as you look forward that probability will rise. t's face it, were closer to the end of this economic cycle than the beginning. >> will stay there. will come back to you. j.p. morgan asset management team. up next, the grace and good of the city with francine lacqua. the future of global banking. ♪ [ soft music ] e.t. phone home. when you find something you love, you can never get enough of it. change the way you experience tv with xfinity x1. mark: welcome to "the pulse." i'm mark barton. let's get the bloomberg first word news. here's nejra cehic. nejra: saudi arabia's new oil minister says the kingdom will probably keep producing crude at near record levels as the world's largest exporter sticks with a policy of defending market share. the chairman of the state producer saudi aramco took over from long-standing oil minister this weekend. crude prices on the rise after wildfires in canada's oilsands region knocked out more than a million barrels a day in production. the country's biggest energy companies have declared force majeure

that's why i think when you look at it now the market's gone up, giving them the green light. >> you make the case that the market should be looking at things and investors should be looking at the picture more positively than they are. >> what they should be doing is allowing for the possibility that there is also upside risk in this market. when savita mentioned the big concerns, a lot of people at home are nodding right along. that's why you see six weeks in a row by her firm's calculations, six weeks in a row of heavy outflows from stock mutual funds and etfs. the retail public is saying i don't want to be involved. the pros are involved. the pros are taking what the market gives. it's interesting that in general, people are not really looking -- >> positioning is the reason to be bullish on this market. i agree. we have seen outflows but you know, i have to say i don't think that everybody was all in on equities to begin with. so we have been in the most hated bull market we have ever seen. this whole bull market we have seen outflows from stocks into bonds. i don't know if that'

i think, if you look at -- you know, if you look at platforms nobody agrees 100% on the platform. you look over the year, there are always things where there's a difference between the platform and maybe the person's views. but i think we are very close on many of the things. look, on trade, it's good deals as i said. on other things that -- you know, we're talking about, i want strong, very strong on the border. i think most of these people are pretty strong on the border. >> but paul ryan for the tpp, you are not. >> i am for the tpp. i want a much stronger deal and does and allow the countries to manipulate their currency and this does not allow for that and

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you can use this saying the port go function. betty: a closer looks holdings -- at paulson's holdings. asking, why who are is home depot doing better than a change weretail, see in a comparable acis on sales. here you have a remodeling basis so it is a survey of people who do remodeling for a living. these have tracked pretty closely together at least directionally. it is not just people like you and me, it is people who do this as a profession. that is feeling some of the demand. betty: it is interesting, they pretty much do move in lockstep. i feel like today we are focusing much more on retail and housing numbers. i saw this chart earlier. i'm going toani, have to hand it to julie. matt, let's keep you in the loop. what do you think? david: i like -- chart. like dani's i am going to judge a chart for a chart sake and i think julie is the clear winner. ♪ york andnoon in new 12:00 p.m. -- a.m. in hong kong. occam to bloomberg markets. from bloomberg world headquarters in new york, i am scarlet fu. here is what we are watching. stocks are slipping th

if you look at fed fund futures, it's not. i think you have a little bit of a conundrum. >> we have breaking news on alibaba. >> good evening, simon. yeah, we wanted to fill people in on a story that is just breaking now. started breaking in japan 20 minutes ago. soft bank, 32% of alibaba shares are owned by softmank. it started back in 2000. soft bank is going to be selling roughly $7.9 billion worth of its alibaba stake. taking it down from a 32% level to about 28% when these various transactions are done. let me quickly tell you about the transactions. the key one is the issuance of what's going to be a $5 billion mandatory exchangeable trust security that will be exchangeable when it -- in three years. it's a three-year term. when it turns out in three years, you'll get alibaba shares. it will have the effect effectively of having softbank go to the upside in three years, but not actually suffer any of the down side. not clear exactly what other terms are associated with that convertible security, including the premium and/

where in the world are you looking to play those plays? across amandel: multi-asset portfolio, you can think about it is credit, high yield, which we are overweight in the u.s. and europe. it you can think about it in terms of, fixed income. those are markets like the u.s. treasuries, australian bonds versus german and canadian bonds. everything is moving sideways, you have to look for ways to capture that differential. vonnie: are you looking at corporates? even at thesel: valuations, you are looking at reasonable expectations of single-digit returns, total returns, so even though things spreads have, tightened, valuations have changed, you're looking at those returns. that is within shouting distance of what you would expect. that is ok. vonnie: we were showing our it has been difficult. i guess it is always difficult for emerging markets somewhere in the world. poland and turkey are getting hit hard. where are you looking internationally? benjamin mandel: a lot of it is driven by the fact china has definitely been in a period of short ru

