tv Bloomberg Daybreak Americas Bloomberg June 13, 2018 7:00am-8:59am EDT
it will only take one member o fed to push the fed took four hikes this year. cleared to launch, at&t-time warner get the clearance to merge. in doubt,t error one faces a fight to keep in power as emerging markets suffer with the fed normalizing policies. david: welcome to "bloomberg dareak" on this wednesday, june 13. they made their announcement of the host of the 2026 host. nafta might not be there, but we will all play soccer together. you will have games all over? canada, three in mexico, three in the united states. inent to a couple of matches 1994. it is a big deal. alix: i'm scared.
i'm scared. david: the host country gets a alix: even if you're terrible, you will make it? david: hopefully we will not be terrible. alix: in the markets, boring. s&p futures go nowhere. up despite industrial output disappointed in europe. we could get a fed rate hike today, the dollar flipping into negative territory throughout the morning. the spread one to watch, flat, flat, 40 basis points is how we trade. crude softer as well. russiay, it ial about wanting to pump more. that will be key over the next couple of days. david: you broke yesterday that they wanted to pump more. alix: a little meeting tomorrow speaking of. david: now it is time for the morning brief. we will get u.s. producer price 10:30data fm a today at
eastern ti we get the crude oil inventory report. at 2:00, the federal reserve wisetsate decision. we will bring you special coverage on bloomberg television beginning at 2:00 p.m. in new york come 7:00 p.m. in london. alix: time now for blooerg's first take. we are joined now by our guests. the meetings, the dots, what you need to know. will we see one member move their dots up and see four potential hikes? >> there might be. the market is pricing in 1.5 more hikes after today. one member moving will not move the market. alix: i am building excitement. isi think what is important what is the discussion about the terminal rate. where does that long-term dot
change? do we get an idea of whether the fed is thinking about rea utrali how far past the neutral rate are they going to go, and what impact will that have fun the economy and inflation? the inflation data yesterday was the highest in six years in terms of cpi. wages could be a zero, and that is not a good sign for the consumer if that will persist. i think the fed wants to hike enough to get inflation expectations lower. alix: what is the trade? is it going to be flat, flat, flat? >> it will be continued flattening. the curve will continue to flatten. points, targeting 32 basis points in the near term, we think we will get all the way to 25 basis points by
the year-end. david: what is price sensitivity for stocks? >> the market is on this count down. there is an obsession with when the yield curve will invert. longeterm look at inre rth fed will take it ey. at some point, maybe they will hike today, but later in the year will they ease up on the gas pedal, take it easy and let inflation run harde hotter? i have been in this industry for some time and have never heard equity investors so keenly and focused on the potential inversion. there is just an obsession. they are watching for what is the feds inflation response? what they suggest this is a transitory event? they did get hotter numbers yesterday. will we get one today and how does that affect the yield curve overall. drumbeat, stay with
bloomberg. we will bring you special coverage of 2:00 p.m. new york time. david: at&t got its answer. it gets to buy time warner after all. the federal district judge is a 172-page opinion. there was not much ambiguity to it. we had a very happy at&t general counsel that talk on camera. >> on behalf of everyone at at&t and time warner, we are gratified with the court's decision to categorically reject the government's bid to block this historic merger. david: categorically is the word. if you look at the decision, there was no ambiguity. the government got nothing. i think it isnteresting. it is telling for the market and the broader mergers and acquisition landscape. on of the big frustrations last year is we did not get a bigger
accelerationn a. warner.t just at&t-time it was across the media and communications and technology ndscape. inyou get an acceleration m&a activity on the heels of this, you will see a broader enthusiasm developed for the market, particularly those sectors that see vast potential for increased activity. david: there is risk here. , if you end up having a lot of m&a act that gets finance, that could orporate debt, adding on to the supply we have, so there could be spreadg. that could pressure interest rates a little bit depending how these companies fund their m&a activity. david: we get all excited because in m&a, banks make money. you have to make the deal work.
