in place during the obama restriction was not appropriate and set standards too high. >> this will begin a process that will determine what the standards should be and is not conclusion very in that regard. is that weclusive look at issues that should set standards, they need to be updated and evaluated and standards need to be revised accordingly. mark: the epa in partnership with the highway traffic safety demonstration work to come up with new standards. washington today, 33-year-old became the first person to be sentenced in special counsel robert mueller's investigation. ordered toawyer was serve 30 days in prison and fined $20,000 for lying about his context with former trump , rick gates,cials and those connected the russian military intelligence. french rail workers marched

through paris a series of strikes. at protests are aimed president macron's labor performed plans which would deny future hires with job security and early retirement and. pension for existing workers. the national rail authority said only about 12% of trains were running today. seven countries are interested in hosting the 2026 winter olympics. canada, japan, switzerland, and turkey have expressed interest. about is expected in september of 2019 and the ioc will try to attract more candidates. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. shery: it does 1:00 in new york

and 1 a.m. in hong kong, i am shery ahn. vonnie: and i am vonnie quinn. welcome to bloomberg markets. ♪ shery: from bloomberg world headquarters your the top stories from around the world we are following. the new york fed new boss, john williams is selected to run the central banks are all new york fed, but this banking industry and what it means to wall street at this hour. and from the red, the dow s&p 500 rebound from yesterday's selloff but the nasdaq still i don't with the new criticism of amazon from president trump. vonnie: and the president expected to take the stage at this hour with leaders of and lithuania.,

will take you to the white house when it happens. shery: the markets are seeing a rebound, let's get the details from abigail doolittle. a rebounde are seeing of major averages and we have to nasdaq higher, but it is another day of intraday volatility with the s&p 500 and the nasdaq slipping lower. the s&p 500 lots also weekly lower. -- was also briefly lower. investors continue to remain jittery and uncertain about regulationsabout and the trade war, and right now we have the russell 2000 outperforming to a small degree. that index is wait with small-cap companies -- weighed with small-cap companies. as for the tech weakness, this is comprised of big tech names, and we see these what sauce

throughout the day at the lows of three quarters of 1% at the highs up 1.2%. tech is the drag on markets recently, so there is a question if these what sauce may suggest you going to see more of the same for the other major averages. and the fang trade plays in here. -- theget g #btv 2764 s&p 500 in purple and white and we have to thank indexes -- fang giving a lookare back and there's a question if we'll see a reconnection, and it's just a lot of errors can come out from that trade. turning to media names and the potential deal cutting movement for media names including cbs trading higher. down, and cbs is

said to consider a low market rate for viacom. these companies are controlled by the family of sumner redstone, the billionaire, and are considering coming back together now. and we have disney trading slightly lower on the news they , ifsaid to want to buy sky that will help the fox offer. and spotify on a direct listing trading sharply higher, up 23% on its debut. gonie: three hours still to anything can happen in new leader for the new york fed, john williams is coming east to the new york office beginning on june 18 what impact will have on wall street? that's asked the man who wrote the book on ben bernanke.

ethan, thank you for joining. a powerful voice on monetary policy dissenting with the head of the fed at the time. what does he do to tilt the new york federal reserve office? >> we think he is quite similar to bill dudley, we have a hot-dove chart where we show it one in the committee and we put williams and dudley next to each other. slightly more hawkish than the chairman, so i do think he brings big change, he is in the middle of that debate going on in the fed whether to hike three or four times this year. i think will be an important voice. he is a very smart economist and has been around a long time. actually think he is an excellent choice to head the new york fed. shery: and he is one of those people must talk about shifting

the framework for monetary policy. price level targeting instead of inflation level targeting. the chart showing the level of prices in the steady growth path could lead -- rising 2% per year keeping the long run average inflation rate at 2%. could this be a new framework that williams can bring to the board? i think it is going to take quite a while for the fed to change their framework, but you see there is already change going on in the fed. if you look at their forecast, the committee on average is forecasting that will overshoot their target and end the cycle with inflation a little above 2%. that is a sign they are recognizing that if you go through a period of low inflation you want to make up with a little bit higher inflation and put yourself in a better position to face the next crisis by getting inflation a little bit about your target. price level targeting and

overshooting a little bit on the target are similar policies. you can see the fed already drifting in that direction. atnie: he will be voting every meeting as opposed to some of the other fed members rotate. the next meeting is made to, and after that is june 13 and there will two more before he gets a voice. will there be more interest rate increases given we have had two two more meetings and likely one more rate increase? is on i think the fed automatic pilot and they will hike at each press conference meeting going forward, unless they see something negative. significant correction in the equity markets or something much worse than what we have seen, or growth does it deliver the way most of us are expecting with all this fiscal stimulus. fedink the momentum for the

is pretty strong right now and they feel confident that the economy can handle higher interest rates. i think they keep going at press conferences. shery: and we still don't have a vice-chairman and we are hearing he is ahard cleary, columbia university professor -- if we do get this leadership that signifywill for the markets? what policy should wewhat polic? ethan: i think it is a continuation policy.

interest. and it is at 45 basis points, and if he at 1.8 inflation you get above 2%. tell us why this model is still something he stands by and why you think -- what you think of this particular model? ethan: i think this is a hard thing to estimate and i think john williams will acknowledge that. it is hard to pin down what r- star really is.

in love witho fall your research and you look at the broad spectrum of views and models and think about what you want to do based on that. if you were to take that model as god's truth, you probably would be talking about stopping the rate hike cycle at the end of this year. i do think he believes that, and if we listen to, broader comments from john williams he understands that probably the economy can handle higher interest rates. he will certainly finish the job this year and continue hiking next year. shery: a more pragmatic approach. much. thank you so up, stocks rebounded from seven-week lows, but does it give the fed enough reason to turn more dovish? that is next. this is bloomberg. ♪

vonnie: this is bloomberg markets. shery: stocks are rebounding today after yesterday's tech route to a broader turn sending the s&p 500 below its 200 day moving average. bonds overhauling today and the 10 year yield is that 277 and the swings in equities raise concern if the fed can take a more dovish turn. here with more is kathy jones. i will show you what the stock markets are doing, we have a chart showing of the s&p 500 below the 200 day moving average. last year when the fed was hiking rates we wondered why there was no market reaction in terms of financial conditions,

what are you seeing out there? kathy: financial conditions have tighten the selloff in the stock market. the hike in rates and the pickup in volatility and the whitening --the libel are components idening -- it is not as loose as it was but it has gotten tight. vonnie: do the chances and probability of getting tighter now that we know john williams is the next new york fed chair improve or go higher? don't think the williams appointment will be a big change for the fed at this stage of the game. then't think it changes path of fed tightening, that is more of what the economy does and what the markets do. if we get increasing volatility and an increasing rate, that would be something that starts to slow things down.

if you start to see banks get tighter terms of lending -- but i don't think that at this stage of the game we are seeing that. shery: why didn't treasury markets react sharply when we saw selloffs this time around? kathy: that is a good question and i was surprised we didn't see a flight to safety in the treasury markets. yields came down quite a bit, we and a lot of that has been discounted. vonnie: kathy, if you are mystified, where are you looking for your q's now? is it the president's tweets? kathy: we try to put that aside and not the indicator to watch because you get a burst of activity and it thinks quite down a little. we look at economic indicators, and what we are seeing is the increasing inflation or leading indicators of inflation are picking up. so i have some numbers earlier

might have been people loading up on inventory before price increases. when you do have to trade -- pricesnd tariffs go up and contributes to inflation along with higher wages. so we are really watching the inflation indicators more than anything else. shery: what about the yield curve? we saw it head below 40 basis points on monday come and the charts showing you the spread widening today. pitfall anytime soon and why economy?s indicate the the fact that the yield curve is flat as much as it has and hasn't steepen very often over the last year and a half tells me the market believes that as the fed is tightening it will keep a lid on inflation. the only surprise is if we get or 2.4.n at 2.3

guyse: what are you looking to buy or sell or advising people to do? we are keeping inflation short and up in credit quality. credit spreads have gotten very low. you are not getting a lot of risk premium for your money in high-yield or lower chances of investment grade in emerging markets. we are migrating credit quality and staying short duration. vonnie: i have to ask you about the news slate of reference rates. how is it going to change business for you? kathy: right now it wants to change too much but over time it will be an interesting moment. it will keep lawyers very busy of how this is going to work. jones, thank you so

