are with north korea. because to me that is the big cloud or overhang on whether this is going to turn out to be a positive or negative situation. >> well, secretary ross is expected to go to china later this week to try to continue those discussions about trying to reach a trade arrangement the question is whether they'll go down the path of shopping list approach and having china agree to buy more airplanes or soybeans or lng from us. or whether they'll go down the path of trying to get china to fundamentally change its industrial policy regarding forced technology transfer and intellectual property rights i think the chin

kkr has agreed to buy dmc software, and i.t. management provider.is owned by a group led by bain and golden gate capital. they took the country private five years ago for 6.9 million dollars. shipba is making a deal to packages around the globe. the company's leading an investor group that is taking a 10% stake in chinese delivery express.to that price, about $1.4 billion. that is your bloomberg "business flash." we are watching the markets, caroline. caroline: keeping a close eye on the bond market. we have seen so much commentary today saying this is the biggest market and apps are widening because this is thin volume. nonetheless, very few bids out. atening from italian 10-year 22 basis points. we have not seen these heights since reminiscent of the debt crisis. germany, moved to safety yields out of the german 10-year. is this contagion? this is what is being debated. societe generale saying they are concerned about this move. "is out of sync wit -- panic mode is out of sync with fundamentals. this is bloomberg. ♪ . ♪ caroline: this is "bloomber

also, reuters reporting late last week hpa health care and kkr have joined forces to make an offer fornvision. shares up 3%. shery: coming up, president trump escalating the war with his justice department, order an investigation into whether the fbi infiltrated his campaign. does he have a case? this is bloomberg. >> bloomberg television's brought to you by interactive ratedrs, integ investment banking with higher returns. ♪ shery: this is "bloomberg markets: balance of power to go -- of power." reporter: gina haspel has been sworn in as the cia's first female director. president trump praised hassle as being respected all over the haspel israised being respected all over the world. the trump administration has a warning for iran now that the u.s. has left the nuclear agreement. speaking at the heritage foundation in washington today, secretary of state mike pompeo listed the man's he says should be included in a new nuclear treaty. ompeo: the sting of sanctions will be painful if the regime does not change its course from the path it has chosen to one that rejoins the league of natio

i didn't think i'd say that. >> i didn't either, but that's where we are >> henry from kkr, thank you me. >>> finishing the day, dow dropped 55 points on the bell. small declines to the s&p and nasdaq, and the russell had a gain and closed at an all-time high for the small caps. >>> time for a cnbc news update, sue? >> kelly, thank you. here's what's happening at this time, everyone by a 54-45 vote, the senate confirmed gina haspel to be the first woman to lead the central intelligence agency. this despite partisan misgivings about the role in the agency interrogation program after the 9/11 terrorist attack. >>> a school bus crash in new jersey killing a student and a teacher while injuring 43 others, many of the injuries are critical or serious. the school bus collided with a dump truck on interstate 80 ripping the undercarriage off the bus. students on to other busses taking part in the trip reacted to the news. >> it was scary because i know many of my friends on that bus, and i just - >> reporter: are you worried >> yeah, i'm worried everyone is now praying with them because we al

that has never been kkr's way and that is not the way we are doing our fund.are really trying to partner with businesses for a sustainable long outcome. emily: you invested in lyft in 2016, this was before uber exploded. now, uber is coming back and new leadership. are they losing market share now that uber is back on its feet? david: we haven't seen that. i won't give specific numbers, mostly because i don't have that, but we think they are doing fine from market shift gain. what we saw in them was a management team that was very dedicated to continuing to grow a lot and wasn't looking for a quick exit. that has really played out. we have had fortunate tailwinds behind us in different ways, but i would say the thesis of them coming and working with us and other investors to build the business in the long haul was a big thesis and that has been working well for them. emily: what about a company like magic leap, which has raised a ton of money, but has no products on the market yet and it has been a few years? david: that was a little bit of an anomaly investme

if that's familiar, well, we'll see how familiar it is private equity firm kkr announced iannounce edrs, a firm that buys loans made to home flippers. the ceo is here with us in a cnbc exclusive thank you so much for your time. >> thank you for having me here. >> congrats, by the way. >> thank you $75 million of equity investment back in late 2016, just now increased that to a quarter billion dollars. >> what do you guys actually do? you know, headline is wall street's getting into house flipping, like, we know what happened last time, but what you are doing right now is taking pools of money from all different types of investors and giving it to people to renovate houses and sell them, is that right? >> basically, that's right what we do is partner on a national basis with high quality local lenders who make these types of loans, and some loans are made for developers who are buying, renovating houses and ultimately sell them, and some of the loans are made for people who want to hold houses long term, it's a combination of the two, but the other day, we set our credit standards and

