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tv   Bloomberg Markets Americas  Bloomberg  June 14, 2018 2:00pm-3:30pm EDT

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welcome to bloomberg markets. scarlet: we are live and bloomberg world headquarters in new york over the next hour. here are the top stories we are covering on the bloomberg and from around the world. teflon tech as the nasdaq hits a new record high. what can slow down this sector? comey in the crosshairs. in moments, the department of justice will be releasing its report on the former fbi director. we take a look at the fallout. and the future of food. how one agricultural tech startup is harvesting more than less through vertical farming. we have u.s. market closing in two hours time. let's get a check on where the stocks are trading with julie hyman. is this a new record high? julie: we have vista virgins divergenceh -- this
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again, which has been asserting itself between the dow and the nasdaq. the dow weaker on financials, industrials, and also holding back the s&p to some extent. but they do not tether the , whichand the nasdaq 100 is why you see that outperformance in today's session. it is a question of momentum, not just for these sectors but their components. facebook, alphabet, amazon, netflix seeing gains today. netflix is gaining higher, even after it was said the shares would go back to $340 a share because of increasing competition, which has been a knock on netflix for quite some time. take a look at the bloomberg. we have a track around the ny faang plus index. this shows the daily performance. you have quite a streak here of
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11 in the past 12 sessions that this index has been higher, and it also has been hitting record close after record close. optionslly told us some , you can now buy futures and options on this index. that could be something that is affecting the flow of trading as well. to smalle-cap tech cap, we have the russell 2000 higher today. it has not recouped its losses from yesterday, but some of its components doing quite well. the company is raising the cut it takes from each sale, lower than it was a month prior. analysts are happy about this move. key bank saida -- this would be a good step for the company. also, this company is reporting -- it's experimental nasal spray is an alternative to epipen showed promise as an alternative to that. we are seeing those shares up
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15%. finally, transcontinental realty is trading higher, in a joint anture with an unnamed party, major financial institutions that includes 41 existing properties and 12 properties with rights to develop more. those shares also up 14%. with all of this upward momentum, you would think we would keep going. this might give investors cause. the smart money flow, this is what tracks the heavy volume, particularly at the open and close of trading, when the smart money is thought to be more active in the market. that is going back to 2008. . we are watching these underlying elements in the market, so this is something to keep an eye on. just crossing the bloomberg, the justice department's internal watchdog issuing a wide-ranging report on the actions of top federal officials handling the investigation of the hillary clinton personal email use.
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we have just got their findings. they are saying that james comey at the time was "insubordinate," but they do not fault the fbi for not charging hillary clinton. the department of justice inspector general has opened additional probes into this week , apparently, and they are confirming that james comey did use his personal email for official business, which carries ties to the insubordination, the actions he took. that is separate from loretta lynch. a very detailed discussion about the 2016 election. scarlet: attorney general jeff sessions also says this reveals a number of significant errors and that the inspector general report is not the end of the process. he goes on to say that the u.s. attorney's office will recommend whether to open any new probes. it is not clear if sessions is referring to himself, because he is recused from any investigation into the russian links with the campaign, the trump campaign, or whether this
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would be his deputy, rod rosenstein. these are the initial headlines crossing right now. julia: and we will get more details. let's bring you up to speed with some of the top stories we are watching. mark: secretary of state mike pompeo was pushing back against suggestions that sanctions against north korea will soon be relaxed. pompeo spoke today in beijing. that have made very clear the sanctions and the economic relief that north korea will receive will only happen after full denuclearization, the complete denuclearization of north korea. mark: secretary pompeo added he had constructive this russians on the issue with the foreign ministers of china, south korea, and japan during his visit to china. prime minister theresa may missed an unofficial deadline to release contents of her agreement with party rebels on brexit.
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bloomberg has learned that pro eu emts inmates conservative may's conservative party want to give lawmakers more power to influence the terms of the divorce. they reportedly asked the house of lords to propose the amend ment before may's last-minute promise of concessions. of the human rights council the u.n. is calling for an independent investigation into human rights violations in kashmir. and blamed both india pakistan for civilian deaths and injuries. the decades-old dispute has "robbed millions of their basic human rights. india and pakistan have a long -- bitter the relations over kashmir. michigan has begun enforcing the strictest rules in the country regarding lead in drinking water after the flip water crisis.
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this will eventually result in the replacement of all 500,000 lead service pipes in the safe -- state. it could cost $2.5 billion over decades, money that is expected to largely come from water customers. at least 15 people died influence because of the crisis, which began in 2014. and in the end, it wasn't even close. ofsia won the opening match the world cup by crushing saudi arabia, 5-0. russia won its first world cup game since 2002. a opened the scoring in the 12 minute and continue the pressure from there. the next big test is against egypt on june 19. global news, 24 hours a day, on air and on tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. julia? julia: let's get back to the breaking news from the justice department. we were talking earlier, former
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fbi director james comey was being "insubordinate in handling the probe into hillary clinton and the email scandal that took place, the personal use of the email, damaging the borough -- bureau and the justice department's image of impartiality. he does not appear to have been motivated by politics according to the watch job report we had released in the past few moments. let's get some context. we are joined by our national political reporter live on capitol hill. take us through some of the details of this report. the president would beg to differ, because he has argued the whole way along that the findings were rigged in favor of hillary clinton. the inspector general report found that james comey was being insubordinate and that his handling of the investigation into hillary clinton email server. it did not fall upon his ultimately not charge hillary clinton, which is what president trump and his allies have faulted him for. they said the doj and the f the eye let her off easy.
