during a 2016 presidential campaign. wasblicans claim the text disparaging to then candidate donald trump, which led to a bias which tainted the bureau's russia investigation. described the effort as a partisan inquiry to undermine the inquiry -- investigation. >> i believe this is just another notch and putin's belt and another step in america's campaign to tear us apart. house republicans are demanding testimony from lisa page after she failed to comply with a subpoena. treasury secretary steven mnuchin says u.s. tariffs and china's retaliatory actions have not dented the domestic economy. secretary mnuchin was looking to dial back concern from congressional republicans that a trade war is hurting american consumers and companies. speaking today before the house financial services panel,

mnuchin said he and the administration officials are available for talks with china over trade. he also dismissed the tariffs as moderate in size and aimed at leveling the playing field for american industries. british prime minister theresa may has published her most detailed blueprint to date for britain's future relationship with the european union. the so-called white paper free trade area for goods, not services. thanks in particular will lose their current access to the e.u. market under the proposal, which may calls principled and practical. to view theg the eu plan with the spirit of encouragement and respect. the u.s. military says a service member was killed today after being wounded in combat in afghanistan. his name is being withheld pending notification of family members. it is the second u.s. military deaths in afghanistan and less than a week.

last saturday, and army corporal -- an army corporal was killed. global news, 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. >> live from bloomberg world headquarters in new york, i'm shery ahn. >> and i'm jon erlichman, in for amanda lang. to bloomberg markets. here are the top stories we are following from around the world. a shift in trade rhetoric. tona tones down its response president trump's threats.

will chinese and u.s. trade officials be able to figure out a way to start talking again? in sun valley. what some of the biggest names are saying about the rhetoric, from wall street to washington. begin toank earnings roll out tomorrow. jpmorgan reporting results before the bell. we will take a look at what to expect. let's get a quick check of the major averages. as you are talking about trade tensions easing, that is listing the u.s. market. the dow is up 9/10 of 1%. the nasdaq is trading at an all-time high. the s&p 500 up 8/10 of 1%, continuing to rebound from its pickles declined -- its biggest decline in two weeks. we are seeing wti resuming some losses. pricesa slight drop in after fresh warnings were issued

about the shrinking supply, but we are continuing to see crude selling off again. you can see the line in yellow. investors are still concerned over a trade war sapping global demand, not to mention bloomberg calculations also show opec's compliance rate with the cuts comparedo 126% in june to 159% in may. --di arabia produced it boosted production by more than 49,000 barrels a day. have increases in crude been lagging in the u.s. in the past, john. and certainly we can show some other graphs to track this china-u.s. trading relationship or the gap, if you will. certainly, if you look at what has been happening in recent years, we can show you that u.s. white, to china are in the others in blue. the u.s. imports hundreds of billions more than it exports to china.

that is perhaps one of the factors when it comes to the art of the trade deal if you will. u.s. and chinese officials are hinting there could be a chance to resurrect trade negotiations after president trump ratcheted up pressure with an additional list of tariffs that would tax over half of all goods they import to the u.s.. the latest list is going to august 30. for the latest, we are joined now by jenny leonard. she joins us from washington. just give us a sense on what we now seem to be hearing from china on this helping story. jenny: so what we are hearing from china, in string thinly -- interestingly, is a lot of rhetoric. they called u.s. the trade bully . china said they will fight back but we are not seeing any action. after the first round of tariffs on $50 billion, we now saw action from china. now with the president we areing up the ante,

not seeing anything from china. there is no loud response. that does not mean they can't u.s.ly make life for companies a lot harder in china, and that is probably what is going on behind the scene. we are already seeing in the bloomberg data that china's investment, consumption, factories have all been going down. so the expectation right now is that china might not have the tools to respond to the u.s. tariffs as well as they would have wanted. farl, what do we know so about what talks are going on right now? are there any at this point? right now, no meetings are scheduled. there might be something going on behind the scenes that is so behind the scenes it is not high-level talks. what we do know is there is some signaling from the white house treasury secretary steven

mnuchin said the u.s. is open for talks. from the chinese side, they are signaling we are open for talks, although the u.s. condition for talks is that the chinese show willingness to change. we have seen from chinese statements they do not think they are the problem. they do not think what they are accused of is actually valid. for is why the condition picking up the talks again is unclear, because we do not know when the china will -- when china will blink, with the u.s. will blink, does anyone need to blank? these are all the things we are trying to figure out right now. you so much. thank bloomberg trade reporter jenny leonard in washington. some tax cut optimism and trade war gloom, terrace fears are iff fears are- tar starting to weigh on wall street. bloomberg banking reporter laura keller is here with the story. so we have rising interest rates, corporate tax cuts, and

we are not seeing the benefits. what is going on. laura: exactly. you pointed that out really great. it is just not happening. this optimism we had maybe six months ago when donald trump's tax overhaul was happening, all of these banks were coming out and saying look, you will see more deals and you will feel these companies by, it will be great for banks. overshadowedng by the trade wars. that is never good for banks, because the corporations will worriedow when they are and there is uncertainty. for they cannot make the loans they thought they could. shery: so whether or not you weather out the storm, is the outlook bright? laura: that is what we are waiting to hear this quarter. the second quarter seems to be one for big banks, where there is not one theme that will be happening. what investors are typically looking for is a story to carry out the last part of the year. so i think that is what we will be looking for to have that picture, whether executives believe that the second half has

some kind of catalyst that will be on the positive side. laura, let's talk deals. obviously, the biggest bank make plenty of money through m&a. what are the trends telling us about what the quarter will look like? laura: i think we have a chart to illustrate this as well. there has not been a lot of completed deals in the u.s. lately. is really just not very good coming here into the quarterly data. so there is a surprise as we are seeing is happening. while the completed deals are not great, which will show in that second quarter we will be looking at tomorrow, you do see a lot of deals on the pipeline side, which means that going into the future, there could be get from the banks that m&a. so we will have to see if those deals are to be completed in the third quarter of the fourth order. we will just have to wait. shery: and we will have to see what happens with the flattening yield curve, because that is not helping either. laura keller, thank you for that.