in the yellow heading out of anzo you're going to start tapping the brakes and once kkr you get overthat crash is. shutting down some lanes. right now our sensors still in the green. impact on your morning commute. once you get on interstate 80 things are looking good. we are in the green heading on over towards the bay bridge ñplaza. ards the bay bridge this is right near powell street. once you hit that berkeley curve. overr1$ñat the bay bridge toll plaza, no metering lights just yet. but any minute .obwe will see those activated and those cars start stacking up. we have a little bit of a backup in the cash lanes. southbound 680 pgaat the limit you make your way down the sunol grade but northbound 680 we are seeing a lot of slowdowns. we have reports of a wrong-way driver on that northbound side just heads up if you know someone who travels that ír stretch call them and let them know to look out for that. we are still seeing speeds in the yellow due to this overnight roadwork. it looks like caltrans still has some alternating lane closures. they should be out there for about anothe

going to be handed over to kkr.acquisitions and date back 120 years in tennessee. chuck barry, b.b. king, likes of jimmy page, now in receivership. >> one of the most iconic brands in music instrument production. they're stopping dogs from being in the cargo hold and others from the cabin. they're going to stop transporting any animals in summer to places like phoenix, tucson, las vegas, palm springs. worried about impact to the animal's health. >> live in london, thanks for that. >>> coming up, a look at one big thing. more on the deputy attorney general response to republicans amid reports that lawmakers have drafted articles of impeachment over the russia probe. >>> the latest on special counsel russia probe and new warnings about potentially invoking the power to subpoena. >>> former director of the cia and nsa, michael hayden, joins the conversation and discusses his new book on national security. morning joe moments away. captivating exteriors dynamic lighting elevated comfort powerfully efficient and one more

that position has done very well in the after math of the discussion they also announced a stake in kkr. >> were they effectively passive investors? >> reporter: largely, yes. they didn't take the typical avenue we'd expect to see. they have largely been passive, maybe having some discussions behind the scenes with executives no major changes at those two firms. so we can possibly expect the same thing from citi but of course it's still early to tell. >> leslie, thank you leslie picker in the newsroom. tim, you're a shareholder. >> i think there's a lot of leverage that citi bank can pull or has exposure. credit cards were very good in the first quarter. their core business is strong. if you want leverage in a growing economy, that's what we're arguing, i like citi bank. >> valueact, theranos of value fame, that's my only comment have at it >> i'd agree with that i would say citi is trading at a discount to book value they reported book on the "closing bell" with kelly and mike book value is $71.5. even if you give them a 1.3, 1.4 multiple price to book, you're talking about a $90 stock

stanley, and that stock has surged more than 80% since about a year ago, they revealed an investment in kkr it was acquired at first through derivatives, but the stock itself has gained about 30%. value act didn't push for large changes at either of those companies and it appears at least in these early stages that they're using the same tactic at citigroup. citi told cnbc in a statement, quote, we have been having constructive conversations with valueact and welcome them as investors. according to the investor letter obtained by cnbc, they believe citi, which sord of has been a laggard relative to its peers is poised to benefit from its scale and relatively low risk profile. after studying the bank's financial statements, valueact said citi can return $50 billion in capital to investments in the form of dividends and share repurposes over the next two years and double its earnings per share by 2020. the firm says the market's underappreciation of citi is akin to microsoft before valueact invested in 2013. brian. >> yeah, you know, so guys, what do you think here? this is sort of, on one ha

kkr has agreed to buy information technology management provider bnc software.arnings,were getting first-quarter net income 372 billion rubles. the estimate was for 349 billion rubles. gascon profit beating by a healthy margin. 2.14-quarter revenue was trillion rubles, beating the estimate. watch gazprom at the open. stories.ur top snap elections could be held in italy as early as july. premier has failed to form a government and is due to meet later today. the political uncertainty has triggered market selloffs across the periphery. two-year bonds plunged the most since the euro was created on concern that the country could leave the common currency. here is reaction from some of our guests. go to one guest in particular. luke take more, senior investment manager at standard aberdeen -- aberdeen standard. luke, we will go to you first. what is your reaction. attarella make a bumble over the weekend? >> he did what he needed to to protect italy's position in the european union. they are in a precarious state economically and the profligate fiscal spending for th

