Transcripts For BLOOMBERG Whatd You Miss 20170612

Allow the rally to take place and to take the street today. The Largest Police actions were recorded in st. Petersburg and moscow. He was arrested by police as he apartment. Scow hundreds of people stood shoulder to shoulder outside the pulse nightclub in orlando, florida, early this morning, remembering the 49 victims killed there when you go. Then he Malaysian Ringgit was read aloud beginning at 2 02 a. M. Local time. The shooter pledge allegiance to the Islamic State during the attack and was killed by police during issued out after a threehour standoff. Globaglobal news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Live from bloomberg World Headquarters in new york, i am julia. Scarlet i am scarlet fu. Joe i am joe weisenthal. We are 30 minutes from close of trading in the u. S. U. S. Stocks in the red for the second day running. Joe the question is, what did you miss . Scarlet not rated by the apocalyptic. Shares of Electronic Companies dropping. Congress confronts sessions. He will appear before the committee tomorrow, but will his refusal to discuss the president add more confusion to the mix . Board relieving the head of business, but will this be enough to address the companys string of scandals . Lets take a look at where the major averages stand as we go to the close. Abigail is standing by. Abigail today, the bears are in control. We have declines in the three majors. They are all lower, but off of earlier lows. The nasdaq had been down 1. 6 so we feel a little bit of relief whenthe hardcore selling the nasdaq closed 1. 8 . The first down day for the doubt in four days. The biggest twoday slide since september. Nasdaq on pace for its biggest life since last year slide since last year. Lets look at one of the bright spots, that is Energy Trading higher in sympathy with oil. 6 10 of 1 . Of 1 i was told earlier that this has led to job openings. Inventories are likely to drop in the coming months while costs from opec will accelerate in the coming months. Hoping the second today come here are some of the best names within the energy complex. Chesapeake, plus two of the drillers. They trade higher or lower in sympathy with oil in a more extreme fashion. They are in the forehead of the data. Lets look at the tech. Apple, amazon, facebook, and alphabet. These plus microsoft account for 75 of the selloff we have seen in technology. Pretty amazing. The twoday decline for apple around 7 . The worst decline for that Company Since april last year. It almost feels like the music has stopped. Everybody is clamoring for chairs. It could be Goldman Sachs putting out cautious comments. Los what it has produced, a sector rotation. Really interesting if we take a hop in the terminal. It is out of the election. In yellow, we have the financial. In white, we have the technology. While the s p 500 has been about even, up 13 for a while, tech had overtaken financials as the top sector, but now we have the financials overtaking tech. Financials now at 21 . 18 . Ology around joe thanks. What did you miss . The june fomc meeting text top billing in the week ahead. The latest Economic Data on retail sales and consumer inflation will also be carefully participants. Ket on was the morning, we get in sales, which will give us a gate on Consumer Spending and more clarity on where gdp growth is headed. For more on the economy, i want to bring in andrew, founder of sao tome research, for his take. Research, for his take. When you look at how the economy is doing, what do you see going on . We have seen a lot of peak of everything. Peak autos, payrolls. Now we will have peace Consumer Spending peak Consumer Spending. Scarlet based on what . I have my whole data that i pull it from the broader economy. I am looking at millions of transactions each month in the luxury spending, gambling, drinking, drugs, prostitution. It goes back 25 years that is currently correlated to retail spending with a few monthss lead. In february, it started going down. I dismissed that because i thought we had the february tax deferral and a late east, but every month since february, it is sharply turning down. Joe we see the chart right there. Your proprietary and vice versus core retail. Without going too much into your secret sauce, characterize your process. What are the sources . Andrew the data is out there. The data is out there. There is a lot of data out there. Is a matter of knowing where to look. Gambling, as an example, every month, 5 Million People go to casinos in the u. S. A lot o a lot of people. If you want to know do they have money to gamble with, it is literally spending. If i go to a casino, i know i am losing money. Is a cap space economy. That gives insensitivity to what. S going on ging 400 pin people. We cannot make decisions based on a survey with 400 people, but you can make a reality check on what millions of people are doing. It has a salad the last few months. Julia you would look at credit creation i guess and how much that is driving retail spending or Consumer Behavior, but i guess also sentiment driven as well. To what extent is the noise we got, the politics in the u. S. , driving that can sentiment of Consumer Behavior as well . We keep talking about, where is the wage growth . If at some point we get stronger wage growth, does that added element . Andrew it is going at 1. 