morgan stanley is quietly plotting a comeback pushing for more fixed income trading business. among lenders suffer competition for banks. on my syntax companies and to displace banks aspects of consumer business funding capture imaginations of investors. coming up we will keep you

strategist, chief for morgan stanley. think you for joining us on the bloomberg market day.e will be back in just a couple minutes. ♪ alix: welcome back to the bloomberg market day. i am alix steel. the imf chief christine lagarde moved markets when she aired the central bank to delay its rate hike until 2016. sheiks find yourself in a news conference this morning. christine lagarde: we thentially agree with president of the fed in the must be date hike he -- data dependent. that's clearly the line that has by janet yellen over and over. we see that the team is analyzing the inflation rate is not progressing at a rate they would warrants without risk. i can come back to that in a second. in a few months. which is why to make the points, we are saying the economy would be better off with a rate hike in early 2016. when hopefully the inflation numbers would have -- even if it is relative to the 2% under the fed's rules, because we believe in the trade-off between starting to early and and havinginflation to return to lower rates is higher than the risk of slightly above 2% inf

morgan stanley downgraded it to underweight on future excess supply. what is the best way to play mu? pete, kick us off on this one? >> i was a bull on this stock. i've seen it slip down like everyone else. i'm looking at this thing. even if the earnings are only a little over $2 a share, which i think is part of this note put out by morgan stanley, it's relatively cheap. 11 times earnings, something like that, it seems inexpensive. the competition is out there. intel has been making that move to be much more competitive. they've got the server space. they are also trying to get themselves in the mobile space. i think the winner ultimately will be sandisk and intel and i think there's going to be a future for micron. >> do you own this? >> no, i don't. their story is that there's a new size coming that intel is going to be major buyer of so they are not competing with intel. but, you know, it's a momentum stock. it was a momentum stock on the way up, as was sandisk. you make more chip prices go down and everybody is focus canned on a lack of pc demand.

morgan stanley plotting a comeback pushing for more fixed income trading business.nders offer new competition for banks. online syntax companies and are displaced and many aspects of lending are capturing the imaginations of investors. this morning one of the convicted killers who escaped from an upstate new york prison is now listed in critical condition. authorities say david sweatt was shot twice by a state trooper near the canadian border. this is a partner was also shot and killed on friday. don't miss maria bartiromo's interview with new york governor eric cuomo this morning at 8:00 a.m. eastern time on "mornings with maria." nasa calling it a tough day for the space agency astronaut no-space rocket broke apart minutes after launch. the rocket headed for the international space station yesterday with a cargo of supplies including the first of its kind docking port. the second consecutive failure to ship in to the space station in in the third in eight months. the loss. the loss of the rocket. the loss of the rocket is a huge setback for nasa counting on privat

morgan stanley, bank of america, barclays, deutsche bank, hsbc, jpmorgan, suntrust bank -- all of them lining up, some of them committing more money. uber is getting half a percentage point below what competitive rates are out there. is it a sign of uber moving towards an ipo? they already have plenty of cash on hand. we have paul sweeney joining me now from new york and cathie woods.

betty: you were at morgan stanley how long? about 10 years, rising from junior director to -- junior associate to managing director. betty: were you openly gay the whole time? trevor: i was. i had a great experience there. i loved serving my clients. i got to do a lot of interesting ipos. i found it if i worked really hard and did a first-class job for my clients, and i was comfortable with who i was as a person, we could get great things done. betty: did you find you have to work harder than others because of your different sexual orientation? trevor: i think so, to be honest. i think i needed to prove myself. to myself and to my colleagues, that i could succeed. by working harder and being more successful, i was able to show them what a gay guy could do. betty: what do you think of tim cook, who famously came out in our own publication of ?bloomberg businessweek" what did you think about him waiting this long? trevor: i have been lucky to be out since 18 years old. even have different journeys and i respect his journey. by be

we will be back with morgan stanley's head of asset.rexit would put a monetary easing in question. my question to you, the last two years, controls in 2 eurozone countries. do we have to start asking that something is wrong? is that the case? guest: the currency union is a weak one. in response to german unification and leaving a plan originally that was after political unification of the euro and we have brought it forward and have not made significant progress of unification. we do not how cisco autonomy or fiscal finance minister. that makes a very big difference. a currency union is solve optimal. -- suboptimal. you have to deal with the expenses of suboptimal. what it happened in the case of cyprus, they lost capital control but part of the program. that is very different to the current situation. you have cap of the trolls that are -- capital controls that are failure. in its quantity, a very different way of looking at things. far more severe. jonathan: on the fx market we were talking about discriminating on the euro pairs. euro

