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a proposed question about citizenship on next year's census. the coalition, which is leading a lawsuit to bother question, says a republican redistricting consultant played a major role in the question. study thatm 2015 said the question would help republicans of the polls. release ofling for redacted portions. arab and muslim leaders are arriving in saudi arabia ahead of a trio of summits in the holy city of may cap. saudi arabia called for the meetings in response to us like intentions with its key rival, iran. ministers of the organization of islamic corporation, saudi arabia urged muslim nations to confront with "all means of force and firmness" recent attacks that the u.s. and some
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arab officials have blamed on iran. protesters in sudan are threatening to launch a civil disobedience campaign to pressure the ruling military to hand over power to a new civilian government. the threat comes after a two-day strike failed to produce results. talks between protesters and the military about the transfer of power remained stalled more than a month's massive protests through longtime ruler-- threw longtime ruler omar al-bashir primeowerful to in india, minister narendra modi has been sworn in for a second term. his hindu nationalist party won overwhelming victory. today's ceremony was attended by several sub asian leaders. modi did not invite pakistan's prime minister, a sign that tends relations continue between the nuclear-armed rivals. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton.
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this is bloomberg. ♪ scarlet: it is 2:00 p.m. in new york, 7:00 p.m. in london. live from bloomberg world headquarters, i'm scarlet fu. lisa: i'm lisa abramowicz, in for caroline hyde. this is "bloomberg markets: the close." scarlet: a possible recession. running apple? -- rotting apple? one analyst says the risk of trade was made be priced into apple shares. and james gorman calls markets fragile but does not expect to collapse. more from that interview ahead. all that and more coming up. first, a check of the markets will we have seen paring of gains.
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.2%.q up continuing a design despite the attempted rally if seen in stocks. scarlet: is a petering out of the rally we have seen, if you can call it that. bonds continued to extend their advance. lisa: oil is reflecting the same story with the idea it is falling with respect to slowing growth, and the dollar is unchanged here. definitely an interesting market right now. scarlet: let's dive deeper into the market action with our reporters. taylor gets us started. taylor: it is all about the bond market for me today. take a look at the 10-year deal. go back to december 2017 to see bond yields this low. we heard from vice chairman richard clarida in the last few hours talking about how inflation is transitory and the fed is monitoring for a persistent shortfall inflation
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part of what is anchoring these yields. that leads me to my next point, if you come to my terminal angie tv . it is about positive real rates in right -- in white. break-even, the inflation gauge in yellow. you are seeing positive real rights is real rates in times of stress. if there is any sort of indication of calm in what seems like panic in the bond market, it is that we are still getting positive real rates. emma? emma: i'm looking at media companies cbs and viacom, both getting a pop on talks that they are are due to start merger talks next month. they were part of the same company and number of years ago. shari redstone, who oversees her family's controlling stake in both cavities and is push -- in both companies and has first just them combined, and
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les moonves oppose that. he left last year. showing how chart they performed. cbs is credited with minimalist because it does not have a cable bundle. but should it combined with viacom, a lot of analysts say there is good upside and it would rebalance the portfolio and give them more exposure to younger audiences. we heard from wall street today, upgrading cbs because they are truly excited about the possibility of a merger, saying that the risk-reward is good for both companies. abigail: we have small gains for major averages but bearish sentiment on the rise they suggest there could be a pullback ahead for the s&p 500 and the other stock indexes. here in the u.s. and perhaps globally. we have a chart going back to 2015. on top, s&p 500. on bottom, aaii bear reading.
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each time it's like towards highs of 50, it has been followed by a correction in the s&p 500. it was true in the beginning of 2018. certainly true in the fourth quarter of last year. we have the aaii index going from 20 to 40. it could potentially go to 50 and that would bring the s&p 500 back down into that range. the overall, despite the reprieve we have today, pretty bearish for stocks. scarlet: thank you for that settle. for more on the impact of these global trade tensions, we welcome of even investors head of u.s. equities. great to see you. >> nice to be here. scarlet: i want to get your take on the bond rally. does it signal reception? -- recession? >> i don't think it necessarily signals recession. we are in an environment we have never seen before.