at&t has caught the car. is the deal going to work? nol them do. >> the market is enthusiastic because companies don't need to tap the cred marketso fund m&a. we were given the gift of lower tax rates, which unlocks a lot of potential for future growth. investors are frustrated we are not seeing that growth manifests itself in future expectations yet. ande have more mergers appointment of a tremendous amount of exss capital in the system, it will only be good for we have had this pent-up demand for some time that would imply there are a lot of good deals out there that companies are going to pursue over the next year or two bank. alix: our third top story has to do with turkey. a bloomberg poll said president election,ould win the
but there is a margin of error for the competition. you're looking at equities down, the lira gets pummeled, although off the lows of the session. yield jumping. cds widening out. your thoughts on turkey? the uncertainty premium that has to be built into this. we don't know what turkey's fiscal policy will be. we know that president erdogan wants more control of the economy and central-bank. when you don't have an independent central bank, investors are reluctant to move into your country because of that. they have saying raised interest rates 5% and that did not help the lira. of course not. you are talking about a more controlled economy, someone who might not understand the macro backdrop. why do you want to be invested in a country like that?
david: how much of this is because we have a stronger dollar? how much of it is idiosyncratic? the election, problems with nafta, problems in brazil. >> it depends on the country, but it is clear it is not just turkey, not just argentina. it is a lot of emerging-market countries experiencing pressure. i am interested in sentiment. what i hear from investors is they are still wish on the outlook for emerging-market stocks. that is a difficult position to take right now. that puts a lot of pressure on chinese companies to follow through in an environment where you have lost the growth in turkey, argentina, brazil, and there is pressu on the rest of emerging markets putting pressure on the portfolio at large, and this is the single biggest area of optimism in the landsce. it is having an impact, and i
don't think it is idiosyncratic. i do think the dollar is playing a big part. david: it does not feel as global or synchronized. thank you both for being here. coming up, the fed is expected to hike interest rates this afternoon, but what comes after that? we will discuss that with our next guest. york, this is bloomberg. ♪
the company processes payments for uber, netflix, and spotify. an electronics retailer said a cyber attack affected 6 million ofment cards and systems several stores. the company says so far there has been no evidence that data has been used fraudulently. zte fell as much as 41% in hong kong after the company agreed to u.s. demands pay a $billion fi and revamp management. to resumellow zte business after a two-month hiatus. tells the federal reserve us that 2:00 this afternoon what it has decided. the market is sure they will announce a rate hike. the bigger question is what comes after that. thatll show you a chart shows you topline projections
for the marketplace for this year. so 50-50 between 3% and 4%. the yellow line is next year at 1.7%, so slightly north of 50-50 joining us now is our guest. they mangebout $40 billion in assets under management. tell us where you are on this chart. >> i would say towards the 4%. the thought process was we are starting to see momentum in the economic numbers. even though we see diversions in foreign markets, we think that will pick up, so the global growth story will be in sync. david: how concerned are you about that inverted yield curve? >> he has to get the pectations in the maet. we do not like surprises. his job is to explain the economy and buildup expectations. if the expectations are built
properly, there is knows price. if not, then you have volatility. alix: you have only seen inflation expectations on the front end. can see the 5-30 breakevens spread you can see how much it has been lower throughout this year. if they are able to raise short-term inflation expectations, but not long-term, it may have to do with oil. what do you do revious guests talked about potential wages going up. we have to look at that and some of these businesses and see if down thea wage push road because there is a shortage of skilled workers. they have toay attention to that. are correct.u we have not seen it pick up dramatically. alix: is there a trade you ne to be looking at today? is it cash that is more appealing? manager a global looking at all facets, i have to
look at the world relative, so my best relative alternative. i think the emerging-market area has experienced a lot of and currencyields movement down the road could be a potential place to be. 2% short-term yield is a safe place. you will not lose. there is some opportunity between 4% and 7%, picking up 4.5% to 7% yields, so there is potential upside. aat is a place to be placeholder, but there are opportunities elsewhere. david: it is also a question of how much money we are lowering. we are looking at a real potential daster g h mu we are borrowing. listen hahe had to say. >> he we are doing something that seems like a suicide mission. we are increasing the size of
the deficit while raising interest rates. you will run into an intersection with e n, i think. david: what about that? >> i do not disagree from a macro standpoint. that is probably a dollar negative when you look at it in the big picture, so there could be a play down the where rates are higher and there could be a differential in favor of the dollar and the fundamentals from a macro standpoint would be negative and you can short the dollar. alix: you are sticking with us. don't forget to turn into bloomberg for our fed special, the fed the sides. -- decides. plus, princeton economics professor will be watching our special coverage at 2:00 p.m. eastern time. david: there is a story breaking on bloomberg a german company is considering strategic options, including a potential sale of