coming up, we are heading to idaho to meet with ed carnegie endowment national peace president william burns. this is bloomberg. ♪

is bloomberg markets. i'm shery ahn in new york. jon: and i'm jon erlichman in toronto. we are keeping an eye on the big trip. hisident trump taking off today inaugural visit in the u.k., where he will be meeting with prime minister and theresa may -- prime minister theresa may and the queen amid protests in london. maria, obviously this is the

first trip to the u.k. by the president. what is the town like? house he been received so far? so president trump has landed in london, it is a four-day working trip, and the reaction on the ground, it it is easy to see behind me. close to 200 people are gathered at an anti-trump demonstration. i am not sure if you can hear what they are saying, but they are saying down with trump, trump, how many kids did you take today? very contentious language we are hearing from people in london today. i have been speaking to some of these protesters, and some of them are telling me they felt they had to come up to show that london is the diverse -- is a diverse multicultural, muslim city, and they are angry at the comments we have heard from president trump on women's rights, his immigration policy,

onehe mood on the ground is attention and very contentious language when it comes to politics that just go beyond the u.s.. no wonder. this is downgrading the u.k.. continueheading out to their meetings, but the meeting that president trump has been looking forward to, although he is tempered expectations on, the russia meeting. what are they expected to discuss their? that's right, and that is a good point. is spending very little time in london, maybe one of the reasons as we are expecting a big protest tomorrow morning, when baby trump, a giant balloon of the president with a nappie will fly over london. clearly very contentious. when it comes to politics, it is also very difficult for prime minister theresa may, who has

been under incredible pressure this week due to the number of resignations within her cabinet. and today she put out the brexit paper. it is difficult to see had he gets anything from trump, given the stakes when it comes to international trade relations at this point. so at the mess, we get a visit that has no incidents and president trump doesn't really get into brexit. maria, we know that the president has been reading up on brexit over the past couple of days and weighing in on that object leading into this trip. how is his commentary on the subject potentially going to impact everything surrounding the brexit conversations at this point? maria: that's right. you heard it, just before he flew into london, president trump did comment on brexit. again, it has been a very volatile week for theresa may and u.k. politics. she has had a number of

resignations, some very high-profile conservative lawmakers quit in her cabinet. and trump just said very clearly, this does not look like the brexit the u.k. voted for. that is an issue for theresa may. on the one hand, she have to make sure that they get a trade deal where trump is overturning the international theme, but the domestic audience, she can convince them that this is brexit and britain needs brexit. but trump is saying that brexit does not need theresa may. we know that trump has had a very contentious week with european leaders at the nato summit in brussels, where he has certainly said you guys need to start paying up for defense, otherwise we are going to have to quit and just not be involved in nato anymore.

a very contentious situation in europe this morning. shery: maria, thank you so much for that. let's now had to idaho. bloomberg news deals reporter and hammond joining us now with a special guest. ed? burns,m here with bill the former u.s. ambassador to russia. we have just been hearing about trump arriving in helsinki. he goes there on the bank -- back of dismantling or attempting to dismantle a lot of the institutions that are involved with american allies. in a way, he has done putin's work for him. generations of soviet and russian leaders have tried to take a battering ram to the nato alliance, for example, and a number of other institutions that have held the west together and made it strong.

and the image that was created at the most recent nato summit american which an president is very skeptical of alliances and tends to see them as restraints rather than asset. so if you are putin, you are seeing this as a battle already half won in the run-up to the senate. -- summit. ed: president trump makes it sound like he doesn't think --re was any collusion interference in the election, but it is clear they were involved or not. think putin was meddling in the u.s. elections in 2016. it is beyond anybody's questioning. it seemed exceeded -- it succeeded beyond his wildest imagination. i think he intended to sow chaos in the american political system , and i think he succeeded well. i think he was surprised as anybody on election night that trump had actually won. into thesehey head

talks, what should we be expecting to come out of them? should there be any kind of substantial outcome? hard that will be a little to predict, because we have a very unpredictable american president. the task seems to be to manage what is largely a adversarial relationship. that is not an argument against taking some practical steps and trying to re-create some guardrails and that relationship, to resume conversations about arms control, you have a big with the treaty that expires in a couple of years. our militaries need to talk to one another to avoid advert and or inadvertent collisions. that would be useful steps to take. the risk is that you can fall into one of two allusions. either the allusions that personal rapport can overcome all of these differences, kind of the art of the deal approach with one great man trying to come to terms with another, and putin will be very clever. he will play to that sense.

that is one allusion. the second illusion is that there are bargains to be done on the basis of this personal relationship. so everything from technology -- from acknowledging russia's annexation of crimea to a russian commitment to push iran out of syria, they seem white far-fetched and i think they are, but those are the kind of allusions you can find yourself falling into. trump has been very outspoken and the fact that he is delivering peace on the korean peninsula, he has tweeted just this morning, kim jong-un, is this him, but realistic in the way that these policies are being conducted, or is this meringue politics, where it looks great but there is nothing in the filling? is, of courselem personal relationships matter in diplomacy. the problem never was in the case of united dates and korea,

whether it was a good idea for president trump to talk to kim jong-un. the problem is they talked past one another, and i think that they have done, the concept of denuclearization is one which the u.s. and north korea see in vastly different ways right now. and president trump proceeded to oversell what were extremely meager results. so that just gave you an unforced error, kind of a self-induced disappointment in a way. none of that is an argument against continuing to pursue diplomacy with north korea, but you have to be realistic about it and recognize that the north korea are going to play a very -- the north koreans are going to play a very tough, long game. ed: one of the big focus is here

at the conference is obviously this brewing trade were between the chinese and the united states. bill: the challenges are legitimate concerns with the united egg, whether it is the government or the private sector having with chinese businesses over the years, whether it is forced transfer of technology, industrial policies that are aimed at protecting domestic markets and keeping others out, but those happen to be concerns that are shared by others in the european union, the japanese and others. i think the thing is rather than try to make common cause with other parties that have the same kind of concerns, we have started second and third front trade wars with them. rather than make use of some of the multilateral institutions, that can actually help you in bringing bigger pressure on china. as was the case with nato, the president has tended to see them

as constraints, holding us down rather than providing us leverage. i think that is really unfortunate. ed: we will have to leave it there, but a fascinating conversation. back to you in new york. shery: great insights from carnaby -- carnegie endowment president bill burns. this is bloomberg. ♪

jon: it's time for the bloomberg business flash, a look at some of the biggest business tories in the news right now. -- stories in the news right now. a j.p. morgan chase whistleblower has been awarded a record $30 million by the commodities trading commission. the whistleblower information helps the cftc's to the bank are failing to properly and warm welcome -- inform wealthy clients about a conflict of interest. in december, j.p. morgan agreed to play regulators -- pay regulators $370 million. a big transaction in the tire business. france's michelin has agreed to buy canada's cam so for about

$1.5 million. cam so makes rubber tracks for construction and farm equipment. is trying- michelin to diversify away from cook -- just car and truck tigers -- tires. and the tax credit for electric vehicles will start phasing out after december 31. the incentive was designed to decline once electric carmakers reach higher production levels. tesla is the first u.s. company to be affected. that is your business flash update. live from new york and toronto, 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. scarlet: it's 2:00 p.m. in new york, 11:00 in san fransisco, and 7:00 p.m. in london. i'm scarlet fu. julie: and i'm julie hyman welcome to bloomberg markets.