7 in our population is going at 1 . You will not get a lot of weight pressure with your population is growing at about the same speed as your wage growth. Convergence. Read fundamentals now matter. What you are really talking about is the markets have been rational. Fundamentals have mattered. They are coming back. When you look at fundamentals, i think we happy. Have peaked. Scarlet you also look at google trends and what they are searching. There is a lot more interest in asking about whether the stock market is in a global and whether gold will continue ble and whether goldman continu gold will contie rising. Andrew Google Searches, you can take a look at Google Searches. Interest in stock market bubble as a search term. I like it because it means people are aware that maybe and they are concerned. If you say they are concerned, is that translating to behavior . Is that a sentiment we want to know about . It is not translating it, but i would expect it to lag. Another thing in the Google Search you will see is job security has peaked. It is contracting. People are not job hopping as much. Why not . Opportunities are probably not out there. The only reason you job hop is to get more salary. When it is not there, you stop looking. Julia you think consumer brandin Consumer Spending behavs peaked . Conditions have actually improved. Imagine the timing starts to take hold. Then what . Andrew the classic term is policy ever. You have inflation being mile. Expectations, mild. And he will raise rates. Joe one of the stories at the beginning of the year with , we do not seem to be getting any of that anytime soon. You look at hiring data. What are you seeing when you look at the degree to which companies are going out looking for people . Andrew hiring was up a little bit as we came into april. More tapping of the rates in the near term. Multiple people do not buy into the trump salesmanship that exalted run overnight and money will come out of the keynesian bucket. Companiesncture, were savvy. 2 gdp does not move the dial. Joe a programming note for wednesday. Tom keenes and scarlet fus kickoff special coverage a lot happier eastern. Ith a full lineup of guests next, hourming up exclusive conversation with london mayor sadiq khan. He spoke about keeping innovation growing in the u. K. Capital as well as his relationship with President Trump. From new york, this is bloomberg. Scarlet what did you miss . Last week elected in the u. K. Opens a new front in the battle over brexit. Theresa mays senior ministers are promoting is exit. Determine to force a clean break. Here is mayor sadiq khan talking about his plans for the city owes brexit. Mayor khan i am really excited. It was the biggest london tech week ever. It shows the world that london is open. Over the last year, we have had companies from facebook to google, snapchat two square announcing record investments. It shows the confidence they have in london. We will see more than 300 events, more than 55,000 visitors from across the globe coming to london to recognize we are europes tech capital. Talk to me about the vision you have. Technology helping adapt the city. Mayor khan we are a smart city, but we have to be smarter. We have to use technology to deal with issues from transport how we deal with issues of climate change, the causes and the effects, and the global withility, helping those access to better transports and jobs and skills. Abouteat thing i what it has been our ability to attract talent, venture capitalists. The great thing about london we shall be a massive connected business campus, the largest in europe, making sure we can help startups. It is important for people around the world watching this recognize ecosystem we have here will help you flurries and thrive. Also, you are hiring new team members. Mayor khan yes. I have learned from other great cities across the world and see what new york did and chicago and others. Why advertise for is londons first ever chief digital officer because what we need is a cute digital officer who is focused to making sure we are connected, focused on opening using data to pioneer. Have been we measure the local authorities across london are more savvy with providing Services Using technology, which will be cheaper, but also services for consumers, citizens, londoners. Believer in i sawk one of the things to do postbrexit is to say three words that are really important. Because we voted to leave the eu , i do not want to start thinking we would be in were inward focused focused. Itrecognize the contribution does for our city. One of the things i am doing is negotiating with the government a different deal for london if we can. In the meantime, my message to the worlds will be open to talents, innovation. One of the reasons why london is the greatest city in the world is we have an open to people from all different backgrounds and ideas. What would you like to see for london . Mayor khan the key thing is to make sure the government recognizes immigration. I appreciate and respect that people in other parts of the country voted to leave eu. One of the reasons was concern around immigration. Whether it is in their interests or not, parts of the country do not want immigration. We need immigration. We want it as well. The government has to recognize led to contribute hugely to our country in terms of Economic Growth. Thent to to carry on being success we are. Able to do this in the current political environment we find ourselves in this election . Mayor khan what i am hoping is theresa may and the cabinet recognize the results of last weeks general election. The country has rejected a totally extreme hard brexit. The country rejected the form of brexit presented by theresa may. The government has to recognize that. Otherwise, they will be forced to whether the consequences. The consequences are businesses not choosing to come here. Businesses choosing to leave. Which is not good for the government or london. Lastly, you are just inside. There is an old added. Mayor khan i get the polite version. What about be polite version with the relationship with donald trump . My priority is being the mayor of london. I do not have time to do with treats from trump. My views on him have been consistent. The moment theresa may decided to invite dollar on a visit, the moment she decided to offer him the red carpet, i said it for a number of reasons. Longstandinghe wellrespected policy of the u. S. Relation to refugees and a host of policies that he has. The carpet was not the right thing to be rolled out for donald trump. We will see what happens. Scarlet that was london mayor sadiq khan speaking with caroline hyde. Julia it is now time for the Bloomberg Business flash. General electric stepping down after 16 years as ceo. By a 30be replaced years ge veteran. He will stay on as chairman until december 31. He discussed the road ahead under his watch. We have a track record we can be proud of. We have a weight on the future where we will be even better. We have to build on our strengths. We have to make sure we are known as an Execution Company and deliver for all the constituents, including customers and employees and