that's our house call at morgan stanley and three is the u.s. sentiment is not very high.ve underperformed the china shares, underperfeormed europe. equities look better. you look around the world, wait, why would i do equities? sentiment is not very high. that sounds like a time to buy not sell. >> when does the fed move? >> our house call officially is december. our chief u.s. economist has it at december. our call is they're going data independent. whether it's september or december, i'm not sure. our view is what's probably more interesting than what happens to the overall market level, scott, what happens underneath. our big move the last six weeks has been to go over with financials. >> i've got you. >> okay. dr. adam parker, i appreciate it. >> good to see you. be well. >> enjoy it as always. quick, wrap it up. >> i think it's the wrong call. more legs in equity. high yield is not where you want to be not with the rate hike. >> he still likes stocks. >> he walked away from his original call. i just think the high-yield bonds in particular is a really bad call. >> an

now morgan stanley saying do not buy the dip. we'll tell you what it could mean for stocks here. plus good things come in small packages. why a few small cap stock picks could mean big gains for your portfolio. the names we're watching in the second half playbook. but first to the tech wreck that was the nasdaq. the index closing down the week. three-day losing streak finish the week. the culprit micron after today's brutal report. could this be a sign for more pain ahead? there's quite a spillover. >> it's not a positive sign. i don't think you can equate it out to tech in general but for the chips let's talk about them real quick. micron obviously the leading culprit here. traded seven, eighttimes normal volume. about 150 million shares today. down huge. probably the biggest one we've seen in micron in quite some time. how do we trade it? i know it's cheap enough on valuation. all the analysts lowering their numbers. everybody's piling on. but given the amount of volume it traded, given the sell-off leading into this move i think just for a trade you're buying micron against 19

they took out a $70 million loan from morgan stanley. he missed an interest payment. an internal issue, hence the filing for bankruptcy. they tried to do a preferred conversion. that the not meet the kind of reception there were looking for. to give you the contrast with business, those gun maker's stocks have done well. what you see gun sales have declined per person, meaning they are not new people coming in and buying weapons, more people are buying a second or third gun. it typically coincides with some kind of news item, for example ferguson and shootings that you hear about. also, this is a residue of what happened because of the obama administration's early efforts to introduce national background checks. scarlet: part of this is tough comparisons. sales really took off in 2013. pimm: to make a note in terms of , about 7% of the business is tied to the u.s. military. that was in the last reported quarter. you take a look at the competition, discounted material coming onto the market. someone has been dumping a lot of discounted product and that has hurt sales.

morgan stanley saying, don't buy the debt.e are currently potentially heading into that bear market territory. mark: julian is here. julian chillingworth, is this an "i told you so" moment? julian: possibly. but it is possibly not something to be too smug about. you need to drill down. this is not the tech bubble in the late 1990's in developed markets, where the tech names in that index are trading on 60-80 times, but below that, the industrials and some of the more old-fashioned companies are trading on 12-15 times. i think people will be looking around for value. i also think you need to bear in mind that retail in this market is even higher than in the state. you are going to see a great deal of volatility. this is going to be painful to some people, including some of these entrepreneurs. you could see some effects of the major banks as well. mark: 105% gain over the last 12 months. some advanced. let's bring it to the other side of the world, the united states. the big issue there is when the fed is going to raise interes

adam parker from morgan stanley. ♪ from we are moments away the closing bell. bloomberg market day. i am alix steel. [bell ringing] it is read a across everyone's. you are looking at the dow closing off by 174 points. the dow and the s&p are closing at one-month lows. the stock suffering their worst day in more than a week. plunged at its session lows. we are kind of in the same zone there. most stocks finishing lower in all of the sectors in the s&p finishing lower. and ugly, gross red day. joining me, joe weisenthal. one thing that caught my eye today, the macro picture -- they reported the low in of earnings and sales rates for the end of the year, but they did not say bad news.

