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tv   Bloomberg Markets Americas  Bloomberg  May 16, 2018 2:00pm-3:30pm EDT

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scarlet: live in bloomberg world headquarters over the next hour. here on the top stories. tracking treasuries. three .1% with some investors warnings it is higher still. cutting apple. investors have not been the skeptical since 2008. and summit snag. a meeting with president trump saying demands are one-sided. beenbigail doolittle has tracking this. .> we have some solid gains s&p 500 and the nasdaq, and we have haven bonds selling off once again traded to levels seen in 2011.
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that caused a decline that scarlet was talking about. .e have yields climbing higher not bothering stocks. lots of green. bloomberg, into the we see first of all mainly green. nine of the 11 sectors higher. but the lower ones are real estate and utilities. it is interesting to see that. up top, let's take a look at those stocks doing well now. up 5%, that could be a continued relief rally. issues around indonesian waste will likely be resolved. newport trading higher by 3%. valuend steel production was one and a half percent in april. that could be part of the move
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up. numbers came out for the month of april. they were not as stellar as expected. let's take a look at the media movers. a nice rally for disney and comcast. asseems to do with fox up 1% murdoch, the media mogul, his eldest son be the chairman and ceo of the new fox company. this is widely expected. this is a positive around the deal that disney and fox are trying to do. the fact that comcast is .allying may suggest optimism when comcast got into the shares they traded lower as would be the case. some green here for media movers. we were talking earlier about
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hans and yield. let's take a look at this interesting chart about the position around bonds going back to 1990 and what we see. record net position's against bond futures. joining toe patrick talk. interesting stuff happening here for sure. >> let's get the first word news with mark crumpton. union leaderspean are meeting for a summit to build against trade protectionism as leaders have expressed concern president trump will proceed with plans to impose tariffs on steel and aluminum. washingtonocus on pulling out of the 2015 iran nuclear deal. the european union cancel president is criticizing president trump's policies. he spoke ahead of the summit in
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bulgaria. >> we are net -- we are witnessing a new phenomenon. looking at the latest decisions of president trump, some could likethink with friends that who needs enemies? mark: they want to take a united stance against issues with the trump administration including the withdrawal from the iran nuclear deal in the threat of punitive trade sanctions. the director of the government ethics office says president trump should have reported a payment from his attorney to stormy daniels in his public financial disclosure. agency released the 2018 disclosure today. under ethics rules officials report the value of assets and the amount of income in broad
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ranges. india says troops in kashmir have been asked to stop counter duringce -- insurgency rom and on. the what muslims to be up to observe the holiday in a peaceful environment. india and pakistan each rule part of kashmir but both claimant as there is. global news 24 hours a day powered by 2700 journalists and analysts and 120 countries. this is bloomberg. lisa: pimco predicts 10 year 2.5ds will top out at percent when others say he could go as high as 4%. said at somed point the high yields will be an impediment for growth but right now they are not. james fuller weighed in during an exclusive interview.
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>> i do think it is crunch time for this. those that are more sanguine on this issue feel it will rise and we have not seen the yield going up in the past day or two. how is that going to proceed over this year and to 2019? i don't think we are in danger now. the yield curve has a nice upward slope. it is not too far off the yearse over the last 30 noti would be concerned we march into an inversion without our eyes wide open. >> the yield curve begins to flatten. maddie, thank you for being here. a lot of talk about the yield curve. we are at the lowest levels on a lot of parts of the yield curve since 2007. how concerned are you?