we are live -- scarlet: we are live in bloomberg headquarters in new york over the next hour. pop and protests. president trump faces a backlash from brits as he kicks off his u.k. trip. the bidding war for sky heats up. we are live in sun valley, idaho as global m&a tensions escalate. tent.der the bloomberg businessweek gives us a behind-the-scenes look at the tesla model three production saga. u.s. markets close in about two hours time. let's get a check on where stocks are trading with abigail doolittle, and it looks like some appetite for risk has returned. abigail: at this time yesterday, we were looking at a pullback for stocks on the but now we have green on this dream. the maybury -- the major averages all higher, and risk

appetite is back on the table. investors are looking past the possibility of an intensifying trade war between the u.s. and china, and you can either at the nasdaq is leading the way, up 1.1%. 1.4%.sdaq 100 is up 1.6%, upon itsat best case for june 1. but here are the big point of the business. ca, the two-day chartists touring, up 18%. 2008,he best day since and this on the $18.9 billion acquisition by broadcom. this is an enterprise software company, so some analysts are scratching their head as to how these companies will come together, but cna investors are loving it. these shares up 18% and giving a tale into the entire software space. software is also a

company, citrix systems, and even autodesk, not necessarily in the same area, but delay software company getting the tailwind from the ca acquisition. if we happen to the bloomberg, the tech strength we are seeing today is also the story of the year. chart, a somewhat busy but the point i would like to make year, in white we have technology. that is the top sector on the year for the second year in a row, up 15%. in blue, consumer discretionary is not so far behind. disney, and in, green, the s&p 500 and the trade war fears we were talking about abating on the day. on the year, there is a bit of a hit here. looking at materials, industrial, consumer staples, other sectors that are more sensitive to the possibility of a trade war kicking into full swing. finally, oil yesterday absolutely plunging. this is a two day chart. on the lows yesterday, closing down 5%. at one point today, oil was slightly higher, but at this

point it is down 5% over the last two days. the worst two days since the end of may, but at one point it had been the worst today's since since march days 2017. with fears that the trade war could take a bite out of the --bal economic picture growth picture. time will tell. scarlet: abigail, thank you. let's get the first word news with mark crumpton. house judiciary committee robert goodlatte is defending the republican-led house investigation into the justice department as the committee began a hearing to question former fbi -- current fbi agent peter strzok. says it goeslatte to the very heart of our system of justice, one that is supposed to be fair and treat everyone he will he under the law. >> we do not want to read text message after text message dripping with bias against one of the two presidential

candidates. we don't enjoy finding compelling evidence that the fbi director had predetermined the outcome of the case months in advance. democrats have said the investigation is in attempts to undermine special counsel robert mueller's russia probe. the nra is applauding judge brett kavanaugh, president trump's pick for the vacant supreme court seat as a "outstanding choice." the top lobbyist for the gun club cited his strong support for the second amendment. senator on both sides of the debate say brett kavanaugh might push the court to expand second amendment protections. richardcut democrat blumenthal called judge kavanaugh the worst nightmare for any advocate of common sense gun violence invention. the trump administration says it completed the first round of reunification's of all children under the age of five with their

parents. but a federal judge will have to decide whether officials moved fast enough to comply with his orders. the children and their guardians were recently separated after tossing the border illegally. the department of health and human services says it has custody of the miners and the department of homeland security, which is holding adults, says 57 children were reunited with their parents. pompeory of state mike met in brussels today with the ief.oreign-policy ch mike pompeo remained in brussels after the nato summit to make a has threatened to impose sanctions on entities trading in iranian oil. some eu companies are now reluctant to resume trade with but othersehran, want to preserve the accord.

global news, 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. julie? julie: thank you, mark. it is time for our bloomberg deals report. your move, murdoch. the fox chase for sky is stepping up as you pay regulators clear the way for a deal, but the show is far from over. a 34 billionade dollar play for the british broadcaster, which is a 5% premium to fox's offer. hammond --now is at still in sun valley. i wonder if you were able to quarter any of the players in this arms race in media right now? ed: not just any of them, all of them. roberts who spoke briefly to the press this morning. he said you guys need to find something else to write about.

he did not say we need to find something else to broadcast about, so we can talk about that until the cows come home. mr. murdoch was fairly cagey and said it was not something he wanted to discuss. i think bob iger simile stopped any questions related to the deal. these three are all in the same meetings, the same conference, potentially they go white water rafting together or spec writing -- or horseback riding or whatever it is they do, so it will be interesting to see how they manage that conversation. scarlet: absolutely, and there is another deal we need to keep in mind as well, comcast and disney both vying for 21st century fox's assets. explain how these two overlap and heavy influence one another? ed: let me try and break that down. so you have sky, which is now being bid for by comcast. guy also want to sell itself to fox. fox wants to sell itself to disney.

comcast also wants to buy fox and own them both. is murdocheresting has made his hand very clear. he wants to do a deal where he sells the fox news assets to disney. that would allow him to do this guy deal, because the government murdoch can buy sky, but it is contingent on him exiting the other news asset by the deal with disney. comcast coming into the deal with sky, it is a question to they just want guy because it helps them expand internationally, or do they want to buy that because it throws a smattering to the works with mr. murdock's plan? obstructing in other words. spective,n roberts' per the head of comcast, which is a priority? what he first century fox or sky? -- 21st century fox or sky? ed: i think sky is what they

want to end up owning, because they want to expand the international business. but one important point to make clear here is there is always a second consequence that they do not want disney to end up owning the fox assets. so probably if you took everything they could out, sky would be the crown jewel, but they would want to do a deal that would make it very hard to make it end up owning assets that would make them much more competitive with comcast. and with all of these competitions that we are talking about, there are also the big guys that are nipping at their heels, like amazon and netflix. andhey are horseback riding white water rafting, it is not just the traditional media guys., it is the tech what cross-pollination and discussions are you seeing go on there. that is absolutely right in terms of wire these deals happening? they are happening because you have a huge headwind from the media industry, which comes in the form of people like mr. bezos and netflix entering that

space and disrupting it in a way that has changed the whole dynamic of the industry. so what they are doing is saying look, we need to do deals to get out of that wave that is coming towards us. i do not know whether the conversation in the contract -- conference was between all of the variables, but we spoke to mr. bezos and he did talk about disruption in the industry and other areas, but he is taking into -- most recently, a big push into health care. the fascinating thing about a conflict like this is you have all of these minds together under one roof period for a long period -- one roof for a long period of time. so the questions round out to what do we need to be doing as an industry to protect ourselves from this disruption coming our way? scarlet: thank you, ed hammond. we will stick around as you continue to talk to the titans in sun valley. we are getting an impact from

the tax deficit -- tax cuts. the fiscal deficit to the year to date has come in at $607 billion, 16% wider than a year earlier, so seeing the impact their of the tax cuts. we will keep you posted on further development. this is bloomberg. ♪ berg. ♪

julie: some breaking headlines coming out now from jay powell, the fed chair that spoke in an interview to marketplace. he is talking about the fed is independent of political considerations here. he also said consumer protection is utterly central to what we do. he also is talking about the u.s. economy, saying the economy does not boil at 4% unemployment. i sleep ready well on the

economy right now. he is more concerned about longer-term u.s. economic issues here, he says, income stagnation is a concern, but he says the fed cannot directly affect that. he does a that tax cuts and spending will support the economy for a few years, but he says the u.s. economy is in a really good place at this point. he also said a little bit about trade it looks like. the fed is hearing rising concerns about trade policy effects. interesting there. isdoes not sound like he pining on it, but says the fed is getting feedback about those trade policy aspects. continue towill monitor those headlines for you. meanwhile, in the newest issue of bloomberg businessweek, we take a look at this writ and glory. we talked to several designers and engineers, including elon musk. tom joins us now. this recount the last two weeks of the second quarter, with