now the wall street journal says morgan stanley wants to add market share.ost profits. it could also turn off investors who like that morgan stanley has focused on less risky activities. that's a look at the top stories this hour. the introduction of the apple watch was expected to be a disaster for companies like fitbit, but so far, it has not been. fitbit had a sales bounce the spring and after the first week of the apple watch sales, fitbit started outselling apple watches according to data from price intelligence. joining me now, bloomberg anchor pimm fox. does this surprise you? if iti do not know surprises me or not, but it certainly shows that people are loyal to fitbit. the first thing, 33 percent of people who buy the fitbit product actually buy it from the website. they have already made up their mind. they are not going to paris and shopping on amazon, the second-largest place that they bought the fitbit. run rateking about a that was like 10.9 million, so let's say 11 million fitbit europe. the price point -- you talk about the apple watch, that

that's the main reason i applied to morgan stanley. with a group that cares about young guys making money. i came into the leak atgue at 19. it was adjust to i became a millionaire overnight. obviously, i had my trials and tribulations. i invested wrong. that's where i lost most of my income. >> like in what? >> real estate. not being able to watch it. i'm playing basketball rung up and down the court. i'm not watching on a daily basis. it ultimately comes to me at the end. to share my story with young guy, i look at the nba and athletes in general as a fraternity. i want to share my story so they don't make mistakes. we need to get that number down you talked about 60% in the beginning, i'm about to be a part of that. morgan stanley set up that very well. i'm excited about that. >> i'm mad at the fed. you are trying to save these guys money. how do you invest conservatively? >> we are. >> how? >> it's dramatically based on what their needs and interests are. starting out, having a tight savings program, having a program for liquidity,

morgan stanley is the top pick and -- >> even though morgan stanley was the best bank stock last year's more room? >> they have the most compelling mix right now. >> in europe a big restructuring. a big reshuffle at deutsche bank. have we gotten to a point have weather the u.s. banks trade in a separate class. >> the european banks have been much slower to rationalize their balance sheets than the u.s. banks. i think we can give credit to u.s. bank regulators to push that along but then there's share shift between europe and american banks. morgan stanley remains my top pick. >> we are minutes away from our live and exclusive interview with the outgoing ceo dick costolo and the interim ceo jack dorsey. we'll be right back. it took tim morehouse years to master the perfect lunge. but only one attempt to master depositing checks at chase atms. technology designed for you. so you can easily master the way you bank. leave early go roam sleep in sleep out star gaze dream big wander more care less beat sunrise chase sunset do it all. on us. get your first month's payment plus five years wea

and just for argument's sake morgan stanley is flat. so a stock that has certainly underperformed year to date anyway not over a year and three years it's done incredibly well. former super bowl champ casey crawford is here. got his hands -- he has his hands in real estate with a successful mortgage origination company. his views on housing, the economy, and so much more coming up next. ♪ i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet? every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members

let's get back to our conversation about greece with the mo cowan stanley -- with the morgan stanleyd of strategy. and a european commission -- over the weekend, the talks fell apart in 45 minutes, and now they are saying that the technical preconditions are there for a greek deal, but then yesterday, they were saying they were far apart. not what they want to see on pensions, on vat, perhaps on the primary budget surplus. a residual gap between these parties? hans: if they are a deal then of course, they will always be there. you have to think about how to reach an agreement and it is almost built on a mutual understanding, and what is the problem here, since the mutual understanding is not here, and then one of the previous commentaries they were saying that there was a risk that the euro and greece were developing into kind of a sleepwalking situation, to sleep walk out of the currency union. that has to deal with the understanding of each other. and he sees this currently happening, so the europeans are coming up with these proposals, but they are a key element. they want to keep

what morgan stanley says, the most viable technology platform.to the universe of the world's most valuable technology. it is -- dan: it's riding a wave that's unstoppable. penetration of increased mobile technology you can take with you . right now, it is a little bit disappointing in terms of what you can do now. you think about it in terms of what you can get. people talk about how it is a negative and it is rude to have. i keep my phone in my pocket when i am out and about. tom: we should note that katie has a nice target on apple. she is very optimistic. brendan: we're going to go to top photos. a thank you to julie, who fly to this. vonnie: some top photos to show you. action around the world. in bujumbura burundi, 200 students slid under the gain of the american embassy amids t protests for the president running for a third term. the ambassador came out and convinced students to leave peacefully. the campaign sparked widespread protests and a coup attempt number two following the supreme court ruling on the affordable care act yesterday a p