especially shareholders. They only company at the end of the day. Employees, we are the vehicle to get there. Julia he will retire with at least 112 million. During his tenure, he received one of the Top Manufacturers but struggled to win wall streets approval. Jack bogle is not buying into thoughts that investors should look outside the u. S. The 88yearold investor known as the father of index funds says he is fully invested in u. S. Securities and stocks and bonds having an equal share. In s p 500 has jumped more than 400 since 1993. European shares have gained around 180 . Asia at 40 . Added 40 . That is your Bloomberg Business flash. Joe coming up, another selloff for tech stocks. We have three charts you cannot miss. This is bloomberg. Scarlet i am scarlet fu. What did you miss . U. S. Ology shares leading stocks lower for a second day, and it has been a very busy day when it comes trading in those tech shares. This is the etf that tracks the nasdaq 100. What we see here is the white light is what is happened today. The yellow line is what typically happens. Clearly today is a lot heavier than what we normally see. In fact, daily volume on friday in the qqq was the highest since the summer of 2015. Would follow that with a pretty robust amount of trading today. 416 of the daily average today. When you look at the actual priceperformance, and rounded off its two biggest twoday drop off. Thisspeaking of the qqq, chart has been making the rounds. It is a chart of the relative the nasdaqof qqq, 100, the etf, versus the s p 500 etf. You can see that line. The onemonth volatility surging at its highest level in years really demonstrate how what we are seeing is very concentrated. Either indices not doing very much. Now with this anxiety, very much concentrated in the big tech names. You see it in the spread here. Julia the relative gains so important given what we were saying last week about low volatility, but it is not just the u. S. Elsewhere in the world, whether or not there is pullback in the tech stocks in the lives of europe or asia. Europe is an interesting one for me. The stock shares 600 is the yellow line we are seeing. Goldman sachs not the only brokers at it last week. Underway,r going trading at 21 times earnings. Fascinating that for me is what they said about the stocks leading overall. That is not a 20 year high. A 20 year at high. That techat reminder bigger than just julia global high which concerns. Scarlet these companies are all global. It is more about what their specialty is and how dominant they are in their particular part of the world. Julia in europe, it was a lot of supplies. Scarlet the market close is next. At new mexico eight divergence between the nasdaq and the major indexes with the dow and s p 500 off by 2 10 of 1 . That has that coming off of it slows down by more than half of 1 . From new york, this is bloomberg. Julia what did you miss . Tech stocks drop a second day. The is now whether they represent a more fundamental crack in the bull market. Scarlet i am scarlet fu. Joe i am joe weisenthal. If you are joining live on twitter, we want to close you to our closing bell coverage every p. M. Ay at 4 00 eastern. Scarlet looking at the nasdaq, we are closing nearly session high. Lost ground lot of in the last 15 minutes or so of the session. The nasdaq down closing less half a percent. Ercen joe still a gap but not as big as it was indefinitely all the solid lows this morning. Scarlet when you look at a different sector groups, of course, you would expect technology the worst performers here. I will show it to you in highlight the red you see across the sector. The writer read it is, the steeper the losses. If you open it up, you can see apple down by 2. 4 . Hpe off by 9 10 of 1 . There were a couple of gainers, including srx and wdc. You can see some of the other groups performing a little bit better here. ,f the gainers that are notable Telecom Companies and energy names doing better, gaining at least half of 1 . When you look at the nasdaq 100, that is the culprit here in terms of steeper losses. You can see them move up at the end of trading. Days, down by 3 , that is the biggest twoday drop since september of last year. I will point, the group had fallen a lot more. We are looking at the biggest twoday drop in a year. In terms of individual movers, we have to go back to now the g companies that Goldman Sachs has been highlighting, including qqq because it is the etf that everyone is fixated on. Facebook, apple, and alphabet falling by better than half of 1 . Joe a quick look at the u. S. Government bond market. Not a ton of action, but it is interesting that despite the selloff, we are seeing higher rates with tech down and rates up. It little bit of a silly in treasuries. Julia what we are seeing in the dollar today is losses caught between a stronger euro off the back of the first round parliamentary elections for Emmanuel Macron. Does it hold up in next weeks versus concerns of the u. K. And what kind of government theresa may is going to be able to form here. You what is going on in dollar brazil today. Just hours after being acquitted of Illegal Campaign financing, the president being accused of asking the companys intelligence age industry to cae corruption investigation. The president has the night, but that is putting some pressure on the resilient dollar. We have some of the highs that. Falling today. Carolyn wilkins, the Deputy Governor of the effects of canada, indicating the central bank is looking at the possibility of raising rates as the nations economy picks up steam. As you can imagine, a rally of 1 . Joe finally, a look at commodities. Not examine action. Oil up a little bit. The biggest action was in silver, down 1. 6 . Silver has characteristics of growth and Precious Metals into it down 1. 