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things are reacting differently. the bond market rally right now is a risk-off trade. people are nervous as the rhetoric around the trade discussions with china has ramped up. atn we hit the market peaks the event of of april, the market was assuming there would be some sort of agreement. it was in the markets mind that we have mood -- we had moved past it. now that the rhetoric with china is not only back, but escalating, the market is getting nervous and people are switching around sectors. there is no clarity. lisa: my question is, are you buying stocks? susan: i think you are always find stocks for the opportunity. lisa: ok, let me rephrase that. are you going more overweight interest you stocks that are selling off more in light of the trade wars? susan: i am taking a look at individual stocks to it is a great stock picker's market, better than we have seen in
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quite some time. correlation has dropped. you are able to find companies that might have come out with something that was positive in a reason earnings report. theeard from companies, and baseline for management teams is that the u.s. economy is doing well. i think that things are getting overly punished when there -- and when there is fear in the market, there was always opportunity. scarlet: you are fairly bullish on the u.s. consumer. you feel good about the underlying u.s. economy, although the performance of retailers leaves a lot to be desired. they don't have any kind of his ability or the consumer is pulling back, people are jumping the stocks. , with we had retailers not great numbers. but remember that there is a lot in the consumer discretionary sector beyond retail. mortar forricks and the most part because there is pressure from internet sales on to that and a lot of extra competition. but i do think millennials are shopping, and they are changing
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their spending patterns. this is not how a 60-year-old is spending. they wanted experience it. there are great ways to find growth, and that is what the market is going to seek. look at where the growth is. lisa: any names want to recommendor put out there? susan: i would say choose carefully, wisely. -- choose wisely. scarlet: when you choose carefully, you are choosing to avoid health care right now. susan: i am. you have volatility in health care. there are some things you cannot avoid. political rhetoric is one of them. scarlet: proxy for domestic politics. susan: i think it is a proxy for domestic politics. health care for asking a intical decision for us producing volatility in the portfolio. lisa: how much is based on the idea that we will not get an escalation of the trade war? susan: you have to look past that, because the escalation in the trade war happened in the
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last month. a month ago we thought this was all behind us and it was going to be fine. now we are talking about rare earth and problems with material supplies. it doesn't seem like it is getting better. that is a problem for the markets. they thought it would be a handshake at the g20 meeting and we would be passed this. scarlet: -- lisa: what about for you? does it change anything for you? susan: this has to be resolved a couple months out. look to the long-term, there is opportunity, and with a volatility, you have to look past it. with my companies i'm looking at where they will be next december, well tested. scarlet: we have seen how expectations for what the federal reserve will do have changed dramatically. what are you forecasting whether it will be a rate cut, to rate cuts, or whether the fed licensees and because the weights and sees --whether the fed weights and sees? susan: we had a little bit of a panic in december and then we
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had the powell pivot and now we have softer language from the fed. i think that is important. the fed is learning how to translate words that the market can understand. we are 180 degrees opposite from where we were months ago. there is probably going to be a cut, there might be two cuts. you have to look past benefits to u.s. businesses, meaning capital is still a customs of main street is doing well and they can make money in that environment. lisa: thank you for being with us. really interesting market and good take on it. coming up, apple's slump. we will speak to an analyst who says the risk of a trade war with china may have been reflected in the stock. plus can president trump may be cracking down on immigration, but numbers show that immigrants are creating prosperity. and the force is strong with disney as it unveils its new star wars land. all that ahead. this is bloomberg. ♪
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scarlet: it's time for our top calls, a look at the movers on the back of analyst recommendations. from 190.n tesla they call the company and niche model carmaker. tesla down by 2/3 of 1%. upgradinguggenheim, the target from the former street low of 39. analysts praising the company's smooth transition from a video distributor to a conductivity company. shares down .8%. finally, bank of america seeing
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china tariff risks to apple already priced into the stock. analysts studied iphones, services, and new products is outside come and said the chinese retaliation is low since iphones armada. at the little changed at the moment. lisa: those are your top calls. we are going to dig into that last call and bring in the analyst the hind i just behind it. --the analyst behind it. joins us now from washington. it appears they are moving the market. what makes you so confident that all the risk is priced into apple shares? >> good afternoon, thanks for having me. what we're seeing here is looking at what china can do. there are two ways in which china can retaliate. the first is direct way in which they could ban iphones. we think the likelihood of that is quite low. the second is actually more
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measurable, to look at the data. we look at multiple different sources of data to get some confidence about what is actually happening on the ground in china. survey, very extensive and the survey results actually show that the purchase of iphones for chinese consumers, and globally as a matter of fact, are not very different. they did not change much to the seoul trade dilemma we are going through full -- change much through this whole trade dilemma we're going through. second, when we look at what happened with iphone sales in china, inventories draw down from edges a big up because as trends continue improve, which they should seasonally at this time of year, we should see a pickup in the back half of the year. lastly, when we think about what the app store, quite an important thing for chinese the trajectory of that has significantly improved from to of digits in february
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over 20% in the months of march, april, and so far in the first half of may. the data is actually telling us that the trajectory is much better than what people worried about, and those are being reflected in the stock. scarlet: you make a good case there, but i want to go back to the idea of the chinese retaliation on apple. apple employs indirectly many chinese people come and the iphone is made there. having said all that come is apple doing enough to shift some of its supply-chain away from china, just to hedge itself and make sure it is getting the supply-chain source through other places? wamsi: it's a great point. i think there are a couple of different issues at stake. apple is tied in. apple is one of those unique companies which has tremendous amounts of influence not just a mystically, but in china. -- not just domestically, but in china.
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and are very, very involved working very closely with the domestic authorities in both places to leverage. secondly, when we think is on the topic of actually moving any production out of china, we were working at it quite extensively. we call it " again," gama, and we think there is a way for apple to change the design of the product, increase automation, such that for a longer period of time you could see production moved to other regions, particularly to the u.s. in the interim, apple is moving some platform production starting up in india as well. lisa: i want to talk about the other calls we have seen out of other wall street firms. for example, goldman sachs saying that apple earnings would take 29% hit if china were to retaliate by getting iphone sales in the nation. do you agree with that assessment?