much. vonnie: it is time for the bloomberg business flash. helpy is willing to to rupert murdoch's 20th century fox went approvals to buy skype and is the has offered the by sky news guaranteeing independence and these concerns for regulators. the interest in the news, regardless of the $52 billion takeover -- if stocks do not go through. wall street analysts are defending and tell bash fell shares monday after a bloomberg report that apple plans to use its own chips to power the mac. morgan stanley expects the move to have limited impact on intel. jpmorgan says the share price buying opportunity and does not consider the change to be a major threat. that is your bloomberg business

flash update. spotify's biggest playlist yet, open trading at 165.90 pressure. per share. this is bloomberg. ♪

vonnie: this is bloomberg markets. shery: spotify made its public debut today, opening trading at the new york stock exchange at $105 and $.90 per share and they launched its alternative ipo on a date or tech stocks around the world are under scrutiny. joining us is caroline hyde, the chart showing spotify peers are lacking the s&p 500, gets by to fight is doing pretty well for its alternative ipo. >> shaking off the market

concern, and we see a 25% pop. the is interesting is that cofounder is a billionaire -- the founders themselves aren't that related by this pop in sh ares. stable price more at 25 billions, but we are at $30 billion, and is interesting to see the valuation in private markets this stable year. this had been testing waters, and this isn't any normal ipo. this is a direct listing, therefore to hadn't been price discovery and was done by phone by back advisors. and is a supply and demand what this high valuation might suggest is that -- we only know 30 million shares have traded hands. that is 6% of outstanding shares. therefore this could be a supply tightness and is pushing and elevating the share price, and

therefore we could see it going falcao going forward. -- we could see it going all the going forward. vonnie: was there not enough buyers? normal ipo, there to startkup period sling as soon as today, therefore we didn't know if they will be holding on to shares or selling them. overall some investors i have spoken to and some big european names making millions and millions out of this particular deal, the likes of baltimore, speaking to them -- they really like this new direct listing. it provides liquidity, but also helps bank fees and it stop making it diluted.

to a broker who bought it at a $3 billion valuation. shouldestion of why you pay a fee to the bank requested why you need a dilute or shareholder and why not take a stand for existing shareholders have supported you along the way and do what is best for them. that is allowing them to trade shares whenever they want, not locking them up and paying fees to bankers. it is a great way to do it. >> he didn't tell us if he will sell today but many anticipate that the valuation could go higher from here. spun five can be worth $100 million, and why so out when it is worth $30 billion? shery: spotify is this appears to be a catch-22, you make more money, but you paid more money. challenge is ahead. >> you are right, and maybe

spotify is talking to artists, and that is how they protect margins going forward. another key issue for the investor base is what about apple? and have been successful, apple has had more streams than spotify. but spotify has double the amount of users and it is likely perceivable. vonnie: caroline hyde, thank you for joining us from london. 60, for is trading at $1 a gain of 22%. president trump is meeting with leaders of baltic states. this is bloomberg. ♪ retail.

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. comcast business outmaneuver. shery: i'm shery ahn. i'm vonnie quinn. this is bloomberg markets. you are looking at a live shot

of the white house. president trump and the heads of the government for the baltic states will hit the podium for a news conference. earlier there were some comments on amazon by the president as the leaders arrived at the white house. stocks react.the they have bounced back from that initial pressure and we are seeing the dow up .9%. most sectors on the s&p 500 in the green rising .7%. materials are falling. the nasdaq is also up .5%. all averages are in the red. 17 states and the district of columbia and six cities sued the federal government today saying a plan to add a citizenship question to the

census is unconstitutional. several states have joined a separate lawsuit filed by california's attorney general last week that seeks to block the citizenship question from being added to the census questionnaire. congress is considering letting president trump roll back parts of the just passed federal spending package. republican lawmakers are facing criticism for having approved the $1.3 trillion measure. kevin mccarthy has been discussing the plan with the president over the past couple of days. congress is on recess until next week. a global chemical weapons body will hold an emergency meeting tomorrow to discuss the poisoning of a former spy and his daughter.

it has called an extraordinary session to its headquarters in the hague. in south africa opposition politician julius muslim of visited the house of the late mandela. liferters celebrated his of activism. the nation is mourning the loss of what he called a giant. -- heregard him as our as our leader and she will continue to be our leader. we are here to say to the people that we are here to continue the fight. mark: a state funeral for what he mandela will be held on april 14. global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton.

this is bloomberg. vonnie: we are moments away from a news conference by president donald trump and the leaders of the baltic states. they are concerned about things like russian aggression. we want to get to that in a few moments. first let's get to michael mckee. there is so much going on today between the president's comments about amazon that really impact have amarket and now we new new york fed president. >> not to mention nafta going on. vonnie: trade in general. should the market have reacted to john williams --? >> i would suggest not. it doesn't change the monetary policy debate because williams

has already been on the monetary policy committee since 2011. it gives him a permanent vote but doesn't change the input that he's been giving to the committee. we will wait and see who the san francisco fed brings in to replace him and that could be a different voice. we are still waiting for the president to nominate a vice chair and three other governors. shery: it's very interesting when we hear about john williams we hear that he doesn't have a bloomberg terminal at his desk which tells you a lot about how he does not keep up-to-date with market moves. how significant is that? >> i think he's going to have to change that because the new york fed deals with the markets every day. they are the people who fed monetary policy. his statement was basically trying to reassure markets that he wasn't making policy based on which way the wind was blowing. he was looking at the fundamentals of the economy. and he will still do that in terms of monetary policy but in

terms of carrying out that policy ahead of the bank that intervenes in the market on a daily basis he's going to have to pay much closer attention to what's going on. shery: sahil kapur joins us now. we are awaiting the press conference by president trump in the baltic state leaders. what are we expected to hear given that this comes at a time of heightened tensions with russia? >> that's right. we are expected to hear the president speak in moments at a press conference with the leaders of three baltic countries. the president did speak to reporters briefly before this conference and he talked about everything from china to mexico to immigration. one thing he got very passionate about was border security. he kind of returned to campaign trail trump. he talked about this caravan that is ostensibly bringing people from central american

companies -- countries to the border. there was a lot that didn't have to do with the topic at hand. these leaders are going to want to hear an assurance from president trump that he has their backs against russian aggression. that is their main concern and a strong nato of course which he has been critical of. vonnie: will he give those assurances? given how this president has been acting in relation to nato it's not exactly clear that both sides wishes are aligned. >> that's clear. there's two different dimensions we need to evaluate this on. president trump's rhetoric and demeanor towards russia has been pretty warm. he has said praiseworthy things about vladimir putin.

the nine states actions have been somewhat different. he has taken tough actions against russia whether it's confronting them for their actions in syria and their ,upport for the assad regime selling lethal arms to ukraine to fight off russian separatists there and recently expelling 60 russian diplomats from the in retaliation for a poison gas attack. there are things the administration could be doing even if we don't hear much of a signal. he could concede that -- conceding that the russians interfered in the election could cast doubt on the legitimacy of his presidency. shery: we just saw kellyanne conway take a seat. we will keep you updated as that news conference gets started. we have heard about president trump talking about president xi

jinping. trade a key focus for this administration. could we see a culinary deal with mexico and canada on nafta? >> it's fascinating for the markets. the presence words never seem to match his actions. he is tweeting about getting rid of nafta and how bad mexico has been. he suggested they have gotten better. continuing to threaten nafta while at the same time looks like the u.s. trade -- will be meeting with his counterpart from mexico to put together a deal he could announce next week in lima. the idea being that they want to calm the markets down about the prospects of a global trade war. essentially saying we are taking nafta off the table as an issue. is he still talking about mexico paying for the

wall? surely mexico will not agree to any kind of nafta deal. >> of course mexico is not going to pay for the wall. this is a campaign trail rally thing he said over and over again. he recognizes that, which is why he's trying to get congress to pay for the wall. there have been constant negotiations back and forth between him and democratic leaders who agreed to give him the wall in exchange for a path to citizenship for these undocumented young people. they have broken down over and over again. president has reportedly mused about finding a way to get the military to pay for the wall. there seems to be no legal avenue to do that. going to pay for it. congress is not going to pay for it. he has $1.6 million at the moment. doesomnibus spending bill not allow him to actually construct the wall anything other than fencing and babies -- levees.