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>> we are feeling constructive about where we are right now. if you look at where we are with short rates, two and a half percent. given where investors expect equities to go, if they subtract expected return on equity's and subtract that real rate, if you look at the equity risk as coming lower and lower, combine that with the risk and volatility that we have seen. equities are something that we feel constructive about. we know the bar is higher for investors. >> the fed president things it is not that big of the deal. he said in my worried about the fact the yield curve is flat? no. >> unambiguous. lisa and i were talking about this. the flattening yield curve seems to me more of an academic
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debate. what does it mean in practical terms for businesses? and investors? >> when we look at where the tenure is trading, it matters as much where you are, how you got there, as where you are. if we rip plus 3% because embedded inflation expectations are going up, we solve the curtain -- concerns over the last couple of months. that is not a great story for investors. correlations spike in those environments. but if we read plus 3% because expectation means that real growth is going up like we saw yesterday, that is a positive environment. we feel comfortable in this environment two thirds of the increase we have seen in the 10 year is deal -- due to real
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growth. that is a positive. the other thing i would mention is we believe there is a lot of money from investors, pension plans him insurance companies waiting to get put to work. rates go up they need to close that gap against liabilities. $20 trillion of pension plan assets. as that money is put to work there is a natural anchor. >> we are we going to end the year? our ranges anywhere between three and a quarter and 375. above that you have technical levels. >> given benchmark rates are cameg, and today carmen out and said frankly emerging markets seem like they are in a worse position than they were crisis, dofinancial
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you agree? >> we do not agree with that. we think fundamentally the story is good. if you look at earnings expectations, 15% earnings growth out of emerging markets. we think this is a technical story. if you look over the last 18 months you have seen $130 billion flow into emerging markets equity. that has reversed three years of negative flows over the prior two years. right now combine that with a investors are meaningfully positioned. the tightening of condition concerns leads people to feel expose. we think this is technical, and unnecessarily a fundamental story. >> is there a temptation to make a bigger deal over what is happening in turkey and
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argentina and conflated to the rest? bute are isolated stories you always think about 2007 and before that with russia, you can conflated to the whole asset class. >> we could not agree more with that. if you look at turkey and the , it is about 1%. a small allocation in a smaller portfolio universe. that is not something we should conflate and expand the importance of when we look at the emerging world. what we see is there has been a transformational change trade technology is 30% of that universe today. that wasn't the case even five years ago. they are not even tethered to commodities in the same way they once were. , the potential
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around that, it is an issue but it is more of headlines than the technicals. >> i would think they would be recommending to go full in a metoo take advantage of this opportunity. are you? >> we are exposing our client put folios to emerging markets, again, bring cognizant of the risk. .he bar is simply higher volatility has picked up. cash rates are up. cash is a reasonable alternative. risk inan we are taking emerging markets. we are trying to be thoughtful about where to take risk as opposed to broad directional ways in the world. we are doing more relative value positioning. >> take risk but tread carefully. thank you so much. company filings report,
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the takeaways from the start up season. this is bloomberg.
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lisa: this is bloomberg markets. season innother 13f the books. spicing the apple, institutional investors have not been this sour on apple in years. hedge funds hit the like button on facebook. from convertible cars to a $35 millionnds, stake in tesla's debt to could this be a hedge or a bit? here to break down all of the
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trends, elaine up. this is great. inc. you. -- thank you for talking to us. what happened with apple here? >> a lot of interesting things. investors had the exposure in by the most since a few years. this happen for several reasons. the concern is about apple's iphone production. a lot of sentiment here about how is the iphone x doing? people were not sure if they would be willing to see an additional exposure to that. warren buffett made clear he was going long on apple. there is that contrast. >> yes. the stock rallied. this was followed by the earnings report. shift. we can see this
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if you look at the data, investors have exposure to apple for the third quarter and four quarters. this is a trend here. it is an outlier. david, his firm cut a most $1 billion in apple shares. there was an interesting article on bloomberg looking at how the only saying stock that had some love was facebook. >> which is interesting. people are saying to me concern about the cambridge analytical scandal is exaggerated. there share price has reacted. if you look at the share price it has decreased by 15%. there's a lot of skepticism here.
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there is also some optimism on the other hand that the performance would go up and it would be good. of facebook. media >> i think it is important to talk about the 13f filings, a snapshot that we don't see the other side of these trades. they could be offset by other hedges. this could be part of complicated trades. to determine too much like the apple reduction. they could have gone right back in. how accurate is it? that. have to know everyone knows not everyone has to file. only certain investors have to do so. obviously we have to look at the short interests will we have to look at the share position, the
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buy and sell recommendations, analysts are pretty bullish on facebook despite the stock. you have to take this with a grain of salt. >> the narrative on tesla has changed. show there has been a lot of investment in the company which i thought was interesting where it himself a hole with investors. he is an indignant wrapped inside of a mystery. there is concern about short-sellers, a lot of concern about the model three production. there were a lot of moving pieces. a -- as note it as a huge move but interesting now that we have a mixed fourth
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quarter. you have to keep in mind the conference call was after people made decisions and put money into the stock. >> soros moved it into convertible bonds of tesla during the quarter. we don't know what it was paired with. >> it could have changed since them. thank you. coming up, another take on tech. ceoght, synchrony financial waives the value of data in the age of amazon. this is bloomberg.
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>> this is bloomberg markets. scarlet: the amazon effect is transforming the way people shop. decisions,g big margaret keane.