its gas turbine business. they had been sining they weretd the gas and power generating area. thepetitor is general electric, which had already been struggling. siemens is looking at the possibly of a joint venture or sale of the gas turbine business. i find what we are seeing in industrials completely fascinating. itas been decades they've built up their business to be the future of energy going forward. ge wanted to be in the oil services business three years ago, and now they are stuck having to unwind all of that because they got too big. david: when we talk to dave cody , he says he thinks industrials are underpriced and therean opportunity to go in because the market is so deeply discounting the siemens and general electric . maybe a smaller company has a better shot than the bigger companies. alix: coming up, president heard
alix: in emerging markets, turkey taking the headlines, 10 year yields at a high as headlines and the pridential election ways on markets. take a look at a five day chart. the bigger is down 2%. .till with us is our guest the question we keep asking in particular, the turkey situation is idiosyncratic, the central
bank not hiking enough to stem , a loss in the currency presidential election that seems questionable. is it idiosyncratic or general? of both a combination short-term a long-te. they have a current account deficit. concerning when you have an interest rate environment going up. usually you have a bond and currency selloff in that environment. risks nowshort-term feels uncertainty, which feels selling and people being more cautious. we have avoided that market for those reasons in this environment and will continue to avoid the market. david: some people say turkey should be really successful. it has a lot of things going for it in a population, resources. it is a fundamental political issue? from a demograpc and manufacturing standpoint they have done all tht things from a leadership standpoint of a they have pivoted the wrong way. i think that is fundamentally
negative. when you look at an environment to high interest rates, current accounts and currencies get hit come so it is a fundamental negative. david: brazil, for example, we have a fairly large country with a lot of things going for them struggling right now. >> short-term brazil is a political situation. there are some yields we like. there are some situations there from the fundamental economic standpoint that is weaker and a central banker not clear on policy, so that has led to volatility in the currency and bond market. alix: we keep hearing emerging markets are better off. if you come inside the bloomberg over credit default swaps five years for brazil, turkey, argentina are moving higher. idsytic things, butt erng mke better than 2013? >> from a funding standpoint,
the mismatch from a 2008 situation to now is better, but i do think you are taking a wait liquidity in these markets. they had a great run. liquidity,ke away that puts pressure on the currencies and markets, so that is a function of that. i don't think they are better economically, but in the short run that volatility will impact these markets. alix: so where might want you want to look for bargains taken down that have good value? >> some areas like indonesia, a positive demographic, incremental yields between 6.5% and 7.5%. we were going from below investment grade to investment grade, tlook positive. we like that scenario in the longer term. as rates go up and there is a squeeze on liquidity, there is
currency and bond pressure, but we think the fundamentals are solid, so we have invested in their and that is one of our stronger holdings in the long-term. david: india. our toes dipping there. we don't think the market has developed from a liquidity standpoint, but something we are looking at from a longer-term point of view. david: great to have you with us. wpp is having their shareholders meeting in london. there is a lot going on. they are looking for a new ceo. these are headlines. the chaian has been reelected by a vote of 85%. there was some question about that. almost 30% of, shareholders voted against the compensation report. they did report a modest uptick in revenues. 1.4%, although north america is really struggling. they say client relationships remain strong, so they will continue to get headlines. the: goldman sachs saying
risk-reward balance is balance for wpp. they are continuing to be operational risks, etc., but i for breakup has an upside of as much as 49%. that would be so hard because it is so complex. david: that whole business is going through so much turmoil. alix: they can spend it off into silos and that will be better for lue. david: coming up, at&t's week when. what the court ruling allowing its merger could mean for other companies. there are a lot waiting in the wings, including disney and comcast. live from new york, this is bloomberg. ♪ bloomberg. ♪
even though industrial output was down .9%. .3%,sh equities down uncertainty about presidential election cu.k.er asset ination goes nowhere. sterling at 1.33. the boe gets a little bit of relief there. the south african rand the worst-performing em currencies as they connue to get hit. i want to see when they open up trading. david: they are trying to turn the economy around, they have a new regime in place, saying they have theirogether but the markets are not reacting. alix: a year ago may have been helpful inway. i want to keep an eye on bonds. nd auctiona weaker bu for the 10-year, so it should be interesting.