tesla cranked out 5000 model three sedans in a week. give us your understanding about how elon musk lost it on that earnings conference call? hard couple of months. he has described the past couple of months as some of the worst of his life. what we decided to do was merge our information to tell the story of the model three in all of its great and glory. there is so much stake here. they are doing these crazy moves and spending a lot of cash, but on the other hand, if they was -- if their college with a are setting out to do, they could be one of the biggest companies in the world and more than that, they could change the world. what we saw after taking a really deep look at this company was this is a company that is struggling and attempting to grow up. we saw that across all different

parts of the company. is mostwhere that explicitly obvious is what they did with automation. 2016,oes back to early you remember when they launched the car for the first time. internally, they had all taken bets on how many people would place these $1000 reservations and things like that. the most outlandish that in the company was 200,000. when the final tallies came in, it was twice that. that transformed what was happening inside the company. elon wanted to increase the timeframe when they were going to reduce this, and he also made some decisions and how the company was managed, including he put his -- the people who designed the car, these engineers who work on designing the car, he put them in charge of designing the processes that built the car. it is a really unusual thing. that is when he started talking about the machine that built the machine. you have this unusual circumstance and the person who

designed the chassis, the underside of the car, who is also designing the machine that calibrates and builds the chassis. wouldt: on some level, it make sense. it was fascinating to read your story, because i am not a gearhead traditionally but i found it really interesting reading about the listening to the designers of the car and how excited they were to come up with different innovations in the car, and the machine to make those innovations. but in some ways, tesla was starting over as if no one had ever been in the car business before. tom: and i brought that up. thisit is screaming at you will not work. this has been tried before, this will not work. he said look, detroit has told me this won't work for the last 15 years. he said if i listened to detroit, we would not be anywhere near where we are today. he said we were idiots

and said our design engineers were naive about the manufacturing process. a dumb said it was decision that they had to make for themselves and learn from themselves. i think that is kind of symbolic of the whole mood at the company right now, like they have made some mistakes and now we are trying to grow up and be a little more mature of how we approach things like automation. they had this crazy idea for automation for the factory. it is like a moving warehouse of parts. you have all of the parts going on this crazy conveyor system, and you had 500 robots that would lift things up on a second level where they were building the car, and robots would piece the car together. the best thing to pick up parts on the planet are these things. they have been developed over billions of years, and robots are imperfect that grabbing small parts.

so they have 5000 different processes to build this car. even if all of your machines are working at 99% accurate, that 1% adds up and tops the line. julie: tom, thank you so much, and there is so much in the story. we have only scratched the surface, so please go to bloomberg.com, go to the terminal, and read the full story. including not just the aspiration at tesla, but the cost, most financial and human -- both financial and human. coming up next, our exclusive interview with congressman patrick mchenry. why he thinks we need to give the president time and space when it comes to trade. from new york, this is bloomberg. ♪ s is bloomberg. ♪

--i have six is dimly consistently been a pragmatist when it comes to trade in the details in the specifics of every trade agreement i would vote for. wouldd vote for some, i vote against others. having had that pragmatic approach, i would think for us to have some choppy waters here, if it leads to a better outcome, i am willing to go through with it. >> is the house going to take up the issue of tariffs anytime soon? rep. mchenry: no. >> why not? rep. mchenry: what we have consistently done in law over decades is give the president authority when it comes to trade. be very difficult for the congress to take in that authority because they don't like a singular action. i believe that if we are talking about discussion of tariffs by

this time next year, it could be a different conversation. in the short run, i do not see the house or senate taking this authority away from a president that is engaged in a major battle. >> we are hearing more and more from business is about how the impact of escalating trade conflict has the potential to negate the effects of tax reform. does this concern you? sure, there are plenty of concerns, large economic concerns that we have. rising gas prices is a major economic concern, fiscal policy by the congress, monetary policy by the federal reserve, there are a lot of factors going into what is driving our economy and the potential for --

rep. mchenry: to have any engagement by the administration to reset -- their market to some of our financial products, to more of the financial product, the stop the theft of intellectual properties. those things would be huge wins. there are potential gains out of this battle that is going on when it comes to trade. thathe major critiques stand moment by moment, day-to-day about this president has to do more with style than actual policy. so let's see what this looks like once we get a new reset.

>> if republicans keep control of the house next year, what beuld the republican agenda regarding financial services policy? what to the financial services committee focus on? what are some specific issues? rep. mchenry: i think we need to look to the next generation of regulatory changes and law changes. the battle we have had for the last eight years is to refine, to change dodd-frank. we have made substantial changes, this congress, to dodd-frank. that is a positive thing. regulators are making additional changes, those things are very positive. view -- rearare view mirror looking rather than looking out the windshield. so much of what happens when it comes to financial service policy is to look at the last crisis, and make changes based off of that. the next crisis will look different than the previous crisis. so we need to look at -- we need

to be forward-looking when it comes to legislating. aroundocus has been fundtech. in do you deploy technology the financial services space? i think we have huge opportunities to build bipartisan consensus tot can make it into law, change our regulatory footprint and embrace technology, embrace innovation when it comes to financial services. those are not the dodd-frank, not dodd-frank bottles -- battles we have had over the last eight years. we need to look to the next generation of legislating on how we actually make the economy stronger, to make sure our markets are still the global center of capital formation, and that we are the model of the rest of the world on capital formation and financial regulation. scarlet: and secretary jay powell making some comments in a transcript of an interview with marketplace. he says the u.s. economy is in a good place, but the inflation goal has not been fully reached. this is bloomberg. ♪

?andres manuel lopez obrador --

julie: let's get the first word news with mark hampton. mark? president trump made the remark in brussels at a press conference during the two-day nato summit. the president is expected to meet with president vladimir putin on july 16. the u.s. and the european union are not recognizing mr. putin's use of unmarked troops to take control of the ukrainian peninsula and organize a referendum to join russia. economic imposed sanctions, which remain in place. germany has approved a foreigner -- the former cattle on nresident expedition -- catala president's extradition to spain. q2 month faces embezzlement and partlion charges for his in the failed independence bid last month.