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they discussed how amazon impacts their margins. >> it really doesn't. if you think of how customers in cases where we are seeing a reduction in brick and mortar, most stores will not generating the volume retailer wanted. we are capturing that. for us it is actually helped us become more laser focused on what we needed to do. in addition to digital the other has been analytics and big data. getting the infrastructure right around that so we can help partners combat some of what amazon has been able to do in circle. this virtuous you can see how you are purchasing. by building up the data we can help partners do the same. >> data is valuable. may more valuable than we realized. what you keepide
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as an asset and what you share. >> it has changed. if we go back, retailers were .ot always willing to share we are seeing a transformation. we are partnering to figure out what is the best way to share information. an example, we do sales online. we are alwaysngs concerned about is fraud. process more save canus in terms of how we approve a customer and shipping a product out. i would say there is more synergy in terms of how we use information. >> how do you address fraud and hacking? >> the biggest area of focus for us is authentication. as more and more people shop online and more identities have gotten stolen, it puts pressure
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to make sure when you are using your card, it is you. we have been investing in new technology that is state-of-the-art in terms of better authentication. that help usup look at areas we can invest in. in companiested that help us do better authentication using different databases. that was the cfo -- you can watch the -- now it is time for bloomberg business. we will stick with amazon. amazon offering prime members more perks at whole foods. an additional 10% off hundreds of products and unique merchandise.
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belfour's is not paying his debt. million of the97 110 million he was ordered to pay earlier. he was released in 2008 after being convicted of defrauding investors. scheduledis wednesday. that is your business update. >> a reminder about the function, g tv . that is where we can find all the charts.
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>> analysts have been warning about the ramifications and now it may be about to happen. populists are finalizing a deal to take over one of europe's biggest economy.
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>> italy was indebted to avoid a bailout. now the cost has come due for the italian establishment. buckled inonal party march election. they've suffered their worst ever result. eclipsed.sn it was the 31 liter -- 31-year-old leader trying to tie up negotiations that they can present to the president. how uncertain should and pastors -- investors be? the bond market responds as been muted. ecb q program still continuing.
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italy could be taken over by two college dropouts. as our economic chief says the fastest road to another euros in crisis runs through rome. follow me on twitter. get your updates. lisa: that is some of the reporting by tick-tock. this is bloomberg markets. time for charting futures. we dive through the charts. a backup in rates. taking a look at bond futures. let's start with the move higher in rates. the highest level since 2011. well before the temper tantrum in 2014. investors thinking rates will
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continue to go higher. the 10 year yield is trying to take on yesterdays highs. can see with that chart, the question is, will it? let's take a look at the technicals. you can view the chart in the bloomberg. we see the 10 year yield sharply lower climbing higher above the moving average. this is bonds sold off. areas of consolidation on the recent move up. move out are having a of that area suggesting we could see an equal and opposite move higher towards 3.2%. that would suggest we will continue to see bonds selloff. lots of fears around inflation. ,'d like to bring in patrick thank you for taking the time.
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what do you think about that chart? on the 10 yearce is 3.25. that is when you are hitting the 30 year downtrend. in the near term that isn't anything that would get in the way of that trade. >> look at this one year charter , on pace for its biggest move higher. it is extraordinary this is out doing the temper tantrum. you have a chart we can take a look at in the bloomberg healer. is this the front of month contract? >> yes. it is going back to 2003. you don't actually trade yield. they don't always behave the same. this is making a distributive pop. in 2009.ached a peak
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reached a final high and then fail to reach that in 2016 mud then came down. when you see a pattern like this it is a signal things have changed. old trends need to be thrown out and consider a new direction. lisa: taking a look it is confirmed down. , the 20 of framing this day moving average, another bloomberg,ve in the talk to us about levels and what your idea is here? >> we use the function because it is a good overbought and oversold indicator. this is good for a bloomberg user to look at. right now it is oversold. today is not the day you go all
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in on shorting the 10 year. lisa: that is interesting. in market check i showed a chart showing these record shorts on bond futures. that is oversold now for a different level. >> it is traded around the moving average consistently. i would let it come back to the 20 day. thaten you would sell backup to those levels. thank you for your insight. great stuff. back to you. scarlet: let's get you to first word news with mark crumpton. say the trumps campaign was willing to accept help from russia. showed evidence between the trump team and kremlin officials which warned investigation. meetingnt to the june 9
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. donald trump, jr. said he did not tell his father before meeting with russians who promise to deliver damaging information about hillary clinton. june a hassle is a step closer to becoming director of the cia. the senate intelligence committee urged the full senate to confirm her. many them a credit and republicans oppose her. michigan state university has reached a $500 million settlement with hundreds of women and girls who say they were sexually assaulted by larry nassar. hundreds of girls have come forward to say he abuse them raisman, buy douglas and michaela maroney. he is serving decades in prison. cleaning up a day after powerful storms pounded
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the region with torrential rain and golf ball sized hail leaving three people dead and 200,000 homes and businesses without power. several lightning strike led to fires in jersey and massachusetts. and onnews on air tick-tock powered by 2700 journalists and analysts in 120 countries. this is bloomberg. coming up, we are off to the races. shares of churchill downs writing to a record. this is bloomberg.