if you look at the movements of the dollar recently you will see it moving higher.t doesn't really want to have the dollar moving too quickly, in case there is a confusion in the markets about what it policy is. to your original premise, that this is a good thing, the fed is raising rates because the economy is better -- europe, japan as well, they are looking at not only stimulus but negative rates and extending even deeper. >> i think japan is probably passed the point where monetary policy makes a real difference. if you look at the statements by governor kuroda, he is looking for fiscal stimulus, at the government after the elections come through because that is all they have left. angie: i guess we're probably going to get that as a response to the earthquake. and also word now that likely we are going to see a reprieve and not get the sales tax hike. >> it is tough because they do need it. they have a long-term budgetary problem is debt problem they need to finance in this population is getting very rapidly older did you have a q1 surprised that there's not mu

francine: when you look at inflation, the u.s. may overshoot. ere that the u.s. is doing right? i know it's wage growth. what can we look at the u.s. and replicate? bruce: the basic story is europe and japan have had it two or three recessions since the financial crisis. the u.s. is had a steady stream of growth. theon't want to worry about growth. what's happened is we've been growing a little over two. that's been decent growth relative to the weak productivity performance. that onet's important of the real problems in the world we are going to have is the u.s. expansion which is getting tight and mature. that's a very different stage in their economic cycles. if it overshoots, does that mean we are looking at a policy mistake from the fed if they don't start normalizing? bruce: it's hard to know right now. i think it's reasonable after having had inflation so low for so long to let the labor market run and let inflation get a little bit higher. whether you couldn't control that are not as the key question. taking that risk, following that path

you are looking at financial conditions. d is the fed hike telegraphing that financial conditions will tighten and hurt the fed, but you are not seeing it? matt: if you look at important financial expressions that cause a lot of tightening a few months ago, you can kind of see that in this chart, equity volatility, treasury market liquidity, and then you also have the probability of deflation implied by markets and investment-grade credit threat. this shows the biggest tightening essentially in at least four years. scarlet: and it goes up. matt: exactly. we are finally getting back to normal after four months of significant tightening. if you look at what the fed is saying about it, they are treating the slowdown we saw in the first quarter and the fourth quarter of 2015 to the financial tightening. it is not clear they are ready to test that again. that is why june or july may be a little early for a rate hike. we will have to the. oliver: we were talking about this earlier, the fed has gone hawkish on a dime when people are

>> you want to apply a trend on many different time horizons. looke past year, the past six months. if you are building a type of strategy like this you don't want to focus on one specific time horizon. on longer-term time horizons. do we expect to see a reversal? we pointed out that bond trend followers are having a gigantic year. equity, not doing so well based on your model. you expect some of these to change? >> it depends on the underlying market. what's going to be important is what the fed is going to do for the bond markets. in terms of what the fed is going to do i don't expect them to hike any time soon. that should be good. all right. thank you very much for joining us. diamond coming up, a discovered near the arctic circle. we show you where it was found. ♪ alix: what'd you miss? the largest gem quality diamond in north america. , firefoxet pendant will likely make someone pretty happy. as interesting as where it will wind up. >> 130 miles south of the arctic circle the ground is blanketed in snow and ice. the landscape is more water than

now it looks like it's going to happen. to you further monkeywrench is being thrown into this, or does look like it is on? >> i'd say we have seen a pretty crazy six months to say the least, but i think the impeachment is on track. we don't see any major surprises, although we are talking about brazil. that we think overall we do think the impeachment will happen tomorrow, and with that, the following day, they'll be able to begin to take brazil. scarlet: the government is appealing once again to the supreme court. you expect them to intervene in the process? >> it's a possibility, that the court has traditionally refrained from what they see as intervening in other branches of power. they set up the rules earlier this year, pretty clearly. now my educated guess is they'll avoid weighing in again. i think this is a matter that pertains to the senate. scarlet: i ask because so far the supreme court has focused on procedural matters when ruling on the impeachment. is there a chance that at some point it might be tempted to intervene

francine: do you feel it getting better when you look at european growth, when you look at european spendingple seem to be buying more cars? we have the car data but you are a barometer because you are cross-border and you look at other parts of the world. actually, yes. we do expect that europe -- has development in 2016. the first quarter, was our customers a little bit weaker inner automotive business, but we see that the markets should stay on a good level in 2016. the same is true for the u.s., north america. good start. should develop for the rest of the year. as well as the other big automotive regions -- china with close to 5% growth. we expect this continue -- to continue. we expect the business environment for us in the automotive in the next three quarters should be good. francine: how do you look at the tesla model 3? andtesla has become cooler cooler. do you supply tesla? does it mean that it is the cooler german cars that will lose out? >> well, actually, yes, we do supply to tesla. we will supply to the model 3. yes, it is an attractive car for the electric market. it is far t