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the inspector general report disagrees with that, but it does fault comey four is the fact he spoke publicly about this investigation in defiance of justice department and fbi protocols. that is not something you generally do in the heat of a campaign with some of these things are still being investigated and charges are not being pursued. the aggressive look at this report and argued that the fbi's actions, james comey's actions essentially helped make donald trump president. senior democrats have argued there was a double standard in comey's actions in that he spoke out critically about the hillary clinton investigation while concealing the separate investigation into potential coordination between donald trump's campaign in 2016 and russian officials. there is a lot to chew on here. scarlet: and in terms of looking at the response, jeff sessions coming out saying this watchdog report reveals a number of significant errors and this is not the end of the process.
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how do you read into his comments on whether there will be any new probes opened, and if so, who would be leading them? keep in mind, attorney general sessions is in a context where he is facing a lot of pressure from his boss, the president of the united states, to continue to pursue evidence that the fbi and the doj were biased against him, are biased against him. of course, james comey was dismissed by president trump, which led to the appointment of special counsel robert mueller, facing an enormous amount of criticism from president trump as he pursues the links between the campaign and russia. there have been a number of indictments and some guilty pleas, including from some senior officials, so this has really rankled the presidents. now sessions has to make a decision where he could upset president trump, or find something wrong in his report. that might make the president happy. scarlet: thank you so much for the analysis on the release of
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this report from the doj's inspector general. we will have more at the headlines continue to cross. overview of broad the market, from silicon valley to emerging markets. we go around the world with -- e koch of this is bloomberg. ♪
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julia: this is bloomberg markets. i'm julia chatterley. scarlet: and i'm scarlet fu. time to get a snapshot of some of the biggest business stories in the news today. the u.s. could fall behind china in terms of artificial intelligence without a strategy. the small and get china is on risk without a coordinated approach between the private and public sector.
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china has made it a priority to increase ai output 10 fold, and looks to dominate the industry by the year 2030. royal caribbean is banking on the ultra rich. the cruise operator has taken a $1 billion equity stake, 67%, in start sea cruises, which at $500,000 per person. the cruise can cost around $240,000 a person. bought 173ogle has acres of land in the netherlands as it considers building more data centers. they also bought land in luxembourg, denmark, and sweden. they want to be able to meet data demand in europe, and say the decision is expected soon. that is your business flash update. we are going to stay with tech, because our next guest just returned from a weeklong investor trip to silicon valley. joining us now is katie koch,
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goldman sachs fundamental equity partner. you visited 21 companies? the supply chain. was there a unifying message from the companies, or that you could pull out? >> there are a couple of key takeaways from the trip. across the whole 21 plus companies we met, there was uniform optimism about the economy. cfos, wef the ceos and thought this is one of the best operating environments that they had ever been part of across all consumer segments and also across all regions. so a lot of optimism about the operating environment. number two, a lot of talk about ai. one of the cfos of the tech platform out there really made the point that she felt that ai was going to end machine learning but then really drive the winners and losers across all industries. to embrace that. that was encouraging to us, because we spent a lot of time mapping out the digital strategies of companies we invest in across all sectors.