we will hear more of a confrontational rhetoric continuation toward mexico over nafta and even canada because he has been saying for a long time that the united states got a raw deal. he knows he's not going to get mexico to pay for it. vonnie: you have been following these rounds very closely. we haven't even spoke about the canadians. they must be so riled by some of the things the president continues to say. can there be something next week that they all agree on? won't it feel like mexico is swallowing his pride or that the president is swallowing his pride? >> what they are trying to do is ignore donald trump which is what congress did when they put together the tax deal. they just went and did the work and that's what's happening at the lower levels. therefore to forging ahead on the things that they can reach agreement on and there trying to come up with creative solutions to meet each other part way. we will see how much the u.s. is willing to compromise. that's the key to whether they

can get any kind of nafta deal. the u.s. has taken some hard-line positions. if the u.s. is willing to compromise the can come with a deal that can be filled in later. much of the work beyond those headline issues is simply a matter of working through the issues and there's 30 chapters to this. it's a very broad deep treaty. it's going to take longer than just a week. shery: everything ahead of the mexico presidential elections in july. kapur, anything likely to be done in congress ahead of such a big political changes coming up? onthe midterm election is november 6. we are certainly moving at a political season as primaries have already begun. retrenchingresident increasingly toward his base with this very hard-line immigration talk that ultimately made him president. in recent days he has been on a

bit of a twitter rampage talking about how the border is unsecure . he has talked a lot about this caravan of central americans coming together to apparently pursue asylum claims. he has also basically killed whatever hope was left of getting a daca deal. that authority flatlined and the president -- that has already flatlined and the president stuck a dagger in it. we will be hearing more and more i suspect of this hard-line immigration rhetoric because the president wants to keep his base happy with him. to the wishesuned supporters.s he wants to keep those people energized and mobilize ahead of the election. >> we make a big deal out of the mexican election but it is in part the u.s. midterms that are

driving the urgency to get something done. the administration recognizes that they really want to vote this year -- a vote this year. it is structured is not a treaty. it's what they call a congressional executive agreement which means it's not the senate that has to ratify it, it's a majority of both houses have to approve it. if democrats take over the house there's a good chance they might vote it down especially if they don't like things like the labor provisions. stronger labor provisions to improve working conditions. they want to get something done before republicans conceivably lose control of the house and you have to publish the agreement. you have to have some comment period and then they get to vote. there is a time frame for the u.s. as well as the mexicans. shery: does that mean the president will now keep relying on his executive authority and the power of the presidential

pen? can't get things through congress of course he's going to look at every opportunity he has executive late to get things done through executive orders or directions agencies and so forth. we saw a lot of that from president obama in the second half of his administration or congress was just paralyzed and not giving him anything he wanted so he resorted to that. it's not an uncommon thing especially in this day and age. it was expected that the president was likely to be doing that if they face a divided government and congress run by the opposite side. president trump has more common cause to be made with democrats than members of his own party. republican leaders are very skeptical of his tariffs and his rhetoric that could in their view lead to a trade war. even some people in his administration including famously departing economic advisor gary cohn will be replaced with someone who has in similar views on trade

favor of trade and against his more protectionist views on this. if democrats do take control maybe we will see a potential deal being struck between him and courting their support on the issue of trade. i emphasize strongly maybe because the prospect of cooperation between trump and democrats on anything is dubious at best. that is an issue where he seems to agree with the left more than the right. vonnie: the camera keeps alighting on h.r. mcmaster until john bolton is the national security adviser. let's change something slightly. the president on this notion of what he can and cannot do, he can with the power of senate consent appoint members of the postal service as board of governors. amazon feeling the brunt of the president's tweets. what would it take if the

president were to appoint some board of governors to the postal service, they were to decide they were going to -- is that what would happen for amazon to feel a hit from this or could president to something more immediately? >> the president doesn't have a lot of options here. in theory he could replace members of the postal board. i'm not sure whether they can be fired or not. , they have contracts generally have to be honored. you can't just abrogate them without paying a penalty. in the future it possible the postal service would want to raise the cost but there has been no evidence that the president knows anything about what he's talking about in terms of amazon and the contracts they have according to the postal service. amazon pays the same rate as everybody else and helps the package delivery business. amazon and others helps keep the postal service operating because it makes up a great percentage of their revenue. shery: president trump has

fornated three individuals the vacancies in the postal service. that is still awaiting confirmation. we keep pennington h.r. mcmaster to wilbur ross -- panning h.r. mcmaster and wilbur ross. the latest we have heard about another member of staff is scott pruitt is being kept as epa chief and that the president actually supports him. that's right. my colleagues reported that the president has given essentially the thumbs-up to scott pruitt who has been under fire after it was reported that he got an alleged sweetheart deal from a lobbyist -- a condo in capitol hill that is controlled by an energy lobbyist. for about six months of his tenure as epa chief. like the president has

no imminent desire to fire him. the president is a mercurial individual. he can change his mind. we have seen when staffers seem to be on the ropes that they end up surviving. sudden seen him make moves to fire people. the is the -- the issue of is going to be -- it can spiral into something where his democrats can make a case that there's a systematic rulesattitude to ethical in the white house. i want to go back to amazon just briefly. the president seems to be on the little bit of an island going after amazon. he doesn't seem to have allies in congress including in his own party who have much of an appetite to go after them. quitunclear if he wants to policy backbone behind this or if he is just venting because amazon is run by jeff bezos who also controls the washington

post which president trump has been critical of. we are now looking at pictures of the heads of baltic states and president trump coming in for a news conference. theoday i'm honored to host president of estonia, the president of latvia and the president of lithuania at the u.s. baltic centennial summit. thank you all for traveling to the white house. for these really important discussions. we have just spent a long time together and it was very interesting. this summit proudly displays to the world america's deep and lasting friendship with the baltic nations. on behalf of the american people thank you very much and we are going to have another 100 year very long and beautiful 100tionship to this is your year of independence. congratulations.

centuries the united states has stood with the people of the baltics in support of their independent sovereignty and self-determination. through the decades of brutal soviet occupation the united states never ceased to recognize the sovereignty of the baltic republics. in our discussions today i was proud to reaffirm america's commitment to the wells declaration of 1940 and the u.s. baltic charter of 1998. the same principles lie at the heart of america's approach to world affairs honoring the right of peaceful citizens and nations to protect their interests and chart their own wonderful destinies. arethree baltic republics committed nato allies. i want to express our gratitude to each of your countries for fulfilling your full obligations benchmarkg the 2% gdp for national defense this year.

your commitment to burden sharing is an example really that other nato nations and partners all around the world will have to all get together and bear. some of them do not make the same commitment. hopefully they soon will. went nations are committed to peace and security they have to pay their share and we will all enjoy a much more safe and prosperous future. baltic countries are also providing security assistance and training as part of the coalition to defeat isis. the coalition has liberated almost 100% of the territory once held by isis and syria. and in iraq. isise will not rest until is gone. in economic matters are cooperation continues to develop and grow as you well know.

we are about several new opportunities for collaboration, especially in science, medicine and technology. immediately following this summit the department of commerce in the u.s. chamber of will host a u.s. baltic business summit to expand regional trade and investment between our nations. and they're all looking forward to seeing you. the baltic countries remain a key market for u.s. aircraft, automobiles, machinery and medical equipment and we welcome increased bilateral trade with all three nations based on the principle of fairness and reciprocity. we are enhancing our cooperation on energy security. we're all collaborating to diversify energy sources, supplies and routes throughout the baltic region including expanding exports of u.s. whichied natural gas of

you have become a bigger and bigger user. these are some of the many wonderful opportunities we can together. to all three baltic leaders with foroday, thank you again helping to celebrate and this is really a very great celebration because it's a historic milestone. our friendship will continue to grow closer and are cooperation the continue to bring about greater security and prosperity for our citizens as you have done terrific jobs as leaders and presidents of your countries. we tell you that for your citizens we are there for you. as we begin the next 100 years of our partnership, the baltic republics can trust the united states will remain a strong crowd and loyal friend and ally. thank you very much. thank you. thank you very much. >> probably it's my turn. >> please.