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i know you are saying it seems less likely, but is that the potential magnitude of the hit that apple could take? wamsi: we disaggregated the hit from two perspectives. first, if there are tariffs, quantified by a dollar in $14ings on a $40 base-- base. secondly, if they are completely banned in china, apple sells 35 million iphones currently in china makes about four cents per million iphones. we can do the math, and it doesn't come to such a large number. at the same time, we have to be aware that what is the risk of actually doing something like that, i think it is a fairly dramatic step to say 35 million iphones will not result. what we think is that there will this0 million-ish iphones years old globally, and china could be down 20%, that would mean 6 million iphones.
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the idea of a demand-disruptive -- something that is demand- disruptive in the interim could only be a temporary hiccup in the overall story. we don't think of this is something structural and sustains itself for the long run. scarlet: ok, i hear what you are saying. however, we don't know what is going to happen. two pretty temperamental leaders who could get caught up in the emotion of the moment. what could apple do when it comes to its cash and return of cash to shareholders? it has a buyback program in place. do you expect apple to make any meaningful changes to that cash use? wamsi: no, it's a great question. i think apple has been very, very disciplined in its approach and capital returns. they have been good to buyers of the stock. if you look back at last quarter, they waited in the month of december when the markets were extremely choppy. they were quite opportunistic when the stock did in early
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january-- dipped in early january. a user the timing to buy back a tremendous amount of stocks. we think they are good stewards of capital and do a good job in ofing back the stock an the same time they look at the long run and see all the future innovation coming to bear, and they look at the start and think it is a great return. 75 billion dollars unit is a tremendous amount, as you noted. we think that ultimately it is better spent on content or ever spent on m&a. you have to look at the return. currently apple is still building out its content portfolio. you could easily put $20 billion a year towards content to match the likes of disney or netflix. i don't think it is quite as prudent as this moment when they are building up the capability. tremendous amount of investment in services. mohan, bank of
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america electronic manufacturing services analyst, thank you so much. wamsi: thank you very much. scarlet: coming up, more of our exclusive interview with morgan stanley ceo james gorman. what he says trade war tensions make sense. this is bloomberg. ♪
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lisa: quick check of the latest "business flash" headlines. aoomberg has learned that proposal already has attracted interest from comcast and charter communications. government officials have met with comcast and charter over their potential role as the fourth wireless operator. call icone investor is suing occidental petroleum in the wake of the decision to buy anadarko. a $1.4 billion his goal is to get a sale of the company. he says the anadarko deal is
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hugely overpriced. hisowner of la croix lower today after a cunning of the price target. sales are effectively in freefall. it faces stiff competition in the sparkling water category. rivals, coca-cola and nestlé. that is your "business flash" update. there was a story getting a lot of buzz about the snap program and the food eligibility, and basically expanding it to things like -- scarlet: beef jerky. lisa: fitting within certain healthy categories. scarlet: beef jerky presumably is part of meat. stuffed olives, what would that be? present vegetables? -- fruits and vegetables? lisa: stuff that goes on something. it shows the lobbying efforts on
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one hand by smaller convenience stores, grocery stores that want to sell these items that are cheaper and might be more plausible. on the flipside, you also have an effort to make people healthier. scarlet: this was under an obama-era bill. stores have to carry seven kinds of each staples. they are trying to reduce the kinds of each staples they have to hold and subsidizing them as a way to make sure they abide by the lot to accept footsteps. it is very complicated. lisa: i like beef jerky. scarlet: stable for you? lisa: not quite a staple. depends on the day. scarlet: this is bloomberg. ♪
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take your business beyond. mark: i am mark crumpton was "first word" news. president trump and acting defense secretary are distancing themselves from in order to keep a worship named for the late senator john mccain out of sight
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during the president's recent visit to japan. the president told reporters at the white house that he was "not a big fan of the senator," for that he wasn't involved in the matter. spoke to shanahan reporters as he traveled in jakarta, indonesia. neverhanahan: i would dishonor the memory of a great american patriot like senator mccain. also think it is important, i would never disrespect the young men and women that crew that ship. mark: three u.s. officials confirmed to the associated press that the white house told the navy to keep the war ship named for mccain out of president trump's site during his visit tuesday to a base outside of tokyo. turkey is considering deploying a russian missile-defense system along the country's southern coast. bloomberg has learned that the battery could be delivered within weeks. that would enhance turkey's
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military capabilities in the training. the united states has threatened to sanction acoma if it goes ahead with it -- ankara if he goes ahead with the deal. benjamin netanyahu's birthday celebration was premature. israelis will vote again september 17. netanyahu was tripped up by one-time coalition partners who couldn't reach a compromise on who should serve in the army. lawyers for the man accused of killing 11 people at a pittsburgh synagogue asked october say fbi is discouraging witnesses from talking to the defense, undermining the suspect's right to a fair trial. the defense is asking a judge to tell the fbi to stop what it says is improper interference in the case. officials say the gunman open fire with an ar-15 rifle and other weapons during worship services inside tree of life synagogue, killing eight men and three women.