the international monetary fund is standing by its proposal for -- in haiti that led to days of violent protest. haiti's government agreed to eliminate fuel subsidies as part of a broader agreement that would have expanded finances and ended -- opened up more support from the imf. the haitian government announced that price increases of up to 2% would take percent the next day. federal authorities have reopened the investigation into the murder of emmett till, a 14-year-old african-american who was abducted and killed in 1955. the justice department says it reopened the inquiry after discovering new information, but declined to comment further. victors of till's mutilated body continue to resonate, even years after he was killed in mississippi. global news, 24 hours a day, on air and on tictoc on twitter, powered by more than 2700

journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. julie: we have live pictures in opt for sure, where president trump is set to dine with prime minister theresa other business leaders from companies like black rock and dimaggio. dinner, what is on the menu, scottish salmon, beef and strawberries, and, quite a rich finish, clotted cream ice cream. that will be on the menu. and on the menu for discussion will likely be right that as as the trade, relationship between theresa may and donald trump has been strained at times. and if they want to add to that, they can talk about russia as well. julie: to throw some

strawberries on your clotted cream. we are joined by our reporter from london, who is not where the president is arriving, because he is being kept separate from those protesters. maria, what kind of representation is there and what kind of people are awaiting the president, and what message are they trying to send to him? maria: that's right. we have seen president donald trump inc. helicoptered in and out of the premises you see behind me. this is where he will spend his first night in london, but it is also the focus point of an anti-trump protest we have seen now for about two hours. close to 200 people. i cannot quite hear what they are saying, but they are saying things along the line of down with trump, trump, how many kids did you take today? trump's domestic policies are clearly resonating outside the u.s. and they have had a very strong reaction from people in london.

we have been talking to people pretty much all day, and they say they felt they had to come out and really show that london is a diverse, multicultural city and to protest some of the comments we have heard from the president when it comes to women's rights and's children and his immigration policy, which has been very controversial here in europe. strong reaction indeed, especially because there is a --t, helium field, made baby shaped effigy floating in front of the palace as well. the first lady will be spending a bit of time in the capital. can you tell us more about what she will be doing? i think it is very significant that melania trump will be spending time in london. [inaudible] it is also significant that the president will not be spending any time in the city of london, and that is where we are expecting a big demonstration.

that isa giant balloon flying over parliament. it has been approved by the mayor of london and we know -- it has been a source of contention. the very significant. melania trump will be in london, and trump keeping a very low profile. maria, have you seen any supporters of donald trump? we do know that he has some fans, including saint nigel berridge or boris johnson. have you heard or seen them around? on thei can tell you ground, the language is really not the most supportive of president trump. everyone who is here is against his views on migration. they criticized the way president trump has referred to them as and also used an opportunity to attack prime minister theresa may for inviting him to the u.k., and was also hearing pushback from

some of the comments we have heard from the president about the european union, kind of being obsolete and reshuffle and get back. we know president trump has also been very vocal about brexit, thing today that what theresa may is doing is not brexit and not what the people from the u.k. voted for. usually when you get protesters here, they will usually tell you they are against brexit. it is a line that connects the two. supporters of trump on the grounds today, not many. scarlet: maria, thank you so much. julie: and only around 200 protesters, which is a presence, but not a huge amount. i wonder once they inflate the balloon, if more will come out of the word work and change the tone -- would work and change the tone of the protest. maria mentioned this comes as the president made some comments about brexit. theresa may did lay out her

brexit blueprint as well. it was a 98 page paper, the white paper, that promises to maintain the uk's close time -- -- eu single.n. market for goods and services. but when it looks at things like banks, they could be cut loose. financeing in u.s. editor michael moore. you spent years in london covering the big banks. this is certainly something they were preparing for after brexit. is what theresa may proposing in this white paper, is it a shock to the banks? michael: i do not know if it is a shock, but it is not what they are hoping for. this kind of looks like ce, whichy equivalen is u.k. banks can operate in the eu it uk's regulation is deemed was in theto what eu, but the problem with that is that the eu can deem it equivalent, but they can also deem it not equivalent. scarlet: it can change its mind. michael: it can change its mind.

if the eu k -- if the u.k. and rules, the banks are in a bit of a limbo. they do not like the uncertainty of that. now, once they get into negotiations, the two sides could work something out that is a little more concrete than just a standard of equivalents model, but this is less than the banks were hoping for. and what were they hoping for? what would be the better scenario for them and if they get their way, and potentially come out of negotiations? they are hoping more on the good side of things, which is avaspoke agreement -- spoke agreement where they can operate in london and have fewer restrictions on that. they have -- they want as close to what they have now as possible. scarlet: to what extent have the banks move their operations out of london and set people up in

frankfurt or paris or amsterdam, for that matter? taken thosey have steps, picked where they want to go and put the first bodies in motion, but they have been kind of slow to do the huge moves that we have heard about, and i think some of that is .aintaining some optionality they want to have a presence there but maybe not move everyone both were they see what the final deal looks like, but you are starting to see, you know, by the dozen some bankers moving to frankfurt, paris, dublin, and that is to get ready for the 2019 date if they are needed at that time. scarlet: -- julie: and how does the new version in the white paper change the calculus from what they were expecting? if anything, it will cause the banks to move sooner and in more numbers, but as always with these things, the devil is kind of in the details in what agreement is hash out,

but if you are looking for momentum one way or the other, this would seem to indicate moving more people to the european continent. scarlet: thanks so much, michael moore giving us some of the effect of that latest white paper from theresa may government. let's take a look at more of those live pictures from around blenheim palace as we await president trump's arrival. again, blenheim palace, the 300-year-old birthplace of winston churchill, a man who reportedly trump has at times compared himself to or aspired to be like, at least admired greatly. that might be a special place for him to go and visit there. with expected to not meet just theresa may, but with u.k.-based executives from the corporate world, who will join him for dinner tonight. then friday, president trump will meet theresa may and her newly appointed foreign secretary jeremy hunt, who has said publicly that he was a fan of her former foreign secretary.

when asked if he was going to see him in the u.k., he said who knows? julie: i think they probably will see each other. that tends to be his favorite phrase. scarlet: you can see the guards getting ready for the arrival of the president and the first lady. way toll then make their checkers, the prime minister's countryside retreat. we will bring you more pictures when the president arrives. from new york, this is bloomberg. ♪ oomberg. ♪

this is bloomberg markets. i'm scarlet fu. julie: and i'm julie hyman. it is time for our stock of the hour with abigail doolittle. abigail: we are taking a look at the xl k, or the sector spider up 1.4%.

really a rally we are seeing here for technology. you can see this when we happen to the bloomberg and use the imap function. most of these sectors, eight of the 11 s&p 500 sectors are higher. up top, tech by a wide margin, 1.6%, as investors are buying yesterday's dip. but there is one special stop behind today's big rally for technology, and that is ca. enterprise software shares up 18%, on pace for the best day since 2008. is down 14%,com buying the company for $18.9 billion. some analysts are wondering how they are going to fit the enterprise software into their chips business, and the reason why broadcom is down so sharply. at the purchase is providing deal and for other software companies, including microsoft and red hat. and the faang stocks are

rallying as well. if we take a look at the faang index over the past few days, up 1.4%. it is also worth noticing yesterday on the pullback, the faang stocks were higher. today we have the likes of amazon, and alphabet rallying in a big way, but there is one stock that is not rallying, one of the consumer discretionary pieces of the faang trade. and that is netflix. shares of netflix are down on the day, down 1.4%, as you can see. this comes as you bf is cutting the shares to a neutral from a buy, mainly on valuation. but eric shared and the analyst they're saying there is risk from competition, free cash flow burn, dependent on the capital market to build out all the content they are doing. he does not he a lot of upside to the second quarter that they will be reporting next monday, but the biggest piece of the puzzle, valuation. he has a fair point. let's look at valuation, because you could make the case that perhaps it is off the charts absurd. function in the