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we think the ability to leverage that data and maximize for cost and growth is going to differentiate across companies. the third thing we learned is that there is consensus around the fact that more's laws is dead. we do not have to get to swamps, but the idea that computing power has doubled at half the cost. that has helped over the past 50 years and is reaching its limits. what that means is the time between technologies will extend a little bit, and there will be winners and losers on the back of that. the winners on the back of that will be the fact followers to the big semi companies, because they will be able to compete on innovation rather than manufacturing speed. the losers will be some of the more scaled players in the semi space, and also semi equipment manufacturers, because of the time extending and not needing to update as much. the other thing i would point out as a theme that came up a lot was 5g. we went there years ago, it was all about the cloud and now it is all about 5g and potentially
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seeing china as a leader on that, because not everyone is as familiar with the tech jargon, breaking it down basically. the big impact of going from one g to two g is that voice went from one dollar a minute to $.10 a minute. two g to 3g, we got email, 3g to 4g, we could use the internet, and we are now going to 5g. we will take data from going from a garden hose to a fire hose. it will change a lot of things in the ways we consume content, because there will be no latency on video, and that will create a lot of winners and losers as well. takeet: that is a lot to in. when you look at how the companies are dividing their money and resources, are they investing in r&d on their own or are they more interested in acquiring the businesses? katie: a lot of people are making up the investments to have the rmb, but these are ampanies operating against
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good economic backdrop, so you should expect to see a pickup in m&a. there is a lot of interest in that, and clearly tech companies will be a beneficiary of that. julia: what was driving the optimism about the environment? look at how cash-rich some of the names are here as well. what were some of the underlying drivers at a time that feels like great optimism and when you look at valuations, we question whether or not there is a value? should address valuations. i think the optimism, because the underlying economy is so strong. that is true in the u.s. and around the world, so their clients are actually seeing a great operating environment and they have a bigger pie basically to sell to. the comment around valuations, i really want to make a point here that while valuations are obviously extended in general in the u.s. market and people are fearful of tech, we are so far,
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from the tech bubble we had in the late 90's, -- 1990's, which people ask about a lot, $4 trillion in market cap is the size of the german gdp. if you look at the companies at the height of the tech bubble, they're valuations are about 23 times the height of the tech double in the late 1990's. these companies are generating solid revenue and earnings growth. they have sales growth that is five times the market, margins two times the market. it is supported by fundamentals, not just eyeballing it. we are not dependent on that. it does tie many ways to the performance we have seen from the s&p 500 in particular, the strength of the tech relative to everything else, and your calling getting away from large-cap. i am teasing and insinuating that part of our conversation.
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is staying with us, and we will continue this conversation. plenty more to come. from new york, this is bloomberg. ♪
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scarlet: this is bloomberg markets. i'm scarlet fu. julia: and i'm julia chatterley. we are back with katie koch. we have so much we want to discuss with you, but we want to pick up on one of the things you were talking about, artificial intelligence and allowing that to generate rater growth. scarlettied to a story mentioned as well, with booz allen hamilton saying if we do not invest on a federal level, we will fall behind china. one of the big things about tech and even the smaller guys -- what are the players in tech saying about this lacking environment? katie: it is a real risk, because the u.s. has historically been on the cutting edge of all of this and china has a massive advantage with a
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centrally managed economy. with 5g is connected to ai, they have three stayed on companies that can push the capex to own that space. i think there are worries about china taking the lead over the u.s., and the answer is we have to have better public-private partnerships and be more involved with government as well as the corporate to maintain our technological edge. one thing i will say regionally is we are a little fearful in seeing a hugeare advantage over europe. scarlet: how much space to these silly con valleys -- silicon valley ceos have what the government? katie: i think we need to do more of. are dependent on proving out the business case of this, because we want the private capital to come to market, and it will take us a little bit longer. it will take people a little longer to buy into the business, where as in china, the government can just get behind it. julia: what this administration
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has done is provide reforms, fiscal stimulus in particular. i want to tie it back to what we are seeing in markets. theier, you were seeing hair back in the risk of the larger caps. talk about the wrist in the smaller cap -- risk than the smaller caps as well. katie: and picking up on this idea of local expansion being so helpful in extending this economic cycle. i am encouraged by earnings. when we look at the equity markets, we like equity over credit, credit over rates. clients always pushed back and say really? you like equities? valuations are in the 99th percentile on most metrics. we say you have to follow the earnings. through, they will support these valuations. the first quarter earnings season is very encouraging from this year. it is the strongest earnings season we have had with 26% earnings growth in a decade. that is very encouraging. one thing that makes us very encouraged is when you look at small cap, 86% of companies had
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positive earnings, 81% of them had earnings prizes, but only 47% of them had positive price action. dislocatingething between earnings trajectory and what companies are doing. for us, what we would say is we have a hike in ansys but low conviction market. a lot of consensus around the we just talked about the ceos in the valley having the same view, but conviction is not high. people are not putting us in those positions because they are fearful we are more towards the end of the cycle, and the thinking is it is becoming increasingly short-term. you have to take a longer lens you to find value in the market, and small-cap is a place we are doing that. julia: do you think that is right about the point where we are in the cycle at this point? youars greatly with what are saying about the technology guys in particular. or do you think it is headline risk and people afraid to be optimistic? we think the recession, to be clear, is another couple
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years out, but every economic moves, people know we are closer to the end of the beginning, and it is causing concern. but we still see this as a place of great opportunity, big beneficiaries of u.s. policy. you talked about physical -- physical, so they are the biggest beneficiaries of task -- tax cuts, and valuations look reasonable. scarlet: and we see that as outperformance continues as a result. katie koch sticking with us, going around the world to talk about her picks in outside markets, including india and japan. from new york, this is bloomberg. ♪
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scarlet: live from new york, this is bloomberg markets. it is time for charting futures, where we dive into futures
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markets through the chart and captioning the attention -- capturing the attention of many traders, the big bet made on treasury note futures through options. for we break that down, take a look at the today chart of the 10 year yields, all over the map as the 10 year yield gets skittish on the fed and the ecb. briefly above 3% after the fed decision, and now here is the bottom of a roughly seven point this point -- basis point range. we have bonds trading in verse two yields. let's take a look at this long-term chart of the generic 10 year notes contract, and we see this is the big bond bull , going back decades, up up and away, but we see that that up trend is starting to be breached, perhaps suggesting that maybe the bull market in bonds could be coming to an end. to break this down, i would like to bring mike mcglone into the picture. that is an interesting picture, but let's dissect the options trade. there is the options monitor
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function on the front month contract of that 10-year note. talk to us about finding that trade, first of all. mike: we have september options. here is the 120 cycle. open interest. you can see how it sticks out. a lot of open interest. go down to win they are selling, 122 straight down here. that is the call spread that they are in and they are buying, but the question is why they are doing it. we do not always know, but sometimes when you see that chart, and options person will say hey, -- abigail: let's talk about how the initiator of the trade makes money through this call spread strategy. we have a great way to break it down, where we can see the profits available to the trader. here we go. option,en you buy an you are limited to the premium you pay. you lose what you pay.