6 , but overall a quiet day in commodities. Those are todays market minutes. Scarlet lets take a deep dive now into the bloomberg. You can find our charts using the function at the bottom of the screen. Joe what is going on with them . Scarlet something is happening this week. They have the fomc meeting this week. Janet yellen will be holding a news conference. The line indicates a rate increase odds. The blue line is a look at the on iodds of a september increase. That has come down to 24 . It was as high as 50 a month ago. We have had a lot little turmoil, negative headlines, and softer Economic Data that may be reducing the possibility of a rate hike. Joe we did not see any change in this weeks suggesting how many people think that that is a done deal regardless. That the fed is a done deal regardless. Julia a number of commandos whether it is the balance sheet, concerns over inflation, or they might try to find type financial conditions, but they are going in the opposite direction. Let me show you my chart. The white line you are looking at is the u. S. Financial conditions index. Continues see, that to loosen rather than tighten. The blue line i am showing you is the emerging markets that carry trade index that we put together here. It is show you the relationship between loser financial conditions and improving trading conditions for risk sentiment. How long will that continue . Scarlet absolutely. What did you miss . Best a lot in Tech Companies led to a second session on concern the group has been rising too far, to pass. The sudden slide to many investors off guard. The question now is whether this drop represents a positive or a more fundamental pause for a crack in the bull market. The tradeoff is less than compelling, one says. Start with that question about what this selloff in Tech Companies really means at the end of the day. The stocks had a great run and were overdue for a pullback. I think it is more or less random noise. We are still in an upward direction, but we will see a lot more volatility over the next few months. A few weeks ago, we are talking about how on volatile stocks were. It is more of a return to normalcy scarlet but the selling we have seen has been orderly. There is no sign of panic or any extra concerns that have led to there. Ed thats right. The nasdaq closeout 40 points. The upside is relatively limited. Julia you are neutral on equities overall in the u. S. , but the sentiment out there, this one might turn into that as well. How do you square those two things . Ed i think we are still in a bull market and a trend is upward, but maybe we will get a couple percent between now and the end of the year. Is not a free trade. You get a little better value elsewhere. Joe one of the striking things with regard to timing, just last week, Goldman Sachs came out with a note that in addition to having incredible momentum in growth, all of these tech stocks have lower volatility than traditional safety areas of the market. So many people are leaning into the stocks. They are massively overweight. There isa danger that so much concentration in them that they could reverse quite rapidly . Ed that could happen, but also, these are the great growth stories of the market, where the overall growth of the economy is relatively weak. You see people pay a premium for growth. I am assisting the stocks will see the great when they have had this year, but what you are seeing is there is not an infinite valuation for what people will pay for the market overall or these groups. Julia it is interesting you make of what they were holding a little more cash than you have been. Any give us a sense where that is relative to where you have been over the last two years . I appreciate the bull market aging at this stage. Ed it differently portfolio. Seven only 1 or so. Not a huge amount of cash, but we are not completely invested. We are looking worldwide for opportunities. Getting a little caps on only reduces your risk, but it gives you a chance to buy in. Scarlet also reflects some of the concern out there. One was calling it the wall of worry. Risks the most discussed geopolitics, the raising of the debt ceiling or not, china, which one seems to you the most underappreciated that could catch people wh off guard . Ed there is a possibility of a recession. We are not calling for one, but the market is not pricing that in. The odds perhaps a bit higher than normal. You have a fed tightening, a long economic cycle. You look at some of the data consumption, some of the loan activity for commercial loans has been plummeting. I am not suggesting we are about to head into a recession, but that is a source of risk that is underappreciated in stock prices. Joe on the flipside, where do you see opportunities that you think other people might be missing . Ed some of the things we have been doing is things other people have been doing. We have been rotating outside the u. S. Or from the u. S. To outside the u. S. You will get a little better growth in the shortterm. We have started to pull more money back into emerging markets. You are still enable market. Around the world, price pretty rich. There are some places that offer better opportunities and others, and that is all we are trying to do. Julia on friday, Emmanuel Macron is a game changer for the country we were told. How do you perceive europe as a whole now given the shenanigans we have seen in the u. K. Versus the core of your . Position. Ll have our around the world, geopolitical risk, if you reacted to it over time, it has been a bad move. Most of the time, things have come back maybe that means we are getting a little bit too complacent. Europe offers good growth. Also, valuations are a little cheaper. That is why we are rotated in that direction. Scarlet ed keon, they do so much thankk you so much. Joe breaking headlines from steven mnuchin, who will soon be testifying to a house subcommittee regarding the economic policies from the administration. Steve mnuchin says the white house sees at least 3 Economic Growth once the agenda is in place. They will pursue better trade deals. We will keep you updated on that mnuchin hearing. You can catch the full hearing on the line go on the bloomberg. From new york, this is bloomberg. I am mark crumpton. It is time for first word news. The wall street journal reports that secret service, which operated recording systems in previous administrations, does not have audio or transcripts of any thing that may have been reported in the trump white house. Press Secretary Sean Spicer told reporters today the president would when he is ready to address the possibility that tapes exist up conversations with former fbi director james comey. Attorney general Jeff Sessions will