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global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. ♪ scarlet: from bloomberg world headquarters in your, this is "bloomberg markets: the close." i am lisa abramowicz. scarlet: i'm scarlet. morgan stanley's ceo is weighing in on u.s.-china tensions. he says it is a good thing the relationship is being reassessed. james gorman spoke to bloomberg television in an exclusive interview from beijing. take a listen. james: 40% of the world's gdp is tied up in these two countries. to have a major trade war would be very bad for both countries. everybody understands that, i
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think. i certainly hope that they do. the u.s. ceo's i've talked to understand it, the chinese ceo's i have talked to understand it. what we have got is a resetting of this relationship, which makes sense. after 30 years of incredible economic growth in china, there needs to be a resetting. there are certain things on the trade site that need to be addressed and are being addressed. do i think this is going to evolve, is a betting man, into a trade war? note my do not. there is too much interest in keeping this on the rails. some said to me that if it doesn't happen by the g20, by late june, i'm not sure about the exact timing of when we need some form of resolution, but clearly the negotiators need to come to the table and figure this out. not everything -- that will take decades to get done. but we need to get the train back on the tracks. >> what are the global economic implications if we get a full-blown trade war and trump pulls the trigger on an
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additional $.25 tariffs on those $35 billion of chinese goods? james: frankly, a lot of that is priced in. a lot of what he said of where the 10 year is right now, where the s&p has been moving -- unfortunately, it is not in isolation. we have brexit going on in the background. there are other things in the u.s. political environment, elections coming up. there is a lot of macro noise right now. i cannot predict exactly what will happen is that tariff kicks in. but the bottom line is that the two largest economies in the world do not serve themselves well by engaging in a full-blown trade war. the u.s. runs a surplus in services. china runs a surplus in goods. there needs to be more adjustment and transparency particularly about technology trends, and we need to get this thing back on the tracks. scarlet: that was james gorman, ceo and chairman of morgan stanley. president maybe try to limit
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immigration, but states with the greatest institution of immigrants are trading the most jobs and have the greatest increase in personal income. here with more on the story is matt mika. in have a great column bloomberg news where you really quantify the link between job growth and wage increases and immigrant workers. what is the rationale behind this? you talked to a bunch of people. what are they saying? data-driven atry bloomberg, so the first thing we do is look at data across the country, and we look at the biggest states, because it made sense just to make our comparison apples to apples to the extent that is possible. when we look at the data, from really coast-to-coast, north to south, east to west, what we found is the states that have the biggest percentage of immigrants, unauthorized and authorized them both together, are the states that happened to have the biggest job growth
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since he was inaugurated, january 20, 2017, and the biggest rise in personal income. conversely, the states that have lessively sparse or immigrant populations don't do as well, markedly so, in both income growth and job performance. lisa: i was reading this column. i love that you are, that we are data-driven. though whatk you, would you say of the idea that immigrants are going to the areas where there are the most jobs and income is growing the fastest, so it is a self-selecting -- which comes first, chicken or the egg? matt: absolutely true, both are true, but it is a virtuous circle is really what it is also it makes sense for that to be the case. first of all, who are immigrants? these are people who are motivated to change the situation for the better.
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their economic spirit, if you like, to begin with is much more vibrant than somebody who is not so disposed. people arething is looking for any way they can to produce whatever they are making, selling, serving, whatever. there is theere greatest diversity in terms of business in terms of economy, is going to attract all kinds of people who are looking to make their way. that is why if you look at it from both ends, it works together. and it works in the opposite way if you have a population that is very stagnant and also resistant to diversity. scarlet: you point out missouri is one of those, one of the states with the lowest immigration ratios. but it is an interesting case study because immigrants can be found in certain parts of its economy.