that is where drew and morgan stanley come in.a budget that you can do the things you want to do in life. erik: thank you so much. olivia: still ahead, much more including my conversation with gary player. he will weigh in on tiger woods and how he thinks the sport has evolved. ♪ erik: coming up, the latest in the greek saga wi. olivia: the u.s. open kicks off today in chambers day. the course is set to be one of the most difficult to play. on friday i sat down with 1965 u.s. open winner, gary player. i began by asking him about the big money involved with the sport. gary: it is hard to comprehend that it is 1.7 whatever it is. i am delighted for the young people. we tried to improve golf. we traveled the world promoting golf. not like tiger woods getting to me in dollars and $3 million. -- hitting $2 million and $3 million. as long as the players will remember that the sponsors, the public and the media are responsible for this. olivia: what has changed most about the game since your heyday? gary: everything. you do not have spik

economist at morgan stanley. the outlier call on the too big thing tooo the run -- can we make some news this morning? are you going to adjust for december to september or from december back to 2016? ellen: i assure you we are not, although i will promise you we will make some kind of news this morning. how about that? tom: i know you have to do that with your clients and there are compliance issues there. the news out of paris is important, and it speaks to what is behind the market. will the fed catch up with oecd and bring down the growth forecast for the nation? ellen: when any later this month, they will have to revise lower their growth outlook -- when they meet later this month they will have to revise lower their growth outlook. it has undershot estimates quite a bit such that we would have to get 4.5% to 5% growth in the second half of the year for the fed to maintain its current growth numbers that it has put out at the march meeting. those growth forecasts will have to come down, but that will not have

morgan stanley saying now is not the time to enter the chinese market.this china bubble headline. this is the direction, inverse bearish china. this is a new, it is a week old. already up 7%. this basically gives you the opposite. what it does is it shorts the etf. the borrowing costs on this are pretty high. there is a 10% that it cost per year. you are now short. this has seen assets flow and has 64 million only after a week. that is a lot for inverse or leverage products. usually you don't see assets off the bat. >> the fed is already -- the fed is another big looming event. eric: this is the best performer in june right now. if the fed is going to raise rates for september -- we see flows into bank etf's. this particular one is regional. they are going to see a benefit more from rising rates. this etf is about 6.5% this month, and all four bank etf's have seen inflows. you are taking money out of real estate and putting it in financials. >> thank you, have a great weekend. bloomberg market day days starts right after this. ♪ >> it is 10:00 p.m. in sh

we are joined by morgan stanley chief equity strategist adam parker.s you talk to your clients, how is the thinking on greece evolved -- evolving in the last two weeks? as earnings kickoff, you will probably go a whole day without mentioning greece. to me, i'm bullish. i think the economy in the u.s. is likely to be better in the second half of the year than the first. and equities are really not that ambulance. is only a market that 2% off its all-time high. i think people are waiting for earnings to come in. i am bullish. morgan stanley now says a greek exit is the base case scenario and that has no implication for your strategies? adam: it does. two experts on the economy in europe have had a good call about what could happen there and you have this sort of holy of beingthey call it, in the euro and being in power and making demands, but one of those things has to change. ultimately, we think that equities should trade more substantially with european equities. scarlet: what kind of premium? can you quantify it? adam: in the last 13 years you have t

morgan stanley is in the lead. but there are other banks participating.t are the other steps that they would have to do in order to file for the ipo? emily: we do not know what is going on in the company. people are pounding the pavement, trying to figure out if it needs the ipo, or if it is closer. we can certainly be surprised by filings from time to time. but they are preparing themselves for when that time may come and it could happen potentially in 2016. alix: i read that their billion,n could be $16 why bother going public? emily: companies are staying private longer and valuations get higher. this looks like a steel. airbnb potentially at $24 billion. snapchat at $16 billion. what is interesting about uber, there are a lot of potential things that could impact their business model. the california labor commission ruled this week that drivers must be considered employees, which means that they would have to pay per employee for benefits. they have filed to appeal that ruling to dispute it. but if that comes down the pipe, that could have a huge impa

one heard of building a rival to major wall street firms, 3,000 brokers, not quite 18,000 of morgan stanley but he is by a series of small accusation like this over last 5 years, he has quietly built a big nationwide firm, he is one big merger away, in my view, say ubs wants to sell to him or merge with them to run a firm that is up there with morgan stanleys and merrill lynches, the gold in the business of dealing with small investors, monday, likely, deal gets announced. i say likely, you never know what they will final last minute. but we should be reports monday this a done deal, we brought it to you first, yield lehman brothers brokerage firm, one of the last vistages of lehman brothers left at barclays, they kept the brokerage report it was an independent union. >> a lot of people not happy there? >> well, we'll see how they fe feel. stifle is not a bad place to workweek seal what happens. -- work, it will be interesting to so what happens, we should point out where your broker working determines on your products, and investments and where they trade. one of the interesting fascets th