why do you want to buy if the ecb is going to hike next year? headline on get a what'ppening outside the business world with emma chandra. president trump says there is no longer a nuclear threat from north korea. the president is back in the u.s. after the summit with kim jong-un. he says everyone can feel much safer now since the day he took office. in the u.k., british prime minister theresa may is searching for a brexit compromise that will keep our govern from falling apart. officials begin work today on a new clause in her key piece of legislation. the text needs to honor her pledge of her own conservative party that she will take account of their concerns if the u.k. leaves the eu without a deal. the soccer world cup is coming to north america.
the sports governing body awarded the 2026 edition of the ico.nament to the u.s., cana, the final will be played in metlife stadium just outside new york city. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. it took 36 lawyers over 3000 pages of documents pages of trial transcripts, and 172-page court opinion but at&t finally got his permission to buy time warner. "thee end, the judge said government has failed to meet the burden for the proposed transaction is likely to lessen competition substantially." our bloombergcome deals reporter. on the telephone we have walter piecyk. i want to start with the lawyer. jennifer, this was not a close
call in the end. >> not at all, it is unbelievable almost. throughe just walk every piece of evidence that the department of justice presented at the trial and rejected it. the unbelievable thing is not only did he reject everything, testimonial evidence, documents, economic analysis come he also said the evidence that at&t presented as to the efficiencies that would be derived from the deal, -- david: he said it does not go far enough. >> he said without the arbitration offer they put out there for rival distributors, they could have done that without that. no surprise at&t general counsel was pretty happy. listen to what he had to say on the courthouse steps. >> on behalf of everyone at at&t and time warner, we are gratified with the court's decision to categorically reject the government's bid to block
this historic merger. case stands as a testament to the wisdom of this combination of these two great companies and how it will benefit consumers for generations to come. david: tell us what happens next. going into this i thought there would a stay, and they have a deadline to get this closed by the 21st. but the judge had some different ideas. >> usually when the government a chooses to appeal a decision, they will seek an emergency injection to keep the company's closing pending the appeal pr it can take two to four months before you have that decision. they are trying to keep it apart . in this decision, the judge preempted them and said don't even try to seek a stay, i will not give you a stay. the judgek at what
d to say. i have not seen before. the government has taken its best shot to block the merger. the defendants did their best to depose it. the court has spok. to use a state to accomplish what could not have been indirectly done would be unjust. i hope and trust the government will have the good government -- .udgment, and wisdom to avoid this is really admonishing the government. >> i have never seen anything like this. the state.ill appeal they can go to the court of appeals and say we need this emergency stay. based on the language i don't think they have the language. alix: this is the happiest n david on the televisionet in two years. walter, your take on what this randall stephenson has to go to hollywood. how does at&t handle that? >> this has been a long time
waiting and this was a big waste of time for the government to drive through this process. they have been moving on with their pay-tv business, they wanted to get this content to try to learn more about the types of content that customers want. i think they are ready to move forward and have an l.a. presents. presence. this is more of a diversification deal but there will be benefits. they are ready to deal with their new emploes and try to make better content for consumers. alix: are they ready to hit the debt market? they were the biggest corporate issuer last year. >> they were, and they had to return a lot of that money because the deal was supposed to close by april 22. they did take out a term loan of
about $16 billion, so they probably have a bit of time, they don't have to ise that. we think they will probably come in. they will have to come in parts to finance the deal but will they also build out their five g network? dove to accomplish? >> they have a huge capital budget already, have increased the capital spending, especially after getting the tax break. that helped them to have incremental free cash flow not only to fund this transaction and incremental interest expense but also some additional capital investment. as we all know, at&t is focused on the dividend. on top of the capital investment for 5g, incremental content make, andthey want to they also want to continue to fund the dividend. that is where some investors may get concerned, if the pay-tv business or wireless business