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talk to us about that. matt: missouri happens to have, like a lot of states, a health care industry, happens to be the fastest-growing industry in the u.s. one of which is people like me and babyng older boomers are driving the bus for better or worse -- some would say worse. the health industry is a big employer according to the pew research data we have access to. that is where you see the immigrant population in health care. and by the way, it is similarly so in florida for example, the same sort of thing. you look at the orlando area, a vibrant economic part of the country. very robust health care industry, guess what? immigrants are there. two. lisa: what is the most surprising takeaway from the data? matt: i guess the best part of it is that the states that have will,st open, if you
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borders access to diversity happened to be the ones that are performing best economically. you think that has got to be a fairytale, right? but it turns out to be a reality. that is why it is such a good story. lisa: matt winkler showing how the fairytale is a reality. bloomberg editor-in-chief emeritus mat twinkler. coming up, bloomberg chief executive joins bloomberg radio for a live interview. let's get a quick check of the markets. that is the rally has been squelched for now. the s&p is down .2%. again, yields driving, going lower, in the character bearish feel. aere does not seem to be resolution with respect to the u.s.-china trade wars. scarlet: people of come to
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accept that we will not get a resolution this week, this month, next month, maybe this year, even. equities happen in a straight line down over the last 40 minutes or so. yes, we have losses. not steep losses, but something to keep an eye out. lisa: honestly, without the headline from what is pushing people to buy or sell? from new york, this is bloomberg. ♪
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shares jumpedon despite a cut in its full-year comp sales view. here to explain how things could have been worse -- tell us. >> among other things, the company actually cut its fiscal first-quarter earnings forecast in the middle of the quarter ended managed to -- and then managed to beat that projection. line, andtty much in you could say the same thing with revenue as well. on top of that, you had sales up profitability measured by gross margin came down. but you see where the company is
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headed and that as much as anything is what explains why the stock is higher in the wake of its results. you see how the company is looking for faster growth. there is that .1% figure in the first quarter on same-store sales, and they are expecting a pickup for the rest of the fiscal year. scarlet: these are estimates, of course, but they are looking for stability as well, which is more than we can say for the retailers that have reported this far. you have big ups and big downs. dave: one of the things that came out of the conference call was about the effect of tariffs, then burlington's case, relatively minimal effects of tariffs. i was talking about abercrombie & fitch, and they gave estimates. an increase of 25% was coming down the line. did.ngton they make that adjustment. lisa: is anyone questioning the
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estimates they are coming up with here and saying things will be affected is way? it is not as simple as x number of tariffs will affect by y. people are not necessarily going to buy as much. dave: the thing with this company, inefficiencies can work to their advantage. another thing on the conference as ais you get disruptions result of everything on the tariff front. that means more opportunity for them to actually buy and then be able to resell using that off-price approach. this may turn out to be a plus for them rather than a negative as it has been for so many other companies or will be down the lifeless of scarlet dave wilson -- down the line. scarlet: dave wilson, thank you so much. he has given us another one to keep an eye out for the breaking news on facebook. the annual shareholders meeting is taking place right now, and mark zuckerberg speaking at it. he and sheryl sandberg were
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reelected to the board of facebook. there was a shareholder effort to remove mark zuckerberg as chairman, perhaps splitting the rules of ceo and chairman. that was rejected. none of this a surprise, given that mark zuckerberg has voting control over all of facebook's shares because of the dual class structure. he might be a minority owner in terms of the number of shares he owns, but he controls what the board does. lisa: and he has shown repeatedly that he is not going to be swayed by the criticism saying that he has to type a group. he is saying i don't care what you think, i will stay where i am. scarlet: and any shareholder proposal you want to make to change that requires his approval. that is not going to happen because he needs to say ok. lisa: we will keep you posted as we hear more from the shareholder meeting. i want to take a look at what some people are looking at in the market, which is at what point will the relative value of u.s. equities draw people back
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in again as yields get lower. as a&p 500 earnings yield measure of yields is paid generally from the s&p 500 vs. two-year treasury yields. you can see the carry that you get on s&p 500 stocks vs. two-year treasuries has skyrocketed -- not skyrocketed, increased the most since earlier this year. it raises the question, when you low rates become a boost for risk assets. we don't necessarily see that because it is seen as a bearish indicator. but at some point --this is hoping i'm watching for. scarlet: there is no alternative. at some point people have to go in. the numbers just don't match up otherwise the let's take a look at how equities are performing right now. there is perhaps a little bit of interest in equities in that we have hit a bottom for the day. we are off our lows of the session and the s&p is now coming back up a little bit. lisa is raising a skeptical
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eyebrow. lisa: the optimistic tone you can start. that strike. --that you can strike. scarlet: we are keeping an eye on uber. it is reporting public results. we will keep an eye on that. let's head over to the bloomberg interactive brokers studio and my colleagues carol massar and jason kelly. they are the host of "bloomberg businessweek radio and television." carol: you are listening to "bloomberg businessweek" on radio and television. lucky for us, we have the chairman and ceo of ups. great to have you here on radio and television. glad to be here. carol: every day there is a story about amazon candidate packages festered of folks -- trying to get packages festered revokes, or fedex.