morgan stanley saying they're obviously issues involved. scarlet: one thing definitely moving is the euro. moving the most in three months. down by 1%. it is all about the greek discussion, or maybe not. alix: is it about housing gekko as -- a great note out saying it is about housing, not about greece. i thought it was really fascinating. >> greece has been the factor for the past five years. at what point to you make it a bigger issue? chanting take it down, take it down, hundreds gathered in sweltering heat outside the carolinas it has demanding the remover -- removal of the that'll flag. inside house of representatives met to vote on a budget but decided they will hold debates to possibly have the confederate flag removed from the statehouse grounds. the virginia governor called for the confederate flag to be banished from state license plates. this pays homage to the sons of confederate veterans. will no longerit sell confederate flags in its stores or online. last week's massacre and south carolina renew the debate over the flag. earl

we've also got former morgan stanley john mack here exclusively. remember, he was a big supporter of hillary clinton's back in 2007. you know how that went. he then went on to support jon huntsman jr., you know how that went. who is he looking to now, what duds he think of the anti-success -- does he think of the anti-success rants we've heard out of liberal candidates? his thoughts on that. and, of course, all attention on these markets now that are technically underwater for the year. robert proctor, remember him? the elliott wade theorist who now sees major market crisis if not crash coming. now, owing maybe to a sign of the times in that he doesn't carry quite the influence he used to, the markets aren't really tanking on that. but when you hear the reasons why he's worried about these markets, you might want to listen up. but before we get to that, to brian wesbury, chief economist for first trust, who joins us now. the gist of what he is saying without getting into all the chart gobbledygook is, hey, the party is over. we've had a six-and-a-h

morgan stanley has a stronger franchise going forward over the next intermediate time frame.d have a huge m&a pipeline are very attractive here. >> you guys still like the health care space. we've been talking a ton about this one. just as people wonder whether it's running out of steam, managed deals are happening. >> the m&a activity stayed quite strong. every week there is another significant merger. earnings growth continues to remain strong and ten major sectors expected to be the number two sector for the year. cash flows into the sector remain strong. a number of measures it's getting overowned, not to any extremes. with the dollar rally, we are comfortable. >> every day, another hacking story. today potentially in major league baseball you and michael like this etf p.m. investment cyber security. >> it's one of the true secular trends. whether it's fireeye, palo alto networks, they are all about revenue growth here. if you look at best in class fireeye, their top line is increasing 50% per year right now. that's an attractive place to be. we've seen huge hedge fund ow

do you agree with adam parker of morgan stanley that it's now a good time to buy u.s.tocks gapper professor shiller: i think the market is highly priced. it has been highly prized before and gone higher. , myt now, i have surveys gale school of management surveys of stock market attitudes showing it's kind of like 1997, that people have low confidence in the valuations of the market, but they are still optimistic. i find it very hard to forecast right now. i think it's a little dangerous to be in the market, but that's not saying it will not go up to new highs. scarlet: right, you have some of couldow confidence, which be added fuel for the gains in the market. the strongeve that dollar -- the strong dollar and a weakness in oil prompted many analysts to reduce estimates for this year through the first half -- have they overshot on the downside? professor shiller: i do not forecast earnings. the factors you mention are obviously important. i would mention others that are kind of long run. one is corporate earnings over gdp is at a high level, and that tends to mean the

morgan stanley has added antoine walker to the firm's financial advisory practice.s a checkered past. he declared bankruptcy over 13 nba sessions. erik schatzker and olivia sterns spoke to him ahead of -- spoke to the head of mobile sports and entertainment about why players go bankrupt and the need to educate them about finances. >> i think it is a commendation of things, especially looking at my own situation. coming in the league at 19 years old and not having knowledge of what to do with the money is the main reason it happens. not being educated and not understanding the basic things like taxes, understanding that's only half of what you are really making. i think a lot of athletes don't think about our futures. we don't think about when we become 35 or 40 years old, we try to spend the money to fast and we don't think about our life after whatever sport we are doing. olivia: you had a $70 billion contract and you spent the bulk of that. but you are 19 years old. how do you change that? >> we are teaming up with antwaun and others to change the narrative early.