yes. whatever you like. >> we are very thankful for the becauseity to be here of the alliance which we are affirming today with the united states by adopting the declaration. we say that article five is ironclad for all of us in the collective defense issues are important for all of us and we understand how important nato is for all of us and why we during our discussions talk so much about affirming nato. the investments in child defense, the amount of necessary to invent into our defense and of course together where it is necessary all of us and lithuania is with the united states on fighting terrorists through all the world.

so we are partners, allies and trustful allies. thatse of that we are sure the reforms of nato which we are investing together and preparing together will be resulted as it was before but especially now because we see in united states leadership the willingness of the united states for a different quality of nato. i was joking about that we need leadership sometimes for decision-making given unpredictable leadership to make enough leverage and pressure for the rivals to believe that we as weke a decision and think this kind of leadership in president trump and this is good because without the leverage and pressure there will be no additional spending in our

defense. in nato there will be no additional decisions for rotating military forces of the uniteddefense. in nato there will be states in. there will be no willingness to look into the matter of defense which we need very much. from all of this point of view we trust that our partner and ally is investing seriously in the future of defense not only our region but the nato territory defense and in the peace and security of the world as it was before. of course businesses are coming together. in military corporations goes with economic operation and i'm happy that today in our business forum we will sign two agreements with two american companies on the liquid gas corporation. lithuania has a liquid gas station and factory, so-called floating boat.

we can be independent all three baltic states on the gas supply because of that and this gives us strength and the possibility to make our own decisions not to depend on one supplier and american liquid gas will come on time and will make us more independent in our decision-making and diversify our gas supply. real friendship and cooperation between our region and the united states. withcomes also together trade matters where today we see some discussions on the world level tween the united states and european union. we are together with decisions that the thread needs to be to alland equally feared sides. there is no sense to go to the war. as alliesould support of the united states.

together with international andgations in military together with the united states and european union in solving the trade issues we are standing with and together and we hope next willesident said be even better, closer together and we will be able to achieve and make more. >> thank you very much. please. >> your excellency president u.s. presidentic summits have reaffirmed are assured commitment to fundamental values. friendship andg the steadfast partnership we have enjoyed for nearly a century. is united states of america our closest friend and ally.

i appreciate that we help each other's mutual support in our endeavors as well as insecurity challenges we are facing. today we reflected on our many achievements and 70 course for our future undertakings. we have agreed to enhance our defense and security cooperation. deterrence policy in the baltic region and military assistance provided to our forces. we will continue to commit to percent of gdp towards the development of our military capabilities for the purposes of posture inng nato's

the eastern plane and contributing to international security. and the unitedte states acknowledged the need to continue the successful existing cooperation with hope in conquering modern day security threats such as terrorism, cyber and informational warfare and nuclear proliferation. committed tous placing greater emphasis on advancing our economic and trade and investment relationship. we recognize great potential in areas of innovation, modern technologies and the digital economy. we will explore possibilities for forging new

partnerships to this end. i am particularly proud of successes of latvian companies that have generated more than 2000 jobs in the u.s., in georgia, in north carolina, in california. it just shows how important is this economic cooperation. states in theltic united states agreed to continue promoting closer people to people contacts because these foracts are very important every member of our society. and let me stress that president host was an outstanding today. in this.r hosting us

for us in this very important event when we celebrate 100 years anniversary of our statehood. thanks. >> thank you. president trump, my dear neighbors. dear journalists. i would like to thank president trump and his administration for his political leadership in our region and for the very reasonable commitment which has been demonstrated through a number of high-level visits to our region. we do celebrate our centennial anniversary of these hundred years for 50 we were occupied by the soviet union. and people in our country got up every morning knowing that there are democratic countries led by united states who have never recognized the occupation of the baltic states. our national flag, the blue

black and white was waiting here in america throughout these years. it couldn't have been done at that time in estonia. back thenrtwarming and we remember it and we are still grateful. we will be forever. today we agree the declaration also reminding us about the foundations of our relations. my friends spoke a lot about what we do. it is always worth it to remember why we do this. we believe that peace security and prosperity demand -- depend on strong sovereign nations to our partnership is based on principles of democracy and individual liberty and the rule of law. these things are extremely important. togetherstand like-minded partners and allies. baltic states are quite small

but they are important because of their location. but not only because of what we do as contributing partners to the global security. we find it very important to contribute in the counterterrorism fight. 2011 toit important in spend 2% of their gdp on defense. we find it extremely important to remember that we stand together and we form something which we call it in my office and axis of good. good.s an axis of estonia and the united states are very different to the size of their economy. we are not speaking about digital economies, this doesn't matter anymore. estonia is one of the world's leading nations of digital governance and our companies are working with companies in your country to make sure that people could benefit. this cannot come without

cybersecurity. -- we have been attacked on cyber long before anybody else. we still work together. we contribute and we hope that we are really helpful to all of our partners. we have also more conventional trade that we do together. people in walmart: for their pre-ordered packages will see them delivered by estonian made package delivery robots. we are also proud of our legal .nvironment in estonia and then upscale when it makes more sense to upscale. together onwork

defense matters come economic matters and always stand a common base. this is the foundation of our relation. thank you for today for making this visible, together on defense matters come economic matters and always stand a common base. this is the foundation of our relation. thank you for today for making this visible, this axis of good. >> think you very much. very much. i will take a few questions. we're going to also have questions specifically for the baltics. steve? writers. -- reuters. >> thank you mr. president. something together on defense matters come economic matters the military advisers are urging you, what is the current thinking on the subject? do you still want them back and could you clarify about having the u.s. military guard the border with mexico? >> first of all the border, the mexican border is very unprotected by our laws. we have horrible horrible and very unsafe laws in the united states and we are going to be able to do something about that hopefully soon. hopefully congress will get and createogether some very powerful laws like mexico has an like canada has and like almost all countries have. we don't have laws. we have cat generally is. people come back years later for a court case except they virtually never come back.

for theare preparing military to secure our border between mexico and the united ittes, we have a meeting on in a little while. ishink everybody that it something we have to do. now the caravan which is over in fromple coming honduras thought they were just going to walk right through mexico and right through the border. you know, nafta is a phenomenal deal for mexico. it has been a horrible deal for the united states. we are renegotiating it now. it has been a horrible embarrassing deal for the united states. this should have been terminated or renegotiated many years ago. in mexico we have a trade deficit of over $100 billion a year. i told mexico yesterday that because of the fact that their laws are so strong they can do that hard toit believe the united states can't. i said i hope you're going to tell that caravan not to get up to the border.

and i think they're are doing that because as of 12 minutes ago it was all being broken up. we will see what happens. have strong borders. we need the wall. we have started building the wall. and that's very important. as far as syria is concerned primary mission in terms of that was getting rid of isis. we have almost completed that task and we will be making the decision very quickly in coordination with others in the area. as to what we will do. saudi arabia is very interested i said, youion and us to say maybe you are going to have to pay. a lot of people, we do a lot of things in this country. we do them for a lot of reasons. it's very costly for our country and it helps other countries a hell of a lot more than it helps

us. a we are going to be making decision. we have had a tremendous military success against isis. it's close to 100%. and we will be making a decision as to what we do in the very near future. we will be consulting also with groups of our people and groups of our allies. >> you are inclined to pull the troops out? >> i want to get out. i want to bring our troops back home. i want to start rebuilding our nation. we will have as of three months ago $7 trillion in the middle east over the last 17 years. we get nothing, nothing out of it. nothing. remembered in civilian life for years, i say keep the oil. thegot the oil, isis got oil. that's what fund their campaigns. they took a lot of the oil.

