Of Something BigShort Term Forecast have already been partly very wrong. Shery plus, former president bill clinton responds to the shooting in orlando. Its all straight ahead on bloomberg best. Hello and welcome. This is bloomberg best, your weekly review of the most important Business News analysis and interviews from Bloomberg Television around the world. This week began with a block west tech story as two of the industrys most Prominent Companies agreed to team up. It is merger monday, guys. Microsoft buying linkedin, valued at 26. 2 billion, 196 a share, a 50 premium to fridays closing price. You are iron up. You are fired up, you were totally shocked at this deal. Absolutely. One would have thought they would go after salesforce or a Traditional Software company, but this was truly out of left field. Microsoft, next to amazon, has the biggest operational cloud infrastructure, tons of data centers all over the world operating at very high efficiency at very low cost and used by all kinds of businesses around the world. Linkedin is very much a front in front end of a cloud application, something people actually do with a Cloud Software product. Yes, they put their resume up and yes, people hr people will use it, and more important like, sales use linkedin to find people to sell stuff to. Microsoft is getting a front end to their backend in terms of using businessfocused software. Its very interesting what they can already do with that right off the bat and what they can develop over time. Emily what will that process be like, and having to you make how do you make sure this does not turn out like nokia or to some extent even skype . This is writing the riding the Technology Wave of the future. This is the core of microsoft this is something that we can , differentiate, and when i look at those dimensions, this checks all those boxes. Polls from three companies all place the leave campaign ahead and come on the same day that the sun newspaper, u. K. s best selling newspaper, backed the brexit. Which numbers should we believe and which should we not . It seems clear, but numbers move towards leave. We are looking at polls, and at around 48. 5 for remain and 51 point five for leave. 51. 5 for leave. Its not a large percentage, but it is there. Even the firm polls are narrowing. They are starting to clear fear the possibility of a brexit a little more. The concerns are finally beginning to come through, is slightlyresult less obvious than it appeared to be a couple of weeks ago that is , and that is , and ago, and that is showing clearly and developments and currency markets, primarily, but also bond markets. The 10year, again, to compare and contrast with a german10year, and seen, which has moved mightily in the last 60 minutes there is 0. 02 thats not the twoyear, that is the 10year. Francine this is huge psychological impact, the first time the german negative. A reminder, it is the 10year. It is not supposed to go into negative territory. I know we were expecting it, but again, this is in none of the textbooks. No, but go back a few years and negative Interest Rates were not in the textbooks. As an economist, it is fascinating to see how the world and our understanding of economics is changing quite rapidly. Central banks would be blissfully happy if they could get inflation back up to 2 . In a lowinflation world, bond yields, even long term will be lower, and it will therefore not be unusual for them to slip from time to time below zero. No change in Interest Rates. I repeat no change in Interest Rates. The fed in a unanimous decision is holding. What is more important is the outlook, the outlook for rate increases, the jobs, if you increases increases, the jobs, dotsu, increases, the if you will, and another big shift by the fed to lower for longer. I repeat lower for longer. A majority of the fed voting members still anticipate two Interest Rate increases by the end of the year. Six now favor only a single 25 basis point hike. Recall in march the last time we saw them, only one member of the fomc was that dovish. Plus, the committee now expects to raise rates at a slower pace in 2017 and 2018. The longer run fed funds rate was cut to 3 . Is this an admission that the cycle we are in right now is different than what we have seen in the past and that Interest Rates overall will not return to what we think of as normal . That is absolutely the case. This is an enormous acknowledgment by this fed. In 2012, when they started the dot it was at 2. 25. , it is now at three. This is what we called the new neutral for monetary policy. We are anxiously waiting these numbers, just come through, actually. No change in the annual rate and monetary policy, staying with that ¥80 trillion stimulus program. This is probably essentially what the market was expecting. Because of the fact that we had the fed meeting this week and, of course, the brexit vote next week, many were expecting the governor and the bank of japan would hold also. It looks like they have been keeping that stimulus rate at ¥80 trillion. The thinking among economists we have spoken to his theres is that theres reasons to delay both internally, given that they are trying to allow the negative rate policy to gauge the effect of an negative rate policy on the economy, and secondly, there is an election coming up in july here. Theres also the Global Market uncertainty, and with the brexit vote next week, theres thinking that if the doj were to ease today, the effects of the measures could have been undone by a brexit vote that then caused the yen to strengthen. Just got the bank of england rate decision. I want to bring it to you. Unchanged on the Asset Purchase Program but so much detailed to detail to get through. The bank of england continuing to warn about the risks of a brexit, saying it could affect the economy, push the power down pound down sharply. Thats the headline. Weve got the minutes. As you say, no change. 