morgan stanley predicting the newest "star wars" film will be the third highest grossing movie of alld will generate $1 billion for the disney bottom line. the managing director at morgan stanley wrote the report and is with us now from their offices in new york. you say this would be the third highest grossing movie of all time but not enough to topple james cameron. our report next three main points. we are quite bullish on "star wars," and why would you be? there is incredible anticipation and then you have disney's marketing power behind it. the second is putting the movie in context. as big as $1 billion is over the 10 years of the film, we are talking about only a 6% contribution to their net income and earnings per share. and over half of disney's earnings come from their media abc,rks, mainly espn and where we are much more cautious from a sector perspective. you are buying disney stock at a 25% premium to the p group. as bullish as we are on "star wars," we think that is relatively priced into expectations. scarlet: given all of that, what is the biggest risk to "star wars" n

morgan stanley issuing a note the juniorients that high was likely a peek.g 44% for the daily limit in just a moment. it was suspended from trade. betty: that was your asia rep. who is the best ceo and banking here in the u.s.? bloomberg markets did something interesting. they crunched the numbers tournament bracket style. number one, the ceos competed on the most-watched measure of profitability and return on equity. among the winners, jpmorgan's jamie dimon and also john stumpf of wells fargo. you can check out the full bracket on bloomberg.com. they went down the games, the brackets. you guys narrowed it down. mark crumpton is the voice that you are hearing. let's not tell them who the winner was. but who were the last two guys standing? john stumpf of wells fargo. it's a little chung and -- tongue-in-cheek, but it's about profitability. pery: growth and book value share which is very important when you're talking about banks. -- who isnner is going to say it? mark: it was john stumpf. this is one of those things where you look at what he has done for the

meanwhile the settlements with goldman sachs, morgan stanley could be finalized late they are month.y interesting. we'll be watching loretta lynch, u.s. attorney general taking torch from eric holder who reaped some prior benefits. the timing, size of these potential fines, is what remains the wildcard. we'll watch names such as jpmorgan, citigroup, bank of america, morgan stanley and goldman sachs to name a few. >> that makes me thirsty. pepsi wants to stem the slide in soda sales with new strategy. >> okay, they do. pepsi is channel nelling two trendy markets. all natural everything and kraft beer. both of them booming a new line of soda is coming out. it is called stubborn soda. not sure what is with the name but that is the name. we hear it is made from cane sugar, natural ingredients. it will come in natural flavors, orange hibiscus will be one of them. served like from a fountain. they're channeling a different market here. pepsi needs to reverse a decade slide in soda sales. who drinks soda? we have water. we drink energy drinks and things all natural. sandra: kids growing up,

adam parker, strategist at morgan stanley. much more, stay with us.ack in a few minutes. ♪ alix: the international monetary fund tells the fed what to do. christine lagarde moved markets when she urged the world's most powerful central bank to delay its rate hike to 2016. she explained herself in a news conference this morning. christine: we agree with the president of the fed in that the interest rate hike must be data dependent and based on sound and detailed and granular data and analysis as is possible, which is clearly the line that has been articulated by chairman yellen. we totally agree with that. ,hat we are seeing in the data the team is analyzing, the inflation rate is not progressing at a rate that would risk -- i canut that in a second -- a rate hike in the next few months. to make the point, we are saying the economy would be better off 2016the rate hike in early win the inflation -- when the inflation data and numbers would have consolidated. slight is to a risk of a over inflation relative to the 2% rate which is mandated. we believe t

even the morgan stanley's? morgan stanley has been doing better and so has ubs. are still vulnerable. ron: we're doing that as well. we are not just a unique -- look , it's not shopping. i don't want to come off as it being shopping. we have a model that is the meritocracy, blob blob blob. stephanie: i wasn't going to hear that. erik: where do you want to grow your footprint? where'd you want to have more brokers? ron: everywhere. erik: in this market? ron: there is a ton of market share that we can grow into. i don't want it to sound like we want everyone. we want quality people and we want to continue to grow. we just have 3000 and the largest firms have 15,000. this is not a numbers game. stephanie: help us understand where you can make money where others can't. we talked to traders out of morgan stanley or goldman sachs they can't take any positions and make money anymore. you were never in a position to take paid positions and you are making money. how does your formula work when those were saying no, if only we didn't have dodd-frank i would be crushing it?

