Equity board. S p 500 futures negative not even a 10th of 1 . Minors leading the losses. Switch of the board. All eyes on crude. Inching to the 50 mark. Wti 48. This is what i am looking at in the fx market. A dollar on the front foot. Switch the board and get to this. 14483. One pound, camp. The remaining 37 in the leave. The referendum is ahead on june 23. That is when we are now where you get one pool and you get the spike. Lisa it wasnt one single pole, there was building up to this. Jonathan a bit of momentum may be. David now lets go around the world and check in with our Bloomberg Team for indepth coverage of our top stories. Mike is an anchor of bloomberg surveillance radio. Cooks first trip to india. Matts house and joins us. Lets begin now with mike. This is the feds april meeting that and minutes of the fans april meeting are out today. , what are we looking at . Michael they have been trying to talk the markets of present time and we are finally getting some reaction. Investors are going to be in michelle wie mode in show me mode. The meeting was three weeks ago, but i pulled some stuff out of the march minutes to show you the kind of thing we would be looking for. Several expressed the view that a conscious approach to raising rates would be prudent. In contrast, others indicated an increase of the target range at the next meeting might be warranted. That is putting things down the middle. In april, did one side or the other get more weight . Might we see many or most substituted for some or several . They also talked about the dollar inflation Going Forward. David are the markets listening for what the fed had to say . There is still only a 12 chance of a june move so are the markets really listening to them . Mike they have not been listening even though futures is a kind of silly way to look at it this way because banks have so many reserves they dont need fed funds. Curve,look at the yield end,icularly the short after the meeting in april, we saw the yield on way down. , it the last couple of days is about the range where it would be if the fed raised rates so they are starting to price this in. Tomorrow will be a big day as well. We will have three fat speakers. I will be interviewing geoffrey lacher tomorrow on Bloomberg Radio and then we hear from Stanley Fischer and bill dudley. A lot more for traders to incorporate. We could see a big change in the outlook this week. David thanks very much to mike mckee. Jonathan with the big guys coming up, over to japan now where the economy. A recession. We want to get the details. 2015 was ugly. It looks ugly of the First Quarter. Put it all together for me. Good morning. Japan escape recession, but if you look, there is plenty to be cautious about. Japanese are sitting on a lot of cash, there is a real drive on the economy to drag on confidence. It is important in the context of the big policy debate and raising sales tax. Spending, government is across the lines so todays numbers are preliminary. When you consider the soft backdrop to the economy, is eager the headline but plenty for the government to worry about. Jonathan with a good headline, maybe that is a problem because the fx market has stabilized as well. What is going to be the message from the japanese authorities and their counterparts. They are demanding an intervention sort of speak. There is a feeling they should push for this idea that can intervene in what you might consider disorderly circumstances, but defining what those are is much harder. The focus might be on fiscal spending. Japan might look for a green light. They have a statement coming up anyway. They may look for support from the likes of canada but expect resistance from germany. Cushions on fx but no major resolutions. Jonathan i think it is very to say that when your outlined is you your headline is you got a recession, that is good news. From japan to the u. S. , another busy day in the u. S. For retail earnings. Bloombergs Matt Townsend is here with us in new york. Fill us in. We are getting a better picture of how u. S. Retail is doing. Ois came out today they raised their forecast for the year and kept their sales the same. Waiting tostill spend on their homes. The report was mixed. This company is figuring out what to do not because of the big idea for a merger with office depot fell apart. Lisa in about one hour, we will get earnings out of target. What are you looking for . The ceos whole strategy of bringing in private labels and exclusive brands is taking hold. Target is a good bellwether for the economy. Again, it is a mixed bag. Willing to spend on their homes and things they value. Lisa thank you so much for being with us. David now we go to the United States to india. Tim cook is in india for the present ever. Is introducing an accelerated program for iowas developers in bangalore. We are joined with more from mumbai. Is always interesting with tim cook going to india for the first time, but how important strategically made this be for apple . Is going to be hugely important. India is the second fastest Smartphone Market in the world just after china, but the dynamics continue to be different. Iphone has been the only bright spot in india. Is underscores why tim cook has chosen to come here. Here is the interesting piece. The challenges will be twofold. One is on price. Iphones are extremely expensive here. The cheapest iphone is 399 compared to a cheap smartphone of 135. The demand for smartphones in india is at the low end of the market and apple does not operate that at all. Tim cook will have to write a new playbook and that is what he is really here for. India is on the cusp of 4g. Reliance geo is a huge venture in the 4g space. Here andis going to be meeting executives of these two companies hoping they can get some alliance and distribution as well. David you put your finger on it, this price point issue. Apple has been a high price provider, highquality and not cut price. Is he going to have to rethink that to make progress in india . Harsha you bet. Cannot be a cut and paste model of china. And india has a peculiar market with its own dynamics of