we didn't keep the oil. to get back. i want to rebuild our nation. think of it. $7 trillion over 17 years. we have nothing except death and destruction. it's a horrible thing. so it's time. we were very successful against isis. we will be successful against anybody militarily. but sometimes it's time to come back home. and we are thinking about that very seriously. ok? iq. -- thank you. >> mr. president, what about getting in the joint declaration americanthat periodic deployments in the baltic countries. what specifically can you commit to having heard requests and

wishes of the baltic state and you have mentioned russia as a terrorist state. did you have a meeting of minds here as to the threat that russia poses to the neighboring countries? thank you. >> we have a very strong relationship with the baltic states and we are with them. we are friends and allies. we are going to have a long-term very fine relationship in addition we do business on trade. we work very hard on security together. surprisingly large numbers of trade. these are very industrious nations. you are from there so you know exactly what i'm talking about. these are tremendous people and very very industrious. we do a lot of business on trade. thank you. thank you very much. >> interesting especially because we talked in that weighs about the rival.

especially now a border. then country behaves forms wars,, threatens we have nuclear missiles on your border, you sometimes call this country not very friendful. that's why the invest in our sick purity and defense -- security and defense and nato and we would like to see strong nato. strong alliance. and that's what we're going to do together. >> thank you. would you like to choose somebody? >> mr. trump, speaking about economical cooperation with my country at, with latvia, what is your message for investors in opinionnd what is your about the investment? >> i think all three would be

great places to invest. stable governments, incredible people. hard-working industrious people. i think they would be great places to invest. i would have no problem with it. i think as president of the night states -- the united states they would call that a slight conflict of interest. i think it would be a great place. all three would be a great place to invest. >> first a question to president trump. as said, the concern of the baltic states is russia. before the press conference you also said that at the same time good relationship with russia is not bad. but how are you going to deal with president vladimir putin? is he as your enemy or someone you can have dialogue with? and the second question is to our president.

is the defense of the baltic states enough or should there be something more? for example, defense systems. thank you. >> i think you will -- we will be able to have great dialogue i hope. if we can't, you will be the first to know about it. nobody has been tougher on russia than i have. i know you are nodding yes because everybody agrees when they think about it. strong energy, the act states. my point was into other forms of energy like windmills. we are very strong on energy. we are essentially energy independent. we are an exporter of energy. not a positive for russia but it is certainly a positive for the united states. just passed a $700 billion military budget. next year $716 billion. we are going to have a military hadnger than one we've ever by far. that's not exactly a great thing

for russia. way it is.the we are going to have the strongest military that we ever had. nato was delinquent. they were not paying their bills. discussedtates as we were not paying what they should be paying. since i came in, many many billions of dollars additional have been paid by countries that weren't paying and now they are paying. and they will have to pay more, frankly. so there are many things that i have done and not only the 60 diplomats. germany did four, france did four. we did 60. there's nobody been tougher on russia and with that being said i think i could have a very good relationship with president putin. i think. it's possible i want and you will know about it. believe me, this room will know about it before i know about it. it's a real possibility that i could have a good relationship

and remember this. getting along with russia is a good thing. getting along with china is a good thing. getting along with other countries including your three countries is a good thing, not a bad thing. i think i could have a very good relationship with russia and with president couldn't and if i id -- president putin and if did that could be a great thing and there's also a great possibility that that won't happen. who knows? ok? thank you. i would also like to contribute a little bit to your first question. trust the judgment even when we were occupied. and when we saw it membership of nato. because we are on a common foundation. you can walk around the mall and it's all written there. therefore i trust the judgment of president trump and his administration on that matter.

on defense, we did discuss the deterrence capacity necessary to make sure that our deterrence is believable to everybody who might want to question it. equal partners don't come to talk to each other this week. -- this way. i come here to ask for visa freedom. we find the solutions together which will work for us all together because we are in it altogether. we have -- we are equal contributors according to our size to this process of guaranteeing our security. summit weuring our discussed security in our region's. this discussion continue anyot to which aredialogue

eastern neighbor russia. please --eporter, pick a reporter, please. you can pick a reporter. the baltic reporter, ideally. real news, not fake news. you want to pick? i think we have enough. do we have enough? yes? mr. president, pick a reporter from the baltics. not the same man. he was very tough. yes, go ahead. please. ahead -- go ahead. >> i am from latvia. i have a question for our president from latvia. you are going to san francisco after your meeting here in washington and you are meeting some people who are making business connections from latvia and the u.s.

do you see any certain outcomes out of that? thank you. >> first of all i think during our summit i will repeat again that we discussed how we can sanction economic cooperation between baltic states and the u.s. californiay visit to to the silicon valley will give i think good basis for a better understanding of what our business people need to be presented here and what i can help -- how i can help them to be here because anyway i think all these cooperations between baltic states business people and the u.s. business people is very important for our society, for our business societies. as i said, we are thinking not

only about investments in our tontry and we are trying make a better environment for investments but also our business people are investing here and i think it is important for both countries. for latvia and for the u.s. >> i just want to conclude by saying that i'm very impressed with these three great baltic nations and the street great presidents. thank you very much for being here. thank you everybody. thank you. that was president trump speaking with the leaders of the baltic nations, latvia, lithuania and estonia. deals,lked about future energy security very much at the heart of the broader issue which

is the concern for the baltic nations about what russia does and ofregion and beyond course the tensions and the ongoing relationship between the united states and russia itself. bloomberg's national political reporter joins us from the north law. -- north lawn. pointkapur come at one the president was asked directly was there a meeting of minds over the threat that russia presents here? and the president talked around it and simply didn't answer the question. >> right. and we know this to be the case. the president does not like to talk about this issue. he has had a warm rhetorical posture toward russia and vladimir putin has certainly raised eyebrows among his critics. at the same time his administration has taken tough actions against russia such as expelling 60 -- 60 diplomats and saying russia was behind the poisoning of an x five.

the big question on everybody's mind was less about -- less what he says and more what he ends up doing. his administration does think that sometimes the light his rhetoric. julia: great point. sahil kapur, thank you so much for that. as he said, having a good relationship with russia and china is important whichever way it goes. he also said it's possible we will have a good relationship with russia. it's possible we won't. who knows? julia: given all of the factors and this too shall pass. that's the mantra bulls are repeating after -- joining us now is the biggest balls on the street, tom lee. he says that this pullback will prove to be another by on opportunity. his s&p target 3027.

great to have you with us. >> nice to be here. julia: thank you for your patience with the present. talk to me about what we are seeing in the markets right now. i have not seen this talked about in the last couple of weeks. is this still a healthy correction to you? >> no correction ever feels good. julia: or healthy. >> it's accomplishing the right thing. it is causing investors who may be in january thought it was tough to find new ideas, it's allowing a lot of stocks to reset. it's leading technical levels go from overbought to oversold and we are giving fundamentals a chance to catch up and surpass expectations. i do think it's actually quite healthy. >> what about the underlying concerns if you are looking at the fundamentals that some folks have pointed out. credit conditions is really the focus for a lot of investors right now. yes the trade war and the technology set off -- selloff. credit conditions are bubbling

under the surface. when did that become problematic for you? >> there's mixed signals from credit because i think in the short and like libor and commercial paper market, rates have gone up. we have done a lot of work on this and we have read a lot of other work on this and i'm pretty comfortable that it has a lot to do with structural issues. moneyies are repatriating so it's robbing the market of demand and there's a lot of treasury issuance. when you look at the longer end spreads are acting pretty well in most companies borrow sort of long-term. i think there's problems in the short and but not the long end. julia: you can see this in the chart. the blue line is the fed funds target rate. the white are the financial conditions. on a relative basis those financial conditions tightening. what do you think investors should be doing at this moment?

what should they be looking at specifically? not releasing the volatility spill over into other asset times tearch i guess point that there will be opportunity here if not now. >> i don't want to be dismissive but a lot of the fears of the trade are playing out in the equity markets. i would say it's an overreaction. i think underlying trends are still really positive. the labor market is tight which is pointing to which inflation and that's real inflation. that's going to help a lot of the sectors in the s&p like mining materials energy, the banks. i think it makes sense to still be oriented towards value. that's really what will show leadership in the next five to seven years. >> just quickly, you are looking at biotech specifically which has been a very volatile sector along with technologies from the large-cap biotech. ways the groups that

are likely to face risk in the next couple years are going to be tech and health care. it.because they deserve it's just because they are so successful that there's a lot of industries that complain about it. i think they are likely to face scrutiny. what's important to keep in mind is tech success and even health care success is because they are globally dominant sectors. it's not because they are robbing the average american. i don't think they are necessarily a bad group. >> thank you, tom lee. this is bloomberg. ♪ retail.