and we'd be buyers of citigroup and morgan stanley into their post crisis highs. >> citigroup and morganicks, mike. are these banks, and you talked about the "b," the balance sheets and the "a" asset qualities. are these banks smarter than they were 7 years ago? >> look i've been covering this industry for quarter of a century. and the word "smart" i don't always like to use. but i do like to use the term balance sheets, the phrase balance sheet strength. you do have capital that's double where it was pre-crisis. you do have liquidity 50% higher. regulators looking over the shoulders of the banks. so when you look at capital liquidity, earnings stability, additional conservatism i'd much rather own $1 of earnings today than $1 of earnings precrisis. and that's what's underappreciated. >> here's the bear argument. what if the federal reserve raises interest rates and we don't know how the market is going to respond. what if the market and they buy treasuries at the long end of the curve. what if it slows the economy and treasuries are in demand and rates go lower, won't that hurt bank pro

kudos to morgan stanley and goldman sachs, a week down golden price target 19.ifference and say $20 is where the stock broke the upside from last year around early spring. that's where it has to hold tomorrow and it really feels like it wants to go there. when they lose pricing power, it becomes a company. >> for more on micron alex joins us. he has an out perform rating on the stock and a $40 price target. welcome to program. what do you say now? >> thank you, simon, it's no surprise that micron missed. you pointed out the initial pop in the stock and investors were relieved it isn't worse than it is. the scary thing about the guide, it is exceptionally weak and it does incorporate the launch of windows ten. with that as a catalyst micron obviously is not feeling very optimistic. what do you do with the stock here? again, we didn't think it was a surprise. the stock is off very attractively. i would agree that if the stock holds around the $20 level, this is a time you want think about buying it because there are irons in the fire for the back half of the year

what's your take somehow morgan stanley positioned? >> we as you know have co-authored a big report on liquidity, and we are concerned. we actually think that it's not just a question of rates going up and what will happen it's also functional whether there is a risk of the market because of regulations, which have actually caused dealers to reduce repo balance sheets and the sharp observers they'd be. it would be my single biggest concern, the market structure. it's hard to quantify that look at individual days of things that happened like october 15th and see that you're getting this gap in volatility which is not good. >> we want to thank you for stopping by to chat with us today. we appreciate it. we've been speaking with with the president of the morgan stanley institutional securities group. back to you. >> thanks so much. little bit of a cautionary note there on the markets. that was really interesting. >>> time now far cnbc news update let's get out to sue herrara. >> here's what's happening, fifa president sepp blater will res

julie: i will start with a call on the airlines are morgan stanley.ll on the industry which has not performed well this year. the one-year chart for these but they have come down for the year to date. pulled back into a bear market even though they were up over the past year. over five years we have seen a climb in the airlines. with this recent underperformance analysts question whether the run that we have seen and the declines we have seen which one of these is the market getting right. morgan stanley says the industry structurally has changed and is better positioned to weather any kind of downturns even though there has been concern lately about capacity expansion and pressure on pricing. in terms of where they shake out for the individual airlines they are looking at particular favorite airlines at delta united as well as alaska air and you are seeing the stocks are up in the premarket in terms of equal weight. they're looking at american as well as jetblue. they say jetblue has had a great run. there are underweight including southwest, hawaiia

we left out a couple of guys in the middle, but morgan stanley in the top, you have we will see, blahah, blah. now, you see raymond james and stifle. >> that's the wrong list, though, because we do break the top tin, that's quantity not quality. >> if you combine with raymond james, you are in the -- not just a regional broker, you are rubbing up against morgan stanley. a lot of people tell me that you built this. you're the longest serving ceo in wall street, how long did you say? 25 years? >> 20 years. >> okay. i haven't heard that in a long time, 20 years for a ceo on wall street, but you built this firm, moved up the ranking piece by piece. are you ever -- are you going to do the there was transformatial deal? >> you always tell me things that are you think i'm thanking i'm never thinking. this one is not going to come true. raymond james is great firm, great friends of mine, our business, it's like trying to merge companies that are too similar, we have big institutional businesses and at the end of the day the numbers don't work. they're great competitors, but i don't see that t

morgan stanley, bank of america deutsche bank, hsbc jpmorgan, suntrust -- all of them lining up, somef them committing more money. uber is half a percentage point below what competitive rates are out there. is it a sign of uber moving towards ip you? o? we have paul sweeney joining me now from new york and kathy woods. paul i want to start with you. why is uber taking out this line of credit if they don't need the money? paul: it is the first step of going public. we have seen this move in the past from other early-stage companies, tech companies that are really hot on wall street. by going to your banks and singing we want a line of credit which we think most large companies should have it engages shows that a lot of these banks are committed to the company. they look at the commitments made at the credit companies as a precursor, a gauge at how much the companies could depend on these investment banks. yes it is always nice to have a lot of credit in the marketplace before going public but it is also a little bit of a road test. emily: kathy, you think uber could use this money beca