the game. Hasung for instance redefined a strategy to india. It is tough to be a price conscious market. He wants all the apps and features at a lower price point. Mind you that apple does not have this division and retail model because the laws do not allow them so itll be interesting to watch how apple will define all of this customized for the indian market. The headline is extremely interesting and the potential seems to be large. They have to scratch through the surface and that is what to cook is trying to do. Revenues are small, but the potential is going to be extremely large. David thank you very much. He is coming to us from mumbai. Lets get an update on headlines outside the business world. Sherry is here with first world news. Call this one a split decision. Bernie sanders one the democratic president ial primary in oregon and Hillary Clinton claims victory in kentucky. The primaries do anything to change the dynamic of the race. Clinton is inching closer to the number of delegates she needs for the nomination but sanders is not giving up. Senator sanders let me be as clear as i can be. We are in until the last ballot is passed. Shery the next big task, delegates in new jersey and four other states. The wildfires in canada are threatening Oil Operations again. Suncor energy has evacuated. Oneda has lost about Million Barrels of production a day because of the fire. Global news 24 hours a day powered by our 2400 journalists in more than 150 areas in the world. Jonathan check out this charge. Investec confusing leaving to periods see volatility come up in the end, it is a mission to know where its the start of 2015. This is easy. More next. Itid yogi berra might call market deja vu all over again. Ofre has been a lot volatility and shifting Investor Sentiment and when you add it up, the market is moved to less than 1 since the start of 2015. Did you identify our mystery chart that jonathan said everyone should know . It is the s p 500. It has been stuck sideways in a treating range for years now. Joining us is our hogan. The s p had an alltime high almost a reg out and it has been ranged around there since then. First and foremost, we need to see earnings. We have had four quarters of negative Earnings Growth and that included the last quarter reported. Importantly, we are probably at an Inflection Point where we start to see earnings in the back half of this year. Guidance was benign to mildly positive. Two key factors there we are seeing stabilization in Energy Prices and a pullback in the u. S. Dollar, which i think is real important here. In both of those former head wins state tailwinds into the second half, we may see earnings. That would help a lot. Over the last seven months or so while we have been in the primary election season, we have had a massive negative drumbeat of absolutely everything wrong with the country, which obviously has an effect on Consumer Sentiment, Consumer Spending, and corporate spending. What regulations will apply, who is the next leader of the free world has certainly pulled in and will dissipate as we focus on the general election where things get a little less negative in the two candidates focus on each other and stop but everything wrong with the world. Lisa you said something important. You said we are at an Inflection Point where we see guidance neutral to positive for earnings Going Forward. If this is not enough for investors to start deploying cash, having more confidence in the market, are they going to be too late . What are they waiting for to see to finally jump in and start deploying their cash . Art a couple of things. You start to look at valuations. We have had amazing dislocations, but what you start to see is a real trend that will turn the s p 500 is rotation of some of the darlings that are overbought. Tradingout the telecoms at extremely high historic levels on multiple basis and very low levels on a heel basis basis. Ield i think that is the first leg area that becomes selffulfilling. When you start seeing some of the underperforming sectors get a lift, that has probably already started happening in the Second Quarter. It was certainly evident yesterday. That trend continues and starts to give people more excited about the market moving in the right direction. Jonathan help me understand something. The s p 500 will join 20 other periods without making a new high. In london, that is nice but do they have any significant start for me as an investor . Art does if you look at what happened after all of those periods of time to markets. If you go back in history, after that extended time of lamarcus, we had a significant outperformance in the following year. I think that is the good news. The good news is that when you think about the drivers in this market, one of the things we are starting to see is europe that is stabilizing and getting better. China is doing a better job at their currency pegs and certainly rationalizing some of the monetary and fiscal policies so i think some of the outside or external effect of the market are getting to be less of a headwind and turning more positive. If you are going to use history as a guideline, understand that when you went to that sideways action, coming out that tends to be more positive than negative. David last question. That overallut values are at 86 percentile over the last four years. Can we expect it to go higher than that . Art that would be true except what you have to layer on top of that when using the five model and bloomberg ran a great story on this just this week, so if you look at the yield on a 10 year and compare that to valuations, we are at a lower level than we were in terms of valuations with the one in three quarters on a 10 year versus valuations in the s p 500. We are lower than we were the entirety of 2002 to 2007. 50 basis points lower than the yield on a 10 year. Well see that for an extended amount of time. I think that will drive more investment into equities. David thank you. That is art hogan. Coming up next, with so much uncertainty across the globe, where is your money safest . Steve gives us his two cents in a bloomberg exclusive next on. Jonathan this is bloomberg. Good day to you all. Markets firming up in europe. Get to the boards quickly and i will show you. Benchmark in germany down 1 10 of a percent. Futures a little positive on the s p 500 in the u. S. A stronger dollar story. 