Rescinding the carbon laws. , data in the u. S. , 8 30 a. M u. S. Jobless claims. The Bloomberg Consumer comfort number at 9 45 a. M. P. M. , the Consumer Credit number four june. Earnings, before the bell, wendys, duke energy, and amc. Bell, news corporation, not 21st century foxconn with the unit that owns the wall street journal. I cant keep track of the names. It is the wall street journal, essentially. News corp. 19thcentury . This is what Rupert Murdoch loves. Maybe newspapers can make money on their own. With a pay wall. Cbs, lions gate, and solarcity as well. Bank of england comes out with its Rate Decision at 7 00 a. M. , ecb comes out at 7 45. Of the important out press conference for governor mario draghi. That will be a remarkable press conference. A data check. Stocks, bonds, currencies, commodities. Futures bounce after a tough number of days. Interesting to see how the equity markets in the u. S. React after what we healed from frankfurt. Oil south of 97. Vix, 16. 37. German 10 year, contrast that with our 2. 46 . 36 with news on ukraine. Brendan greeley, help me out. U. S. , hereame as the is their yield below 2 . Red circle is the u. S. Yield . Yes. What a differential here, two different economies. Is the continuation of the story we have seen in europe for the last four years, germany has been a huge part of sending other capital to the periphery. Place. Is still a safe it gets the brain drain from spain and bulgaria, straight to berlin. Bund. Ave safety in the they are part of the problem and also the biggest winner. They are the full faith and credit. Us ino gallo will join the 8 00 hour. Lets look at the front page. Bank of america on the verge of a recordsetting settlement in the Mortgage Backed securities case. Bofa will pay anywhere from 60 17ion to 16 million to end the government investigation. Bofa have been trying to negotiate down the 17 billion number that was focused on. Uggla the New York Times has a back story. The banks top lawyers and executives, you have to assume who made the illfated decision to fight judge raykoff. Leverage was eroded after they lost that case. There are different numbers in operating income. 360 nine daysa, of present operating income. Jpmorgan, 204 days. Gorgeous chart. Citi, 161 days. Viewhought bloomberg had a good point. They wrote it is a shame that these cases do not go to trial. What we would get is understanding of how the bank works internally. They do not want us to know. Useful for future regulations, we dont have it. We have a settlement, they write it off, the shareholders take a bath and we dont get anything out of it. Is a secret how surveillance puts it together. Day, i will explain it. I am a mole inside surveillance. Russia striking back against u. S. And eu sanctions over ukraine. Putin announcing food imports that will be banned for one year. On them among them, cheese, pork, fruit, vegetables, and dairy. Food from countries that have supported the sanctions like canada and norway. This is not funny but sometimes putin does things that feels like putins pride. When he goes on vacations and get pictures taken with white tigers or shirtless. Odka, i do not see it in there. They do not need imports of vodka. The first idea of germany, is some of the slowdown in italy because it is the initial there is concern that will be a drag going forward. Adidas seeing a hit from sales in russia. What else . Story,third frontpage concern over deflation in europe. You showed us the 10 year yield of the german bund. The twoyear yield falls below zero today, negative right now. The catalyst, industrial output grew less than expected. Tension increasing over ukraine, people are stampeding to the safe haven of german bunds. I have to bang this gong again. It is the longterm consequence of the fact that germany did not have to bail out its own banks. Was filled out by irish taxpayers. Really . Help me here. Banks notout weak doing what we have the courage in the u. S. To do, or is about lousy economy, or both . I always make this germanys fault. It is about taking too long to understand that the problem was not with the banks, but with the economy. Germany has been obsessed with austerity. It is realizing now it has to help other economies. This morning, Mario Draghi Press Conference. We will have that later. Those are our frontpage stories. Our guest host for the hour id. Looking forward to this, ceo of wsl strategic resource. Forget backtoschool. Exist in the winter and end of the spring . It is almost as if every store in america closed. Has summer been ok . 75 off. That is what is happening. I got an email about a sale, it is only 80 off. Is this permanent . It is permanent and a sense that entrenched shoppers saying im not going to overpay for anything. Im going to check the deals. Unless you have something really new and different, i will come. How toilers have learned gain that, they adapt accordingly. Who is coming out the best . We have a new series of managers running big retail companies. Walmart and target, the discounters, are now very focused on the best deals. Uniqlo and h m are in a good place. Highend, Luxury Brands are struggling. M ts stick with h cheap and cheerful. They are getting traffic. It is about young people, middleaged people, kids. Thats the starting point for people. Is a mix and match going on . Highlow . Even the wealthy are saying i am stupid to pay 300 for a white tshirt. I might as well go to h m. How much . Some people will pay 300. Kanye. Cheaper bowties. It was like 7. Tom, you overpaid. Come on 100 tshirt. There we go. 300 ifpeople will pay it is the right brand name. Not us. I am going shopping after the program. Goto company news. Some company news headlines, boeing wants to cash in on aviation junkyards. They might be in the market for a Salvage Company that