bloomberg. there is a lot happening, but what i would like to point out is on a pe basis, it is trading at 633 times premium to the comp. this is worth noting, because it is not a tech company. the others here, walt disney, 21st century fox, so that is why the valuation is so out of whack. so, a big, big premium there. scarlet: the valuation argument is there, but it is not new, and investors have certainly found it worthwhile because they believe the company executes really well. what makes the tone different? abigail: that is a great point and i am not quite sure. they have performed so well over the last several quarters, and there are analysts and investors who say do not even look at this company on valuation, but on subscriber growth. if we look at what is happening

for subscribers, it tells us the story. the stock might be up 160% over the last year, but look at the start in the bloomberg. , bothare the subscribers international and domestic, just growing, growing, growing. if this were to dip, that might be a reason for the stock to fall, and that is what the company is paying for. that has also been one of the knocks against netflix consistently. not just the evaluation, but when will it fall? and on this point that just came out, for the first time, netflix emmyovertaken hbo in nominations, 112 to hbo's 108. so that is working out well. forlet: i'm just waiting game of thrones a comeback. abigail doolittle, thank you so much. let's go back to the u.k. as we await the president's arrival. you can see theresa may and her husband as well waiting for the president and the first lady.

they are due to arrive any moment at the palace landing zone in oxfordshire. and they have a big agenda lined up for the next couple of days, including a big dinner tonight. julie, i know you were looking at the menu because it sounds delectable. julie: scottish salmon, strawberries and beef, and clotted cream ice cream. and then tomorrow, president trump and the first lady will be heading to london. president trump will continue to meet with may and her former secretary jeremy hunt. melania trump plans on visiting veterans and schoolchildren in london. by the way, what is philip may called? scarlet: mr. may. and julie, you were mentioning this earlier, blenheim palace is the 300-year-old birthplace of winston churchill. there are some of the attendees of tonight's event, who are awaiting the president's arrival as well.

lots of talk sedo's there. we will keep you posted on when the president arrives. from new york, this is number. -- bloomberg. scarlet: and you are looking at live pictures of -- i do not know, it is called the beast,

right? that is the limousine that carries the president. you are seeing president trump arrive with the first lady at blenheim palace. him,uards are awaiting theresa may and her husband, philip may, are also awaiting him. they will have a fancy dinner and be discussing issues like brexit and trade. julie: we keep talking about the pompeii and circumstance, the beautiful setting, all the guards as well as the guest in the prime minister awaiting president trump and melania trump's arrival, but this is a tench relationship. -- tense relationship. they will sit down and have a fancy dinner, but these are some thorny issues that are between them. president trump has made critical comments, most recently saying he is not sure that s plan fory' brexit is what the british people voted for. there are lots of points of contention, russia, brexit, trade itself among them as well. this will see if all of

palm and circumstance will end up's moving any of that over if the history between these two -- president is now shaking theresa may's hand. if any indication is there, it is likely they will not. scarlet: and he is the first foreign leader to visit the president -- she was the first foreign leader to visit the president after he was elected, and this looks to be the start of a great relationship. but that quickly turned sour shortly after the poisoning in london of a spy. so you really wonder how this is going to play out. mention as well that theresa may and donald trump have spent over six hours sitting next to each other at a meeting at the nato summit, so it is not as though they have not seen each other lately and discussed these issues in the last couple days. let's bring in david merritt, who joins us by phone from london. david, i know that you are in london. this is not where the president will be heading because there is a very active decision to keep

him out of london and keep him in the countryside of the u.k.. talk us through what is going on here in terms of the tension etween theresa may and does -- president trump, especially as it relates to brexit. she has just unveiled this white paper, which is very different than the progressives had envisioned for the country. it is something the president had made reference to it the nato press conference. david: that is right. a big day for theresa may, with this very detailed brexit plan and the white paper. they published that, 90 eight pages long, and we have been pouring through the details all day. and then, donald trump throws a wrench into the process by making comments on it as he is leaving the nato summit, saying it looks like it is not the brexit the british people voted for. what he means by that is it is a softer version of brexit, meaning they will stay bound to

the european union in some areas, and not really a clean break with the european union that people like the man who secretarys foreign earlier this week, what he was advocating for. so not particularly helpful for theresa may, particularly as he has opted this big dinner -- as he heads off to this big dinner. they are down to this very ritzy withr in blenheim palace about 150 liters of business and industry, and it is a bit awkward. we will see how he talks opinions on the process. obviously, the brexiteers are saying this is the sort of thing that even the american president is standing up for. none of it is very helpful for the prime minister. julie: and i'm curious -- as we look at these pictures, we see theresa may and philip may, as well as president trump and melania trump looking just fully

pop and circumstance -- pomp and circumstance, the guards and the bands playing before them. amidst the tensions and all of this ceremony, is anything substantive expected to come out of this state visit? for mrs. may,se she has put a lot of store and this idea that there will be a big free trade agreement after brexit between britain and the eu. i think they are laying out the red carpet for him and giving reservedal treat to only the most special guests, like tea with the queen at windsor castle tomorrow, but i do not think anyone is expecting anything to come out of this. the brexit deal proposed today ,ctually rules out some of the in effect, a big trade agreement with the u.s.. but it also affects britain rule -- british role on things like

food and agriculture to the european union. they cannot open the doors in britain to things like before chicken from the united states, and that will be conditional on any trade deal. this will have to see, but is supposed to be lavish and the best signow of britain to mr. trump, but i do not think it will result in anything being signed. scarlet: they will have a good evening at the least. david, talk us through how much can even be done if a brooch trade between the u.s. and the trade-- if they broach between the u.s. and the u.k.? they cannot really do much until the brexit issue assault between the u.k. and europe, right? david: the rules from the european union say no one can enter into that kind of trade deal. so after that, we moved to after y, next march we move into the transition agreement, the 20 months when the rules of stay the same, but

britain is allowed to negotiate trade deals with other countries around the world. those talks can then begin. but there is a bit of exploratory noise being made they cannot but actually do anything substantial until britain has left the european union. again, coming back to the deal that was proposed today, that ties britain's hands far further than the previous agreement. that is why it is proving to be so controversial and possibly why mr. trump weighed in on it today. scarlet: and as we watch the president, first lady, the prime minister theresa may and her husband, watching the ceremony before them, it is interesting how foreign leaders play up to president trump's sense of wanting to be in the moment and the grandness of what is happening in front of him, whether that is in paris with emmanuel macron or in china with xi jinping. julie: but it does not seem to

soften him necessarily in terms of his policy stances. divisionalso the between theresa may herself and her relationship with president trump, and the british people. -- we spokese burke to our reporter in london who is with some protesters, who are protesting donald trump's presence in the u.k.. but what is more broadly public sentiment like tour the u.s. leader at this point? broad sentiment is pretty hostile, i would have to say. the terrory after attacks in london. so there are a lot of protests planned around the capital. there is a balloon of him as a baby wearing a diaper, and there around the

