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tv   Whatd You Miss  Bloomberg  June 30, 2017 3:30pm-5:01pm EDT

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at least you do people were wounded. police are said to be searching -- at least two people were wounded. police are said to be searching for a shooter or shootings. president trump says a change of tactics is necessary for dealing with north korea's nuclear and ballistic missile program. southke alongside the korean president at the white house. president trump: the era of strategic patients with the north korea regime has failed. many years, and it has failed. and frankly, that patience is over. said the president alliance between washington and oul is an important one, but the u.s. is renegotiating what he calls a rough trade deal with south korea. slow inress has been
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high-level talks to reunify the ethnically dive i -- ethnically island of cyprus. there are many outstanding issues to be resolved. just but all participants have declared they are here to find a solution. -- >> all for just been subsequent they are here to find a solution. acknowledge the responsibility they share for a successful outcome. the participants to heed the call for peace on the island this week. mark: cyprus was split in 19 some before when turkey invaded, oflowing a coup i supporters a union with greece. turkey and has station 45,000 troops in the north. friendship presidential candidate marine le pen has been charged with misappropriation of funds. the national front leader and other party leaders are charged
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misappropriating funds from the european union. the charges.nied in pressure has increased for more accountability in the disaster that killed at least 80 all in the london fire. nicholas paget brown was criticized for walking out of the meeting on the place because present.ts were he admitted that things have dealing with the aftermath of the fire. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. dealing with the aftermath♪ julia: live from bloomberg's world headquarters in new york,
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i am julia chatterley. scarlet: i'm scarlet fu. joe: and i'm joe weisenthal. we're 30 minutes from the close of trading. julia: we have the countdown to the july 4 holiday. joe: but the question is "what'd you miss?" scarlet: republicans struggled to find support for their helpful. meanwhile, president trump gearing up for meeting with chinese president xi jumping -- inping next week. back, buttheir jobs what happens when wall street sees declines across the board? at the dows look major averages. the final close of the first of of the year. abigail doolittle is standing by. >> thanks so much. let's break it down in a number of ways. on the day, we're seeing gains
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on the major averages, be dow, s&p, and nasdaq or higher, as well as the dow jones transport, boosted by the likes of avis, fedex, plus some of the airlines. the nasdaq,ing that full of the tech companies, is utarting to eat out -- eke o -- the worst performance for the tech heavy nasdaq since last week. the mysterious tech selloff continues. not a lot of reasons being given for what could be behind this -- perhaps too far, too fast. still, the best sector on the year. and there is profit taking into the end of the quarter. fundamentally, nothing has really changed with these companies. it really suggests it is a shift
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in sentiment. we will hop on to the bloomberg monthly chart in june. up top in white, we have the banks running away with it. down here in orange, to elegy dropping. that sectoral rotation in the middle, and health care eking again. technology taking it on the chin a bit. trading sharply higher for the month of june -- facebook, apple. big, big gains for the month of june. it will be interesting to see what the next quarter brings, julia. julia: it really well. thank you so much, abigail. the big story washington, negotiations on the senate health care bill. still no deal. president trump tweeting about a possible alternative today.
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he says if senators are unable to pass what they are working on now, they should immediately repeal and replace at a later date. we'll just have a moment of silence for that. return iners will three weeks to work on a more aggressive agenda. one of the big stories, what to watch for out of the g-20 summit -- our political reporter and our national security reporter from washington. is a clean replace of obamacare anything that could plausibly get 50 votes in the senate? i mean repeal obamacare? >> right. this was originally the strategy republican leaders in the house and senate were looking at. you delay that by two or three years and give yourself time to come up with a replacement while moving on to different aspects of your agenda.