you think that the end is near for tesla? that's basically what you're saying? >> look, i kicked it off saying he doesn't understand where there could be a catalyst. i don't think there's a catalyst. and if you think that oil is going south, where is tesla going? definitely correlated. >> i agree with -- >> that's in the phone call, by the way. >> i also said oil will not trade at 50 and i'm still alive. >> you are alive. >> the only pushback for the chairwoman is she said she doesn't like when the ceo comments on the stock prices. he's talked about being inflated in the past as well. so i like the fact that at least this guy's aware of where the stock is. and actually giving the public, hey, i think this is up in the ether. >> as we head to break here, look at shares of solar city. the other elon musk company. they're down more than 17%. this is just in the after-hours trade. it must bring a smile to jim's face. i'm melissa lee, and you're watching "fast money" on cnbc. in the meantime, here's what else is coming up on fast. >> that's what a couple of ceos have done re

if you look at the s&p 500, you will see what looks like some swings, but you are talking about narrowing of the index here. drop of volume going into the holiday weekend. we are not seeing that much on the big scale. material stocks are down as a group. financials as well. defensive groups are doing better today. that is the push and pull we are sector level. on the individual level, stocks facebook is higher as is apple and costco. companyising after the came out with earnings that beat estimates. antiscience yellen, regarding what they are expecting in that event? uptake -- uptick in bond yields. we heard was seemed to indicate the fed clearly saying the market is not pricing in as many increases as could happen. that is at least taking a pause going to her talk tomorrow. a little drop in the yield. futures, interest rate we see a little bit of a drop. big upward move. similar movement there. 1%.s down by one quarter of the recent trend has been up in yields. >> mark crumpton has more from the newsroom. mark: the republican presidential nomination is in hand for donald trump. ofthe hor

you look gorgeous. >> you sure do. >> oh, you look beautiful.k at camera 12. tell us about the hair. >> of course, that's a great haircut. it's shapely. she had a perm which made her hair a little darker but added a few highlights to keep the brightness. >> i love the color. >> it's lovely, isn't it? >> you're about to pass out? >> i'm sitting here thinking man, she's beautiful. that's awesome. you guys did a great job. >> we are so excited. >> this outfit, i love this. >> i'm so happy. when you're building a wardrobe and starting over you want basics. a little statement necklace and jeans. >> love it. >> join your family. congratulations. our second lady is linda slate who is turning 74 today. happy birthday to her from houston, texas. she is, get this, a retired hairstylist. she has one son, two grandchildren and is currently looking for love. linda says she dresses very casually, typically wearing shorts when she's at home. let's take a listen to her story. >> you have been waiting 74 years for this. why is it so important to you? >> oh, i wa

melissa: that is question number one, who are you looking at for vice president. s not watching, don't worry. give us a sneak-peek. what are some of the other questions you would ask that would give you insight? i agree with you, he says i love the evangelicals, like i love the women. i love the hispanics. feel as little patronizing and insincere. >> i'm not sure he knows the difference between dunking and sprinkling. that is okay. melissa: yeah. >> they get it. but again when you look at the numbers, says evangelicals love me. who are those evangelicals? i don't think polling broken down what that word evangelical means. folks who go to church on sunday, every sunday, these folks are still undecided. melissa: so what is question number two? the vice president. >> actually i think supreme court more than the vice president. melissa: then what? >> the vice president really gives you an idea who donald trump is they want somebody with a sort of a track record. donald trump doesn't have track record. melissa: there was list of supreme court. is that satisfying to you?

if you look for it, you will find it. that is a different type of death cross. g at the 200-day moving average. here,me inside bloomberg and this is the relative strength of the s&p 500 by sector, and what you see is a move away from these bond proxies, which is consumer staples, utilities, and to some extent, the telecoms, as well, because of their fat dividend yields, super juicy in this era of low interest rates. boards gaining momentum meeting? the leading quadrant right here, you have energy stocks and material stocks. industrial seen to have rolled over and are now moving into the weakening phase. of course, if the dollar continues to strengthen, you might see more rush on prices and then on these sectors. alix: one person was saying he would have bet on the cyclicals and would have done well this year. the rotation. all right, coming up on "what'd you miss?." the u.k. ♪ donald washingtonn, trump arrived with a meeting for henry kissinger. trump's has looked to sharpen his foreign-policy knowledge.it follows last week 's meetings with republican leaders in