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the upside is unlimited until you get to the top stripe. you see the green and a small amount of red. a 3-1 potential payoff if we get to the 1.22 stripe. a good payoff, but one thing we always have to remember is time. as time goes by, if you do not get to that strive, the option will go away. abigail: and it is interesting that 1.22, it starts to break around 1.25. so this trader is respecting the possibility that we are out of that bond bull market. would you agree with that? mike: exactly. -- briefyou breezed this back in the day when you traded, so what would you have for our audience? bringing things that are more familiar to most folks in the picture? mike: it makes more sense from a cost-benefit analysis, because if we pop up here, everything changes. the dollar could probably decline, gold will probably go
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higher, but this is the key level of resistance. 120 is thee bonds, first strike to get above, and this is the strike with yield and inverse. so those are the key levels pointing out, here is the long call and the short called strike. if the market keeps going down, you saw the limited risk. if the market goes up, you can make a lot, but it has significant repercussions because it is countertrend. everyone thinks the yields are going higher. if things shift and the stock market drops, there is a chance to catch that. julia: thank you, abigail. now, former fbi director james comey has written an op-ed published in the new york times. department taxes decision not to prosecute hillary clinton. hillaryts that the clinton was honest and independent. the inspector general report, suggesting that james comey was
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insubordinate, but not motivated by politics. but let's get you a first word news update with mark crumpton. leaders commented on reports that families trying to cross the southern u.s. border are being separated. minority leader nancy pelosi said "this is not what america is, but this is the policy of the trump administration." >> think of the stress of these children. they take a baby away from the nursing mother. they say they are going to give the baby a shower or bath and they take the baby, put them in a car seat and drive away. this is not normal. in fact, it is barbaric, it has to stop. added that the trump administration could stop the practice "on a dime," but house eager paul ryan says a legislative solution is what is needed. i do think this ought to be addressed. we believe it should be
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addressed in immigration legislation. border happening at the and the separation of parents and their children is because of a court ruling. that is why i think legislation is necessary. mark: both on immigration bill could be held as soon as next week, but the speaker says he will not guarantee passage of any measures. london mayor city con -- london's mayor joins families morning victims lost in the grenfell power plays. say theydents complained about safety and poor maintenance at the tower, but were ignored. prime minister theresa may admits the government had been too slow to act. roman catholic authorities in nicaragua say talks will resume friday aimed at finding a solution to the country of the political crisis. daniel clashes over ortega's embattled government have left over 160 people dead since april.
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his opponents are demanding that both he and the vice president resign. global news, 24 hours a day, on air and on tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. scarlet? scarlet: sorry, we were chatting with katie. julia: sorry, mark. scarlet: we are back now with katie koch. you were chief of staff to general neil when he chaired goldman sachs asset management and coined the brakes acronym to describe these countries that are growing really fast. that might be an outdated way of looking at the e.m.'s, but you do like a couple of them, most notably india. and jim would say that is his thesis or 2050, so we can still see it work out. likeg a step back, we
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emerging markets a lot. we recommend that clients have up to 20% of their equity allocation invested into emerging markets, a pretty aggressive positioning. youhink that you need to -- do not want to be a touristy in emerging markets, because your vacation could end in tears. so 20% is for people willing to take a long-term perspective. if we can talk about the near-term, we think it is a good time to build a positioning for two main reasons. one, the growth premium for emerging markets is accelerating relative to developed markets, and we will have growth out of emerging markets probably around 5%, developed markets, 2.5%. backdrop for risk assets. we also have a lot of improvement in the macro. there is a lot of idiosyncratic noise from other countries, but we have reduced the debt profile over the past 10 years, and final evaluations are very compelling. scarlet: so you do not worry about turkey, argentina, or
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brazil having a contagion effect? katie: turkey is running one of the current -- biggest current account deficit, and they have some pressure on the currency. we do not have a lot of exposure to that country, it is actually a place we avoid. we build a portfolio bottom up, but out of the communities that we invest in, there is a lot of -- outside of that. you are also getting basically two times the long-term growth of developed markets at a 20% discount. this chart has relative performance of emerging-market currencies versus the u.s. dollar over the past six months. there is some real underperformance. the arches asian -- the itentinian peso, and whether that is from -- or nafta, you can take your pick. are there opportunities in those kinds of countries, given they are so beaten up? even when you look at those the onesished most,