recycles jet engines and other components. Airlines are getting rid of old planes to be broken up four parts. The Worlds Largest food company will spend almost 9 billion buying back shares, the first in years. The maker of nespresso reported growth that beat estimates. To newlosing a battle yorks explorers club. Stop selling a brand of scotch called Johnnie Walker explorers club. Diageo says it will appeal. The clubs former members include neil armstrong. Coming up, Thomas Mueller wears adidas. Important german soccer player. Adidas coming off of its world cup success is having some problems. We will talk about that, after the break. Good morning, bloomberg surveillance. Evercore phas merged with isi. Altman making a transaction. In the loop, look for Ralph Schlosstein of evercore. This is bloomberg surveillance, scarlet fu and Brendan Greeley. Adidas reported results come a preannounced bad Second Quarter numbers. The profit margin outlook missed estimates. The golf business not doing so well. Adidas relies on russia. I had no idea, 13 of sales overall. Marketing expenses, when youre up against nike, you have to spend a lot. The company that spends like there is no tomorrow on ads. Is not just marketing. It is sponsoring teams. They did very well in the world cup. But then the sponsoring does not end in the world cup. We are talking about european leagues, english premier leagues. Adidas has an advantage but it is very expensive. They just took over the contract from manchester united, 94 million. Unprecedented amounts of money being spent at the club level. I spent all summer boring you guys about adidas soccer. Adidas has a lot of other brands and a problem that comes up at earning calls is the golf brand. Millenials are not playing golf. Nike also has golf, it is operated nike all branded nike. Has the swoosh. Adidas has brands, nike is so consistent worldwide. , Wendy Liebmann of wsl branding is key. Nike has always been so consistent. Foras always been one brand performance, fashion. Adidas has chopped and changed it for Different Countries and different sports. As an aside, is nike the Apple Computer of retailing . Analogy. S a fair they have continually pushed innovation and design. I think nike does offense that apple can only dream of. Youve gone to all of them. Ologyke was called a fash company, a Fashion Technology company. If you and i said that, we would get punched. I think it comes more from performance. Dicede it is sliced and into different brands, the challenges it is harder to get the global power of the brand. One bright spot for adidas is reebok brand has invested in crossfit. They are sponsoring the Crossfit Games and have crossfit g ear, sponsoring athletes. Part of that is a wider trend towards fitness specific gear. Have you seen in a trick broadly, not just around crossfit . We have done research about the wellness uprising. At all levels in the u. S. Economy the wellness uprising . People Walking Around in workout clothes. Trying to be healthier in eating. That has an impact. People trying to be healthier. That is in everyday clothing or exercise clothing. Shes looking at you, tom. Does this change marketing strategies, it is not just about getting athletes . It is about taking a walk every day. How does that change retail . For a retailer, that opens the doors. Derek jeter is the icon, then, how does everybody aspire to doing a little better every day . Cheese, alk, healthy vegetable. Scarlet . Hat, we will do the rest of the show walking. Tom is scowling. The next hour of bloomberg surveillance, Robert Kaplan, former Goldman Sachs vice chairman will be joining us as guest host. This is bloomberg surveillance on bloomberg television, streaming on your tablet, smartphone, and bloomberg. Com. Good morning, futures up 5. I am tom keene, with me is scarlet fu and Brendan Greeley. Adam johnson is on assignment. Top headlines. Know what, weyou will start with the 30 million americans who lack health care. A finell not pay under the Affordable Care act in 2016 is a list of exemptions including domestic violence, Property Damage from a fire or flood, or having a canceled insurance plan. Government researchers racing to get an exponential drug approved to fight ebola. The worlds worst Ebola Outbreak is being blamed for west africa. Hs in in cambodia, senior members of the khmer rouge have been sentenced for war crimes. The first time top officials have been punished. Those are your top headlines. Good. Brendan greeley gets us started with a morning must read. Blog post by a tech ceo. Why i am leaving the best job i ever had. He is taking a lesser role at his own company. He wants to spend more time with his family. Thats not the excuse . That is what he is planning to do. Is he a millennial . I have this problem, too. We spent 30 years fighting the wars have, the daddy just begun. There is not cultural acceptance that you want to go home and spend time with your kids. What are you doing . Losing the daddy war. Hes a ceo. These discussions about the quality are wrapped around elite corporate officers. Wsl, i ammann of more interested in the retail worker barely making it who has these same challenges. They do not have the option out of a ceo. They are grateful to have a job, it is not a great paying job. They do not always have health coverage. Now, fortunately, some of them do. It is a real challenge and they are the ones who will spend if we give them more money. Excuse my political can you make the statement that because of the new Health Care Directives in the u. S. , retail is going to more parttime help . I cannot but i have heard those conversations. I cannot make a blanket statement. There has not been a good study yet. Not yet. To your morning must read, it is a bunch of elites going out, i think i will take off. Let Stock Options