>> if you look at the duration risk. technology that continues to reduce inflation risk. the question i think we need with regards to risk is the majority of our clients, talking about pensions, the liability they have is the retirement. people are living longer. if you look out, trades below 3%. liabilities that are 5, 6, 7%. when you have to spend more in health care. that is a risk from the investment standpoint. david: one thing we know, we will have a new president, november. if you look at the candidates, there is reason to believe either one of them would run a higher deficit. is the bond market figuring that in? in the clinton administration, it went the other way. market -- is the bond market pricing in? >> with regards to the deficit, i do not think it is a bad ring in the short term to run a higher deficit depending on how they are going to spend. the economy, we have talked about the transition with the types of economy we have today. it is probably a healthy thing for them to run a higher deficit if they are

you have syngenta being bought by jchina. and we know that basf was looking. so they will argue that they have to do this dea in a coolidating industry. >> and alex, on the issue of additional firepower as you touched on for other acquisitions, we heard from the ceo this morning saying, yeah, we are still looking at bulton, but does this mean fewer acquisitions in the drug space? >> yes, it could. and obviously, bayer is largely in the drug space. but, you know, the big picture, they are going to get this deal through to see how much they can actually come out in synergies. the highlighted 1.5 billion usd of synergies might be quicker. it all depends on whether they can use this deal to get a height on dupont. if they can do that, then perhaps maybe they'll have the firepower. i know they are trying to keep a better credit rating, we'll see what the credit rating agencies say about this. and the phrma space, there's usually appetite for deals due to the value that the deals make that you have seen in the past. so look, if they say they have space to keep doing

they are being sent to look into the to bank banks -- deutsche bank. you are looking at u.s. shares of deutsche bank and you can see they took a leg down on these headlines, now off about a third of 1%. perhaps another legal nightmare for deutsche bank as it tries to figure out what it strategy is, going forward. deutschenvestigating bank and as a result, massive losses run 2013. we will have more on this story, after this. ♪ with: -- >> we are back the global head of rate strategy at gdc -- tb security and we are talking about this campaign rhetoric. what happens if the federal reserve is just crying wolf? what kind of people does that have along with the brexit vote coming up? >> this is all in the backdrop of failing growth -- failing global growth. i think they will lose some credibility as they don't explain what happened. in march, at least for us, it was clear that there is a mandate. i would argue that there is an unofficial current mandate for the fed and they're looking at inflation and financial conditions. financial conditions unless they tighten significantly, eff

if you look at maryland. if you look at all of the states i won last weekend, i won five of them including delaware, rhode island, pennsylvania, maryland and connecticut. >> no. i understand your points, the numbers, i'm breaking 60% all the time and we have, you know, competing against two other people. >> right. but let's -- this isn't about the numbers. our numbers, you know are always spot-on in terms of analyzing it. i'm talking getting bigger than that, people within your party, questions about you and questions if you were to be the nominee. you said, clinton's statement that, i know how to deal with men who go off the reservation. you said two things about that. one, you said, no, she doesn't. she doesn't do well with those men. i want you to explain that. you also said something i thought was curious to fox yesterday. you said, i think hillary clinton saying that to me or about me is inappropriate. how can you find her saying that inappropriate, but saying that china's raping the u.s. is, you know, t

what are you looking for in that report? t: we have already kind of taking -- taken the week off. vix has price itself down to our needs to be. coming in wednesday, you will have people starting to worry about nonfarm payrolls and people coming back from vacation thinking about the federal reserve. we have had short covering because people don't want to be short over the weekend and you will see people thinking that things move a lot quicker, maybe even a little lower as nonfarm payrolls come out, especially if they are hot and personal income is hot. is something the fed has been watching as a missing puzzle piece. the trade you are looking at reflects the view you are talking about. you are looking at a bearish spread on the s&p 500. i want to own middle of june, right around that fed meeting because i think volatility is going to increase and i want to sell right before the nonfarm payroll. puts andg the june 15 i'm paying about nine a half dollars for that. then the market keeps going. this is a little more conservative b