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that are the deficit countries, the ones that are reliant on foreign investment in particular. katie: absolutely. longer-term, by the way, are my --leagues in extent come fixed income. there are clearly some vulnerable countries. the big picture relative to the taper tantrum is fresh in people's minds. the macro has really improved. current account deficits at that point in time, more than 5%, shrunk to 1%. in aggregate, it is looking a lot better. we are actually in india. what are we -- scarlet: what are we missing? there was a lot of time spent looking at what modi was doing. big picture, india is where china was in 2000. in that time, china went from the world's sixth largest economy to the second. we think india is on the second precipicehat -- the of doing what china did in 2000. specifically, they will double gdp per capita in less than 10
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years. it is one of the only countries in the world that will achieve that on an unimaginable scale. what is mostabout exciting about emerging markets, it is the dramatic rise of the middle-class consumer, and india is at the epicenter of that story. julia: one comparison i would make is also that a lot of the power is decentralized to different regions in india -- exactly., where you have the power there. do you worry about that at this stage when we are talking about the incredible growth that you are talking about? who isin china, we know going to be in power for as long as he wants to be, so that is true. india, when you look at the risks, one of them is thegraphic, but politics is other one. you are asking people to commit long-term capital for a country that is in a five-year election cycle. i will say that the bjp who brought these tremendous reforms to india, demonetization, , werming the bank, etc.
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think modi is likely to win again in 2019. the majority might be a little bit weaker, but he is likely to win again, and we think that tailwind of reform will continue and be helpful to markets. scarlet: do you not want to be an companies aligned with the government? stay away with that, just in case it does not work out? katie: i think you absolutely want to think about it idiosyncratically and get way outside of the benchmark. there is tremendous opportunity for active management. one of our favorite positions is a company called it will be very independent of whatever modi does, but only 6% happenmarriages in india online, and in america, zuckerberg i think said it was 20%. a great opportunity for the government. julia: and we do get all sorts of headlines around trade, other details on the market. what is more important about e.m. overall? is it u.s. monetary policy, or the
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calibration of the growth in china? katie: what is most important is whether we have a constructive growth trajectory. we now live in a world where of course, the u.s. is the biggest economy important to growth, but china is important as well. there is a bit of misunderstanding, because clients get nervous about the terrorist situation, and it is compensated and something bester's -- investors should focus on, but china is a dramatically more important to all emerging markets in the u.s. is. but what matters is being in a decent growth environment and having that growth translated to earnings at a good at valuation. koch, thank you so much. can't wait to have you back on. we want to tell you about the functions on our bloomberg in case you missed any of the charts. it is gtv . i will take a look at the faang stocks and how they are taking a breather. you can see some of the big
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gains they posted in the past couple months. from new york, this is bloomberg. ♪
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julia: elon musk and the chicago mayor rahm emanuel speaking about the high-speed rail proposal by the boring company. incredible images of what this could be online in particular. i love the name, the boring company, because you do not know what it means in than it describes it vertically. julia: time for stock of the hour with emma chandra. and the: today we are looking at the xrt, the retail sector on spider etf. it is popping up on the screen, and we can show it to you there.
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retail,ialty is apparel pulling this etf down today. it is around about one percentage point. interesting, given what is happening in the wider consumer discretionary sector. let's take a look at the imap function on the s&p 500. we will pull that up, and you continuingt discretionary is one of the best performers, better performers of the day, and media stocks are pulling and driving those gains. we watched comcast and disney duke it out for fox. what is bugging retailers? in sales, retail sales rose may, but bloomberg intelligence told us the consumer is still under pressure and we are getting to an ever more competitive environment when it comes to retail, which is highlighted by a number of the name smocks -- named stocks, fred,iffany, sally, and down a lot lower today, 10% earlier in the day.