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strategy ran, that enjoy wall with opposition from president donald trump and senators like rand paul, who seem to have changed their minds. at this point i think the strategy is too far gone. the house has passed a bill and on thatte has proceeded basis. to backtrack would be externally difficult. i do not think it has the votes. i spoke to one senior republican, a former aide, who win expected it would not the votes of moderates who were not happy with the tax cuts and do not want to cut medicaid by as much. that would all be happening in a straight repeal the extent that they do not want to do. do try tossuming they do something like that, repeal , how would replace
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that work out? what is the thinking behind it? the only way to get them across on board is to repeal first and get them to start encouraging spending? >> theyy won't get -- won't get democrats onboard either way. there was a theory that initially they could create a cliff, some sort of deadline where a catastrophic thing would happen and forced them across to the table. that was always, at best, a reach. i do not think democrats ever intended to dissipate in the undoing of the law. the only reason this is being brought up, it was brought up by senator ben sasse of nebraska in a doors on twitter by president trump, republicans of struggle united.heir own party senator mcconnell has a very tough task of getting 50 out of 52 senators. he did not do it this week. it was an embarrassing setback for him. by next week, they hope to have something to the cbo to score. it's going to be a tight squeeze
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, especially if they want to get anything else done. and he suggested canceling the august recess, did me? ,hat is the probability of that she says with a raised eyebrow? the other question i have is, haven't we been here before in terms of replacement -- repeal now and then replace? moderate who had voted for an earlier repeal when there was no chance of it actually passing wood bowls when they did not have the political cover. when you have conservatives wanting a broader repeal, this gives them no further. ofindicates a lack understanding of previous checkmate situations we have been in, doesn't? >> let me take those were by one. the august recess is extremely unlikely to be canceled. to go back to
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their constituents, usually plan a lot of things like fundraisers and town halls to make their constituents know that they are there and they are listening and it is not likely to be canceled. this is usually tactics a member of the minority party uses to troll the majority party. it is a gimmick. it's a very effective stunt that people in the party out of power usually use. it is rare to see members of the party in power using this. with regard to question about later,first, replace look, we have seen the cbo score. a repeal alone would cause more than 30 million people to lose coverage. if you repeal and replace, the number goes down by 6 million. republicans have done a lot of talk about they do not want to pull out the rug from under people and they won a smooth transition. if they cannot agree on a replacement now, why are they to expect they can agree on it
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later when there is less pressure to do so? scarlet: and looking ahead to g-20, the president will be meeting with his global peers then. is a lot of anticipation given his previous meetings with global leaders. let's watch. ♪ [indistinct conversations] clicking] of course, we see the president there with european leaders.asian we have not seen how the president will interact with putin. the stakes are pretty high there. give us a sense of what people will be watching for? >> i think it will come down to this issue of optics. in each of those clips, he shows unprecedented,
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interaction -- the white knuckle handshake with the french leader, pushing aside another leader at the nato summit, and , sheangela merkel, which suggests they have a handshake and trump sort of ignores her. what is going to happen next? he has another round of opportunities for a head g-20ching moments at the because he will be meeting with more than 10 leaders, including also notably,but vladimir putin. this will be their first meeting since he was elected president and you can bet it will be a piece ofrutinized tape, reading body language, how chummy they are, how cold they are to each other. you recall when president obama met putin, it was frosty to say the least. the body language was very poor and suggested great distance. there will also be parsing when they meet. julia: there seems to be all sorts of debate behind the
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scenes about whether they have a formal meeting, in formal meeting. i think both sides are your flow of looking too chummy with putin, given what else is going on in terms of the russian investigation. >> that's right. they have not defined what this meeting will be. there will be a series of meetings. he is not in europe very long this time. it is not expected to be a formal summit or anything like that. there will probably be a bilateral plus side. the public portion does not go very far. h.r. mcmaster has already said they have no set agenda, which provoked a lot of questions. wait a minute, president trump is not going to go i am there and demand action on the election meddling or syria or the ukraine? the many other issues? we have heard that he does what deliverables to come out, so there is a question of whether he will get some sort of deliverable out of this meeting
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with the president. wins, right?al thank you. our national political reporter and national security reporter. from bloomberg, this -- from new york, this is bloomberg. ♪
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scarlet: i am scarlet fu. "what'd you miss?" judge mariostors draghi's speech this week? jonathan ferro asked his guests. shows what i think what draghi said was 100% correct. they are not looking to tighten. they just want to keep accommodation at levels that are consistent with where financial conditions need to be. i did not view his talk is overly hawkish.
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i think it's a reinforcement of what he is been saying. but it came at a time when markets have been surprised. which hasat inflation been low, decent globally. no one is expecting it to come out so strongly put by mario draghi, endicott people by surprise little bit. >> i would have to argue this is not about the short-term course ecb's policyt the response function, which for the last six years since the speech,r it takes" whatever be data comes out, ease, ease, ease. we are returning to a point where economic data may determine the policy response where it goes from flat to a little bit steeper, not naturally where it was 10, 15 years ago, but steeper. jonathan: we can bring up a chart for our viewers, whether
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it is the european central bank, the reserve, the bank of canada as well, across the board, expectations have increased. do we now have a market that may be a little bit more in line with the direction of the central banks or a market that may have misjudged the central banks this week? >> no, i think the central banks will maintain, what i called dovish posture. i think they are really concerned about rattling the markets. we have seen this before where it is strong talk. will be ahink there material change in rates. i do not think this is the beginning of an upswing. jonathan: we have this really strange paradox where inflation expectation is diminishing or over, but rolling central banks are redefining, recalibrating the reaction functions of the same time.