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.

comcast business outmaneuver. >> this capsule is both a hotel room and a type of boat. theme park operators help can up with the first floating pot

hotel and japan. the idea is you will be safe from a senomyx by floating above it -- you'll be safe from a tsunami. stairs will these reach the second floor where you get the 360 view of a observation that. two or three people can stay in one floating caps on and test the amenities of a typical hotel room. but something not normal, this room want to stay in the same spot. to have a shipns paul the capsule overnight into a nearby and inhabited island where visitors can step out of capsules and fight dinosaurs and an augmented ballot again -- augmented reality game. [laughter]

that sounds like quite a vacation. dinosaur gaming. i want to play that game. julia: and the island sounds nice. julie: but you have to fight dinosaurs. [laughter] julia: let's get to mark crumpton. mark: i hope you two are going to be ok. six cities sued the federal government saint additional citizen questions to the senses is unconstitutional and will beat the first time in 70 years that the government uses the form sent to every household to ask people to specify whether they are american citizens. >> we are here for a simple reason. article one of the united states constitution requires the federal government every 10

years to have a full and fair count of all people in our nation, citizen and noncitizen alike. this requirement comes from the founding of our republic. mark: the justice department said it will look over the defending the reinstatement of the citizenship question and the commerce department says the benefits of citizenship information against growing outweigh limited potential has adverse affects. president trump he was to use the military to secure the u.s.-mexico border until his promised border wall is built. speaking at a luncheon with baltic leaders, he discussed the idea with defense secretary jim mattis and the president has been frustrated about the lack of progress billing what was once a major promise of his campaign, a big beautiful wall along the mexican border. aredsales in the u.s. so

last year. last year checks run and was the highest of versus the fbi began releasing beta in 1998. while there is no exact data of firearm purchases, that is the kernel background check system is used as a barometer for gun sales. israeli prime minister benjamin netanyahu has canceled an agreement with the united nations to resettle african migrants. netanyahu announced the deal yesterday said he will benefit israel and the migrants, but after criticism from hardliners, the prime minister said today he is suspecting that arrangement. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. news, homeeal estate sales in manhattan have plunged the most since the recession.

they fell 25% in the first discuss isd here to president and ceo jonathan miller, all is not as it seems in this number. this is a total number of sales and the median sales price also fell, but talk to us what is behind this number. i think most important number is the drop in sales activity, two things, the first is the partial metric and real estate sales during the peak development period -- there were a lot of contracts signed that could close until the building was built. has been a 2017 to in numbers iclosings because the products are more expensive than the rest of the market. in this recent quarter of 2018 we saw best we caught a legacy

contract. essentially run dry and that causes prices to fall in little bit in aggregate and causes sales to fall. decliner part of the has to do with this best overused word is uncertainty. word. the new, trite it is processing the tax law. soon for the specifics of at the impact but it is a layer of uncertainty. relativelyl seeing -- the sales activity is not been usually low from a historic step on, it is just much lower over the past couple of years. mortgageether it is deductions or state and local tax changes coming in -- even rising borrowing costs and the tightening of financial

conditions. at the elements of uncertainty, can you draw any comfort from the fact that this is right across the board? the luxury and to the one that room apartment that tells you a lot of this is more short-term uncertainty and we can see some 30 -- versus ego syncretic issues in different segments? john: what you saw is universally across all price points, number of apartment bedroom size. anyway you slice it, you see general similarity of general activity slowing. that speaks to the uncertainty more than the actual acting nations. it is more like processing and getting used to it. we are going through a period over the next year or two of my's of buyers and sellers having to find their

equilibrium. to some it is going to be more than others because this is based on people's personal tax situations. how do you square what you are seeing the sales market with the rental market? taxesare falling and would be an issue on that end . what are the dynamics there is the sales market? john: in terms of what is constructed -- we see the same impact in rental and sales in the sense that we built a lot more skewed to the high-end of the market. asharacterize both markets softer at the top and tighter in price. what is different about this phenomenon is that renters -- the beneficiaries the rental market are the landlords versus the tenets. and in the purchase market this the property owners and unit

owners that are going to benefit. julia: to talk about a two-year the real moment as far as prices is concerned and how much of it is actually real as far as you lost the actuallyon, versus what is justified and what we are seeing. looking at the stats of the closing prices paid relative to the asking price, more than half of them are less than the initial asking price. john: the way to think of the market is, right now we came through a two to three-year window of aspirational pricing were sellers are naming any numbers and there was no shame in overpricing your property. -- in 2017 we saw a lot of luxury high-end sales. to asking price was cut 20%

30%. now we have another layer of the tax and where going to go through the same process. -- once they jump into the market are much more happy to take care of the potential impact of taxes on the sellers. but the sellers, we tend to say prices are stickier on the downside because of sellers don't get the price they pull back, unless they are under a urgent timeline. julie: went the we know about who is doing the buying? what about foreign investment for example or people buying apartments as investment properties and how this that affect the dynamic? john: we haven't seen a change in behaviors yet from what we saw over the last couple of years. we still are not seeing the level of investment saw in 2014, which is what i called a peak

luxury. it is about investors at the time -- were in the neighborhood of 25% of the condo market. when anits compete investor closes and it becomes a rental. i don't anticipate that right now. we are looking summer between 15% to 18%. i don't foresee that changing a whole lot over the next year or two. julia: what is the clearing ice dropped from here? how much do prices have to come down before we stabilize? john: universally, there is no answer. but it could be as much as 25% to 30%. julie: somewhere in the middle. [laughter] julia: our thanks to jonathan miller. coming up, signs of progress for

tesla, promising a speedy exploration of production in the model three, but is it enough to stop investors from worrying? more coming right up. this is bloomberg. ♪

julia: this is bloomberg markets, i am julia chatterley. julie: it is time for our sector spider report. abigail: we are looking at the consumer discretionary etf, and this of course after yesterday's big punch. the worst sector for the s&p 500 yesterday dragged on by amazon and other stocks, but today we uncertainty,up of

telling a story for the markets that are once again mixed. however we start the strength of automakers doing very well and we have athletic retailers doing very well. oner armour is up 3.5% positive comments from saying the company has sneaker pricing power and that is helping foot locker and nike. one stock that had been a top is now lower, amazon now down 6/10 of 1% on the open more than 2%, and a lower after president trump attack the company around hurting the u.s. postal service. we see meandering trading pattern after yesterday's 5% decline based on the attacks of president and learning what that means. some are wondering why president trump is attacking amazon based on the stock weighing on various indices. he likes to talk about the stock

market as a barometer of success, and right now amazon is hurting. the look sectors more pain ahead for the big consumer discretionary space. of theo-year chart consumer discretionary, and you can see a beautiful uptrend and the etf hugging that 60 day moving average telling us that buyers are in control. and in february happened, look at that congestion of the diamond top starting to break down. yesterday we had that x unlike below that 50 day moving average and sellers are stepping in and buyers are disappearing. combination and could suggest we could see consumer kick secretary -- consumer discretionary go closer to 80 and suggest the pain is ahead for the overall markets. julia: thank you once again, abigail.