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this kind of shows us a cross-section of retail, from luxury, women's apparel, beauty, the discounted amount turning a little bit green today. our stock of the hour is another name stock, michael's, which we should be able to pull up a chart that now. moving at 19% earlier today, it 15, 15down around percent. that is our stock of the hour. the biggest ever fall in revenue since going public in 2014 from michael's. it has been attributed to the shattering of all 94 of its full-size aaron brothers art and framing stores. if we had to look at the breakdown of where michael's has its revenue from, framing accounts for 17% of its revenue, which is quite a large chunk. bloomberg intelligence also telling us that we are seeing a fair amount of softness and the arts and crafts industry at the moment. scarlet: i am pulling up the
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chart that you had prepared that shows the revenue growth. , suret comes to michael's it had to shut down some of its own stores, but how about online competition? alluding are probably to amazon there. interestingly, online sales continued their rapid growth, admittedly off of the base. one can assume that if a michael's customers is willing to shop for their arts and michael's,lies and they will probably do it at amazon as well. scarlet: coming up, we will hear the future of food from the ceo of sour a farming, an indoor farming startup that aims to bring produce in its purest form using technological innovations. this is bloomberg. ♪
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scarlet: this is bloomberg
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markets. i'm scarlet fu. we want to move on to the latest installment of cornell tech at bloomberg. the focus this month, the future of food, specifically how one company is using technological innovation to solve a large societal problem of easing and increasing -- feeding and increasingly urban population. the ceo and cofounder of this vertical farming startup talks about how his company aims to solve this particular problem. >> a big part of what we are doing is instilling that confidence, trust, and transparency in the food we are growing as well. we can hand you a product and show you everything that has happened, from the moment we planted that seed until it is ready to be harvested. scarlet: is this organic? irving: this is not something we focus on at bowery, not because it is an unattainable goal, but because we focus on democratizing access to high-quality, fresh food.
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without a question, organic was wardry positive step for for farming. it is much more sustainable than large-scale industrial farming. the next stepally forward. a lot of people do not realize, but even organic farming uses pesticides. certifiedrganic pesticides, but they are still pesticides. there are issues and challenges that can come with growing outside in an organic farm, and we were able to alleviate many of those so we have an even safer, higher quality products. scarlet: how does the produce get here in your farm to customer's shopping carts? irving: in a big green truck. scarlet: but you shorten the delivery time. irving: what is interesting about what we are building at bowery if this is an amazing information around farming. there is no question that this is a new way of farming, but it is more broadly and innovation on the fresh food supply chain.
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is rethinking not only how you grow fresh food, but how fresh food is delivered to a point-of-sale or consumption in a much more efficient and effective way. if you are getting food from methods, your food is anywhere from a few weeks old to a few months old. scarlet: what kind of food is that? irving: i often ask people how old you think an apple is? four months? 10-12 months. 14 months. that is the supply chain. and i am not knocking it in the sense that this allows us to have apple's all year round and at anytime of the year, but there is a better way to do this. what we can do with indoor farming is rethink the supply chain. so we are locating our farms close to where the consumption is happening, and by relocating
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that point of production close to the consumption, it is about a day from when we harvest from when our product reaches the selves. -- shelves. it lastse nutritious, longer, so instead of taking things home and then two days later throwing it out, two and a half weeks later, a bowery package will still look good and taste good. that would make me suspicious automatically. it does not seem like that would sit in your refrigerator for a couple weeks. iting: and food, by the time reaches you, is already a few weeks old. you mentioned you grow about 100 different types of crops. could you grow things that you normally wouldn't grow in the united states that was only be -- would only be in asia in your indoor farm? irving: absolutely. you can actually grow anything indoors. anything will not make economic sense, but you can grow anything hydroponically. anyone who has been to
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epcot center, they have a very cool hydroponic farm with pineapples and things they are growing there. we have grown over 100 different varieties from outside of those categories, and when we look at the market, we see a substantial market that is really attracted -- attractive as a candidate for indoor farming. not for everything, but i also said the other day, technology is surprising us. some things that maybe today i whoot think will grow, knows? one of my favorite things we grow as the saudi arugula. -- wasabi arugula. angula is a plant, but it is arugula plant that tastes exactly like wasabi. who knows? one of my favorite things we grow asit is actually a natuy occurring, naturally growing plant.
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it is incredibly difficult to germinate and grow. these minuteve controls of our environments and the conditions around our crop, we can grow wasabi arugula widely and consistently year round. aarlet: because it is such controlled environment, it is almost an artificial bi arugulat, so wasa can be grown in new jersey. julia: rocket. it's rocket in my part of the world. being 12bout my apple days old? scarlet: from new york, this is bloomberg. ♪
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julia: it is 3:00 p.m. in new york. scarlet: welcome to "bloomberg markets." ♪
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julia: we are live in bloomberg world headquarters in new york over the next hour. here are the top stories we are coming on the bloomberg and around the world. the nasdaq is seeing new record highs. can anything slow the sector down? the top u.s. regulators say it is not security. silicon valley meets the silver screen. we will look at apple's push into hollywood. let's get a check on the markets with julie hyman. julie: widening a little bit with the doubt deeply in the red now. as i look at some of the groups on the move, it is somewhat confusing.
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typically, he will see defenses up encyclicals down. that is not really what is going on today. if you have the classical -- classically defensive groups training higher as we see yields lower, then, consumer , a more economic sensitive group tech is in the green now as well. also, consumer state through -- staples to the downside. isis not that trends that economically dependent. technology is doing well. large-cap in particular. the records along with the nasdaq 100. the momentum trade is seemingly continuing. it is the media helping on the news that comcast will be
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benedict -- bidding for the 21st century comcast disney shares higher, comcast shares higher, not to mention a much rotter media as well on continuing speculation about who else might be the target. one of the down groups, banks and financials, are under pressure as we have yields whatng down enough despite many viewed as hawkish commentary coming out of the fed yesterday. go figure. you see citigroup and wells fargo lobe -- lower. a quick check on the spread of the curve here. the yield spread on the bloomberg, we have it continue to flatten or narrow. terminal, you the see a longer-term chart of it. here.heading down right now, 30 seven. quite some time breaking below 40 spread between the two.