you want to look at percentage of daily trading volume and how much of it. held by 34 hedge fund managers on an uncle of you stock that in their heart oncology -- on an stock that in their heart of hearts i know nothing about. scarlet: i wonder how much of this is due to the fact that a lot of these tech funds have gotten too big and now they are being pushed into a lot of the same names. fabio: you are also getting of the -- with a lot platforms, you're getting younger and younger managers, -- with less lexis experience who also tend to group at a higher level. when you look at the managers who do it because they believe in it, i don't think you have seen bill ackman do a me too tra de. lead dog.proverbial i love apple. month, he doesn't care. he doesn't care what the press thinks or what the world thinks. he does what he does. alix: the problem is you look at something like the pershing square, staunch defenders of valiant. but there were other hedge funds in there as well. when the other hedge funds get redemption requests, they have to sell valiant. this

and downstream assets you are looking at? s a little bit more detail on the health care, the kind of assets you would look at their. >> it is absolutely the downstream assets within the health care sector. you know, you can never be precise about the timing of when those things are actually going to come along, but we are confident that we have built relationships and that we are a good partner when they do come to dispose of downstream assets. that is very much part of their strategy. we would be looking at lpg businesses and retail petrol station businesses as well. anna: you talked about the energy side of the business, how it has been driving results. what about the other parts you have seen weakness in. for example, technology. are you scaling back investment into technology? >> we have been very fortunate for a number of years that there was extremely strong growth in that area and we had a particularly strong market share with those suppliers in those categories. but we believe that the business is very robust. we are c

if you look at it two to three years from now, is it going to be $700? might be $500 stock. >> didn't we learn that last week, what the real game is where you had online sales, if i recall, over the last year were up i think ten? >> but -- >> straight retail was down 1.7 or whatever? i will look back. i think those were the numbers. you get the point. >> i get the point. when apple went to 130, people were like this is going to 200 because margins will expand. you do hit a wall. you have large numbers. i'm not saying i want to short the stock. i'm just saying i'm not going to -- >> private label business, though -- >> would you buy the stock right now snnchlg now? >> i'm not long but i would buy it. i like to buy amazon on pull-backs when they disappoint. here's what i'm going to tell you. the whole purpose of going private label is because that's where there actually are margins. amazon reselling food from other companies, you're right, there are no margins. what they are doing is about margin expansion which is not something you see out of amazon. if t

you. >> whoa! [ cheers and applause ] >> oh, my gosh! >> look at you! you look awesome! d to believe it's the same person. a lot of us when we eat, we eat emotionally, you're not paying attention. is that what was your issue. >> you just ate. i wasn't paying attention and -- >> part of your craft is your baking. >> exactly, i enjoyed baking so i had a sugar addiction. >> she walks. tell them about that. >> walking is my goal. i walk and now in the fall i'm going to do the avon 39, the challenge to walk 39 miles in two days. >> good for you. >> did you start off with -- i can only imagine short walks and they just got greater and greater? >> my first walk was like ten minutes out the door and ten minutes back, so 20 minutes. yesterday i took a seven and a half mile walk. >> so i think we have -- i know you like baking and you figured out a way to incorporate your baking and still cut the calories. >> did someone say cookies? >> skinny cookies. instead of using oil she has used pumpkin in her cookies. >> there you go. >> just a little tiny bit. >> would you like a quarter s

in a way, if you look at the inflation expectation of the u.s. the said doing less, inflation -- hence, interest -- rishaad: [indiscernible] guest: anymore -- rishaad: great talking to you. [inaudible] ♪ rishaad: you are back with "trending business." heads it is on the banks are discussing challenges as well as opportunities. what is really topping the agenda at? you know what? lori take a look at the theme, global is setting the tone. it is about taking the islamic banking world forward. this is the 2 billion dollar economy poised to be a $4 trillion economy by 2020 if issues like sustainability and millennials are addressed. millennials can form 50% of the business. the baby boomers do not really understand. islamic banking is not taking millennials into consideration. lots of discussion on how syntax -- that is not really happening in the islamic banking world why? because infrastructure is not in place. regulation is not in place. it is hard to embrace technology in particular in a sectors like islamic banking. those issues are being addresse

can you make any sense of this? lookt the employment numbers and add up the actual wages combined with the increase in employment, you have money available for consumption running a rate of close to 7% up. i think that's why retail sales are good. folks are not saving all this money, they are spending some of it. i think the retailers are looking backwards as opposed to forwards. they are not paying attention to the numbers. betty: what do you mean? what they're looking at they experienced in the first quarter, and everyone knows the first quarter is a bizarre quarter. people are hiring in buying and all kinds of things. betty: fed officials are saying that sort of like what you are say -- i think people are underestimating the u.s. economy. eric rosengren's set this as well. you hear his exact comments on this. >> many on wall street, and if you look at the financial futures, they are expecting at most one increase over the course of this year. that would be consistent with an economy that was actively -- actually prett