doesot sustain the types of free cash flow they have in prior years. david: it is alsofabilit did they overpay? they got what they wanted, but did they overpay? what comcastare paid for nbc universal, they paid a higher price. this getting bigger, what assets you need toivsify, their willingness to pay up for some of these things. there were a lot of pundits that said, had thiseal had been blocked, time warner could get an even higher price from verizon, disney, comcast, anybody else who want to come in to buy the asset. jennifer, is th a anything goes merger world now? certainly open doors d will embolden companies, for sure. the department of justice has lost some leverage in their own merger negotiations, particularly for vertical deals. avid: t-mobile-sprint is not
vertical deal, horizontal, so it may be a mistake to assume that that is absolutely right. this clears the path for brian roberts to make the bid for the fox assets. we are expecting that today, so you could see the floodgates opening. alix: what other kind of media assets would be at play? yesteay, lions gate, cbs, viacom, all of those shares were rising. it makes it easier for these companies to be bought. alix: the same thing goes for telecom. is this a t-mobile-sprint again? verizon also? they are leaning away from content. knee-jerk it's a reaction to assume the court ruled one way on this transaction at all types of transactions are now somehow good. i don't think it works tt y. you could get a different judge,
and as you profiled earli said the government to approve the facts of the case. that doesn't mean they cannot the facts of blocking a sprint-t-mobile transaction. i'm not sure just because you lose one case, a person that gets to that point in their career, means they quit and do not find any other murderers out there. i know that will be the knee-jerk reaction in the market but that is incorrect. we will have to see how those meers play themselves out. david: explain the fox deal. after this decision was announced yesterday, the fox price went up, but both comcast and disney went down. that is presumably because they think comcast will overpay. are they worried that does he may overpay? been allreenfield has over this and the expectation is there will be a bidding war. rich is pretty confident comcast wants this asset.
disney has talked about not want os there ia fear amongst the investor community of a bidding. alix: you are talking to bankers. what are they thinking right now? >> they will have a really busy summer. they are canceling their summer vacation plans. talked about verizon before, but it also makes it easier for somebody like charter, who may want to get into content. a tech company could want to come in and buy a traditional media asset, although that would be surprising. but never say never. david: walter piecyk, jennifer rie, and nabila ahmed, thank you . great discussion. tim cook discusses tt apple's bn the u.s. more on that in wall street beat. tune in to our colleagues this morning from 7:00 until 9:00.
siemens is considering a possible sale or options for extremely gas turbine operations. the german engineering company is looking at allossibilies such as a combination with a rival. zemin says. as he said the turbine part is a rtf their future industrial core. elon musk has been forced to rethink his ambitions for tesla. they are cutting about 9% of its workforce. the firings are taking place after tesla bungled its first attempt to mass produce the model three. estimate tesla maybe lose $1.3 billion over the next few quarters. the spanish parents of clothing retailer zara is benefiting from advances in technology. haveompany's improvements improved the efficiency online and in stores, hoping to compete with amazon's move into fashion. alix: three things that wall street is buzzing about this morning.
first up, the dream job. tim cook talks about apple's recent investment but not all companies are living the dream. morgan stanley yield results. james gorman says the firm's goal of generating a billion dollars of bond revenue a quarter is a conservative estimate. he was open for rent. southhampton home rentals surge. david: nice shot of shinnecock. joining us now is jason kelly. let's start out with tim cook. tim cook talked about their plans for investing in the u.s. listen to what he had to say. a neware going to create campus within the united states that is in a different location than ever to current campuses in california and texas. we are going to hire 20,000 people.