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how do we make sense of that? >> i have a chart of my screen which is a discussion of the breakevens in the eurozone, as opposed to where the bond -- bund has been trading. ucb decrease in inflation expectations has been an -- you see the decrease in inflation expectations has been an inch worth of move. that is interesting, particularly that we have had swings that are much larger in the last few weeks. jonathan: if you want the answer globalholds the key to rates and the cp curve, did you get that answer this week? says but i do not know if i got the answer. the first thing i look at come out where do i get yields? i think the u.s. is being dictated by what other central banks are doing. we have low inflation.
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at 1.4%,comes out yields are higher. why? as expected. >> as expected. certainly. where in a position here what is mattering more is what the ecb is doing and what the bank of england is doing, more so than what the u.s. data is telling us. the curve?hat is what is the plumber telling us right now? , i looking atberg shaving the curve, and certainly there have been historical 1994, orif you look at two thousand four were the fed was slowing down inflation. today, the yield curve has been flattening since 2011. despite a small blip in 2013, the taper tantrum, we have been in a flattening trend since 2011.
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i do not think that is the fed -- the fed is not trying to tighten policy right now. doy are trying to accommodation. what they are doing today is not tightening. above 3% when we get there, yeah, that is tightening. be sure to check out atmberg's "the real yield" 5 p.m. london time. what does the cost of your sushi say about the economy? we will look at three charts. from new york, this is bloomberg. ♪
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julia: in julia chatterley. "what'd you miss?" centereding consumer
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and specifically looking at household spending in the u.k. i think this chart is incredible. if you look at these savings data for the u.k., the change in britain'snce 2015, have saved the smallest proportion of their income since 1963. we have a perfect storm going on . we have the cost of living going up, wages are not increasing. consumers are feeling a real squeeze on their disposable income, and then you have the bank of england warning about the risks being posed about the the level of consumer debt. consumer debt levels are rising five times faster than the growth of the economy. saving less, binging on credit, the cost of living going up, wages are not. joe: there really is an extraordinary chart.
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maybe people are like, well, it is the final party. here are consumers who actually appeared to be in a good mood. change inyear spending on aircrafts, boats, rv's recreational vehicles. this goes back to 1996. if you look at this, it is absolutely surging. big-ticketg on these toys at its highest level in 10 years. it does not exactly look like the u.s. consumer, at least the slice of the u.s. consumer that buys boatswain are the's, which rv's, whichs and may not be representative, is willing to shell out cash. scarlet: i am glad that you pointed out that some everyone. perhaps the rest of us like to spend our extra cash on sushi. california rolls. spicy tuna rolls.
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looking at city to city across financial centers, take a look. these are the cities with the biggest increases in sushi prices. miami leads the way. and then you9%, have two cities from the heartland. columbus, ohio, st. louis, missouri. washington, d.c. coming in with a 4% gain. then look at where the price of sushi rolls are dropping. seattle, new york, basically little changed. i guess this means that julia, joe, and i could go out and spend about the same amount of money we would have before on california rolls. julia: just a burger, actually. and toy boats. scarlet: look at the market as 4 get close to the july
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holiday. it will not be a long weekend, but a lot of people are taking a long weekend. we have a recovery from yesterday. from new york, this is bloomberg. ♪
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julie: genes s&p 500 gyrations
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setting up fireworks for july. the index rises for the seventh straight quarter. the nasdaq rallies for its fourth straight quarter. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. if you are just tuning in a want to welcome you to closing bell coverage. we begin with our market minutes. we can close the doors on the 2017.of the first half of the nasdaq little changed. the nasdaq extending its recent weakness. making and s&p comeback. joe: typically we have seen these big wins in the market. nasdaq much lower.