streets that have been protesting. and also across the country, people are going out to express displeasure with his policies, saying we do not agree with you and we do not agree with your attacks on british leaders and policies. he is not without friends in britain, of course. there are many people who look out for his policies. the men are just quit as foreign secretary, he said he wished britain was being a bit more like donald trump and the brexit negotiations, and britain might beginning a bit more progress in theresa may would adopt -- if theresa may would adopt some of those tactics. it is not a outright rejection of his policies, but it is hard to recall any foreign leader or u.s. president to has elicited such a response from so many different groups getting out on the streets and making their opposition heard. scarlet: do we know whether the president will be meeting with boris johnson, who he has

praised, the former foreign secretary? for that matter, who he has openly been in alliance with as they retweet each other, for instance, and they have spoken on each other's behalf. is there any kind of plan for that meeting, david? david: we are not aware of that, and it would be very unusual for a president in this instance to meet with the person who just resigned rather than the new one. mr. ferret is very keen to remind everyone how close he is to the president. we are not aware of any time being set out for that meeting, but we will have to see. julie: i do not know if you have the answer to this, but i am curious as an american looking at this palace, is this a property owned by the british government that they use for these types of occasions? is it owned by the royal family and they lend it out for the sorts of things? do you know? actually the home

of a duke and his family. the only non-royal palace, as the duke is not actually a member of the royal family. it is the only non-royal palace in britain. so it is not at the government's disposal, but it has been commandeered for this event, and obviously has a lot significant churchill, one -- at the grand, it brought that history with it and of course mr. trump, a fan of mr. churchill and would relish that kind of connection. i think that is why it has been chosen. surrounded by huge parkland. >> yes. absolutely we go back to the point that these foreign leaders really know how to butter up president trump with a lot of ceremony and pageantry. that is what you are seeing here on the grounds of the palace.

i want to ask because there were questions in the past about whether this would actually be a may wassit sister risa the first one leader to visit washington and meet mr. trump after the election, later on, it was withdrawn or perhaps delayed , and there were questions about whether this was an official statement or not. can you walk us through the distinctions? >> yes. a little bit of a gray area. originally, it was a working , and the full part of it normally involves a big state -- ,nd quit at talking him palace involvingt that business leaders and not the i think they are nervous

about extending the full red treatment for domestic politics and at the same time, show mr. trump the full and really lay on the best possible show they can. it is kind of a hybrid. >> they certainly are putting on good show here. there is a little red carpet. the literal way they have rolled thishe red carpet at point. let's now bring in chief washington correspondent kevin cirilli as well. he remains in washington at the hall. kevin, what are you hearing as to the president's goals here, hearing valparaiso may's perspective? >> president trump earlier today following the nato meetings

really setting the stage for what she is walking into, calling it a political hotspot. there is that element coming at a time when the president is urging nato allies to increase how much defense spending they contribute to nato and also at a time of intense political turmoil not just in u.k. but also in the united states. we should note that steve mnuchin is finishing testimony and the second point here in the house of representatives earlier today taking a lot of criticism from republic about back-and-forth with trade in particular with how the president is negotiating not just with china but with european counterparts. just within the last couple of minutes, the chinese embassy putting out a statement and saying the slander of the u.s. against china about gaining extra advantage through unfair trade is a distortion of facts. inre is escalating tension the rhetoric coming around the

world. for president trump, this is a myth point of his overseas visit all coming ahead of his july trip with vladimir putin, he said that my nutty be the most difficult part of his trip. >> so interesting it worked out that way. we're looking at live pictures here. guests are in tuxedo's an evening gallons after the president and first lady in the prime minister had already moved into the palace, they will be enjoying a dinner. but not be an intimate dinner but they will discuss trade and brexit and to some extent, you expect they will discuss russia as well. was interesting also about the visit to the u.k. was originally, he had meant to go forondon to cut the ribbon the relocation of the embassy in london. that part of the trip has been scrapped entirely. what was it about that part of the visit -- the visit that did

not sit right with the trump team? was it that they didn't want to avoid london or because if something is left over with the obama administration, the president didn't want that association with his predecessor? >> according to officials, they have kept the answer close to them. innovated quite candidly, as he is traveling through the u.k.. the president taking questions about the topic of the press conference earlier today and he said it was -- he was not at all impacted by the folks in london protesting against the administration. know, the story clearly has injected itself into his visit. >> david, what do we know valparaiso may's message on russia to president trump and his visit with vladimir putin?

>> a sensitive subject in the u.k.. situation an ongoing with the use of chemical weapons. when the united states and other allies expel russia, diplomats on the back of that incident, and now we have mr. trump agreeing to meet with mr. putin straight after his visit in london. many in the u.k. think that is in some way diminishing the , and we want reassurance that mr. trump is going to continue the hard line with mr. putin on that event. britain still blames russia and russia denies this obviously.

trust last week, another couple coming into contact in the last few days, and member of the what is takingng place with the chemical weapons on british and european, in fact at peacetime. reassurances. >> that really underscores the and thebetween russia u.k. at least in the relationship between the u.k. and vladimir putin. we talk about awkward relationship she has with president trump. she is also trying to manage her relationship with the european union as well. who does theresa may have a good relationship with? is there any foreign leader with whom she shares confidences and is comfortable with at this it is a good question. when you see her performance at the world stage and you look at

her and the g7, she is not a natural performer on those platforms. she does not come into the room in a certain way, one other people had her at -- it is not natural, for her to be a bit of a showstopper. emmanuel macron in france who is a bit of a superstar on the world stage. may admits that is not her style. she does not make any apologies for it. a pragmatic is politician who would just like to get things done and not be too worried. she doesn't hold a huge amount as perhaps mr. trump who prefers a more combative style. very complimentary about emmanuel macron despite emmanuel

macron being a little firmer in his responses. however, some of the year. leaders are coming to her defense. it is interesting in the last couple of days, mrs. merkel of germany saying plans with brexit , you had seen every time, it makes it a bit more wobbly, somewhat -- quite different roles and with a different style than some other politicians today. the president, president trump certainly likes razzle-dazzle. >> he does. i have to say, the crown on netflix -- it reminds me of the kennedy to iie think that the ham palace to meet with the queen as well as members of the government and it was a similar sort of pomp and circumstance and excitement

about the air of celebrity, not just political leaders but celebrity coming to visit. david is joining us on the phone from london. kevin cirilli in washington dc, thank you for giving us your perspective on the visit here. >> let's get back to economics and the federal reserve. the rocky mount annual economic summit is on the way going to the -- from the u.k. to vicar at -- victor idaho here you spoke with patrick, the philadelphia fed president earlier. give us highlights of your conversation. >> i first want to back up a little bit where jay powell did read so ifw and we you are trading desk, that matters. that will continue its gradual pace and not necessarily stop or

speed things up. he also went on to say that trade is not having a major impact on the fat at the moment but that no nation has done a good job dealing with trade wars and that open trade has served nations well. that is where he comes in. ustold me the models show that we are not going to have a major macroeconomic impact from the trade wars we have seen so far but it could get worse if people think it will get worse. here is what he had to say. medium firm enterprises, looking at making some investments, are now saying at least through survey work and interviews, we may hold off on these and see how things shake out. if enough of that happens and we lose those spirits, then i think we have an issue. it's a self-fulfilling prophecy. if everyone believes they will have a larger impact than they may have, then it will have a larger impact.