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lisa: this is bloomberg markets. etf industry have
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something for everyone including millennials who will be driving trends for years to come. of course there is an etf targeting their buying power. global trade -- the fun track's listed companies exposed to spending categories all of it to millennials. the index is based on consumer spending data, technology and demographics. it is weighted heavily in the internet and retail sectors including amazon, facebook, and netflix. the fund has $18 million in 40%ts, and has returned since launching. it has outperformed by five percentage points thanks to >> i feel a little
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jealous there is not one for gender -- generation x. none of those businesses exist anymore. scarlet: blockbuster. tower records. >> it is amazing to me everything cool now is considered millennial and people slam them. they are doing great things. lisa: let's move on here. be sure to join us every time ofy for the first the week were talk about etf's. of --of the hour, shares to close down -- shares of
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-- dave wilson joins us with more. this week has been big for gaming. this even stands out even with that supreme court decision. >> when you hear the name churchill downs, it must be the kentucky derby, right? because that is their namesake. the first bit of the triple crown. this is a race coming up week, the preakness. this is all about the other businesses beyond the race. they have gotten into casinos in a big way and into online gaming. they have a site where you can bet on forces. you see the breakdown in terms of different segments. they are moving into sports betting. the stock up 5% when you have
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the supreme court ruling that cleared the way for sports upting outside of nevada 1.7%. today come you have this deal with the golden nugget. they are moving to new jersey in short murder -- short order. 40% comes fromed casinos. i had no idea. >> it is an area they have focused on over the years. waysylvania has cleared the . in mississippi they have a couple of casinos. it is an area they have tried to focus on. it has happened throughout the industry. racetracks are just racetracks anymore. now you have the online
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component and sports betting to build on that. are you a better? scarlet: unofficially i have been with march madness. the final four. you are thinking about ncaa basketball. thank you. talk with thewill -- you thinks the summit with the president is in doubt.
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scarlet: this is bloomberg markets. lisa: time for a bloomberg , tomsive very raytheon hydedy spoke with caroline
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about the move into cybersecurity and more. >> everything enacted is vulnerable. significant demand globally and domestically for our products and solutions from the government side down to small companies. >> do think governments are focused enough on this? are they spurring the drive? >> as we drive the economy to the next level we have to ensure a connected world is a safe world. we need to provide the cybersecurity for all of our networks. not just in i.t.. we have to be concerned about the operations side. factories and infrastructure. those vehicles will have to be cybersecurity. one crafted vehicle will corrupt the whole vehicle network. >> are you finding the level of
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onurity threat is increasing missile guidance systems, or is it consistent? >> we seeing three major threads. nation states that want to attack us and get our information or alter information that we have to force us to make wrong decisions. the next threat is criminal activity. they want to steal intellectual property on the dark web. a third area, employees. employees.d there is an education process and they have good cyber high. then there is the potential bad employee, that wants to get even with you or has a vendetta. we provide products that protect against all of those threats. >> that was an extensive -- exclusive interview. scarlet: time for a look at the
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business stories in the news now. jp morgan ceo says president trump did the right thing by offering a lifeline to china. it was crippled after the calmest apartment cut off access to american suppliers. he says the u.s. economy has a year or two more to grow. franklin templeton took a hit from weakness in latin america. it dropped 1.7% due to local debt in brazil, mexico and argentina. this as the $38 billion global bond fund was just an to benefit from a bet against treasuries. man u macron will meet with the ceos of microsoft, ibm, google and uber to discuss social responsibility. it looks for ways they can impact consumers as well as discussions on education, gender equality and diversity. the tech for good meeting will take place a day before the
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conference begins in paris. that is your business update. >> the white house pushing back after north korea threatened to pull out of the summit with president trump. we are joined by kevin cirilli. , can youapitol hill bring us up to speed? a severe not going to be giving up their nuclear weapons. >> the fallout continuing following kim jong-un's remarks they would not go through with that june 12 singapore summit with president trump. the day began with sarah huckabee sanders telling reporters at the white house they are still planning to move full team ahead in terms of the ongoing trade -- denuclearization efforts. president trump saying to reporters people are going to