testify publicly before the Senate Intelligence committee tomorrow. Sessions will answer questions about his role in the firing of mr. Comey. The hearing follows kobes testimony last week, which raised questions about sessionss conduct. The attorney general requested a public event, saying it is important for the American People to hear the truth directly. Bloomberg will have live coverage of Jeff Sessionss testimony beginning tomorrow at 2 30 p. M. Washington time. Associate Justice Neil Gorsuch has issued his first supreme in a unanimous decision in favor of a Debt Collection dispute. The court ruled today that the company is not aimed at unscrupulous debt collectors. The Company Purchased defaulted carloads and sought to collect the money owed. The head of the United Nations Nuclear Agency says he remains deeply concerned about north Koreas Nuclear program. A director general spoke in vienna. That is deeply relatable dprk continues to show no sign that it is ready to comply with relevant u. S. I again call upon the dprk to comply free from obligations. Mark in may, north korea announced it will start massproducing a mediumrange missile after a test launch confirmed its combat readiness. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Julia what did you miss . Attorney general Jeff Sessions will testify publicly tomorrow in front of the Senate Intelligence committee, a highstakes event that comes days after james comeys dramatic appearance. For more on what to expect tomorrow and later in the week, lets bring in kevin cirilli. He joins us from our d. C. Bureau. Kevin, james comey hinted at the possibility there is more than meets the eye from Jeff Sessions and his interactions with the russians. What can we expect to hear tomorrow . Kevin two things to look out for tomorrow. First and foremost, whether or not there is any differenc thiss between the president and the attorney general. To have been there once close relationship between Jeff Sessions and President Trump have someone become a bit frozen, but the sources i am talking with close to the attorney general suggest that might be a little bit overplayed. It stems from the notion that the attorney general recused himself from the rush investigation several weeks ago. The president did not like that. , the individuals that if you have a problem with this i could resign this, i could resign. The second point is whether or not there are any other meetings that were not disclosed on behalf of the attorney general with Russian Diplomats and russian officials reportedly when james comey testified behind closed doors after his Public Hearing Committee suggested there could be. Counte\ the administration suffered another defeat with this travel ban. What is next . Kevin the Second District court has struck down the president s temporary travel ban. This is not going to be decided until the Supreme Court rules. Earlier today , sean spicer saying they are prepared to fight this all the way to the Supreme Court. They believe they will win, but there is no denying this has become one of the most controversial aspect of the president s first 100 days in office and is continuing to drive out. It was the pinnacle of his campaign strategy, but is tied up in court. Scarlet we know last week was supposed to be infrastructure week, according to the white house. This week, they are changing the focus yet again. Tell us about what the president has planned for this week. Kevin this week is dubbed Workforce Development we. He will gthe president will go o wisconsin. A hoste going to discuss of workforce programs, including elements like paid maternity leave. This was first committed within the from orbit. But that will also partnership programs. You remember when they had the ceo summit. Secretary mnuchin, secretary ross, gary cohn, this is that came up frequently. 58 for my sources that this i dont in a budget, it is unclear whether they will have an executive order on this. It could be another director. Directive. Julia we will see. Thank you. Tomorrow on Bloomberg Markets , will have live coverage of attorney general Jeff Sessionss testimony starting at 2 30 p. M. Eastern. Unfortunate when you mention infrastructure week, everybody laughs scarlet that is what. Scarlet that is what happens when you cannot give specifics. We will show you how markets are responding. From new york, this is bloomberg. Scarlet what did you miss . France tell the first part of his followers religion yesterday and it seems Emmanuel Macrons new Political Party is poised to take a huge majority. Caroline kanaan reports from paris. Caroline one month ago when he was elected, french president , many had doubts about the ability of Emmanuel Macron to the majority in parliament. Now things are very different after the first round of the election. He maintained his lead in the run up next sunday. Could get three quarters of the seats. Managed tocron has defeat all of the opposition parties. Socialists that ruling the country for the past five years have been decimated. They will only get between 20 and 40 seats. The National Front of marine le , because of the two rung system would get less than two 10 seats. The leader is likely to win her constituency in the north of france. The majority, which is the strongest in france in more than two decades, and should be able to push their reforms. The first big major one that every investor has been waiting for is another role of the labor market. It comes expected by the end of this summer. Lets stay on european politics. A very good weekend for the establishment candidate, Emmanuel Macron, and his party in france. Also a good weekend for establishment parties in italy, which has a local elections. In the bond markets, i am looking at spreads in france and italy relative to german. A little over a year. The white light is the 10year spread. The yellow line is the first spread. We could see italy coming down nicely today. An electoral setback in a regional vote. France down at the bottom also narrowing. It had narrowed already quite a bit with the election of macron in the first place. What was expected to be a turbulent year for cuts in, the eu, eurozone is not turning out to be at all. All the chaos is on the other side of the channel. You see it reflected in nice, france to german bonds. Julia quite interesting to see opposition voices in france saying we cannot have this kind of landslide. Quite interesting. Lets move onto another election , one was slightly worse results. The u. K. General election. There was a poll taken looking at pessimism versus optimism postvote. Business leaders are more pessimistic today about the uks economy than they were after the brexit vote. I am going to move this across so you can see it properly. 