Francine welcome to the pulse. Live from bloombergs european headquarters, i am francine lacqua. We have a great show lined up. Couldng to chris ailman also joining us later on, maurice leavy. Will be spinning to alex a mordashov. All our exclusive interviews. Lets get straight to the markets. The the picture european stocks. I want to see you again at 103. 9. There is more concern after Central Banks japan spurred concern that the Global Economy is losing momentum. Refraining from using Monetary Policy. This get to the bloomberg first word news with nejra cehic, nara. Nejra the yen jumped to a 22 month high and japan extended losses. Governor kuroda says he will not hesitate to ease further. The Swiss National bank has kept Interest Rates unchanged, conserving animation conserving ammunition. It has the potential to come to kate monetary easing desk to complicate monetary easing to come to kate monetary easing. The frank reminds the frank reminds overly valued. Minister saysy there is a need for his country to cooperate in the oil market at the moment. Speaking to bloomberg tv, Alexander Novak also said oil prices averaged 50 a barrel in 2017. Well bring you highlights later in the program. Investigators say they found the main wreckage site of egyptair flight 804 which crashed last month with 66 people. Egypts Aviation Ministry says the Search Mission has obtained images of the airbuss wreckage but did not specify the location. Global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. Find more stories on the bloomberg at top. Francine. Francine thank you so much. The Federal Reserve voted unanimously to leave rates on hold. The meeting also saw a rateficant shifts in the path expectations. Brexit, yellen outlined the decision on whether or not to leave the union is something we have discussed. It is fair to say that it was one of the factors. It could have consequences for the u. S. Economic outlook ahead of the labor market. It has been something of a loss of momentum. You should not Pay Attention to one job market report. If the incoming data were in the coming months to justify the increases that would have this that we have long discussed, i think markets should not be surprised by such a decision. No meeting is out in terms of a possible rate increase. Timetablerespecify a so i am not comfortable to say it is in the next meeting, but it could be. It is not impossible. It is not possible that by july, we would see data that led us to leave led us to believe that we are on a perfectly fine course. Francine i want to show you my chart of the hour. The market expectation for when the next rate hike will come. Anestors believe there was 80 chance of a july hike and more than 50 chance of an increase by december. That was the picture back then, a week ago. If you look at the picture this byou can see tapping the bart go. Investors do not expect increases this year or even by february 2017. My guest is chief investment , the california state teachers retirement i am ailman. To welcome chris a great to have you on the program. You are here 10 days before brexit and we have a fed day. Are you disappointed that the fed has been saying for the last six months, were itching a hike, we are ready for a hike . Chris a couple of those spots were coffee stains. Im disappointed. I think the fed needs to get back to normal Interest Rates as quickly as possible. They are out of tools. They have used them all up. I fear that the last unemployment report caused them to be worried. The fact that the polls have balanced out more on brexit is a big concern is a big concern. If they looked at the bookies and the way it goes, because that is our view that they are more knowledgeable. There was a chance to raise rates. U. S. A soft, but spending is still strong. They need to get back to at least something above 0 . Care francine when i look im sure we have the us closer to a possible brexit, but we kind of knew that. The fact that he almost took july off the table for the fed wants to weakening jobs conditions in the u. S. Are you worried the weaker jobs number was something more sinister . Chris i think i would go with more sinister. The mood in the usa is not that good. The election has been doing a lot of it out because they are possibly hit by negative images. If you look at 70 of the u. S. Gdp is driven by the consumer and Consumer Spending is strong, and it will remain strong. Blip. That may was just a i think it is a sign of the underlying concerns in the u. S. Economy. The statistics are still very weak. The fed should have moved, now it is a question of september or never. Were talking about 2017, and that is just crazy. It shouldve been now and it should of been bold. Francine that pushes a lot of negative yields further into negative territory and and a you invest longerterm. How difficult is it to find yields anywhere . And how difficult is it to choose what you want to be in longerterm . Hris you hit it on the head if there is a yields in the world, it is in the usa. At least it has a positive yield. For us, we are lowering our allocation of fixed income because of that. The fact that the global Central Banks are out of their ammo. They have no more tools, is a bit more emphasis on political risks. That mix it tough for us to invest right in front of questions like brexit, ethier selections. U. S. Elections. Many of the francine if you look at equity, the problem is are you concerned that when the qe drives of dries up, we are left with distortion in equity . s go i am worried with rates down chris i am worried that with the rates down, even in europe which is in crisis. We have partners who have been looking at middlemarket buyouts in europe are seeing things priced at levels that make it hard to generate the kind of returns we want longterm. I am still cautious. I have been cautious. We think the equity markets