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have to wait and see what happens but he is still hopeful the effort will ultimately happen on june 12. yesterday i spoke with several sources who told me that a potential delay in that talk might not necessarily be a bad thing. it will continue to provide time to work with allies including denuclearization effort. north koreans are saying they don't want a libyan deal. on the flipside my sources say is up to kim jong-un if he wants to further isolate himself from getting the type of private investment capital on infrastructure from the united states and china. praising president trump with regard to that deal which previously face sanctions from the united states and restrictions as result of doing business. scarlet: so many moving parts to
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this. i'm glad you brought up the libyan model. it is something john bolton brought up. a country would quickly give up nuclear weapons. talk about the libyan model comments. did john bolton make it public? was this something that was floated? >> there is nothing -- no question the north koreans are looking at previous the nineization deals states have negotiated. ultimately the u.s. was able to get what they wanted in terms of an administration with regard to that country. kim jong-un is looking at alsothing right now but facing intense pressure and has to decide whether or not a dwindling economy reliant on 90% of imports and exports from the chinese is worth it to further isolate. if he wants the private investment and infrastructure to
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build up his country, he is going to have to decide ultimately what is best for him. from the u.s. standpoint democrats and republicans say there is no harm talking to someone. that is what we're hearing a lot of. i can tell you republicans and democrats alike do not want the president to go off message when he is in those talks. specifics,uck by the the specific public relations game going on here. president trump was being spoken of as a nobel peace prize recipient in response to this. i wonder how much this move is trying to tamp that down saying we have given no ground. we are holding our nukes and we have power. >> president trump has said he nukesdenuclearization, no
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is what his goal is. end goalhieves that privately behind the scenes, there is not much of a bar to clear. whether or not this summit actually happens. we should note the tents back-and-forth president and the north korean dictator have said in the path. when you have the little -- little rocket man tweets in the volatility that has provided in terms of energy and trade, look. i think you have to know south korea's role in this. have to know the japanese role in this. it comes down to china. trade economic minister met with a group of lawmakers as they continued back-and-forth china and u.s. bilateral talks. as much as it is about the u.s. bilateral, it is just as important to note they role china plays on north korea.
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whooke with one senior aide was with south korean diplomats feelthat happened and they the deal is so much in line with a back-and-forth with north korea even more so in the u.s. china bilateral. you brought glad that up. kevin brady of texas is going to be meeting with orrin hatch. he has a pretty packed schedule. thank you for getting us up to speed on everything going on in washington. a quick reminder that you will want to check out g tv were you can find the charts we feature here. trends,the 10-year note the price here. this is the rsi which looks at the strength index. we're at a point where you might consider it oversold because we are just quite expand -- it is below the green line.
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>> also the 10 year treasury yields are close to session highs. continuing to climb from yesterday at the highest level since 2011. there is a question, how far can this go and how much is that going to eat into the rally? >> it is something we have been questioning for a wild. up we will have an exclusive interview -- addressing some of these points. some greenten despite a rocky in and out. this is bloomberg.
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newlet: it is 3:00 p.m. in york. i am scarlet fu. lisa: and i am lisa abramowicz. this is julia chatterley. welcome to "bloomberg markets."
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scarlet: we are live at bloomberg will headquarters in new york over the next hour. treasury tremors -- the treasury on the yield targets 3.1%. some investors warn it is heading higher still. bring youomberg, we highlights from our interview with the st. louis fed president. day in court. the latest on the fight with the redstone family. we are an hour away from the close. abigail doolittle has been keeping track on the moves in the market. abigail: we have the s&p 500, the nasdaq on pace for its best a since last thursday, the dow up about .3%. so a bit of a reversal from what we had yesterday, declines produced around uncertainty around rising rates, despite the fact that the 10-year yield is 1% higher today.