1. 09. Yen at get to the other screen because here is some price action for you. The pound bouncing on lows through 145. 14527. Guess what time a poll came selling well in the lead . Guess. Up for tens of one point. ThingSteve Pagliuca market shares are still a safe haven. Erik schatzker sat down with him. Is seen as a very safe haven for money, a strong currency. But as world. It still fundamental growth. And look overck the history of time, we are not at a major war right now. We had world war ii and the korean war, so there was a lot going on outside the country and a lot of bad things happening, but the country is not in a major war. We have had a huge oil and gas dividend. Gas prices are probably the lowest they have been. 5 unemployment. I think we are struggling with that sense of trying to get ahead. Probably the biggest thing we are struggling i with is the income gap. To me, that is something the politicians that are not talking about. This should be talking about education and reforming education in this country and investing in education and a big way in this country. It is the only industry that has not changed in the last 100 years. 100 years ago, we had horses and buggies and now we have cars and airplanes. If you go to my classroom, they are basically teaching the same way. They have little technology. Region pay our teachers more, put more money the system, reform the system. That is the solution to income inequality. It is not building a wall or any of those kind of things. It is really education because we are not going to get the jobs that are paying three dollars an hour from the rest of the world. There is an oversupply of labor. We need to get people educated for the economy. Lisa that was Steve Pagliuca speaking with our own Bloomberg Erik schatzker. I have to say, i think it is really fascinating that increasingly the contrary view and the increasingly popular contrarian view is if the u. S. Economy is doing better than a lot of people out there are saying based on the bond market, based on the stocks. David the other thing i keep hearing more and more is geopolitical risk. With the election in june, it has taken a wild, but people are talking more and more about the uncertainty. Lisa when is the not going to be geopolitical rhythm or uncertainty . David i think it is a little more wider range of possibilities than we have had. Jonathan the situation to be diplomatic is fluid. [laughter] the policies on the table are fluid as well. You can say lets think seriously about policies on the table. On either side of the aisle, i cannot get a handle on them right now. David particularly with donald trump, it is difficult to figure out what policies he would pursue as president. Jonathan up next, from politics to the great debate. Speculation of a summer rate hike hits a fever pitch. Will it be a game changer . Maybe with a little bit of a hawkish tilt. That is the vibe in the market for expectations. We will break on what is happening next on bloomberg. Iaaem jonathan this is bloomberg. Lets get a check on the markets for you and go straight to the assets board. Is stronger dollar morning with the dollar yen. Rule inption to todays the session, the price action on cable. The pound bounces to 14525. Nothing to do with the queen, this one. One single poll showing remain well in the lead. That is coming from the evening standard. Leave at 37 . A lot to discuss. David momentum building. We are two hours away from the opening bell on wall street. Here is what you need to go with at this hour. Japans economy dodged a recession as gains in government and computer recession make up for a slide. Lowesprovement retailer was the First Quarter profits to top analyst projections and raised forecast for the year. Shares are down almost 5 at burberry. They lowered estimates for the second time in a month. Now, first word news from sher. shery Bernie Sanders has won the democratic president ial primary in oregon, and Hillary Clinton is claiming victory in kentucky. A race that is still too close to call. The results do not change a lot, though. Clinton is getting read closer o winning the nomination. June 7 is what california, new jersey, and four other states hold primaries. Joe biden will announce new rules on overtime that may give more than 4 million americans a pay raise. It may also give them a reason to vote for democrats in november. Haveules say workers must made 47,000 before they can be considered managers and eligible for overtime pay. That is twice as much as the current threshold. On capitol hill, it is likely to be a confrontation between the senate and house over the zika virus. The senate has voted for 1. 1 million to find zika virus. Spend 600illing to 22 million would only if money is cut from other programs. The white house calls that woefully insufficient. Jonathan thank you very much. Tom keene joining us now from bloomberg surveillance radio. 240 was the line i heard on bloomberg surveillance 2 for 2 was the line i heard on bloomberg surveillance. These are projections at a point in time. They are not promises. I dont know how many rate increases we will have. Currently, my assumption is two possibly three are possible, but i dont know. It depends on how the economy evolves. I think two to three is more given seeing how the inflation were seeing. Jonathan these two guys came out and set the plant. You get a sense of a shift in 24 hours. Tom exactly. Every three days or so, we oscillate backandforth based on the data. It way i would suggest is when you listen to optimists or the pessimists, somewhere in the middle is a data dependency of an ok economy. What i find most fascinating within the good macroeconomics of the two president s we just heard there is the idea of raising rates so you have some room to move if there is an outside shot where you have to come back down