are running out of steam. We would like to buy into europe and u. K. But with all of this uncertainty, we draw back. When Central Banks runs out of ammo, it means chris we are concerned about a downturn. I am always looking around my shoulder for what is best for when the next downturn will come. I want the challenges. In this environment, it is very difficult. That is normally going to be equity and gdp growth. With the emerging markets banks of flat, china being weak, there is very little growth and opportunity. Francine will talk more about china and how you define that 7 return which seems impossible. Usistopher ailman stays with for the hour good coming up, we have lots, including balancing the books as well as Energy Prices could we bring you an interview with Russias Energy manager, Alexander Novak. Countries in 108 the world, we talked brexit. [indiscernible] coowner billionaire of sever sell. Will also speak to alexey mordashov. We will speak to alexey mordashov. Francine welcome back. Lets get to Bloomberg Business flash with nejra cehic. Nejra volkswagen shares have fallen the most since december to 24. 2 . That comes as ceo repairs to deliver his as ceo prepares to deliver this morning. Give been giving more time to file separate post that they have been given more time to file separate citing the highest technical nature of the negotiations here it deutsche banks chairman has become the latest Global Banking leader to warn about potential dangers of a brexit. Paul ashley says it would be a disaster for the u. K. And a political disaster for the eu. Morgan stanley economists have raised the exit probability footie 5 . 45 . Members rival in china has said to been valued at 28 billion dollars. At 28 billion. The increase on last years valuation of 68 billion would surpassingdidi, airbnb. Francine how to investors in sri lanka negative returns. The skidmore from the man in charge of investing 187 billion, chris ailman. Hows, we were talking about it is tough out there for people like you to invest when negative yields. When we think Central Banks will do more to push return and sovereign bonds is getting difficult. How much are you looking into infrastructure . How much is it difficult to get interaction for fiscal spending . Chris to increase our allocation. We would like to increase our allocation. We know the u. S. Needs infrastructure but the market is not open yet. For us, the return were looking for is going to be equity and gdp growth, but pimco in california coined the phrase the new normal. They were wrong in my view. We got doubledigit returns. Now, it looks like we are going to continue to have low returns. Maybe now we are in the new normal but the gdp growth will come back. We are just in a slow trough right now. Longterm investors will still work out. We like to increase our allocation to europe. Where concerned about japan. Japan is just we are concerned about japan. Japan is just so slow. We have to get through these massive hurdles. System. S still a flawed it is going to take a lot of work. Francine the eu is a mess. We need a cathartic moment, or a definitive resolution. Chris the eu is still a grand experiment that has not been done on the world. For us to call it a mess from a single system to a multicountry system, yes, it is a mess. I would not say that from a invest that from an investor in perspective, it looks rather attractive. We need some more financial integration and we need to see more of a constant political system. The ecb really stepped in and gave it some solidarity to having at least monetary consistency. For us, certainly central and Northern Europe is attractive there are attractive financial opportunities. With the risks, we like the European Union with france, germany and u. K. Is a nice neutral party. The idea of any you that is dominated by france and germany, we are going to have to watch and see. Francine there may be a resolution if people do not say we need to call another referendum before five years, there may be a solution in 10 days. Chris we are longterm investors, so we are not going to start right on june 24 we are not going to just make some moves. We are going to let the dust settle and look. We have held back on our investments in the u. K. , slowed our investments into europe, waiting for this risk to mitigate. We will step in. In the summertime, we have been feathering into europe in equities slowly because we want to be more of a global folio on the equitys side. Holdve had to put that on with the volatility and currencies and the market. That will take one risk off the table. Francine chris, thank you so much. Well talk more about valuations and about france. Ceong up, we speak to the the second largest Advertising Company in the world. We will talk about technology, valuations and potential growth in france. Coming up later, we are live in st. Petersburg, speaking to alexey mordashov. He brings you an exclusive interviewer. The Russian Energy manager is talking about u. S. Shale producers. Stay with us. Advertising Group Supports more than 77,000 special events in more than a hundred and eight countries more than 108 countries. Welcome to the program, maurice levy. He is hair ahead of the aveva technology conference. To bring together 5000 startups with top investors. Chris, thank you for sticking around. We were talking but the fact that u. S. Investors look at europe and you say there is potential in europe. Something is to happen for me to put my money where my talk is it how would you Rate Technology talk is. How would you Rate Technology . Maurice it is about top talent, business, innovation and also the fact that when we get together, a very Large Company in order to have the start up to transform themselves. When you look at the program, it is quite impressive. You have top speakers such as from google. Big, bigvo lineup of