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it also helps account for why the banks are trading lower. you.ank let's get you to mark crumpton. mark: former fbi director james comey is responding to today's justice department report on the hillary clinton gmail investigation p doj says comey breached protocol handling the probe but his actions were not politically motivated. in an op-ed article for the new york times, he writes that while he did not agree with all of the doj and inspector general's conclusions, he respects the work of his office and salutes professionalism, adding he and his team chose the course most consistent with institutional values. secretary of state mike pompeo says after meeting with xi jinping, charitybuzz -- the china's president, they have agreed that a peace process is beginning on the korean peninsula. he also noted washington's
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disappointment over beijing's move in the south china sea. >> also making progress on security. i reaffirmed our concerns with militarized outposts in the sea in danger in the free flow of trade, undermining regional stability. >> secretary pompeo also said all four nations agreed there would be no sessions relief until it -- until korea fully and completely disarms. the president back on good terms with the united arab -- has returned to his home country. arrival, the's government part of the saudi led coalition. and fighterses backed by the uae have clashed frequently.
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he fled in march of 2015 when the fighting intensified. in the end, it was not even close. russia crushing saudi arabia. vladimir putin addressed the crowd. russia won its first world cup game since 2002. it opened the scoring and continued from there. their next test is against egypt on june 19. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: thank you. yes, i am crushing it in my i predicted russia would win. think will win?
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mark: new jersey p it i don't know. because i want them to host the cup. >> we all sold our brackets. >> come on, england. do you have england winning at all? >> i have to do that. i'm not sure they will, to be fair. >> let's go to ed, who probably did not think -- take england to win either. this affect future deals question mark >> that is right. i'm joined by steve. a slightly changed stash -- it's lightly strange week. we see comcast announced the
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biggest ever. what do know about the environment? >> i think there are interesting dynamics going on now. situationime warner can be viewed in two parts. one is law and the other is government policy. law, this decision was not surprising. if anyone expected that the federal court would align with what the government position was merely because it was the government, clearly that was a mistake. i do not think it changes law at all. government policy is a different story at all. a real burden on at&t and time warner to apply with this andest to have the trial whatever level of uncertainty
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there was. if the government continues to aggressively go after maitre transactions in ways that previous administrations did not, i think that will have to have some inhibiting effect. the government may have learned its lesson from this resounding defeat. in the at&t time warner situation. clubs it was such a resounding defeat. it was not just that they lost. they lost come principally. mean the department loses its ability to go after other deals in the future? a justice department has always been concerned about losing cases. one of the issues that remained unresolved is whether they will
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ask for a pending appeal. if they ask for the -- the issues becauseor of the date of the transaction during the appeal. the question is what do the boards of directors and time , will being to do extended for a higher or lower price? it present's real challenges to the boards of directors. i think the government will have to review what it is doing and i think it should pull itself back to where the law has been in the past. what it did with the respect to transaction. revert toy, it will the past, but it might not. >> the impact on m&a in the short term seems to be very positive.
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people are confident and feel ?hey can go forward >> yes. although, we have to recognize that this government has been somewhat more intrusive not merely an antitrust area but also the antitrust area. a concern about what the government policy will be with respect to major transactions. want to blame trump. i was hoping it would be a rare and nonpolitical discussion. i'm willing to see that these might be realistic concerns the government has but i think those broader ine somewhat the past. since you mentioned trump, i the big m&aut
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transaction was stopped a few years ago under obama when the tax rules were changed after the deal was announced for the corporate inversion. >> let's move away. the index funds have been vocal about what they expect in terms of a broad range of issues with companies. normal investors have become more upfront about what they want. much int play out as showmanship or substance? >> i think really positive things have happened in space. i think they happened to be consistent with my own experience. i'm an unusual lawyer in the sense i have done a lot of work representing companies that were the subject of activists. hopee done some work and
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and expect to continue to do both. i think the activists are getting more sophisticated. i think the approach is to approve the companies and they have become subtler. and they will be more long-lasting and in the interests of all the constituents in the companies. i think companies are becoming more reasonable. in the way they are dealing with activists. you do not see companies hanging up the phone and not talking to activists. but think they tried to understand what the ideas are. to the extent those ideas make sense, they try to incorporate those ideas. my judgment is we will see less trauma and more progress. that is good. describe this as being subtler? moving in that direction >> absolutely p lose the most sophisticated of all of the activists in the sense that if you look at his
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track record, companies improved when he approached them and the improvement just continued if not forever, for a really long time. industries have been improved by his approach, and i think other activists are following the same game plan right now. >> there are notable ones that have not. in the way the media cooperates because that is a fascinating subject for us. often, companies say hey, it is not fair. we cannot respond in kind. theseportant is strategy days? >> it is important. it has always been important. it is important to companies and the companies hire very sophisticated financial pr firms and if they are saying they are
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having difficulty getting to the media, i have not noticed it and activists have not yet. i believe what we will see is more substance and less trauma. >> thank you for joining us. julia, thank you. -- skipping over you. find great news and live events by interacting with us directly. fundamental equity partner. you can see comments she made on the right-hand side. a great interview. watch it if you missed it earlier. from new york, this is bloomberg. ♪
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scarlet: this is "bloomberg markets" and i am scarlet fu. rallying determines that the cryptocurrency is not a security. heating up amongst 10% on the new spirit joining us in washington with more is bloomberg's financial recommendation reporter jesse. are lookingestors in saying less regulation rather than more, which is good news. how do you decide whether or not this is indeed security? >> is very company behind an asset that is benefiting from money raised through trading, issuing that security, which has been a real test for a lot of these cryptocurrencies. bitcoin has moved away from any particular entity or person, benefiting from its rally.