57 of directors now pessimistic. Back then, it was 44 . Despite the move we saw in the markets after brexit, the lack of response we have seen, the general level of optimism is drastically. Joe i am genuinely surprised pessimism level was not higher. Pretty striking chart. It seems like chaos over there right now. Scarlet arent you glad you are in new york now . Julia i am glad anyway. Scarlet here is another reason we are glad julia is a new york. If you want to check out our deep dive, you can check it out on bloomberg go. This was from exactly half an hour ago, joe a slitting his chart about secon tech implied volatility. You can see the chart. There is julias chart. Applicable charts. Joe you can even save them. It really is the future of tv. Scarlet that is what i was waiting for. From new york, this is bloomberg. Joe headlines from u. S. Treasury secretary steven mnuchin, who is speaking right now to the House Appropriations subcommittee, making some important comments about the debt ceiling. He repeats he wants the debt ceiling raised by the august congress break. Does not want there to be a weight. He says the government can fund itself through the start of september. A sort ofong been usually going to the end game of chicken, with the administration wants a clean hike. As we mentioned before collision says they anticipate a 3 Economic Growth after the agenda is in place. That would be after better trade deals, tax, and regulation reform. Regarding the debt ceiling, he as he cannot imagine scenario where the deb ceiling is not raised. You can catch this full hearing online go on the bloomberg on live go on the bloomberg. Mark President Trumps revised travel ban has been locked by a second federal appeals court. It agreed the president s executive order targeting majority muslim countries disseminated on the basis of religion. On june 1, the white house asked the Supreme Court to let the ban take effect while the justices decide whether to review the richmond ruling. The president held his first full Cabinet Meeting at the white house today despite what he called the obstructionist democrats. The president told reporters we have much great news to share with the American People today as we continue to deliver on our promises. He then went on to list trade deals completed during his recent International Trip and said a lot of work was going into repealing obamacare. Tars foreign minister says the country is awaiting demands from saudi arabia. He went further and center is the basis yet for a diplomatic solution as sanctions enter a second week. Hassaudi led alliance demanded to stop funding is group. Tartar has denied qaqta is denied funding terrorism. Witness today in the bill cosby case, jurors wil jurors when you arguments and could start deliberating this afternoon. That defense will call a second witness. The defense will call a second witness. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Scarlet lets get a recap of todays market action. U. S. Stocks falling for a second day. Technology leading the way once again. The nasdaq 100 actually had its biggest twoday decline since last november even after close thursday with a 21 gain for the year so this was clearly a case of some unwinding of a very popular and crowded area. Julia what did you miss . The euphoria over tech stocks here in over into today Goldman Sachs analysts warn volatility are leading investors to underestimate their risks. G are stocks that have been treated like stables. With a similar negative correlation to Interest Rates and even lower realized volatility. For further analysis, lets bring in mark lehman. He joins us from San Francisco. You say this is not the time to panic, but a time to reflect. Reflect on what precisely . Goldman makes good points. Mark they are good points. My point is you want to reflect. We could have a these arguments six months ago, a virgo, or two years ago a year ago, or two years ago. There were times he wanted to reflect a desire, what are you only . What is the core fundamentals in those businesses . Where i was Companies Going . Are the markets large enough that you want to keep going into these stocks and take advantage of the lower prices . Joe you make an excellent point that this story we tell about valuation and moment of and how everyone is highly inflated loadings is sort of a story that has been around quite a while. What about fundamentals . Is anything on the fundamentals, amazon, facebook, alphabet, you name it, that concerns you are always this is firing on all cylinders . Mark there is certainly some worrisome things you can point out. Someust mentioned have had colossal successes and colossal failures. Amazon is a truly Wonderful Company that has done some wonderful things. You look at what google has been. They are pouring a lot of money to things that are not going to pay dividends for a very long time. You do not want to put a valuation on those things. They have also put a lot of money into huge potential. Look at what amazon is doing with amazon web services. That is in its infancy. Look at the core business. They own 40 to 45 of the retail market, but is 3 of overall retail. Those are all stories that need to play out. There are worrisome signs. There are things you can say about the economy. You can say that about the agenda. Is looking towards monopolistic type of businesses . I would say yes. I do think theres enough time or energy to focus on monopolies right now. Worry, but i cannot think they ousted the fundamentals, which are accelerating. Scarlet we have seen other countries worry about the monopolies that the business, but i wonder how much of the runoff this year and now the pullback is time to policy concerns. Tech please all s p 500 when it comes to cash overseas. Mark is a great