you. >> look at the democratic side of the race and it's getting even more interesting. d close than the republicans were over the last few months. what do you make of these new polls? >> well, first of all, i don't think they signal a really close race by november. i think if you look at the trend line, they signal that trump will probably consolidate and hillary will probably continue to stag nature and the odds are pretty good trump will win, like 1980, by a surprisingly big number. this country's had a long, long time to get to know hillary clinton. she cannot build a base that works. people don't believe her. that's actually getting worse, not better. of course, she has a real civil war. everybody said republicans were going to have a problem. bernie sanders just endorsed the primary opponent of the chair. sanders is committed to going all the way to the convention in a really bitter fight. i think the democrats will be shambles by the end of the summer. i think younger reform-oriented democrats either won't vote or vote for trump and that poses a huge problem for hi

alix: you look at loans from many peer-to-peer lenders. r best judgment, was this an isolated issue wher or do you see hints of this elsewhere? >> i think the treasury just put out their white paper today which calls for more transparency within the space, which i think has been a common -onee over the past x months year. we need to institutionalize this nascent asset pass, and bring in more transparency to make sure the process, both for buying the loan and servicing of it, is done at the same quality as other asset classes before. this is an emerging asset class. it has huge potential, but is relatively small. inrlet: these companies are their infancy. will you be changing the relationship with lending club in any way? >> i will not. i have a very strong relationship with the person who took over the executive chairman , who i think has a great relationship with the technology community, as well as wall street, given his back ground from vsat. when i woke up, i think everybody i talked to was shocked. the plus that lending club has leader

we are expecting -- if you look at the numbers, the opposition, the numberssenate, we're looking at our0-60 at least. then, of course, this begins this 180 day impeachment trial that will then take place in the senate. for that, the opposition needs a 2/3 majority to finish her off. they will most likely have those numbers. francine: are we surprised at house with it has been? it looks like -- surprised at how swift it has been? john: yes. of thrillseen a lot and spills a longoria. monday and tuesday were two of the most dramatic days i can remember -- there has been a lot of thrills and spill ed. the interim head of the house try to annul the vote from last month. that said brazilian markets into a tailspin. he reversed himself at midnight on that day. one of the weirder reversals i've seen in recent times. follow the narrative thread through all the noise, there is a clear direction to this. the constitutional process -- it is a very difficult one for rousseff to fight. and one is market reaction the huge backdrop of the olympics. the torch has been late in athens. august 5 is the jum

if you look at the u.s., you need infrastructure, interest rates are low.re's a good case to ramp up infrastructure spending. if the debt is created to fund that sort of investment, then it is probably ok. i think we wait for the details. there is a good economic case if it is heading to infrastructure. tom: when i look at the word austerity, austerity in england is different than austerity in europe, is different than austerity in america. is there a thinking of austerity across asia, is that even part of the discussion across the asian nations? err onn asia we tend to the other side. south korea, even if growth is low and global trade has not recovered, they are still trying to run a fiscal surplus because they think that is good fiscal policy, so you are not getting the policy mix right where you have an easy monetary policy. outside of china, it's actually 2009, igold star in still think the instincts in asia are to be very cautious on the fiscal to save a lot of money. that is a hard habit to break. francine: the problem in china is these ghost towns s

when you look at the world, at u.s. you think of brexit and donald trump, it looks and feels like a world where countries are inward looking. >> the view of the organization i work for is that we are moving towards a g-0 world when no power can really lead the pack and can impose its own roles the rest ofn participating country. i think obama's message is that it need not be so, that we can achieve something in that 70 years given this situation we were in 70 years ago. that is not the direction we seem to be going and currently. a lot of countries are turning in on themselves. feel that globalization is not doing much for them. that is not the direction we feel we are going in. francine: charles lichfield. "surveillance" up next. i will be joined by tom keene. ♪ ♪ francine: waiting for yellen. the fed chair speaks that harvard -- at harvard. drops aommuniquÉ warning. president obama at hiroshima. he delivers a historic speech. the first sitting historic president to set foot there since the u.s. dropped the atomic bomb

let's take a look into our deep dive. you can find the falling charts using the function at the bottom of the screen. joe: i'm looking at the labor market going back to that jobs report we got this morning. this is a pretty cool chart, jeff, a bond manager, says this is a great indicator to perfectly time the start of the recession. it's when the three-month moving average of the unemployment rate crosses over the three-year moving average. i hadn't seen this before. he talked about it yesterday at a speech in new york. look at this, the last three times we had recessions back in 2007, 2001 and the early 1990's, it perfectly timed to ine moved across the green line. if it moves again, we're nowhere close to the start of the recession now. things can change. that was a pretty striking chart and shows how trends change and we're a long way from any sort of imminent recession. alix: hard to interpret the report. joe: it made people nervous. alix: i have a chart with two good things, average hourly earnings and aggregate hours wo