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kind of a different relationship. scarlet: scarlet: definitely a different feel. the quarterly performance, go inside the bloomberg, i like looking at it because it gives me a snapshot of how every major market has done. im looking here in particular at the number 11, 12, 13, gains of roughly two and a half to 3%. wellasdaq still doing very . it is a pullback from those big gains we had seen. what i wanted to point out here was canada's performance down 2.4%. what is interesting there is it is among the developed world's worst performers for the second economy hasn as its outpaced its payers -- pee rs. julie: just look at the performance their of the german markets as well slapped on the quarter. scarlet: especially with the
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money going in there. let's take a look at how the other asset classes did as well. bloomberg in particular, this is the second quarter. for the most part there was a rally but it did lose steam towards the end. 2.38%.ted the quarter at it has been a rocky cup you -- couple of days. joe: definitely look like we were grinding lower. we will be talking about this more. we'll be talking about this global selloff in the u.s. government bonds. scarlet: in terms of how the dollar has performed, the cleanest way of looking through that is the dollar index. it held up for a while and then you can see it tapered off in mid-may. the big mover for the quarter,
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oil. at a high of $53 a barrel, down to 42, has come back a bit. lots of talk about the global glut out there and how effective cats can be. can be. nike had its best day since 2014 after they delivered a rosy forecast and announced plans to move closer with shoppers. we already know that it is letting amazon sell its wares directly. 2006, afterst since raymond james upgraded it to outperform. analysts questioning sustainability over the chipmaker macron. what a terrible second day of trade for this company. it has just gone public and it is below its ipo price of $10 per share. joe: the selloff continues in
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the final day of the quarter. 2.3% on the u.s. tenure. , one point 7%.da japan yields rising to .09%. australia to 2.6% on the 10 year. i want to have a broad range of countries here. this is a global trend at the end of the quarter. to -- we are trying [inaudible] it is posting two straight .uarters of losses this is the index longest losing streak since 2014. have a look at the dollar cad as well. the canadian dollar the strongest. a real recalibration. the market pricing 84% chance at
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the height of that july meeting. one to watch there. a bit of profit booking going on. despite the attempt by the ecb to dial back on what was perceived as hawkish, still hanging about the level they are, 1423. sterling as well. 1:30 -- falling back to $1.30. joe: finally on commodities let's take a look at oil and gold. oil continuing its come back, up 3% today. west texas intermediate above $46. the real action in those agricultural commodities, we have been talking about spring
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we -- wheat. we have that usda agricultural report at noon today. a lot of interesting stuff with corn and so you beings -- the soybeans. soybeans rallied. and up 3%. in a sterling end. those are today's market minutes. scarlet: for more on the wrapup of the first half of the year, let's bring in michael haverty. -- larry haverty. policymakers from that perhaps there is reason to be concerned about the rise in asset prices. when you look at the equity market now, way or you see the reason for concern? larry: i think asset prices are high, but not high across the
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board. the main thing that is going on, the main characteristic to look at the bright side, the strength of the consumer. employment is pretty good. housing prices have gone up. stock prices are pushing record levels. consumer wealth is there. consumption indicators are particularly good. i spend most of my time in the consumer sector. there is no particular access in the consumer sector. in the consumer sector. internet services at the top of the list with amazon leading the parade in terms of the volume of its business. well.siness is performing i think the problem is when does the federal reserve take the punch bowl away? quiet,on remains very although spring wheat is going
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because there is a drought in wheatland. pricesre two areas where can get out of control. energy and agricultural commodities. scarlet: i'm glad you bring that up. joe is happy. he likes any mention of spring wheat. you talk about how there are areas of concern. when you look at equity volatility, you might not be able to see it but it is pretty clear, this is a chart of the down.d how it has gone it did average above 20 in the first quarter of 2016 but it is trading around 11.4. seasonally the second half of the year tends to be more turbulent, more volley below -- more volatile. larry: i don't think it is going to be
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easy for volatility to pick up. you really need the bond market to get problematic. overall inflation is not bothersome now. it is going to take several months that best for it to get .thers in -- bothersome wages are under tight control. they may become a problem late this year, into 2018. i can't see it happening now. recentlying to have good bond markets. i think the bond prices will probably fall. yields will rise. the levels are so low they are not tebow -- terribly competitive with stocks. you are looking at returns in the 8-9% area. investors have done better than that. consumers are happy and flowing , trying toatf's participate in what looks like a
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solid, robust economy. joe: you mention bonds pretty government bonds in the final three or four days of this quarter taking it on the chin after a rallying for most of the quarter. index,aggregate treasury do you see more weakness ahead? what is driving it? inflation is not to be seen. what may be behind this shift in town? >> the bond market, the thing that i learned many years ago, you cannot break your neck falling out of the basement. bond yields are at a secular low. they are going to rise surprising no one. they have rose 40%. . do not help our firm invest i'm watching the movie from the sidelines. from the point of view of the equity investor i could see them going up a little bit more that