great speakers. Francine can france ever rival are we ever going to have google . We do hope. With the disruption, well have some interesting startups. Maybe we will have unicorns. For the time being, there are some interesting operations which are growing. Us which arew of striving and trying to build something interesting. , we are all we as publicists, we are already in the field of technology in Digital Technology and digital. So far we have 55 of our revenue which is arrived which is derived from technology. Very Large Companies coming with cisco, making some presentations. We have some some things that have never been seen in europe such as googles self driving car. We have operators from facebook. Well have a lot of you a lot of new operations. A new Police Station will be launched by technology. Francine some of these important some these conferences are important to generate interest. He shows up in europe, d go to conferences to get the do you go to competence to get the lowdown . When you look at startups, you look at valuations . Chris we will invest in some startups. We will be investing through the ships and private equity and venture. We need people who have boots on the ground in those areas to understand the vibrancy of Silicon Valley. Everybody wants to recreate that. It is very challenging because it is a combination of education, entre nous real spirit and that venture capital. On. Ice you are spot you need this combination and shortably in a very place. Geographically francine prepare us. Chris i agree. The Silicon Valley is really adjacent to stanford university. There is a reason. Maurice there is a technique. It creates hightech. There are a few startups around some labs. We are missing is thee the problem is problem and france is that you have a lot of strikes. Are getting there, there are strikes and concerns about the pickup of garbage just two weeks ago in paris. How do you respond to that criticism . Maurice the strikes or something we are used to and we are living with. What happened recently is something which is not very Common People and we have seen with the garbage and also the people who have been demolishing all of this is something which is quite unusual. What is unfortunately usual is to have a few strikes. We can deal with that. We cannot stop that, because it is something which is part of workers. Om of our they have the right to protest, the right to demonstrate, but we need to make sure this is not abating the to come. Francine especially for investors. Maurice what i can tell to chris is we should look at the publicists, we have been the Fastest Growing company in our sector for years. We have the best margin of the industry. We have transformed ourselves and we are second to none offering and to end the services. We have been able to do that with the broken english and living in france. You can see that this has not too high to jump over. When you look at all of the investors, most of them are happy. We have a way francine it has been a great company. You have had your share of setbacks with the merger. Maurice it will come back very soon. Francine something bigger . Oh, the share price. Maurice i am confident on the track of our progress. I feel good about that. We are right on track. , chris, were talking with some of the valuations about tech. I want to talk to you about the deming reports the deming reports. Do you think you need to come together with a lot of your counterparts to show you are more transparent in some of your practices . Maurice there is a transparency aspect and there is the honesty and integrity of the deals. I do believe is not only for publicists. What i do believe is that most of our competition as well as ourselves, most of the industry has called into the contract. Some contract allowed for transaction. Some context demand transparency. We are bound to the contract and we are developing with the contract is proposing. If it has to be transparent, let it be transparent. If it has to be days that are on markup or some specific issues, we are dealing with this correctly. I dont believe there is a huge issue of integrity. Downbelieve we need to sit with our counterpart and come to an agreement in order that this price is going out of the landscape and we can work positively with our clients. Chris all of this is about disruption of technology. You made a point that the company has transformed itself. I think when you think back to france, and most of these transactions where where people have parity affirmation. Half proprietary affirmation we have seen that in the beginning stages of new technology. That is going to be one of the challenges in france. It is very staid and rigid with tradition. Fascinating toee see the google economist. Francine maurice you have this freedom petition. Chris i will play my own i will pay my own way. Is june 13, july 1, july 2. It is open to the public. One thing i would like to say, because you should not think were only a french company. 50 of our business is done in the u. S. Only 6 in the u. S. Only 6 of our business is traded in france. We are clearly a Global Company dealing with all of the global issues. Francine maurice, thank you so much. Maurice, will have to get you back on. We will have to get you back on. Chris ailman stays with us. We will be talking more about china and the challenges there when it comes to corporate debt to stay with us. Plenty to come on the program could an interview with Russias Energy minister program. An interview with Russias Energy minister. Lets check in on the markets. We are trading lower. Lets check in on the bloomberg with mark barton. The stoxx 600 down for the sixday. Every single Industry Group is trading lower on the stoxx 600. Investors worried about next weeks referendum, just a week away 8 . That is what we write up the value on the stoxx 600. Chart. The thi