jason: you are getting names like wells fargo and kkr who are moving their entire operations and blackrocknotably. it is a story that in some ways talks about the evolution of this business. wall street said in part that the story was tethered by paper. they are rate -- literally hand-pickedecks i when midtown came on, it was much more attractive for commuters. you are coming into grand central. now, new office space, and this has the potential to reshape manhattan. julia: the buildings are incredible. david: when they first said they were going to build skyscrapers, look at it. jason: they are building it over the train center. you come in from under the hudson, and it is a spectacular place. it speaks to how companies are trying to -- and we talked about this in different ways over the weeks and months, how they are recruiting new employees and a shiny new building with lots of amenities is a way to do it. julia: a cool place to be. david: thank you to jason kelly. coming up, one of president trump's most contentious foreign policy projects. the us and the u.s. embassy in jerusalem opens

andate equity firm kkr apollo global management are interested in possibly buying johnson control powerns business. according to people familiar with the matter, a deal could fetch $12 billion. johnson controls is expected to decide could -- to decide shortly. and a new drug has proven survival and lung cancer patients. the drug achieved its main goal in an advanced study. many are racing to develop life-saving therapies for lung cancer. julia: thank you. now we turn to the wall street beat, where we cover three things wall street is buzzing about. friend,ne buys a purchasing a chunk of the debt a complex one. and difficulties for deutsche bank. accidentally transferring $35 billion to the wrong account, while the chairman and ounces the run dividends to shareholders -- wrong dividends to shareholders. and spurring a 2000% profit. not bad. david: that is pretty good. jason kelly is joining us, executive editor for global television at bloomberg. we covered this story before at a momentous lunch. let's kiss and makeup, did not a great but it looks like it is ok now. >> if you get into th

kkr was about to go public at 5:00 p.m.announced it was being bought by blackstone at about 5:30 p.m. a ruined everybody july's fourth weekend. -- and it ruined everyone's july 4 weekend. the credit market sell out and the global economy went into the great recession. folly and a lot of voice. -- in a lot of ways. and yet over the subsequent years and as the financial crisis setting, john gray, now the president of blackstone -- we will get to him in a second. he would stop me on the street and tell me you guys have it wrong. the market has it wrong about hilton. this will be one of the best deals of all time. turns out he was right. literally the most profitable private equity deal of all time. it was the biggest check that blackstone had ever written from a real state and private equity perspective. they pooled their money and was not without a lot of drama along the way. david: not only in a deal this big, there is some luck in this. talk about the smarts of this. what did he see that no one else saw? jason: what they sa

kkr has agreed to buy software, information technology provider.ms of the deal were not released. the firm's took the company private for $6.9 billion. that is your business flash update. oming up, secretary steven mnuchin says they will target chinese goods. how they are responding. this is bloomberg. ♪ w amanda: this is "bloomberg markets." i'm amanda lang in toronto. shery: and i'm shery ahn in new york. the white house going ahead with plans to target chinese goods announcing a final list of affected products will be released on june 15, and go into effect shortly thereafter. beijing is responding to the u.s.'s $50 billion threat. michael mckee is here with the latest. the congress -- commerce ministry came out with the statement could what did they say? michael: they are disappointed and surprised here they thought they had an agreement with the administration that wilbur ross would come to beijing and put a list together that china could buy two lower trade deficit. in the statement, they said no the united measures states takes, china has t

valueact has a history of investing in financials last year, disclosing stake in kkr and years priorhat, morgan stanley. >> thank you for more on this now, joining us the "fast money" traders, citi up 1.5%, jeff said in the interview a week back that he thought based on the valuation, these banks could return 15% a year, which is what valueact is looking for. they only have a small portfolio, and now goldman is out there today as well, brian, upgrading names. what do you think of it all? >> right big thing with these is you're talking about the interest rate increase, right? the question you ask yourself, is the interest rate increasing because the economy is getting better, starting to see signs of it, or is it because you talk about oil and inflation's higher if you believe the economy's better and short end of the curve is higher, then you want to buy the banks, and i think that's the crux of some of the upgrades in the banks. >> guy >> i add to that >> go ahead. >> because that's what we do here, kelly, as you know, citibank is right now, last quarter, book value was $7 is1 share

kkr, approving a plan to convert to a corporation.reak later today. don't forget, continued coverage today from china into tomorrow as secretary mnuchin visits with economic leadership for china. stay with us worldwide. this is bloomberg. ♪ ♪ >> i'm not here to convince you. do not buy our stock of volatility is scary. there you go. >> tesla gets testy. shocking analysts and investors refusing to answer questions on model reproductions and cash burn. telling traders to sell. the fed adding the word symmetric to outlook. questioning the trade. let's get ready to rumble. the u.s. trade superstar delegation kicks off in china. hopes are dim. david: welcome to "bloomberg daybreak," i'm david westin with alix steel. it is my son's birthday today. alix: really? david palmer, happy birthday. david: meanwhile, elon musk. alix: terrified. we have to talk about that. in the markets, digesting that crazy tesla call. we will talk a