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nothing to threaten the average multiple that exists. particularly since ash flows are so good and we are going to see further dividend increases. one thing they cannot do is raise dividends or their yields. the coupon is the coupon. can'tn get less but you get more. julie: i want to ask about surprises from the u.s. administration. the bond market seems to be saying nothing is coming. we don't care because hopefully the global economy will pick up the slack. what you think the probability from a positive surprise the u.s. administration? what is the trade? what is the best trade for the second half of this year? individual --st in individual stocks. we try to figure what they are going to be doing. our investors live longer taking
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an individual stock attitude rather than trying to worry about macroeconomic policy. i coined a phrase many years ago that washington is too pessimistic for one person to follow. i think anything good coming out of washington is not something investors should anticipate. i don't anticipate it now, not doing tax planning to that effect. i like the environment now where the government is more or less in a stalemate. we can just concentrate on corporations. corporations are running their businesses very well. costs are under control. revenues are rising. the dollar is weakening, which means foreign investors are looking at the united states as a market where they can move funds in rather than being scared.
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so a lot of good things are going on. i frankly think they are going to continue. we are hopeful we see another 5-10%. larry haverty looking for 5-10%. of course, it is not actually dark in florida. thank you so much. julie: coming up, we dig into the inflation data. what are the numbers telling us about the efficacy of monetary policy? from new york, this is bloomberg. ♪
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mark: it is time for first word news. learning about a shooting at a hospital in new york city.
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three doctors were shot inside .f bronx revenue five others have been wounded. the gunman is dead. jae-innt trump and moon met at the white house. speaking in the rose garden president trump said the alliance between the two nations is important. >> more than six decades after our partnership was forged in the fires of war the alliance between the united states and south korea is a cornerstone of peace and security, and a dangerous part of the world. >> the era of strategic patience with north korea has failed. jacob zuma acknowledges corruption in his country's ruling party but he is critical of opposition groups who want
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him to resign. speaking in johannesburg he said the african national congress needs to cleanse itself of negative tendencies which have crept in over the last years. president zuma admitted he was doing a good job leading the nation despite high unemployment and an economic recession. barack obama and his family arrived today in his childhood home of jakarta. the family visited ancient temples and went white water rafting. he was greeted by indonesia's president. mr. obama lived in jakarta from the ages of six years old to 10 years old. global news powered by 2700 journalists and analysts in 120 countries. this is bloomberg. what'd you miss?
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one of the big stories was the selloff in global bonds, central banks warned of policy in the future. they got economic data from australia and the u.s. pca. more, a huge week for the intersection of bonds and central banks. taking center stage dictating the town. -- tone. we are still looking at inflation in the u.s. and the eurozone below target as it is everywhere. what has changed with this new town? >> the data are not showing what the central bankers are suggesting is going to happen. they think that what has happened is temporary and it is going to turn around. slack is being used up in all of these areas. draghi says it is coming there
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too. he says take out oil. takeout cell phone prices. we have another chart on that. everyone has gone to these universal service plans. you get all of these minutes free. you see what happened in march. we had a gigantic drop in the year-over-year numbers and doesn't come out for a year. we are seeing a big drop in the headline and core inflation rates. joe: i forget who isil joke cpi inhey will announce the future. >> i would suggest this will go on for longer. i didn't reduce my cell phone bill until may. >> cell phone prices have been coming down quite a bit. in europe there getting a rid of roaming charges. cpis not a huge part of the
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or the cpi in europe but enough that it helps bring the numbers down year-over-year basis. julie: central bankers can say it is transitory. but it does influence inflation expectations as well. they have been falling for many months. a slight chains. -- change. basedyou look at market expectations, it shows investment community is not on board. earlier in the year they were. a were buying the idea we were going to get it back. the university of michigan number show consumers have not given up yet inflation. that is something the fed is watching closely. they think we are going to see inflation expectations hold for now. if they don't go much lower than
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they also believe they have a case to continue raising rates. julie: the ecb were more hawkish. they said that wasn't -- you were misreading it. chart must the wrong time to get the market confused about an element of hawkishness expectations are concerning. ex you have markets like anu have markets ocean liner. it takes a long time to turn an ocean liner. we are went a look at the possibility of tapering. mario draghi and just had his taper tantrum. [inaudible] joe: isn't there a ship called qe2? thank you very much. julie: coming up -- scarlet: hedge funds coming
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home. what is driving this migration? this is bloomberg. ♪
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julie: traders who left banks for hedge funds are now .eturning for more we are joined by bill cohen. this is a no-brainer is a net? this is just the start. >> it could be just the start. the holy grail for a trader is always to go to a hedge fund. interesting development.