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investors looking past after take look at the russell 2000 with small-cap index up 1.2%, slightly more on pace for its best day and more than a month. in fact, at a record high. it has been a long time since we talked about record highs for any of the stock index. let's look at the technicals on the russell 2000, and you can do this chart using the btv function. it is a longer-term chart. there is november 2016, the big pop higher on the presidential election, president trump very protectionist. companies that receive more revenue in the united states. sort of meandering sideways, this area here, i talk about a diamond top frequently around the s&p 500 and some of the other indexes. the russell 2000 is even a bit stronger. this battle between peoples and -- bulls, technically, and the bears. typically, this is a bolt
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pattern. if that continues, this for entire area will create an -- an equal and opposite move higher. you want to see the russell 2000 trading at these levels for a few weeks to know that this pattern is confirmed and will not talk down to the downside, as it more often does. let's take a look at the big movers for the russell 2000, shoring on the $2 billion takeover of a vet diagnostics company. is a medical health and vaccine company. we have other charts on this board, but i'm not seeing those right now. consumer discretionary shares, macy's, nor some, jcpenney, 10%, beatingring estimates right across the board, raising the full-year outlook, really leading many
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investors to wonder whether this is the inflection point that many have been hoping for, not that macy's is doing best in the department store space. look at mort norstrom and jcpenney. 16% for both macy's and nordstrom, some of them could be a shorts squeeze. jcpenney at 41%. affecting a load of the suppliers from a real tailwind here for some of the companies that very strong quarter. two consecutive quarters of same-store sale growth for macy's. much, abigailu so doolittle. let's get the first word news with mark crumpton. mark: the yuan sector a general says the eu must look to build stage --ternational u.n. secretary general says
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the eu must look to build on its international stage, and keep the accord with iran alive despite the u.s. withdrawal. >> in order to rescue all other efforts that we are engaging in gauge conditions for a world to reach peace, security, and climate tatian in the front line. guterres also warned that nuclear nonproliferation is in jeopardy. he said the cold war has returned without the dialog used in the past to make a geopolitical crises. european leaders are arriving in bulgaria for a summit to build a position against trade protectionism. leadersing comes as expressed concern that president trump will continue plans to tariffs on steel and
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aluminum. president trump and the leader of uzbekistan opposed partnership on trade and military ties. on the men held talks position near afghanistan as president trump welcomed the uzbek l leader to the oval office for the first time. palestinian markers on -- marchers along the border have rejected a shipment of aid from israel. there is a widespread shortage following those deadly protests. hamas says the palestinians will not accept aid from "the murderers of our people. " global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. scarlet: thank you so much. a bloomberg exclusive to we turn now to st. louis fed president
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james bullard about what he sees regarding inflation and the yield curve this year. j mr. bullard. bullard: what is lower today is lower than what it has been in the past, and people have been talking about this for what it while. i do not think people can lose sight of that is the main idea. >> it seems to be of all the five cautions, the most urgent one is yield curve flattening. in fact, you said it is getting closer to the crunch time on the yield curve, that it could actually invert relatively soon. what is driving it? why is this happening? up bullard: if the fed goes three times, that is 75 basis points them and you have to ask yourself -- is the 10-year going to go up that much over that time frame? if it does not, we will have an inverted yield curve later this year or early in 2019. i do think it is crunch time for this. i think those that are more
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sanguine on those issue feel like it will rise, and we had the yield going up the last day or two, but the question is -- how is that going to eat over the remainder of this year and into 2019? i do not think we are in any danger right now, sitting your today. the yield curve has a nice upward slope, and that is fine. it is not too far off the average slope over the last two years or something, but i would be concerned that we not march into inversion without our eyes the wide open. >> i would like to ask, the believe ite, i touched on 3.09%. a big move yesterday. 10-year note yield were to commiserate with effect, i would guess that would be another 50 basis points. there are people right now saying we will get to another
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3.5% by the end of the year, maybe a bit higher come on the 10-year note. mr. bullard: people are also saying the fed is going to raise rates three times, so that would be 75, as it were. that would be an even flatter yield curve than what we have today. goingto get this today with a talk late last year, late november of last year, and i think it is a good debate to have at the fed. i think other members are talking about it, and that is the important thing at this point. >> the risk is recession? the yield curve does invert -- and we are not there yet -- but i would take that as a signal for the u.s. economy, because it means that the market has a different view of the future than what the fed has. >> is that your big concern here, that the yield curve inverts and we go to recession? next year? mr. bullard: no, the yield curve would invert, you could argue how good that signal is, but the san francisco fed's study on
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this that came out recently in a letter sent that it has seen a pretty good signal of problems ahead for the u.s. economy. i do not think you want to get into that situation without thinking it through. starting inpeople the great recession and through qe1, qe2, qe3 have complained, people in the bond market. but the signal in the bond market, you do not read the kind of message that you used to. mr. bullard: people say "this time is different congo and is something good signal ever since the 1950's about what is going on -- is different. ." a goodis signal ever since the 1950's about what is going on. the other good feature is if the fed reverses the yield curve, to me, that is an unnecessary thing to do at this juncture. we do not have the problems we had in the 1970's or early