and -- equity firms kkr global management are interested in buying johnson controls. controls is expected to move ahead shortly with an auction. that is your bloomberg business flash. francine: planes of the italian populist parties continue to spread jitters among investors. the italian spread widens. the pressure on your does not stop -- europe does not stop it the spanish opposition party has registered a vote of no-confidence on president le j oy. eurosceptic play out in the markets. how can this be contained? >> that is the question. i'm not sure italy turned eurosceptic. it has not elected a government that wants to shake up europe at a minimum. what is going to be important is how aggressive do they get in confronting europe. we have been hearing different things. sayave been hearing them don't worry, we will be consistent with european roles. and then they are full of promises that if implemented will clearly violate european fiscal rules. we will have to see. how can it be contained? one has to hope that some accommodation can be found between the european fi

simply seeking to boost the buy back program valueact disemployeesed kkr last year this is not hostileow, it is until it isn't. >> it is until it isn't. morgan stanley and nxr, they were passive >>> snapchat's parent snap said the cfo is leaving the company to pursue other opportunities. he's being replaced by long time amazon executive tim stone the company's integration of whole foods may be a signal there that he wants to wrap things up a little bit and then shares of hertz are lower today. elon musk is expanding his own stake in tesla it shows that musk bought another 33,000 shares. worth just under $10 million his largest purchase since march of last year increasing his stake about 20% last week musk promised to burn those betting against tesla which hasn't turned a profit in the 15-year history. >> as bad as we thought the conference call was, and we were sitting on set the morning after the call excoriating him it's back to preearnings call levels 300 level. >> were you in a costume last night, joe >> clebs coming out in full force for the annual met gala. the fundraising event.

consensus still, revenue well above forecast the drug maker raised the full forecast a private equity firm kkr than expected ploft raised the stock buy back by $500 million and would announce it would convert the corporate structure to a corporation. that shifts a direct result which lowered corporate tax rate you talk about this being a huge catalyst >> hedge fund first, they own these partnership structures it was a clear discount on the stock. different tax form, individual investors had to dividend out most of their earnings, like a reit in a way. it was one of the cases, they'll convert to corporations. they get put into the indexes. it will be a more efficient organization >> investors will be keeping an eye on the latest productivity figures due out in an hour they expect it to have risen at a 1% annual rate after a flat performance in last year's fourth quarter we are also watching sprint, which is posting a net annual profit for 11 years. they added 39,000 new paid customers in the quarter sprint announcing they will replace the cfo. >>> fitbit sales fell for a sixth straight quarter

homes for sale at an all-time low and, second, wall street getting into the home flipping business like kkry, renovate and then resell homes. samanthaty by yankee is with us. you're a broker. i mean, they're invading your turf. you've got to be worried about this. >> i mean, not so much. as far as home flippers as a whole, home flippers made up 6% of homes sold in 2017, that's up from 2016 where it was 5.7%. we have no inventory right now. i mean, according to the national association of realtors there's only 900,000 new homes that are predicted to come on the market in 2018. we need be 1.3 million homes just to meet normal population growth. so whether it's a house flipper, whether it's wall street firms buying and writing these loans for flippers, nobody's going to take business from me, everyone's going to work with me. i'm not concerned at all. stuart: but the big problem not necessarily for the brokers, the big problem is from buyers. because when wall street money arrives for used homes, existing homes, that pushes up the price. and there's already a very, very low inventory of homes

kkr is increasing its investment in a firm that specializes in home flip r. pers.. last time this did not end well. >> let me give you a little bit of why it's happening. there's 3.6 month supply of existing homes on the market. ona lot of the homes need tlc. if you can't get into that house as a first time buyer, if somebody gets that house, flips it, adds some value, it becomes happehabitable, there's a 35% wh increase. there's arbitrage for entrepreneurs to come in and fix up inventory of homes on the market, make them more liveable and pick up some of that spread 678 it's .it's a profitable bus. there's an entire tv network dedicated to that business. >> maria: that's the follow-up. we were going to ask you, dagen, hgtv and the show fixer-upper, is that part of this? >> dagen: chip and joanna gains, their show left hgtv. she's pregnant again with their fifth child. why i know that, i have no idea. that is part of the problem. i wonder if the home flipping idea is skewed by a few hot markets. there are a lot of markets. >>> even you go an hour outside of new yor