kick in. There is a distinction between the elites and nonelites. Yesterday we were talking about extrinsic and intrinsic motivation. Intrinsic motivation is important for the elites. They want to show that they have a point to their lives and jobs. Talking about retailer workers, extrinsic stuff is important. We talk about how to make sure you have a company culture, for a majority of workers, just pay people more. Pay them more so they can have a better quality of life, whatever that looks like. We will continue discussing this. A topic that does not go away. Back to School Shopping season n begins. The state of the consumer and companys posture feet response. Good morning, that view is better than this in europe. Europe is troubled by recession in italy and low Interest Rates. We will have the bank of england and ecb rates from a gorgeous new york city this thursday, april 7. I cannot convey the difference in december versus the summers we have seen. A perfect sunrise above a perfect new york city. This is bloomberg surveillance, i am tom keene. With me, scarlet fu, Brendan Greeley. Adam johnson is on assignment. A quick data check. A standard data check. Future coat up, 10 year yield, the euro does not describe what is going on in europe. Morning, negative two year yields in germany before mario draghi and ecb festivities. We will have that for you in our next hour. Lets talk about retail, the second half of the year is critical. Third and Fourth Quarter include back to school and the Holiday Shopping season. For backtoschool, according to the National Retail federation, americans will spend almost 75 billion on school and college items. Our guest host is Wendy Liebmann , ceo of wsl strategic retail. You put together a regular surveys and your surveys and reporting shows that shoppers are willing to spend again but they are spending smart. What are companies doing to get ahead of this . To make sure people spend a little bit more than they are willing to . They are getting out early, that sounds like old news. They are getting out early in lots of social media and promotions, how do i connect with people and connect with them personally . How do i make sure my product is on their list. Social is outpush in strong. Deals, new products, reminding people of what they need to buy. Things. Nds of just getting people go in earlier rather than waiting until the very end. Going earlier, a lot of people i talk to will say that they head out to staples for school supplies. Does brick and mortar hold any advantage for backtoSchool Shopping . Yes. R certain things, sometimes it is easier to walk into staples or walmart and get all those things done under one roof. At the same time, i have two kids and a cart, that makes it a challenge. Withwill kill two birds one stone. The marginal economics of backtoschool, 4 makes a difference at walmart. The backpack, 26. 99. Brendan greeley, the frozen backpack with matching lunchbox, elsa and anna, 4 more. Are not a backpacks substitution good. I have two fouryearold girls. Allouse is all frozen, the time. With the success of disney and pixar, how important is branded gear in a time when people are aware of how much they are paying . It does cost more to get elsa on the short, i know. It is very important. Otherwise i am picking the lowest price. When you have 24yearold saying daddy, i want frozen. If you can afford to, you will go for frozen. Throughen will blow bargain shopping. Compare with the Holiday Season . It is much less important. It is a precursor to how people are feeling. I have got to buy, get them sneakers, jeans, a backpack. Ive got to do it. In general, people are not buying everything at once. They are buying gradually as they go into the season. It is a different kind of season. You say it is less important, it seems like it is a lot more expensive than it used to be. When i was growing up, it was apparel and sports quitman, maybe staples. Now, it includes a lot more categories. Is there any industry that does not get a boost from backtoschool . Very few. A really good point. Everything from beauty products, technology, home goods. All of those things. Really smart retailers take advantage of that. Wait, wait. Tooing to sit foephora sephora . Yes. And youre buying school supplies, parents have to buy clorox wipes. And a teenage girl is saying what color lipstick to wear. Girls did not wear lipstick until they were 25. . Hat stock to i buy heres what the shopper is thinking about, all the basics i have to get. Has a unique reason for me to spend more. Otherwise, it is just, all bets are off. I do not mean to sound vague, it is the consumer mindset. The cheapest or the newest, nothing in between. Curious about technology. You said that is a big part of backtoSchool Shopping. Was in1990s when i college, you got one computer when youre a freshman in college and that is how it was bought. What is the lifecycle . How early in the School Career are you buying computers for kids and how often are they being replaced . Depends on schools. In some schools, they provide computers. Kids are using computers very early. I do not know American School systems lucky you. Right . Cookuld you suggest to mr. At apple that his fall product rollout should occur august 15 . It does. Emails that say if you buy a computer or laptop you get a discount for backtoschool. If you are a student, you get a discount right now on applicants. On apple goods. Tech accessories to go with it. Younger age, people starting to buy, parents starting to buy and then replenishing. Hows gap . Slow and steady. They have a new person in charge of merchandising. New creative designer. So much competition. They have got it level, people are going back into the stores. I keep saying basics. Not that one i must go and get it right now. Next time, Wendy Liebm