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traders always have their fingers on the pulse. this says the regulations are going to be changing and traders are going to have more of it good time then they used to. they probably feel they can make more money on wall street if regulations are changed. depressing. been scarlet: i wonder as these traders look around, our investment banks kind of a safe harbor? you don't know how long they will last? >> they are risk averse by their nature. where else can you go? without risking your own capital. i have sure some traders found they could not make much money because their cards were not very good. -- theyl be probably
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will have some compensation at risk. they are probably making good salary without performing too well. if banks are allowed to do more proprietary trading than they have been this could be a fruitful sign. >> we are making a bet this administration is going to be successful repealing regulations that have,. saye fund trader will also since they have gotten more involved, talking more hawkish hawkishly, they are looking more optimistic. this might be put size lee the wrong time -- precisely the wrong time to go back. >> if you could predict what was going to happen with markets, you would not have to work very much.
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it is hard to pick. it is an interesting phenomenon. hedge funds have had a hard time. things are changing at the banks. it could be a fruitful time to go back or could turn out to be a big mistake. time will tell. bill cohan, thank you for speaking to us. joe: you have to wonder if traders underestimate their ability to perform on the buy side. they have access to certain information. suddenly they get on the buy side, they don't have those same edges. >> if you're not making money that is the problem. the number of challenges are there. scarlet: coming up next, a big week for china watchers.
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investigations into risky loans and trump at the g 20. ♪
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mark: it is time for first word news. an update on the shooting here at the hospital in new york city. killing is dead after one person. several have been wounded. according to law enforcement, the shooter was wearing a lab coat and had the rifle concealed inside. there was no immediate word on a motive. the gunman may have been a former employee. a scaled-back version of the travel ban is now in effect. authorities are bracing for nor -- new court challenges. advocates are promising to fight the new requirements.
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people from the six affected countries will have to prove a close family relationship with someone in the united states or an existing relationship with an entity like a school or business . germany has joined other european union nations legalizing gay marriage. lawmakers approved the legislation after chancellor merkel dropped her party's traditional opposition to same-sex marriage. sergey lavrov says he hopes that pragmatism will prevail at the talks between president vladimir putin and president trump. those leaders will meet on the 's g-20es of next week summit. lavrov added he hopes washington and moscow agree, quoting it is more efficient to ensure national interest in concert, not so low.
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global news 24 hours a day powered by 2700 journalists and analysts in 120 countries. this is bloomberg. julie: let's give you a recap of today's market action. we wrapped up the week, the month, and the half-year here. of julythe fourth weekend celebration tuesday. , i will give you a quick show of the performance here. gains. 14% less of a positive story for the u.s. dollar making it two straight quarters of losses. that is the bloomberg dollar
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index. losses for the course date of 8%. i can give you a look at oil as well. obviously a real choppy quarter. as you can see higher overall for the last several sessions, trading at $46 a barrel. we did not expect it to be there. scarlet: not after what happened at opec. producers continuing to trail -- drill. regulator isng investing loans to high-profile businesses. president xi jinping will be meeting with president trump at the g-20 summit. joe: for more on all things china, let's bring in tom. great to have you. lots of different moving parts with china has always.