do you agree with the general? >> lookaid already, if you put the pieces together that we know already, it is very, very suspicious as the general said. the height of the altitude, the catastrophic nature, the a-320 is not known for suffering catastrophic failures. the source of the flight, the destination and i think the most suspicious thing is the fact that it went to all of these different airports in the last few days. including many airports in north africa that are not known for their tight security. so, you know, we do all kinds of great stuff with passenger manifests and the clearing of the individuals who fly the aircraft or the cabin ground, but it's the ground access. the people who maintain it, the people who put on the bags, that's a very serious vulnerability for any western -- >> anybody who feels it's terrorism it was donald trump, the presumptive gop nominee. he put out a tweet that says it looks like yet another terrorist attack, airplane departed from paris. when will we get tough, smart and vigilant? g

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guy: you look at countries that have pegs and you look at the problems that i have having.ing increasingly clear that most of these pegs are unsustainable? clears: it is becoming that that is true. we have seen nigeria hike rates, and that is an attempt to hold the currency in place. kenya yesterday cut rates 100 basis points, saturday pakistan cut by 25 basis points. that is a function that they can afford to do so. they have the floating exchange rate. in fact, they have currencies appreciating. that is what nigeria would like to do, get the currency to a positive place. guy: how much is this affecting the oil price and the difficulties they are having in the delta? charles: this is certainly about the oil price and the delta is not happening, but the underlying issue comes back to the president himself. the last time he was in power in 1985, nigeria's economy was growing at a percent. -- was growing at 8%. thehink it was to do with oil price collapsing in 1986. the difficulty there is the president's fued is influencing the currency debate at the moment. guy: where is th

if crude is noise, what are you looking at? environment is too strong to use. i use it myself, but i cannot think of a better word. mind, the catalyst is a comfort level that the global economy is going to continue moving ahead at a slow pace. growth here in the u.s., inflation moving at a slow pace. it is investor confidence, consumer confidence. it is a comfort level that is really what i would call it that we believe would help drive stocks forward a little bit from where we are right now by the end of the year. amanda: in other words, coming to terms with the facts that we will have low on the long for gross side. you are not looking for stronger growth to act as an upside catalyst? scott: we will come in at 2% gdp this year. we do not have an official 2017 number out there, but if you told me it would be 2%, that would basically be right up our alley anyway. i think in this cycle, you're the gdp growthe accelerate anywhere near 3% or above on a regular, consistent basis. this is more of the same -- modest inflation, modest

but that said, any time today you can see spotty shower, maybe even thunderstorm. looking at the severe threat, if you plan to travel southwest, maybe you have got day trip planned to dc or something likeha

who are you looking at what organizations are what institutions do you think we should be looking at to inculcate the kind of safety culture that needs to be instinct? >> okay. i spent ten years, and i think that's a great example it is just part of who you are, and trying to instill that same philosophy. it is who you are. >> i would agree. it is baked in the absolutely every decision you make, and then to empower workers to see that as their responsibility to get there 1st following up on what the subcommittee chair said, you look at something like click it fix it to empower people who are users of the system not as adversaries but as advocates for making sure that the highest priority situations are dealt with 1st. having recently been in silicon valley there are a lot of entrepreneurs who are eager to try to help democracy work well. we need to find some way to tap into their energy and intellectual in a way that helps us launch in the 21st century and not be tried up in trying to update our computer systems. a number of us would be eager to try to help make the connections. we ha

ern is you look at risks -- you look at brexit. we do not know if it is systemic. we do not know if this country would vote outside you look at the u.s. election. china, the risks. why the hurry? > >> you have to ask yourself the question, if you don't do it? the impact on financial markets is likely to be transient. there are plenty of people out there, like there were in fedember-october when the or threatened too high. then the markets were sold off. it is not clear at all in my mind whether or not doing anything with the the markets to the more stable than doing something. the signal effect of having lower rates for a long, long time, it signals what you just explain which is everybody is worried about uncertainty. signal thatu rates are going up, the economy is strong. francine: every days there is news from the fed saying we are market dependent, data dependent. fedhere a danger that the hikes with markets not being it?y for >> that is possible if market expectations stay where they are. i do not quite by that. if there is a negative impact on the markets, it