point. That is a great point. There is a lot of momentum to get some of that cash here. That is what i would not calling it was something a lot of support across the aisle. To worry is the government interference europe has shown as they have a larger lability to Pay Attention larger proclivity to Pay Attention to those things because those are usa companies. I just do not think there is the will or way to get congress to Pay Attention to those monopolistic fears. That is not a concern they have. Julia lets go back to the market for a moment. A number of analysts agree or disagree and say we have had periods like this before where a small consideration of stocks contributed a significant part of the rally that we have seen in stocks. If we look at years in which the s p has risen 5 or more, the average contribution of the top versus 30 . Currently, that is closer to 50 . At what point do we go, this is too much and it makes the Broader Market vulnerable . Mark i think the market has spoken a little bit over the last couple of days. Thwhen you have that kind of concentration, you get your fears. Historically, that has been a good place to worry. I have been saying for a long time that internet economics lead toward rapid monopolistic type events. It would not have happened 20 years ago that a company like facebook can be created and garner the kind of market share they created in the study they. Amazon and what they had done in the cloud in a short time is extraordinary. You look at Companies Like uber and linkedin and smaller Companies Like zillow and true car, which is trying to revolutionize the buying definition for autos. It is those kinds of quick ascents to the top because of the internet economy forcing that, which is a winner take all economy. Some of the old theories that they have performed so much and i am guessing this is different, but i have sort of saying this time it may be different. Julia i am glad you mentioned uber because we will be talking about that shortly. Thank you. Mark thank you. Scarlet coming up, sexualharassment allegations at the Ridesharing Company uber have resulted in the departure of one senior executive. We will discuss of this icorn,ular tech uniformunci nex. This i next. This is bloomberg. Scarlet what did you miss . A shakeup at uber. The Senior Vice President of business was ousted this morning. This follows a probe into workplace sexual harassment. Michael was involved with at least two incidents of alleged misconduct, so what does that mean for the ceo, and where does the company go from here . For more, lets bring in brad stone. He joins us from San Francisco. You and your colleagues published another story on emil michael and how he had a dog by these scandals, but he is going to point the finger at something else, not the alleged misconduct for his ousting. Brad right. People close to emil michael, who has now left uber, believe he has been unfairly victimized. They stressed his role at the company raising all that money, forging partnerships with Companies Like chrysler. Yes, they say he was at the center of some of these controversies. You named a couple of them. Your four of a visit to an escort karaoke bar in seoul, south korea, a couple years ago. There were supposedly some conspiracy theories about a truly horrific rape of a passenger in india. Emil was supposedly one of those executives. He made a big contribution to the company. They just use some of the characterizations of these controversies and say this is a company with some internal infighting and he was unfairly targeted. That is his claim. I think uber is trying to get beyond all of this stuff. Emil has been connected with a lot of these points of controversy. Scarlet the reason we care so much about him is because he is the closest of Travis Kalanick. What does that mean for travis . Does he get the boot . We brad we care because this is one of the Key Executives that is made uber what it is today. What does that tell us about his fate at uber . Probably not a lot. We will find out tomorrow whether he will take a leave of absence from the company. That has been raised as a possibility. Also possible he takes a little personal time considering the tragedy that befell his parents recently. That comes back to the then comes back to the company. We do not get a sense travis will leave uber. That will be a devastating blow to the company. He is so intimately tied to this integrally side to this company. Julia it has been pretty tough over the last year. Beginning of the year, they experienced losses with the delete uber movement. Than the sexualharassment most. Than ever color was hired to investigate the allegations. Ceo Travis Kalanick himself overreacted in a video. Lawsuit. The is one thing after another for these guys. If we are talking about the culture of the business irrespective of whether Travis Kalanick stays on were not, what do we from eric holder, the former attorney general . Does that help them with an overhaul in terms of image . That it is imagine getting quite confusing to parse all of the center controversies. Ways a company that grew too fast with way too much responsibility and capital and got out of control. What this report probably will recommend is that the company , rebuild some of these divisions that were overlooked or do not grow fast enough, human resources, the legal division, also to indications. I think he will recommend some changes in terms of reading it and director for the board of directors. We already reported they are bringing in an executive from nestle. Perhaps reaching some targets in terms of gender diversity and the management team. We have not seen the holder report yet, but there is lots to look at and lost to address in a company that now has a management team, management ranks that happened completely decimated by People Living on and controversies like this will. Joe i was just going to ask about that. You mentioned bringing in an outsider to the board. One of our more from the outside for the Top Management Team . I thought some discussions about who might theoretically replace Travis Kalanick. It is not seen there are many names internally that could do it. Brad that is probably the biggest challenge. Not only who fills his role. We have written about