in the volatility we have seen, morgan stanley is saying it is not a buying opportunity, buying does not apply here, but that said, there is a great story out on bloomberg today saying there are $21 trillion on deposit in chinese banks and these are people who have all of this money because of the incredible acceleration of the economy and now the country is invested elsewhere. this could spur growth globally and in china. maybe it is not so crazy. alix: good stuff, guys. really appreciate it. lisa, thanks for joining us, also wells fargo's scott wren. now a quick programming note. some exciting news. joe: we are starting something new next week. it is a new look at the markets. it is called "what'd you miss." alix: there will be charts. there will be a lot of fun. coming up, we will be talking about the latest headlines from france. ♪ alix: welcome back to the bloomberg market day. i am alix steel. now to some of our top stories of this hour. the supreme court makes history and caps the biggest civil rights transformation in history. the justices rule 5-4, with anthony kennedy writi

morgan stanley up to 60%. what is your call? >> i think the majority likelihood is that they stay within the eurozone. however, public polling has taken an interesting twist. if you ask greeks if they want to stay in the eurozone, about 80% say yes. if that is the only question. if you say do you want to stay in the eurozone with these conditions of austerity, support drops significantly into the 50% range. this tells us it will be a close call when the referendum is held sunday, and it is largely going to depend on the wording of the ballot. >> how do you think things play out? do you think there will be a referendum? have you think they will vote? -- how do you think they will vote? >> i think there will be a referendum. even though it is a short time to organize a big vote like this across the islands, i think it is so important. we are working with a situation where the banks are shot. it is a terrible mess. that makes things terribly uncertain. when people are being treated the way the greeks are and when the e.u. is scarin

morgan stanley, new high. wells fargo, new high. suntrust new high. key corp. comerica, fifth third. let me show you this full screen. big cap banks up about 11% this quarter. that is way outperforming the s&p 500, only up about 2.6%. it helps that rates moved up. interest rate sensitive groups moved down. you have reits down. dow utilities down. home builders all down. that money coming out of those interest rate sensitive sectors proved to be money going into the bank group. the bank etf has been moving up. investors have been buying into this story what's moving banks? number one, improved economic sentiment. number two hopes for higher rates. specifically short-term rates. good news is the market has reacted to the idea there is going to be short-term rates. bad news is it hasn't happened yet. if it does i talked with a couple of traders. they believe there could be a 20%, 30% up side in some of these stocks. if we get modest moves along the lines of what the federal reserve was talking about. only problem here market's anticipating that. it doesn't matter.

the broke he is, morgan stanleys of the world. >> new highs. >> citi, jp morgan, goldman sachs, morgannley, aig. >> incredible. and you know, everybody said it's going to be the regionals. we can see right now, it's the biggies as well. think the biggies are the ones that matter most. that's what's really putting this market and actually giving it a bit of a move to the upside. you look over at some of the other areas, look at the way the pharma names are trading now. you look at the way eli lily, this big spike in actually continues to move even higher, a new 52-week high almost every day this week. think it's incredible do watch that area. because that remains a very inexpensive area along with the biotechs. >> does that mean if the financials keep working, take this leadership role. it nullifies a correction that some people think could happen? you got the financials working. financials taking a leadership role. some of these other big areas of the market start performing, what causes the correction then? >> as you know, because you've been right here on the desk pounding the table

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we're seeing it in the regionals, in the supers, many of those involved, the goldman sachs and morgan stanleys of the world. we're seeing paper just about everywhere in the financials. but don't discount health care, this is the spot to be. >> you guys hold your thoughts, i've got to go down to washington, d.c., breaking news from eamon javers, the fcc plans to fine at&t $100 million for misleading customers about unlimited data plans. they say it violates transparency obligations. the fcc saying that its investigation alleges that at&t severely slowed down the data speeds for customers with unlimited data plans and that the company failed to adequately notify its customers that they could receive speeds slower than normal network speeds, that at&t advertised. this conference call is ongoing right now. scott, we'll listen to it and bring you more details as we have them. >> eamon, thank you so much. down in d.c., so much activity. jim lebenthal sitting with me as well. i want to get to our first guest of the day, the number one ranked strategist by institutional investor, want to find out wher