5 . That has been the case for the last five months. It says it does have the stability tools to deal with a brexit, to protect the banks. Investors are asking if sterling falls and inflation shoots up, does the bank of england have to hike rates . It is improbable. A cut is much more likely. A brexit could cause adverse spillovers to the economy. Still digesting the news of the killing of the labor mp andrew cox. Suspendedigns have their campaigns. The imf has delayed a report, so tonight, a couple of polls that we do today have been pushed both campaigns have taken the sidelines today. The imf has delayed a report, so tonight, a couple of polls that were due today have been pushed into tomorrow. Maybe over the weekend. David cameron is scheduled to appear on tv sunday night for a look at the sunday morning news shows. I suspect over the weekend we will see a slight return to campaigning but probably not campaigning as we have seen to date. The st. Louis fed president saying he is the missing dot we have been worried about. In a statement, bullard says the st. Louis fed is switching to a new forecasting style that does not incorporate a longrun Interest Rate rejection. Projection. Does this make a difference . I think it is a remarkable admission that growth is going to be low as far as the eye can see and inflation is not going to be a big threat. All along the lines, particularly last year, there has been a debate is the market right . Is the fed right . It looks like the market has been right for quite some time. Two and a half years out, he is admitting they really have no Predictive Power over it, so stop pretending you do. They have been serial overestimating growth, inflation, and the path of Interest Rates, so perhaps it would be constructive to say lets stop pretending we know things we do not know. Still ahead, a Silicon Valley legend sees more tech mergers in the pipeline. Up next, a business spectacular disney spectacular comes to shanghai. Plus, the Bigger Picture for yahoo comes into focus. Shery this is bloomberg best. Our global tour of the weeks top business headlines continues in china where investors and government of the chills waited government officials waited to learn if msci would add mainland global indices. The verdict came down on tuesday. Chinese stocks have been denied entry and a sign msci, and a sign International Investors still are not entirely comfortable with mainland markets. Was this a surprise . It was certainly a decision that divided investors in the runup to it. We did have Goldman Sachs describing a 70 chance this was going to happen. Theres no doubt that china have increasingly taken more and more steps to try to address some of the issues, but at the same time, i do not think that to live through the intervention and everything that happened in chinas markets over the past year it was hard to imagine that could really be forgotten by Global Investors and the such inclusion would be accepted this time around. Theres still a lot of concerns. Yes, there are still accessibility issues. Theres limits on the amount of redemption that investors can do on a monthly basis. That is something that, you know, we expect china to do more about, but i think the broader issue is the credibility one. If they add the shares at a time when Global Investors are not comfortable with being compared comfortable with purchasing them, then that could hurt their reputation. The u. S. Supreme court has struck down puerto ricos debt restructuring law. The law will not let puerto rico Public Utilities restructure their debt over the objection of creditors. Some justices did end up coming down on the side of the bondholders, but they would not necessarily say that was the motivating factor in their decision. This is the question of federal bankruptcy law. The court was deciding if congress lets puerto rico enact the recovery act. If puerto rico were a state, there would be no question it , could authorize its municipalities, including municipal utilities, to file for bankruptcy, but the Supreme Court says puerto rico does not have that kind of flexibility. Where are we when it comes to legislation progressing in congress . You have this federal oversight board. What is happening . The house has passed legislation that includes that board, and now it is a matter for the senate to take up. Had the Supreme Court ruled the other way, that might have rattled that process a little bit and changed expectations, but now the ball is totally across the street in congresss court. Fanduel and draftkings are said to be in talks for a merger. Investors have been pushing for Something Like this. Do we know how long the talks have been going on for . There are reports that talks have been going on for about three months, but you are right this has been a long rumored and discussed merger sort of behind the scenes, but things have gotten more serious. These companies have been in the news a lot over the past year or so. First, all the publicity was very good. Both of these companies valued at over 1 billion. They are unicorns. They are unicorns. Then things fell apart after government started looking at both sites as potentially illegal gambling sites. These companies now have lost quite a bit of valuation since they have gotten into some potential legal trouble. Those troubles are still working their way out here. However, part of the merger talks would have to be that maybe they are in Stronger Company as one. Alibaba has proved its First Financial forecast or provided, i should say its First Financial forecast as they went public and predicted growth to rise by a whopping 48 . How achievable is it for a company which is so huge already . Its absolutely achievable. Chinas economy, of course, is slowing down a little bit, as we know, very big, and they got their fingers in a lot of highs in the economy, but what really makes it achievable this is an