ondon mosque we did a joke april. but the company is carrying that and some investors -- that spring in molly smith, bloomberg corporate finance reporter. we have been talking about this for days with concerns about the cash burn and debt. we were talking last week of the prospect of raising money and some investors are saying it will be double that, what are they telling you now? molly: i don't know if unsecured bonds are in the discussion but the numbers today re: mixed batch if they hit the target or not. people are now looking at -- they are expecting to raise money again at some point in the next year. will be at that point so expensive for tesla and it probably seek another option. julia: tesla made it clear, they don't need to raise money for the rest of the year and they

have unsecured credit lines. does this worry get put to bed? today even need to come back to market and go somewhere else? molly: if they follow through of the production rate of hitting 5000 follow threes for the fourth quarter, then i may cash basis alone they may not need come back. but then you look at the maybencing they need and this is the prudent thing to do to take care. julie: we look at the tesla cash burn on the bloomberg showing the barn as far as the eye can see. one that aboard a free cash flow. as you say, maybe they have enough to cover. is that cash burn number expected to decrease at all? molly: it is supposed to be around the $2 billion rate for the next off months, but

sometime in 2019 in that sector that may be the break even. that is the problem with funding a negative cash flow company. when you look at if they, work to do another unsecured bond sale the fact they were able to get it done at 5.3% of first time around is amazing. to do it again and prove on the execution front -- that will be challenging. julia: talk to us about the alternative options when you're facing an example of investors saying will lend you money at 10%. what are the alternative options? molly: and unsecured bonsall, versus a secured on cell leading to some sort of asset. some talk about the giga factory. that will help lower interest cost significantly. other think another equity raise or another convertible debt offering which they have done several times in the past. you to look at that as well, the

equity volatility makes call options more valuable and make the convertible that route -- debt route. julia: and social media has taken control of the card and delivery optimism. plenty of believers. julie: molly, thank you so much. i want to bring up breaking news on amazon. according to sources who have talked to reporters, there are no ongoing white house talks on action on amazon. it appears to be another case of the president's rhetoric being one thing and action being another, although it is unpredictable. fromding to reporting spencer soper -- apparently inside the white house there are no active discussions about turning the power of the administration against the company according to five people familiar with the matter spoke

on condition of anonymity. sharesve more as amazon bounce up, reversing and up 1.5%. this is bloomberg. ♪

toie: let's get back breaking news on amazon and to recap here, according to reporting from jennifer jacobs spencer soper, there is no active discussion about actually acting on the part of the administration to limit amazon in any way according to five people familiar with the matter spoke on condition of anonymity. this is in contrast to tweets we have gotten from the president in recent days. -- this is in agreement with the white house, the form a from the white house is there is no imminent action as far as amazon is concerned. for more let's forget the market intelligence analyst joining us

from san francisco. what is silicon valley and other techs saying about the prospects of amazon interference from this administration? differentlook at the angles of regulatory risk, our litigation analysts suggest the risk off antitrust issues are lower. the tax issue them a collecting sales taxes from third-party sellers -- that is an issue that it affect the entire market with compliance costs across the board. if any of these affect amazon, it would have a ripple effect, and who can sustain these costs? if you look at the balance, amazon should still come ahead. julie: speaking of strong ecosystems, we have to pivot to another one today, music

streaming service spotify in its first day of trading. trading around the lows of the session, but still around 100 and $50 a share and traded as high today as $169. what is your reaction on the first day of trading in this direct sale versus an ipo? >> we still have to wait for the volatility -- because the supply is limited. if you look at the ownership of the company, a good chunk is owned by strategic investors may not decide to sell. there is a supply and demand imbalance and for that to be irate out you may have to wait longer for the price to stabilize. but the subscriber growth story, if you look at their expectations -- we believe 30% of revenue growth and subscriber growth is like a this year because of the day district they have. long-term you can expect amazon and google and apple to wake up

with all the attention spotify is getting. julia: we were talking about amazon volatility in particular with the tech sector. they want note, and they care more about the low, than they do about the price, but they have got to be pleased. volatility was expected. to see a direct listing is the way to go, yet to wait for a couple of weeks at see how much more supply comes online to understand if this dynamic is working or not. some positive signs, for sure. julie: you mentioned amazon and apple music a be waking up as it were -- they have been around and trying. what caused them to wake up and differentiate since spotify has an advantage in market share?

>> spotify things they have five times more is it related data under closest competitor, which i assume is referencing apple. it is like self driving cars and self driving music, you are spending on our and the and paying artists and users discover content and using it as a marketplace. yet,s have not copied it but looking at the reaction here, you could expect them to leverage data more. these companies are adapt to do that. julia: that is the key here. thank you so much for that. coming up, plenty more. this is bloomberg. ♪

julia: is 12 p.m. in several cisco and 8 p.m. in london. i am julia chatterley. julie: welcome to bloomberg markets. ♪

julie: we are live at bloomberg world headquarters in new york and here are the top stories we cover around the world. their rhetoric versus reality, amazon shares rise is bloomberg lars there are no ongoing white house talks of action against the tech giant. salon san francisco, hello wall street, john williams is cap to replace bill dudley as the head of the new york fed. and deals, deals, deals. but the spotlight on media m&a in today's deal support. we are one hour from a close of trading and that's get a check of the markets with abigail little. abigail: is a little bit of a whipsaw day. we see solid gains for the three

major averages with the dow, s&p 500, and nasdaq all higher by 6/10 of 1% or more. the nasdaq had actually been lower, but with bonds trading off this is a risk on picture. intraday volatility with investors nervous ahead of earning season and a lot of macro factors. we hopped on to the bloomberg and look at the imap of the s&p 500 and we'll see that we have lots of green here. higher, and are because rates are higher the high dividend yields are up the least. telecom and energy and materials leading consumer discretionary's. amazon is higher at this point and tech is higher. the point is broad moves higher for the s&p 500. it seems to be changing by the how are. this speaks to the intraday volatility by i.

these intraday moves for the three major 500, and the dow, s&p nasdaq -- the move on the day was less than 1%. dowin february had, and the hadn't moved greater than 6% on the day, so lots of big moves. anything about the pink line is a greater than 1% move. -- there's lots of intraday volatility. amazon come at this point, up 1.7%. and then opened 2% lower as president trump tweeted midmorning talking about the fact the company is hurting the u.s. postal service, and investors are looking past that. most recently, bloomberg has arened that some sources

saying the white house is not actually considering making any changes or discussing plans, so we see shares rallying. that could of course change. and finally other notable movers on the day. johnson & johnson and united health, those shares are up or than 2% and rbc says a strong first quarter for johnson and johnson and it will top revenue estimates. toted health is positioned benefit from the final medicare advantage rate. and we have airlines trading higher as delta put up revenue that came in at the high end. right now, if you can believe it, a risk on tone despite volatility on the day. julia: it's good to first world news with mark crumpton. mark: president trump is not the only one unhappy with china's trade practices. in an interview with bloomberg, david lipton said officials in

beijing have acknowledged the need to change certain trade policies that were enacted at a time when china didn't have the same influence over the world economy that it does today. >> the time has come for them to address it. they to need globalization and that is why they had the spectacular growth and it will have a strong future. they need a globalization that is durable and that means finding a way to have free and fair trade and to get along with trade partners. mark: that than also called going tension between the u.s. and china as unfortunate and urging continued dialogue between the world's two biggest economies to help increased market axis of what he called a fair basis. a washington today, 33-year-old became the first person sentenced in special counsel robert mueller's investigation. the dutch lawyer was ordered to serve 30 days in prison and fined $20,000 for lying about

his contacts with former trump camping official rick gates and the person connected to russian military intelligence. environmental addiction agency says scott pruitt and vehicle emissions but by the obama administration were too high and standards focused on making cars that people are not going to buy. >> our focus should be on cars people purchase more efficient and have arbitrary percentages of vehicles purchased -- that the fix the purpose of what the standards are supposed to address. mark: the epa said it completed a review that will affect through 2025 2022 but did not specify details on new standards. german prosecutors said today they are seeking the extradition leader inseparatist

his role in organizing an independence referendum. he was detained in germany last month. spain also accuses the 55-year-old of misusing public funds. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. crumpton. this is bloomberg. julia: thank you very much, mark. john williams has been picked to branch of therk fed, and his appointment has sparked some controversy. joining us is dennis kelleher. just how for stated are you by this decision? dennis: i think we had a flawed process that unfortunately did not take into account of the interests of the broad american people.