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1980's. you do not really need to press that hard in this situation, as we might have in the past. >> let's move on to another one of your cautions. we can rank them in order of importance. mr. bullard: [laughs] >> but inflation expectations, you note that market-based expectation, first of all, ateause of the fed r hike, not causing it, and secondly, they are still below 2%. why is that such a concern? mr. bullard: i like the market-based measures, because they are giving you a daily signal that one of markets are thinking. cpi-based, see you have to adjust into a pe base. if you do that, they are still saying that the fed is not going to hit its inflation target, even over the next five years. they are saying inflation will be somewhat below target over the next five years. that does not sound like much of an inflation problem in the
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u.s., to me, at least in the eyes of the market. i think that is because the fed 0, theeady moved off of fed has already started to shrink, and those preemptive actions have kept expectations under control. we are already in a situation where we have kept preemptive action near target. i do not think we need to do a lot more at this juncture. >> another thing that is already happening is the policy rate is already neutral. they are talking here about r-star. -- what itn this what, where it is now, and r-star is. mr. bullard: convincing evidence that the so-called r-star is a lot lower than it used to be. the simplest way to think about it is the trend measure of the short-term real interest rate,
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the trend component. the fed does influence that rate, but it does not influence the trend. i would say it is probably still negative today, and so if you take that as a starting point, a short-term real interest rate being negative, you add 2% inflation to that, you will get something less than 2% as a neutral federal funds rate. we are already right there, so that is the idea, is that we are pretty close to neutral today. here,start going up from we are going to get into restrictive territory, which is going to put downward pressure on inflation. do we really want to do that, when inflation expectations are already hovering below our targets for the next five years? that was st. louis fed president james bowlers speaking exclusively to -- james bullard speaking exclusively to bloomberg. coming up, the skirmish between cvs and the -- cbs and the
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redstone family. who will emerge in control of the network? the latest next. this is bloomberg. ♪ this is bloomberg. ♪
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scarlet: this is "bloomberg markets." and i am scarlet fu. lisa: i am lisa abramowicz. cvs is suing for a merger with viacom, but sumner redstone is pulling back in delaware. joining us for the latest is our bloomberg deals reporter. what a soap opera, a made-for-tv movie. what are we learning for a? they came out in with the
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nuclear option. she has changed cvs bylaws so directors cannot vote to dilute her control, so -- nuclear!ryone is going nabila: [laughs] exactly. lawyers are saying that cbs is theing to take away redstone power forever, and so they are fighting back what is going on. pat.ourtroom is our reporter is down there. there is an overflow room with about 25 people in there as well. let's take a step back. does cbs want to merge with viacom? is this something the company wants for shareholders? cbs says this is not in the best interest for shareholders. scarlet: what about viacom? nabila: viacom really needs this
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deal. the thing with media is it is all about scale. viacom needs to do a deal. viacom has fewer options than cbs does, and that is the crux of the matter. lisa: one thing that confuses me is when you talk about what does cbs want, what does viacom wants, cbs, are we talking les moonves? the epic battle is really between les moonves and the redstone family. there has been some talk of yet another nuclear option that they could possibly employ, and that would be to fire les moonves. nabila: she says she does not want to do that, and she wanted to play nice, and she wants the two companies to come to an agreement themselves. now she has gone nuclear today. lisa: ok, carry on. [laughter] nabila: if she does fire les
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moonves, he is owed about $280 million if he is fired, and that includes his stock options and other benefits. he has a pretty sweet deal. even if he is fired, he probably went. -- wins. scarlet: there are so many twists and turns. what is the timeline after today's hearing? nabila: cbs directors want to have a meeting tomorrow at which they will both devalue the redstone family's controlling stake, so they want to take it down from 80% to about 17%. scarlet: ooh. nabila: if the judge does not rule today on that, the judge can say to "do not have the meeting," and unless the judge says that, they think they should have the meeting, even though sherry redstone today -- shari redstone -- redstone today has change the bylaws. lisa: we need to hit the other medianews, which is fox, locked
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the new headll be to read where are we with the drama? nabila: june 12, the at&t-time warner decision is expected, and we think comcast will make its play. we are expecting a bit of a bidding war. the question will be a regulatory issue, because they have already said no to a comcast bid, because they were worried about regulatory issues. lisa: we await that decision as they get their ducks in a row. scarlet: the would star as shari redstone and les moonves? thank you so much. media ahmed covers mood for bloomberg. jacker and square ceo dorsey says the internet deserves a native currency, and he hopes it will be bitcoin. dorsey was speaking at a
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conference consensus in new york city. earlier this month, he said it move more than $34 million in selling cryptocurrency. housing starts declined in the u.s. last month. they declined 3.7%. apartment construction declined even more, falling 11%. that offset a modest increase in single-family homes. microsoft is planning a low-cost tablet line to challenge the ipad. the company will release the device in the near term. washingtonou to feared i'm checking my notes here, because the president is speaking in the white house cabinet room. pres. trump: ms 13 gang members putting innocent men, women, and children at the mercy of these sadistic criminals, but we will bring them out of the country by the thousands, ms 13, we are grabbing them by the thousands, and we are getting them out of here.