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let's talk about the immediate snapshot. what is the latest data telling us? we are getting conflicting signals. areur assessment is we going to see slower growth in china into the second half of the year. the real estate cycle is turning down, the credit cycle is turning down. joe: what do we see here? the china satellite index versus the nbs pmi. >> we going to get a downturn that called into question a little bit. conflicting messages, the official purchasing managers index says manufacturing and services is better in june. an alternative story, images from space suggest the industrial sectors go back into contraction. .e are going to have to go back
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early indications suggest may be china is going into the second half with more momentum. julia: you see that from the small and medium enterprises as well. the shuttle back -- shadow banking sector. thingsseparate those two we are seeing evidence the tightening is having an effect. do you expect that to continue? >> that is the big question. we have this huge event coming up at the end of the year. seven members of the standing committee, potentially five approaching retirement. we are going to have a huge turnover in china's leadership. there is obviously going to be a massive premium on stability. we are expecting the government to go easy on the deleveraging campaign. scarlet: how do you read the deleveraging campaign overall? it was meant to de-lever the
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economy but in targeting high-profile chinese firms it seems to have grown beyond that. >> the campaign style approach which china takes to addressing these structural problem's, we are seeing action against want against want to terry policy -- monetary policy. now as you mentioned we have seen some of the highest profile incorporates in china -- reportses in china with -- julia: i wanted to ask you about yesterday's announcement with regards to sanctions on north korea. bank, have you heard of that bank? >> i'm going to be honest and say no.
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i've heard of a lot of thanks in china. what this tells me is maybe this is a significant bank in terms of managing north korea's transactions for the rest of the world but in terms of china's financial system this is not a big player. julia: in terms of the relationship between the united states and china what do you think is going on here? we had that tweet from donald trump. it seems unilateral. do you think they are working together? clear, if thing is anybody can exercise effective economic pressure on north korea it is china. we have genuinely seen them do more in the last few months then they have particularly on coal and imports. china has cut that off. scarlet: as we look ahead to
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this meeting between president trump and xi jinping they ended the last one on a good note. both sides were fairly happy with how it went. i wonder what the leadership thinks of donald trump after that tweet. the difficulty getting north korea to get what they want. expectations the trump administration is working out pretty well for china so far. if you think back to the end of trump was talking about 40% tariffs. that would have been a disaster. so far nothing like that has materialized. even if we get something on steel, that is going to be an annoyance for china rather than a structural shock. so far the trump administration relative to expectations is proving better for china.
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joe: i want to bring it back to financial markets. isil this term the party bernanke,ut -- the the greenspan. at certain times policy makers guarantee nothing bad can happen. do people perceive that? that everything is guaranteed to be stable? >> what is striking is even when china's government does their absolute best to put a floor equities, in, and bonds, in the currency, that is it a guarantee of stability. that is what we saw with that investigation. some of the biggest corporations in china. that was an attempt to shore up stability. stocks tanked. scarlet: china understands optics matter.
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xi and trumpident getting ready to meet, is china getting ready to do anything to make sure this goes off well? >> the key is stability. stability in the economy, stability in markets, and stability in international relations. if there are little steps they can take to smooth the way they will be taking them. scarlet: how about in regards to the chinese yuan? >> when china moves the when ahead is really over. during the time as treasury secretary it was appreciated into u.s. china summit. that just doesn't hold anymore. joe: great staff. us.t to have you with
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julia: from new york, this is bloomberg. ♪
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julia: time a look at the biggest business stories in the news now. tesla says there is a potential issue with parking brakes. the manufacturing issue a fax x.del s and as there have been no reported accidents or injuries related to the issue. its tradingped on
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day. share sold at nearly $33 after a final offer of around $29 a share. owns a 35% stake in the country -- company. shareholders voted in favor of the deal allowing it to close as soon as monday. the new company will keep the baker hughes name and will become one of the largest players. warren buffett spat on bank of america could pay off to the tune of $2 billion. berkshire hathaway invested $5 billion in exchange for a bfa preferred stock. it is now worth $17 billion.
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that is your business slash update. scarlet: berkshire hathaway's the fourth biggest owner of u.s. bank stock. following that conversion of he hassc, they vanguard, blackrock, state street and fidelity. joe: those don't even count the assetose are managers that own every stock in the world. he actually own specific things. i think berkshire hathaway should be consider the first. gains how many unrealized in terms of financial investments he is sitting here, if you had to guess? scarlet: billions and billions. julia: any more specific? joe: i can't guess because i
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know the answer. julia: you know the answer. $40 billion. joe: there are two extraordinary things, 2011, we think of the financial crisis as 2008 to 2009. deal well in the his bathtub. he was in his bathtub and he said maybe i will invest in bfa -- b of a. scarlet: that adds to his legend. he comes up with his brilliant idea. as if anyone could do that. >> i'm interested in home capital. inspiredd be another investment. we shall see. saying he doesn't think it is on
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the same scale of returning. a look at have berkshire hathaway's holdings overall. kraft heinz the number one investment. wells fargo prominent as well. there are a number of names that are not banks. american express. moody's. we didn't mention goldman sachs. plenty of banks. u.s. bancorp. a pretty long line of financials. coming up next, the country's biggest deer dynasties. how they went from bottoms up to belly up. this is bloomberg. ♪
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scarlet: what'd you miss?