we had a unique circumstance to some extent because we have a fad, jay powell, was not an economist and does not have history of monetary policy. he is trying to build a strong bench that focuses largely on having the fed knowledge and economist knowledge and monetary policy knowledge. the head of the fed is also the supervisor of the biggest and most dangerous banks in the u.s. and the world. he should be reflecting the diversity of the country. not just in terms of gender and diversity but for city of thought. one of the key flaws of the fed over the last case has been group think, which is caused them to miss significant economic shifts from the dotcom bubble to the housing bubble. we need more diversity and courageous people will actually argue for independence and independence of thought. we did see a process here that we felt established that. when you have someone

like janet yellen coming out and praising the pic of williams, rather than reassuring you, it is the exact opposite that the idea of continuity at the fed is not necessarily a good in. i thinkto be fair, janet yellen's endorsement of mr. williams goes a long way. i think janet yellen will go down in history as one of the great fed president's on the merits across the board. it means quite a bit she is endorsing mr. williams. what i am talking about is a process. while he is a recognized monetary policy expert and a stellar economist -- is also somebody who has demonstrated experience not only throughout the fed up managing. and credited large institutions. let's not forget the new york fed is a large and important institution that it's be managed

by someone was than that before. but what we need and the fed needs is credibility with the american people. to getthe ways credibility is to have more transparency and accountability and have a process that is open so the american people see that process includes the diversity of the country. their heart 320 million americans and it is not credible to say that out of 220 million americans we only have a couple who qualify for this job. there are many more qualified for this job and they need to be looked at. there an opportunity now by both mr. williams at the fed -- the san francisco fed president position is now open. mr. williams has to start off in iraq demonstrated what has been said about tim in terms of diversity of thought and diversity of input. he should, for example, start -- peopleommittees from outside the fed who he will listen to as sounding boards and brainstorm with.

similar they the process they will put in place to replace the san francisco fed president -- a should take it as a challenge to make it a model process that is transparent and accountable to the american people that produces diversity that they talk about. julia: whether it is transparency process or the regulatory aspect, talk about strength of character and diversity in representing the u.s. people better in terms of the approach. is it a fact that he is a white male upset you the most? dennis: not me. truthfully you want the best qualified person to do the job. problem of a historically has been at the pool people like them with the presumption is where the quality is does it actually reflect the diversity of the country and does it reflect the quality of the country.

whether you are a white male or black man or black woman -- you name it, the real issue is cash the net wide and look at all qualities needed. it is not just monetary policy, although it is important, that the ability to think independently to avoid the debilitating groupthink that has led to fed and policymaking and the wrong direction at the critically wrong time. the 2008 financial crisis was a shock to the fed, long before the country. it shouldn't have been a shock, at the diversity of opinion that comes from the diversity of the country is one of the best ways to guard against that. julia: i know if scarlet was here she would say one or two things about that. [laughter] julie: will have more on amazon next. this is bloomberg. ♪

julia: this is bloomberg markets. julie: that's get back to breaking news on amazon. shares are rising at sources say there are no ongoing and how stocks about action on the company. that's bring in brad stone, head of bloomberg technology coverage. he is joining us from san francisco. when you look at silicon valley and how they have been regarding the president's tweet and rhetoric, have they been bracing for something serious here or do they not expect any real action to materialize? brad: absolutely not. every analyst and entrepreneur i have heard from has been bewildered by the president's comments about amazon and the post office.

the post office rates are set by a independent agency with full itard to a congressional and arrangement. the market rates -- the post office itself says the relationship with amazon is profitable. the white house isn't doing anything about amazon because the white house can't do anything about amazon. they can't affect postal rates and antitrust action will take years to get going, and amazon is a small percentage of the overall retail market in the u.s. is small way trump can hurt amazon in terms of canceling contracts with the department of defense but that will run counter with the hope to make the government more efficient. julia: the post office is a little issue among a whole host of issues that they can be smacked with. you know amazon well, how concerned is jeff bezos when he

sees the headline that the president is obsessed in some way of tackling amazon and the powers they got? do they higher a share load more of lobbyists? brad: they have a large lobbying group in washington dc and brussels and it is getting larger. not because of these tweets but the number of issues amazon has with the national government. there is some concern about these tweets, probably because the tweets are sort of inaccurate or puzzling. thatn is considering washington dc area for a site of the second headquarters. it clearly sees itself as a future partner and supplier of the federal government, so maybe there is concern. not about the post office, but about the department of defense cloud contract and the potential contract with the v.a. despite hospitals -- and the supply to

hospitals. at some level it probably has to be some concerning. great to chat with you. that.you so much for time for our bloomberg deal support, reunited, cbs is in talks to buy viacom. but it once a discount. skyey has offered to buy news. julie: very altruistic. julia: let's bring in bloomberg m&a reporter to translate. muting art with cbs, potential offer to reunite these two names with a lowball offer according to your reporting. saiga is goingng

to be a cbs story one day. yet the media mogul and les moonves who wants to make this offer and what's to have control and be in control of the combined company. the man in charge west turned around five,. the offer has been made but we expect an initial offer to be made this week and sources tell me that they do not want a discounted offer. they are looking for something on market value plus a share in management. julie: what is the holdup? a it that even if it is not official offer that negotiations are not making either happy? >> we have been talking about that for a couple of years, and as you can see all these other media companies consolidate, and

has become more important that they think about consolidation. what is holding it up is you have to special committees appointed by the board who are looking at the merits of the offer, and we understand that they agreed there is merit of combining the companies. julia: talk to me about the price. we have both stocks down 12% approximately since we started talking about the potential merger. and we talking about a lowball offer for viacom. traditionally the premium will be 30%, i get the situation is unusual but this sounds like a no hoper. >> five, has done better than cbs -- both stocks are down, as you say. thathink in any situation a discount will seem unusual and something the board wants to kick out right away, but

national amusement which controls both of these companies, sherry redstone at the head, she wants to see what happens. explore, although i don't know if she will go for a discounted offer. julia: disney offering to buy sky news to help fox along and comcast lingering around. all fuzzy and good feelings. this has now become all about disney and comcast and they both want those fox assets. comcast along the way, and they are try to deal with themselves by making an offer to sky. this shows how much disney wants those assets and it will go head-to-head with comcast. julia: and help u.k. regulators. julie: who be successful here, disney? >> comcast will not go away

quietly. julie: we have options coming up next. this is bloomberg. ♪

julie: it is time for options inside and joining me is kevin kelly. ?o market, coming eevin: it is going to be, calmer. if we look at the vix and volatility, it averaged 113. that atctually below 105 and the reason we have that is we have earnings coming and earning season is muting the volatility we see. i think this quarter is not going to begin for because we see vix at 105 and we also see sectors -- the correlations between sectors are diverging

and that is happening in options trading that you are seeing for the sector. if you look at the xl i. julie: the industrials. kevin: right, and that is a bond proxy and safe haven. i want to get the cyclicals, and what you are seeing is more inputs are being put in there, you are seeing more people buying energy. that could have been a bottom, but there was a big search and people put in bullish positions. julie: we will see if things come down with the earnings season. spotify is a big topic today. you are not looking at spotify at self as of yet, but you are looking at a proxy. american power. talk me through the connection here. kevin: cell phone and american towers provide those throughout the country and internationally. they said at the heart of the ecosystem for the streaming and digital world and provide the critical infrastructure.

they help cell phone carriers, the government, everyone, you name it. whether it is on top of roofs or building towers they provide the infrastructure. in seven of the last eight quarters on the revenue side, they are going to a high-margin business. you want to go out to july and by the 135 call spread, and the most you lose is -- 8% upside from here. this is a great way to play the spotify trade. without companies like american power, there is no spotify. we also want to talk about a cell phone tower operator and rising interest rates. how much risk is that? kevin: rising interest rates are not a big problem for rates because that means the economy is getting better and rents are rising.

they are in equity component, and that is where the confusion comes on. the play all the debt they issued is easier to plaay back. bt at a retiring de cheaper price. julie: julia. quick look atet a the equity markets, 30 minutes remaining in the session. the doubt as to be 500 and nasdaq, with 1% gains, that the amazon price and the pop. plenty more on markets to come. from new york. this is bloomberg. ♪ retail.

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. comcast business outmaneuver. >> i am mark crumpton with as witness. nation's sums as the armed forces may be pressed into service at his order wasn't built. the president made his comments during a white house meeting

with baltic nations. until we can have a wild cybersecurity, we will be guarding our border with the military. the presidents, scam a day after administration official said it are crafting a new legislative package and their closing what they call immigration the polls. for the first time, the department moment security has probably a ballast the existence of potentially wrote devices used to track individual cell phone activity. this was an inquiry for democratic senator ron wyden saying it identified these of suspected unauthorized simulators in washington dc last year. devices work by tracking mobile intoes or tricking them locking onto instead of legitimate cell towers. real workers marched through ri