estimate or forecast from alibaba that is ahead of what analysts actually expected. The way they can get there they , are sitting on buckets of cash. If they want growth, they can go and buy growth, to put it bluntly. Theyve already done acquisitions and are providing topline growth. If they want to reduce the numbers and get topline growth out, all they have to do is pull out the check book, buy some company that can give them growth and they will get to whatever number they want to get to. Lets turn to the bidding war over yahoo now. Private equity firm tpg said to be among three groups competing for the company. Are any of these surprising to you . Yes. Who are sycamore and vector . These are names that have sort of come out of the blue, but i have been able to piece it together over the past 84 or 48 hours. They are unusual names, not just because you may have never heard of them because they have not been reported before, but vector, really their expertise is middle technology firm. Yahoo is a huge bet with them. And to come are usually does sycamore usually does retail deals, so it is a little unusual that they are still in the mix here. I am told that they are a long shot, but all of the bids that are come in our between between almost 4 billion and 6 billion, meaning that they are there. Along with advent and tpg. Do you expect it to accelerate . Could we see something of a bidding war erupt now . I think it strains credulity to some degree that you would see a wild bidding war break out, but you have at t and verizon still here. I have said all along if verizon wants to buy yahoo , verizon will buy yahoo , so in the end, a lot of this could he seen in a lens of theres a bunch of bidders out there to try to get to a point where yahoo is comfortable with verizon. Will verizon buy it for that price . If yes, verizon wins. If not, one of the others wins. 17 years, the cost of 500 billion, disney finally unlocking the gates to its shanghai version of the magic kingdom. This looks like well, im not going to say it is a surefire hit for disney, but it is certainly at the moment pulling them in. 600,000 visitors they have had already just in the test run phase over six weeks. They are hoping to get 10 million, 12 million visitors a year. I am in the pirates of the caribbean theme section. The ship behind me complete with noise affects and canons. The kids love that. Just behind me you may be able , to make out, the disney castle. They are very proud of it. The biggest and most interactive castle they have ever built. My producer tells me they have all the princesses in that one castle, which is apparently very exciting. There are 16 parks and also themed areas of the park and also the fastest roller coaster disney has ever built called tron, and a tricky alice in wonderland area as well. Bob iger says this is him putting a stake in the heart of the market here. With a value of about 600 billion u. S. American dollars. You can expect it to double by 2020. Volkswagens chief executive is laying out his grand vision for the company as it tries to recover from the emissions cheating scandal. What do we know then about this big strategy overall . Overhaul . Some of the hard numbers volkswagen has given us our in for example returns on sale. The plans to boost that, not a huge game. It also plans to put out more electric vehicles. 30 by 2025. And it wants those electric cars to be about a quarter of all of its total sales by that year as well. It does not even have one electric vehicle from audi today. Investors are a bit nonplussed, i would say. The other part of the plan is it will cost about 10 billion euros to pull up, so they are already dealing with more than 16 billion euros in cost to deal with the diesel cheating scandal. They say they will spend another 10 billion to switch over to a ride hailing self driving electric car sort of future tech Mobility Services company, but the one cost they will really scale back on is in research and development, which really boggles the mind if you are looking to make headway into new technology. Shery you are watching bloomberg best. Falling crude prices caused the caused rising concerns this week while investors and analysts search for signals that the market is finally headed towards balance. What is the outlook for oil . Lets take a look back at the discussion throughout the week on Bloomberg Television. New york trade in crude has fallen for a third day. The number of rigs has really rose for a second week, so what exactly is going on . Iran says it plans to boost production by nearly 7 billion barrels a day. That is the plan. Turn, in this little the rig count, is it down to the u. S. Numbers or the iran story today . Thats a very good question. It seems like on the demand side, things have been holding up reasonably well. Weve seen good demand from china and good demand from india. Weve seen u. S. Drivers returned to the highways and all go on summer road trip vacations, but we do have two major forces. When it comes to iran, we have seen them restart production faster than a lot of people expected. They are now making Something Like 3. 8 Million Barrels a day, which is, of course, feeding into supply. There is some debate over the accuracy of those figures, but bear in mind, they have come on board faster than a lot of people anticipated. When it comes to u. S. Shale, with oil over 50 a barrel as it has been, we have seen some of those rigs come back on board, and this is a big test case for the theory of u. S. Shale as the new swing producer. So far, it seems like that. As bearing out, based on at least the slight uptick. We will have to see if that continues. Francine, you have breaking news. Yes, this is out of opec. It kept estimating for supply and demand unchanged in its monthly market report, but opec predicting Global Oil Markets will be more balanced in the second half of the year as demand rises. This repo