a Leadership Team comprised of people like rachel holt, ryan graves, who was the president of the company for a long time. Maybe you can do an interim triumvirate to fill traviss hughes, but the problem is shoes, but the problem is there are lots of positions open like the ceo of the company coo of the company. As far as we know, that search is not done. He still has multiple candidates he ha is talking to. If he stepped away now, the physicians go unfilled even longer. Maybe he does need a versatile or professional break from the company. The Company Needs him to stay engaged and fill the open spots. Scarlet you mentioned always vacant positions. Is uber still an attractive place to work . Is is something the experts at Silicon Valley are vying to go to . Brad it is a great christian. In terms o question. You have a 70 billion company where the stock might be already overvalued, but in terms of the challenge and impact on the world and how important uber it is, i think it could be appealing to some people. Senior executiv executive editor for technology. Joe Monetary Policy takes center stage. Spoke toeure bloomberg about what eurozone is not ready for tapering yet. That is coming up, next. This is bloomberg. Joe what did you miss . Central banks are taking the spotlight this week as investors look to rate decisions. Ecb executive board member Benoit Coeure spoke exclusively to bloomberg about his outlook for inflation in the eurozone. We are still nothing inflation when we would like it inflationot seeing where we would like it to be. Ishow much of a nightmare gdp on qe . Stronger gdp is good news. Is unqualified good news. That is why we changed our communication to adapt to the changing reality. It also shows our measures are working. Also, jobs that have been treated in the eurozone over the last three or four years ago, a lot of them have been created nks to the we have an inflation mandates and when it comes to the next step, we have to focus. Why is tapering not discussed last week . It was not discussed at all. It is too early to discuss it. Lot the Economic Situation, the prospect for inflation. There was a sense of progress when it comes to inflation where in spite of inflation, if you look at the stock forecast have illegally you see our policy measures which is a step in the right direction, but not yet, quite enough to start tapering. We are not there yet. When you think tapering needs to be discussed . Benoit i do not want to give dates here. I do not think it serves a purpose. We are very much datadriven. We are driven by fax. We will discuss tapering when we see the Economic Situation right for discussing it. To you have a perfect idea when tapering should be discussed and what it will look like . Benoit again, that will depend a lot on the economic number, inflation. We obviously have to discuss it before the end of the year. That is obvious given what we have sent on buying bonds until the end of the year and later if necessary. That discussion will take place, but it will take place when the data will support it. Is july a live meeting . It is july so there is usually low volatility in the market and youre not doing any inflation . July. we do work in it may look nice, but we work in july. The discussion last week was very much about taking stock of the economy. Taking stock of the progress that will support inflation, and that is a discussion we will have again and again. One lesson of what we have decided last week is to keep our guide us along with reality, and that is going to continue. Joe that was ecb executive board member Benoit Coeure with bloombergs francine lacqua. Scarlet time for the Bloomberg Business flash. J. Crew will announce a Debt Exchange that will allow the retailer to push out is nearterm debt maturity. Offer say they it comes as the longtime ceo announced he will step down and Service Chairman going forward. General electric has secured u. S. Antitrust approval for its deal with baker hughes. The agreement will create one of the biggest Oilfield Services companies. Ge won approval last month from regulators. Video gives ge a 62. 5 stake in the new company. And it could close as early as next month. Shareholders of honeywell are resisting calls to spend on its aerospace unit, according to ceo david cody, who tells bloomberg investors are worried about losing potential paydays on recent investment. That is your blis business flash update. Julia we have more news on the new ge Ceo John Flannery that was announced this morning. They are said to have sent his salary at 2 million. He has a target bonus at 150 of his annual2017, an target bonus will be 3 million. Longterm, it will be paid in stocks. That is how it has been displayed. What you need to know to give up for tomorrows trading day and. Ahead. This is bloomberg. Scarlet wants to look forward to. Prince house of commons convenes with newly elected emcees. Joe i will be watching usa go data with prices out at 8 30 a. M. Eastern. Julia Bloomberg Television will have live coverage of attorney general Jeff Sessionss testimony before the selling Intelligence Committee Senate Intelligence alisa i am Alisa Parenti from washington and you are watching bloomberg technology. President trump today held his first full Cabinet Meeting in the white house with various members offering praise to mr. Trump and his legislative agenda. The president listed trade deals completed during his recent International Trip. The wall street journal reports they do not have tapes that may have been recorded with former f. B. I. Director james comey. The white house says the president would address the possibility the tapes exist when he is ready. Revisednistrations travel ban has been blocked by a second federal appeals court. The ninth ciruit in San Francisco backed up the previous ruling the president s executive order targeting majority muslim countries discriminated on the basis of religion. Jeff sessions will testify publicly to the Senate Intelligence panel tomorrow. The attorney general what answer questions about his role in the firing of former f. B. I. Director james comey. Sessions requested a public event. Bloomberg will have live coverage of mr. Sessions testimony beginning tomorrow at 2 00 wall street time. Global news 24 hours a