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princess trone knows that better than anyone. the company's rise and fall mirror the arc of detroit where servesheadquartered and as reminder family wealth is a blessing and a curse. francis writes about this in her book beer money. she writes about the demise of her family's $7 million industry. he settled in detroit, started brewing a family pet recipe in his basement, delivered door-to-door and saved every penny to buy a horse drawn carriage. a couple of generations later my grandfather was running the company during world war ii.
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he refused to water down the beer formula like every other american brewer was doing to keep volumes up. >> there is the stubbornness. >> there it is. was running the company in the 1980's he did not follow the light year trend in time. he chased it. we should have been at the forefront of that. unfortunately that hit us hard in the 1980's at the same time we were purchasing schlitz, five times are market cap. with national overnight family run, family oriented culture. not really the mentality for a big national brewer. scarlet: what patterns do you recognize now that you are unaware of all you were growing up looking at how this company was managed?
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the pattern was geared toward the men in the family. toy were geared from birth join the family business. the women were not encouraged to join the business or even consider any kind of a position. trustee, which was one of the most powerful positions a woman in the family could have read it was unpaid -- could have. it was unpaid. in your memoir you use detroit as a metaphor for your families change in fortunes. what did you think of detroit today? >> the renaissance is real. it is a walking city for the first time in my life.
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it is a great place to invest. my family invested through the 20th century, but made it an enormous investment in the 1980's. scarlet: you are investing in detroit as well. your book proceeds will be going to 826. >> when i knew the book was coming out, i asked them if i could contribute to their tutoring center in detroit they were building. i wanted to participate meaningfully in detroit's renaissance. we teamed up and made it possible for me to do that, serving those kids coming from underserved schools. it has been gratifying for all of us. scarlet: your memoir struck a nerve with different kinds of people. i know you got a lot of feedback from people and family-run businesses, people outside of it. ,hen you look at holistically
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do you think family dynasties are fundamentally flawed? >> not necessarily. , especially ines the later generations is this sense that they will just be a job waiting for you out of college. pathis not necessarily the everyone in the family should take. if the pressure is removed, and the younger generations in family businesses are encouraged to figure who they are, carve out their own identities, and grow up with an absence of this sense of entitlement, which is up to the parents, defined by the family altar, this will be -- family coulter, this will be -- family culture. scarlet: what did you want people walking away feeling?
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>> i'm sitting with my father at our last supper. he died a few months later. , thatt received a letter dividends would be ending. he hadn't saved anything. i had this insight about him in my own life at that moment that it is striving for something that gives life meaning. whether we succeed or fail, that perseverance is so important. my father never had to strive for anything. it was handed to him. he didn't want the job. he would have preferred to strive as a photographer. i was fortunate that i had to figure things out on my own to a certain extent. my son definitely will. this is a gift. scarlet: that was my conversation with frances. scarlet: coming up
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-- joe: coming up, what you need to know to gear up for next week. ♪
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scarlet: the last trading day of the week, month, quarter, and have.
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the s&p and the dell finishing higher. the nasdaq down by a 10th of 1%. economic data starting monday with auto sales and manufacturing, pmi afterwords. we will get the fed minutes on wednesday. julia: and next week's g-20 meetsg, president trump putin for the first time. that is next friday. joe: and the jobs report friday. the best day of the month. scarlet:
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alisa: i am alisa parenti from washington and you are watching "bloomberg technology." let's start with a check of your first word news. police say a gunman and at least one other person are dead after a man wearing a lap coat opened
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fire inside new york city's bronx lebanon hospital. several other people are reportedly wounded. no word yet on a motive police say the shooter may have been a former employee. president trump will visit south korea this year. the excepted an offer from that president after meeting him at the white house today. the president said u.s. patients is wearing thin on north korea's nuclear program. iran denounces a partial reinstatement of the travel ban is a shameful exhibition of blind hostility and a measure that will prevent iranian grandmothers from seeing their grandchildren in america. the travel suspension which tightened restrictions on immigrants from six majority muslim countries went into effect thursday. the illinois house has adjourned until tomorrow without passing a budget, setting the stage for its third straight fiscal year without a budget. it has until midnight to reach a deal. this will push


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