david: that you are looking at the general area of lower end consumer? s to play it is with the dollar store theme. itnie: why are you playing through the dollar store theme as a positive thing? are you positive on the dollar store for other reasons as well? dan: wage gains is really the fundamental driver. number two, if i look at various economics in areas, it could be a win-win in different areas where we have a weaker than expected economic scenario like seven or eight years ago. that was an opportunity for the dollar stores to take share so they were seeing consumers straight down -- trade down. vonnie: how far can they go? dan: dollar general is up about 13% or 14%. the key thing to remember is they are really adding stores so when you look at their store growth, 4% store growth per year. they are upgrading their real estate. results of this real estate retail environment calling to be a really and locations. when you look at the dollar stores, they have been able to upgrade the of their competitors have fallen on bad times. fromhan: dan skelley mor

if you look at the map hillary won. she puts states like utah and mississippi on the map and up in utah, one of the most republican states in the country. listen, this is not about who will win in november if it's an option, that decision is made. it's hillary. if you look at other demographics, married in 1996 it's even worse. listen, i think -- >> i get it now. i get it. >> remember -- >> and the republican platform. >> remember the bumper stickers after the '72 race and map of massachusetts that said don't blame us. you're in the don't blame us campaign. in other words, he'll win but lose. >> history is part of the -- >> can't blame that on that. >> if you look at 1960 there was a large concern of opposition to richard nixon. >> for conservatives to say this nominee does not reflect, you know, what the values and principles and positions are for a party. >> what did you get out of that, gold water in '64. that worked out well. >> i think never trump and a woman president and roll call, congratulations on that. >> tha

and you can take a look at what happened the last time we did this. really was, you know, sort of a little tempest in a teapot. i expect that's what's going to happen. i do think the probability that we're going to get a rate increase in june is greater than what the market's currently pricing. >> it's a fight, right, in the sense that not that the fed really cares about the market, but they do. i think they want to show the market that actually they have something, it's not just talk. also because once they get two hikes, they start unwinding them. >> they do care about the markets. in the minutes they did talk about easing economic conditions. that's one of the reasons. hey, listen. quickly, we're going to look at the 20-year treasury bond, etf. we 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. a

what do you think the economic story is going to look like if we remain in? e what you think the economy is going to do. , they arethe bookies very bad forecasters of political results. they are not so good at football either. sincet would look like, i we probably are in a bit of a slowdown at the moment. some of that may be brexit-related. there's a chance of recovery if we vote to stay in. i think there are other factors making for slowdown that will kick in order. we are entering a period of fiscal consolidation. this is the other side of mr. osborne. in the second job, he's aiming toward reducing the deficit that is going to tighten fiscal policy. bet is not going to comfortable. we have those encouraging figures from germany. i think it will be a little bit of softness in the next year or so, but then later on, i'm relatively optimistic that it can recover. guy: roger bootle, thank you very much indeed. roger bootle joining us from cap i know economics -- from capital economics. matt, we need to talk about cars. matt: we do. fiat shares are falling in ita

alix: as you take a look at the bloomberg here, this is the g chart 914. to your point, the atlanta fed gdp is now tracking your 3%. --. growth at the percent 3%? growth a do you see growtht neil: no, to me the most important thing is to look at the labor report. is much easier to count jobs than it is to count gdp. that is the way i'm thinking about it. i think if you are the fed, they probably want to see some of that rebounded in the second quarter extend into the third because you want to make sure that the first quarter was not a fluke. that is why i think they will raise in june or july for that matter. scarlet: trade was a smaller drag. u.s.ow that the stronger dollar has an impact on trade, but more portly, the stronger dollar has an impact on corporate profitability among the big nationals. neil: corporate profits have been improving fairly steadily. we have stronger real growth in the u.s. and core inflation is sticking up, meaning corporations have more pressing power. we learned that corporate profits from abroad have declined pretty significant

i look at you, i look at rynair. the amount of capacity in europe right now is eye watering. w you cope with this, and keep yields up? the capacityll: environment is being driven by the airlines. easyjet is growing at 7% to 8% a year. we believe that is the right amount of growth to take advantage of the opportunities we have. we are growing still organically, but there is still a lot to do. we still only have 9% of european -- of the european market. so, there is a lot more space for us to grow and we are doing that in a very organic way. you know, you are right. it is a very tough environment. but it is not capacity that is making it tough. yes, it is a little bit higher, but it is not completely out of sync. if you look at our 24 million pounds of losses as this year, we are coming in about the same of last year at 5 million pounds in profit. brussels, we and have been able to do very well in the first half. and that shows our customers like us. we are doing the right things for our customers. we are very focused on our passengers, but also we have a very resilient business