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>> timing is a key now, and this new generation has gotten to wanting things right away. we see that it has really driven good characteristics in our industry. having things delivered the next day vs. the deferred method is really where our specialty is, it is our focus. we have really encouraged in those areas. jason: how much do you have to revise the strategy or the roadmap in the near term to speed it up? at what point do you have to change things in the supply chain, as it were? vid: the key is to listen to our customers. they will tell you what they are looking for. right now there are certain things -- reliability, the brand of ubs, the people -- the trust
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people have in our brand, the fact that they can depend on us on a day-to-day basis. those are the things we are focused on. as long as we keep aligned with our customers' needs, we will be in great shape. carol: fedex, seven days a week, every day, every month of the year. does that make you guys go back and have another strategy session at ups? david: we constantly review the needs of our customers, and what we were hearing just recently is not only does saturday -- our competitors provide as we do -- but the fact that we deliver to businesses on saturday where they don't, and we pick of packages on saturday, they can be delivered monday and over 170 countries in the world, by picking up on saturday, we can deliver on monday, that has been
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our key. we are starting to hear a little more about the need for sunday delivery. carol: you are not ready to do it? david: we are looking at it right now, and in our last contract, we had language that covers us for saturday and sunday. we are pretty far down the path and we will talk about it if we have more to review. how muchrategically, to worry about amazon? friend, a frenemy, a competitor? david: this world has become more complicated. having someone labeled as a competitor or customer, oftentimes it is a combination. the key is making sure we have mutually beneficial relationships. as long as we do, that is the path we are following. i would not say that we worry -- wedish we respect them
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respect them, just as we respect others who may be competitors certain parts of our business. if we stay focused on doing our job and implement a transformation and carrying out a strategies, we feel comfortable in our position. carol: talk to us about that transformation plan. i have been rolled port in louisville and it is fascinating what you guys are doing. it is not just getting packages from a to b, but you are working with the health care sector and other sectors. give us an idea of as you transform the company, how much becomes the transformations versus what you are doing today. david: i will. years old and we have probably been through five major transformations in the history of art company. -- of our company. this is one of those. there's is not a beginning, there is not an end. the way the business world is changing, we really believe that -- weople have accepted
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have focused in three particular areas. high-quality revenue growth. second is increasing our efficiency, using a lot of technology. third is broadening our management team and our culture. cultures are like anything else, they have to change with the times. the sense of urgency is making decisions and much more important. that is where we are focusing our leadership team. carol: i have to ask you about culture because so much of ups culture is those who have grown up with a company, and pass the ceo's are that way. how much of that works today and how much doesn't an and you have to bring in outside individuals? i'm a big supporter of promotion from within because i have benefited and so have many other upsers. it is a real strength of our company, the way we know our business. at the same time, with the way
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things are changing, we need other expertise and other perspectives and points of view. that is why of our 12-person management committee, i brought three people in from the outside and i'm promoting ups'ers at the same time. we need that hybrid view that this is the best of both worlds. jason: when you think about the company looking around the corner from what is the biggest existential threat you think to ups that you were read out the most? david: the one i worry about the most is within our control is absolutely the pace of change. we are changing this company and we are changing it rapidly, especially compared to the past. the real hurdle is you have got to change ahead of customers. that is the thing that we talk about all the time and that we focus on. and then of course there is always government policy issues that you were rebound. you try to -- that you worry
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about. you try to express yourself, but internally, it is making decisions as quick as we need to make them. carol: u.s.-china trade, you have talked about how that -- i think in the latest earnings call -- impacting forecast for the industry. it is going on longer and longer than we all thought. what is your thinking now about where it ends? are we in some sort of cold war between the united states and china? china is an important market for you guys. david: china is an important market to customers, which makes it important to us. we support policies to try to enforce and get china to live up wtoheir wti obligation -- obligations. full support during. at the same time, the longer this does stretch out, we have more customers exploring to the flex ability of our network supply chain changes that was they make those changes whether
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we have a trade deal or not later on those don't get reversed. i think we still have time, and we really encourage leaders on both sides of the pond, so to speak, to find an agreement that works because time is not our friend here. carol: thank you so much for your time. really appreciate it. david abney, chairman and ceo of ups. back to you guys in tv. scarlet: thank you so much, and hear from the "bloomberg businessweek" reporters and editors every saturday and sunday on bloomberg television and radio. ♪
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>> i'm mark crumpton. president trump says iteris imposed by the united states are having a devastating impact on china. the president spoke to reporters
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today as he left the white house. >> china would love to make it to us. we had a deal and they broke it. to dok if they had it again, they would not have done what they did. we are taking in billions of dollars in tariffs. china is subsidizing products so the united states taxpayers are paying for very little of it and if you look at inflation and pricing, it has gone up very little. >> the trade war between the u.s. and china is escalating. a bloomberg has learned that beijing is putting purchases of american soybeans on hold. buyers have not received any further orders to continue with the so-called goodwill buying. we don't expect that to happen because of the lack of progress in trade talks. vice president pence says the u.s. canada relationship has never been stronger. less than one year after a trade dispute that chilled of the allies warm ties. he was in the canadian capital
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newttawa hoping to pass a trade deal with canada and mexico. it president recently removed u.s. steel and aluminum tariffs on mexico and canada clearing a roadblock to the north american trade deal that he negotiated last year. trudeau,ustin president trump and i believe the relationship between the u.s. and canada has never been stronger and that is a reflection of his leadership and yours. the russian foreign ministry is angrily rejecting a u.s. claim that moscow may be violating a global nuclear test ban. assertion ad in the crude provocation and absolutely unfounded. on wednesday, u.s. intelligence director said russia is probably not adhering to the fact and said russia's nuclear activities would help it improve the weapons capabilities. senatorrm republican thad cochran has died.
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he was 81 years old. he used his seniority to steer billions toward his home state during his time in office. he represented mississippi in congress for more than 45 years. he also served as chairman of the senate appropriations committee as the senate agriculture committee. he left office in 2018. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. it is 3:00 in new york. i am scarlet fu. >> this is bloomberg markets are closed. >> investors pounding the table for a federal rate cut. the yield curve inverts further.