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they would be benefiting from that. >> another digital coin. just move forward as a result. >> there are a lot of projects in the realm that are tied to ether and fear him. if it came out and said it was a security, do all the projects have to go away, so it is a fresh air -- breath of fresh air in that sense. there has been more controversy around that and the fact that reflects self is benefiting from that currency. a lot of people say that. they were mum on the issue today. it did indicate there were tests going on that if you apply them,
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there is a higher likelihood it is deemed security. which will obviously not be good for ripple. scarlet: we will continue to keep an eye on that one. thank you for joining us from washington. now moving to hollywood, when hollywood collide, apple is said to be near a deal to the rights of an animated movie is part of its upcoming slate of original video offerings. angeles, does this mean apple will release a motion available at your local theater? >> that is the big question. we know it is in talks and those to finalizing a deal with an animation studio out of ireland, which has made several oscar-nominated movies, most recently, song of the sea, considered high-quality in caliber in terms of the feature films it makes. know apple has had a tough
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couple of years, talking to executives about projects and filmmakers and hiring aggressively to fill out a team that can buy and produce content put over a video medium. some of that has been through apple's descriptions and we know aat apple wants to present slate of content but it has been very vague about what platform that will be over. to people in hollywood, no one seems to know where the content will appear, itunes, subscription services, or a dedicated new platform. there is potentially a chance to see it in theaters. >> we will hold our breath for that moment. joining us from los angeles. this is bloomberg. ♪
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>> a live look where sarah sanders briefing is underway. making comments saying trump -- trump product human rights with kim jong-un and they brought up a number of different topics and he saluted north koreans as a courtesy. eventn watch the entire by using the terminal function live go. time enough for options insight with julie hyman. julie: thank you. steve, into the week, we kept talking about what a big week it was. you have the summit in singapore. stocks have month -- have not move much. it almost feels like we're back to complacency of late last year and early this year. >> it is like there is a bulletproof feel in the market now. some of it comes from the numbers and every time there is a risk pending, there is another one averted because of good
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numbers. it is kind of what we have in seeing. have alluded to this before but the markets have had a tough time with political events. fed meeting, east be meeting notwithstanding. the market is usually pretty good at this stuff. did -- if i told you last week that the g7 would end with this debacle of everyone yelling at each other, and the markets would move, you would think i was crazy and i would think i was crazy. but somehow, we exist just in that loop. >> we were talking about technology as well. options wise, we know that people are buying the stocks. are they are so bullish -- are they also bullish? >> people feel it is safe to speculate. you see it being led by things like amazon and facebook, stuff where it is very difficult to come up with what the right valuation is, and you can put almost whatever valuation you
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they become momentum stocks and people play the momentum. people are hedging because some of these things seem stretched. one person stretched is another person's momentum trade. >> another thing you can feel and touch. you are looking at barrett gold today, the company. what drew you to it? >> basic it, my thought is as we are getting to the summer months and seeing that that mark is anything,vious to this is the opportunity to try and sell volatility on individual. i'm not necessarily as -- about a 12, so i am trying to think of strategies where we can is something relatively tall,
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where we can pick up a few things along the way. to leave ite have there because maybe we are having technical difficulties? should i send it back to you? ♪ what's a gig of data?
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you'll pay less for data. it's a new kind of network designed to save you money. click, call or visit a store today. secretary says -- and be empowered to dictate
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the terms. he was in the house of commons. >> we cannot allow parliament to instruct government on what steps to take for international negotiations. it would be constitutionally unprecedented. mark: he added an amendment to give a final sammy amendment. a final compromise this week with rebels within her party who supported the move. her office has not released its version of the payment. two weeks after being elected in no serious challengers, sworn in a new government. members took the oath of office today and cairo. in that governing body including replacing the country's defense minister. have approved the fire -- final reforms


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