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we're also joined by attorney general jeff sessions. jeff, thank you. the secretary of homeland security kiersten nielsen. thank you very much. you folks are keeping busy, right? i.c.e. director tom holland, who will be leaving us soon for a life of retirement, but there is no such thing as retirement. [applause] pres. trump: i appreciate it very much, tom. also with us is house majority leader kevin mccarthy, who has friend of mine fear he represents california's 23rd congressional district, and he is very popular. opposition might as well just go home, because kevin, they love him out there. he has brought it home.
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we appreciate everything he has done for the country. say congressional democrats, you take a look at what has been going on and what is going on with the laws, whether it is catch and release or any of the things that we are .ighting for so hard we have started the wall. you know, melissa, what has been going on. we are getting it done. folks in california, they do not talk about it, but they want the wall up, and they are very happy, which is one of the reasons why we started in california. we have made a lot of progress on this. now we are going for full funding of the wall. we will try to get that as soon as possible, but it has become a serious issue. in january, the los angeles police department arrested an illegal immigrant from mexico for drug possession. .nstead of honoring the i.c.e
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retainer, he was set free, and a few weeks later, he was arrested for murder. they let him go, and he killed somebody, and it is happening more and more. we get them out as fast as we can. we have the worst laws anywhere in the world for illegal immigration. there is no place in the world that has laws like we do. catch and release -- think of this -- we catch somebody, we find out there criminals, we end andaving to release them, they go into our society. we do the best weekend. i'm telling you, we do better than anybody, and our numbers are much better than in the past, but they are not merely as we could have. we are down 40% from the other 40%, so thataning is good, but we can do much better. part of the problem we have is
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our economy is so strong that pouring up to get a piece of our economy, and that makes your job even tougher, but we want people based on merit. we want people to come into our country based on merit. we are not looking to keep them out -- we are looking to bring them in. we need them. we have companies moving back into the united states like never before. chrysler is opening up in michigan. so many coming from mexico even and coming back in, so we want people coming in based on merit. case ofember the tragic a family in california who was murdered by illegal immigrants who had been arrested six times by breaking into marilyn's home, raping her and savagely beating her to death with a hammer. this is one example, but there are many examples.
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this butchery happen in america. the state of california tends to , they wanteral law their families protected and their borders secured. they want border security. they want protection. that is what we are all about. we are about protection, both from international and from, frankly, people crossing our borders illegally. i will now go around the room and asked these incredible mayors and officials to discuss their brave stance on behalf of their constituents. they are very popular, there he very -- they are very well respected. these are the top people, and they are people that are good people to listen to. and they listen to them from around the country. i will begin by asking california assemblywoman melissa melendez.
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you have been an inspiration to a lot of people. say a few words, and we will go around the room. ms. melendez: thank you, mr. president. thank you for inviting us. there are more people than you know who support what you are doing, who believe in your agenda of securing our borders, everywhere in between from san francisco to los angeles, you have so many people -- scarlet: you have been listening to president trump's roundtable on sanctuary cities fear you can watch more this on life go -- cities. you can watch more this on live go. this is bloomberg. ♪ this is bloomberg. ♪ retail.
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under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered.
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comcast business outmaneuver. the senate judiciary committee today heard testimony .bout cambridge analytic up the panel wants answers about how the firm this use facebook data during the 2016 u.s.
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residential election to create targeted politico data. -- political data. the consumer did actually consented that at the time. ofe broadly the narrative consent is problematic. when people have to use these platforms it doesn't matter whether or not they understand. >> it is not a question of just informed consent, it is about is it proportionate to the message consumer is getting. president trump should have reported a payment to michael actress stormy daniels. under at the looks rules, the amount of the income should be reported in broad ranges. scott pruitt

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