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to reportst, uber set its first earnings after the ipo. the star wars theme park in southern california. all that and more coming up. first, let's take a look. the s&p 500 off the earlier lows. now, unchanged but not positive. meanwhile, the yen is proving to be somewhat of a haven. ten-year yields dropping lower in light of low inflation data. before you know it will get to 2%. >> let's dig deeper into the market action. about the bond rally. take a look at the 10 year yield in the month of may down 28 basis points. you can see the decline here as
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investors are seeking safety. the best year since 2014. investors are seeking safety but when will the 10 year yield put a bottom. it is suggested that it may be sooner than it feels. here we see the descending trend range. the 50 day moving average for the top. the tenure year yield carving out for the bottom of it. after we see the 10 year yield rally down toward 225 or 230, it then backed up toward 2.5%. similar see something if the ten-year yields should backup and wants. that might provide some relief for stocks. reliefthing not getting is oil. it is poised to report its for -- worst month of the year.
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crude inventories had declined less than expected. we should be able to show you a chart showing you how oil has performed this year. largely dueo a tear to opec production. through late april. since then it has grown. the u.s. china trade war is concerning traders and investors. they are now worried about a follow-up in global oil demand. that is outweighing any supply concerns that we have seen amid rising tensions in the middle east. what complicates the picture further in the u.s. is gasoline. gas inventories in the u.s. are investors had- been expecting to see them fall off as the summer driving season gets underway.
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>> let's take a quick look at the dollar because we are straddling the line between gains and losses for the day. if we finish higher, it will be the fourth straight day that we are up. a lot of persistent strength -- has a lot of people asking for a an explanation as to why this continues especially in the face of the other things we were talking about. one explanation is that a lot of assets are moving back into the u.s.. that is bolstering the dollar a bit. this is causing concern for equity investors because they worry that if this appreciation continues, it will start to erode earnings that we are seeing. that could have a negative effect. the global head of fx strategy at morgan stanley talk to us earlier and said that the appreciation in the dollar and stocks cannot go on forever.
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he is either going to have a lower dollar or lower asset either one or the other. the backdrop for all of this is the economic data. investors are sifting through a pile of data today. u.s. gdp was revised down. our economics and policy correspondent. >> we did not learn a whole lot on the numbers today. the numbers came in about as expected. more consumer spending, less business spending but most of the damage was done by inventories and a trade. has got someex attention from the markets today the january through march numbers averaged then annualized in the fed is not
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looking at that they are looking at the number that comes out tomorrow. there is supposed to be a rebound as that. if we see that, today's numbers will be forgotten. >> inflation even lower than people expected. that's not great at a reason why you are seeing 30 year yields drop. >> it is just transitory. they are concerned about whether this is having an impact on investor psychology. what they are watching is in asian expectations as embedded in review prince going forward. if this continue to slip, they are at the bottom of the range you would like to see. that could prompt a fed response. >> i took his comments as highly dovish. we are very aware of all the risks area >> there are a lot of risks out there including mike
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pence saying the u.s. can double tariffs on china if needed. >> it is hard to model it. prices to what we get. the companies have been absorbing them. those people have been paying the most and how much can they pass along? that is the hard part to know. if the markets go down, or if they go up, who cares. the psychology gets to people and they don't want to spend money which may have happened in december. then that affects the larger economy but you can't model that.
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>> i am wondering given in run-up to tomorrow's numbers, frankly the income numbers which will also be interesting, what are you looking for and what is being priced into the market? has the market gotten ahead of itself? >> the feeling at the fed is int we should see a rebound the inflation numbers tomorrow. if they do, that will relieve some of the pressure. numbers should be ok but they have been hard to read lately because you are getting some big payments to farmers area trump is taking away from them with the tariffs on agriculture than giving it back by using the tariff money that consumers pay. it shows up as income for farmers. that has been hard to parse out. wage and salary
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numbers. salary is a key because spending was a strong last month and there is a fear but that was a bump because of the easter holiday and we will see it go back down in the month of april. if we don't get a strong spending number, that sets you up for what already appears to be a disappointing quarter. >> that may feed into the idea that there is an economic is indicating also with the inversion there getting more inverted. more into negative territory. otherwise, beyond the yield curve, there isn't really anything out there that signals we are near a recession area >> most of the other yield curves also. they are not adverting. some have steepened. the feeling is the fed may take action at some point. it is harder to get a real message out of all of this. there is a lot of supply that
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affects the short end of the three-month tenure. toe have said we are back trading the german yield curve because there is so much going into germany yields are negative there. that money is looking for some sort of return comes here and puts pressure on the u.s. yield curve. that that issts something they are taking into account. they are not as concerned as they would have been in prior decades when the parts of the yield curve inverted. thisere was a story saying year's stock market got too hard for anyone to figure out. coming up, preparing to merge. considering sprint that the best sure of some airwaves. plus, the force is strong with disney as it unveils its new star wars land. we will look inside. downturn mornings.