collects the feeling is, maybe these animal spirits are disappearing. the ceo of a company saying a little earlier, saying it is not a big impact but mainstream companies are starting to get theied these products, future is a little dicey right now they see that jay powell is and then moving to the background level over time. certainly for the earnings conference call. saying that the fed is hearing rising concerns about trade policy effects as

well. i was looking at the fed go page which allows us to get a snapshot of everything the federal reserve has been in terms of events, the fed will release a report to congress at 11:00 a.m. what kind of report is that and what might we glean from that report in terms of how the fed decides to move forward? used to be released at the same time the gemini used to give his testimony next week, but they have moved it up. generally looks back from the months over the last six and the monetary policy actions, but it includes interesting essays about how the fed sees parts of the economy developing. one thing you can look for is if there is anything in there about three or education to we know the unemployment rate is percent. with somet 3.4% college, 2.4% with a college

education. it is people who do not have extra college education who are left behind. that is the thing the government and annette -- and the united states needs to work on. they needfiscal side, to reform education and prepare people for jobs in the future. >> a long-term effort. michael mckee, thank you. from new york, this is bloomberg. ♪

julie: let's talk about the earnings.

the banks have had a rocky run recently. they have bounced a little bit in the very short term in the past month or so, not so good. row, none4 days in a of them are catastrophic. i think there has been a recalibration of the bullishness we have seen. for a while and -- for a while, everyone is coming on air. is put up orow shut up time. we know what the tailwinds were, tax reform and regulatory reform. we know about the capital returns, that is all behind us. have forward, you headwinds. the question is, is it enough to overcome headwinds? we will find out. usually what happens with bank

earnings is the expectations are difficult to calibrate. some win and some loose. that is why i'm playing it from the point of view of one tends to balance out the other. >> so what do you think will happen? you won't see that much movement by the end of the year? >> that is what i'm thinking about. jpmorgan rallying, wells fargo, getting beaten up. from an individual point of view is a lot of activity. i do not know what will go up or down. too much clarity. one goes up in one goes down. this timey thought they should be selling it from the selloff point of view. >> how does that work? >> the tray i thought about today was a butterfly. essentially selling -- you notice in the middle they are if you are 27 call,

selling that money, that is about a 19 volatility, relatively high on a historical basis. time you are selling it, that would normally leave you with unlimited downside. that is a very risky trade. you hedge it by buying out of the money called. as long as it sticks in the next you get to keep the $.30 and at worst, you lose $.80 on the downside. >> all right. thank you. scarlet? >> all right. thank you. steve mnuchin testifying between the death before the house financial services today. he told lawmakers the economy has not been held by the trade dispute. let's bring in kevin, our chief washington correspondent with a key lawmaker at the center of today's hearing. kevin: thank you. a republican from texas, you

.haired the hearing today he really defended the administration's policies on trade. they're asking questions on that. were you satisfied with the answers on the strategies they are negotiating with? >> the in ministration has a number of explanations to offer. i asked for the administration to clarify is what is the ultimate goal? he worked to actually bring down trade barriers, but i look at the trade agreement, which is administration, instead i see trade areas actually built up. upon them,, florida still exported into the u.s. vehicles coming, the

chucks are coming in the u.s. and the ultimate goal is not for the u.s. to import less, but to export more. i hear the words but i see the action. the disconnect at number one. what i still do not understand, in some respects, why are we taking these -- with the whole world at the same time. we all agree the biggest file later and threat to technology and the internet -- intellectual property is china. why not gather together and use the entire community to deal with china first. >> some of your republican colleagues as well are doing that. more than 80 lawmakers, a really nonpartisan vote, sending a message and a nonbinding measure that would potentially back legislation like senator bob corker that would make it more difficult for the president with regard to trade policy,

counterpart legislation in the house, do you support that legislation and do you think it is needed to check the president on trade? is not just this president. i have been concerned for decades that they have given the executive branch too much power. if you read the constitution and i occasionally do, congress has the power to oppose tariffs and regulate international trade. so yes, i support legislation and on a proactive basis, the thee would have to approve application, section 232, which is to say we will impose tariffs for national defense purposes. what is clear to me, do not on foreignion 232 cars. it is not 11-year-old a threat to national security. it is occasionally a threat to

my bank account and you and i keep it going. it is not a threat and it harms the credibility of the administration. i appreciate our president, i just wish we would focus on get ourrst and let's allies focused on stopping the major problem we have on trade. >> the treasury department came out with an interesting report, 16%. the republican president, your thoughts? it has beentely, going on for quite some time and asyou look at the deficit president obama was leaving, you could see it is heading in this direction in the first place. it is at least a part of the solution but also, we have to for future generations. it is a huge, huge threat to the

national security, economic is a greatnd it concern. i have got to tell you, i will be leaving office and it has frustrated me. it is the greatest foreseeable threat to america. we will be a second-rate economic power and military power if we do not solve this debt crisis. have ane do not have to actual price on our doorstep but it is coming soon. >> and want to ask you something about the energy sector. with regard to how the president right now is talking to nato allies, in your district in particular, there is a significant impact with regard to energy. any concerns? >> i have great concern about trade. we are now becoming energy independent and frankly,

fracking has a lot to do it that. some of these tariffs on aluminum can affect our ability to be energy independent. the president is right, our european allies need to be a lot more energy independent, not .ependent on russia it seems like no matter what the president says, you're too soft or too hard on russia, the truth is nobody in the e.u. needs to be dependent on russian energy. this is not a good thing. i appreciate the president bringing it up. appreciate your time. thank you for coming on bloomberg. back to you in new york. >> thank you. terms of the markets, we have 30 minutes before the market the nasdaq in the green. up by 1.2% on the day. small caps as well getting .3%.

you look at other asset classes, you see the safe haven current these getting a little bit of the gains back. they are falling. the yen, for instance in the euro as well. that is as commodities recover, for the most part. metal and oil however still under some pressure here. coming up, we will speak with the guggenheim cofounder, why he says the valley we're seeing in -- the rally in stocks is the last to rot. this is bloomberg. ♪ phones have made our lives effortless.

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mark: i am mark crumpton. questioning fbi agent -- quickly spiraled into chaos as republicans demanded he answer questions about the russia and his disparaging phone text about donald trump during the 2016 presidential campaign. >> you are overruled. >> point of order, let me continue, your testimony is it essential to the hearing. >> the point of order is not well taken. >> you don't know -- >> the witness will answer the question. >> attorney-client privilege. he has been advised not to answer -- suspend. >> are you going to just make up rules all along -- while you go along? >> he said let me be clear under oath, not once in my 26 years in my -- have my personal opinions actiond any personal