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citigroup and bank of america joined jpmorgan in a building a quarterly slumped and trading revenue. this is bloomberg. ♪
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>> it's time for social climbers. you can find all of this on the bloomberg. first up, uber. rocky wallg to a street debut. shares languish since trading began on may 10. beyond me is closing the gap with traditional meat suppliers. eclipsing $100.
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is considering eliminating hundreds of jobs. gorces say 500 jobs could within a global banking and markets although the formal numbers have not been communicated yet. report,n today's deals telecom and media dominate the headlines. t-mobile and sprint are working to reach -- meet conditions. we are joined by our deals reporter. i want to start with t-mobile and sprint. the idea of them coming together and creating a competitor doesn't necessarily have logic why they would want to do this. >> they want to get the deal done. trying to help set up a national
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carrier with its own network would fly in the face of what they have been saying they have been trying to do. >> is this being viewed as a positive by the market? it will get done through such a pony in terms -- >> the companies are saying they don't want to give up more than $7 billion. i think the market is still hopeful. the good thing is they are still talking. executives are living and washington, d.c.. the fact that negotiations continue is a good thing. -- we would see
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them come in soon. >> speaking of legal action, let's talk about viacom. on one hand -- >> it depends on how far back you want to go. what is the latest? >> they have not formerly -- formally started negotiations. i was told of this is not on the agenda but the cbs board is constantly reviewing what their options are. sherry redstone whose family controls both of these companies is not able to propose this merger for two years. this has to come from cbs directors themselves. they want to make sure they are
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exploring all options because they don't want to get hit by shareholder lawsuits down the track. as is definitely an option and a lot of sources i am talking to feel like this is inevitable. at some point they have to come together. the acting ceo's been extended to the end of the year. that was a time frame on it. either it gets done or it goes away. >> you would think markets would be you have tried this before and failed, we don't buy it. they are buying it. if you look at viacom shares, they are up area it looks like the suggestion of it is enough to get people to say this is inevitable. >> if both companies really need scale, while they have been dillydallying over this, the competitors are teaming up. they are gaining scale and getting ahead. that's why shareholders are like can you just do it already? >> can you just get together already?
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>> thank you for being here. let's move onto another media company, disney. unveiled star wars galaxy edged themepark. is set eight a project at the time of the most recent films and opens today. we got an early look inside. >> the newest addition to disneyland california may not be in a galaxy far far away. standing here in the first full-sized millennium falcom , the land has two main attractions. the first is centered around the millennium falcon spaceship. pilot theallows us to kraftwerk man guns in attempt to smuggle goods across the galaxy. later this year, disney will open rights. they have not shared details other than that it will mimic a fight. it will open the end of this year.
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fans can build their own lightsaber or their own droid. it doesn't come cheap. the lightsaber is $200 and the droid is $100. galaxy edge is disney's biggest extension. this is becoming more important at a time when disney's most profitable business, television is losing viewership. disney is losing viewers. i spoke to disney's chairman for park experiences. should investors a expect that kind of investment to continue. >> walt disney says that disneyland would never be complete as long as there is an imagination left in the world. if you couple that with the ambition of walt disney imagineering and i suspect that this is a new high water mark that is not the end. just the beginning. >> disney bought lucasfilms in 2012 for almost $20 billion.
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the receipts of those films have totaled $5 billion. the expectation is that this park will drive the desire for more merchandise. reservations for the land in california sold out within two hours. investors expect the forced to be strong with disney when it reports fourth-quarter earnings and august. >> thank you. this is bloomberg. ♪
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>> it's time for options inside. up month of may is shaping difficult. stocks are down 6% on the month.
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yields also continuing -- what do you think of june will bring? >> it is tough to say. what i know between now and the end of june, there is not a whole lot of upside. we know that president trump is supposed to meet with president she. tariffs are probably the only upside catalyst we can count on. over the next 30 days, i don't see a lot of upside. >> let's bring your knowledge of volatility into the equation. the skew index is not doing much. those investors are not too concerned. what do you think? >> i would not say they are too concerned. the most common levels of volatility are around 12 and a half. that is a level that shows heightened anxiety or uncertainty. i would not say there is no concern. i would say the markets have finally woken up to the fact
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that the trade deal with china is not an event -- inevitability. this could drag on into next year. volatility gauge is just showing the people are finally starting to realize that this might not happen. it is heightened anxiety and concern but not panic yet. quick call action, what are you seeing? >> what we see is that over the last few weeks, and increase positioningeople themselves for a downside move. it has been orderly and modest. it there. to leave jim could be cautious also. it from new york, this is bloomberg. ♪
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>> i'm mark crumpton. the measles epidemic in the united states has surpassed a 25-year-old record. is not clear when the illnesses will stop. the cdc says there have been 971 reported cases of measles so far this year. beene in 26 states have confirmed to have the measles but the vast majority of this year's cases have been in new york. a u.s. immigrants rights group says it has new evidence that the trump administration concealed the source and motivation behind a proposed question


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