we are going to spend $30 ex over the next two years. we are investing a ton in this country. to yes, we are also going combine some of our stock because we view our stock as a good value. from a shareholder point of combine view wy stuffrom woh ss than we do, then that is good for the company. it is good for the economy as well because it people sell stock, they sell --pay taxes on their gains. seeing david rubenstein without a tie on is like seein your teacher at the grocery store. alix: i felt that way the first time i saw david without a tie. traumatic. but to your point. at the same time
yesterday, another big leader of , they are laying a bunch of people off. tesla. >> apple is in sharp contrast to tesla. pessimism, or maybe realism in a lot of cases. tesla. >>elon musk has been talking up, toeting up a storm, but had concede yesterday that they are laying off 9% of the workforce, that is about 3000 jobs. it is a real or of the business. this follows the model three, shall we say, miscalculations come in terms of whatroduction would be, how long it would take, and the cost. david: stop hemorrhaging cash. alix: not morgan stanley's problem. the headline y an investor conference, james gorman said the goal of generating a billion dollars in quarterly average bond trading revenue is too conservative.
that is not what we are hearing from other banks. jason: it's interesting to see how bullish is on that part of the market. we have talked about this at this table oluh. this year has been pretty good arof the business, that desk. at a lot of plas, especially morgan stanley. this is a sweet spot for them. they have invested pretty heavily. notably, in the story, they talk trading,ctronic investing heavily in equities, and even more in bonds. david: having talked to a lot of people, two years ago, they also did consolidation in their trading, they put departments together. they seem to be more streamlined. alix: i understand it is just a bump on trading, but other banks have come up with their forecast and they don't seem happy about the second quarter. a little bit softer come not as good as the first. this is in stark contrast.
jason:ou allud to this, david. has been pulling some pretty big levers over at morgan stanley rather quietly. you sat down with him recently. this is t a btle overhaul, this is a series of pretty major moves. like it is starting to pay off. david: he must be really happy if he owns a home in southhampton. ans init out. as we all know, the u.s. open golf is being played on chanda kochhar. starting tomorrow. there is a big story about renting your home if you live they are there. jason: the rental rates for two weeks or less are up 83%. it makes sense. effecteresting follow-on of this is the summer long rentals, just pop in and watch
some golf. david: this is off of a pretty high base, these are not cheap. jason: the hamptons are not really killing it these days with rentals. this is a nice piece for them. the general manager of the real estate company said it could've been better. they have some short-term inventory, so it is not as huge as they may have thought. you're making these couple of weeks, you are giving up a little bit in terms of summer long rentals. a lot of people didn't do the full summer rentals because they wanted to hang back anmake their properties available for these weeks. david: who is not renting a place? tiger woods. he has a multimillion dollar that he has parked out in sag harbor. alix: can you workout, stretch out? david: his boat is big enough. jason: don't worry.
david: i am watching today the singapore summit. it is interesting how everybody is spinninit. president trump coming back, just landing a few minutes ago. this is what he had to say. everybody can feel much safer than a day i took office. there is no longer a nuclear threat from north korea. meeting with kim jong-un was a positive experience. north korea has great potential for the future. so it is overcome it is fixed. north korea has an official newspaper of the workers party. this is what they had to say.
expressed his intention to lsanctions along with improving the relationship through dialogue and negotiatn. what i like about these two, they are not wrong, it is just not immediate. if the situation plays out, they are not wrong. news: you are in a conference yesterday. president trump said we are not lifting any sanctions. alix: this could be true in 20, 30 years. david: it is aspirational. the farther away we got from the summit, i'm not really sure what they agree to. what did they tend down, how much work is left to be done? alix: at base level, it will be about the neck level of conversations and u let inspectors in, which is a huge issue when it comes to iran. told: various experts have us, they really need to get an inventory of what the nuclear weapons are. alix: president trump talking
about oil again. prices are too high, opec is at it again. timingthis fascinating because we have president putin and mohammed bin salman on meeting for the world cup, and then you have the g20 energy meeting. brent is only off by but overall this could be a big mover into that opec meeting. david: it sounds at mr. putin and mr. trump may be on the same page. the russians want to increase production. alix: coming up, we are talking to the atlantic trust cio. why he sees four rate hike this year. this is bloomberg. ♪
seea rate hike today as a done deal but it will only take one neighbor cnge their dots to push to four hikes this year. at&t and time warner get the go-ahead from judge richard leon who places no restrictions on the companies. is it an anything goes merger world? kim jong-un says president trump offered to lift sanctions. the restrictions will stay in place until they get rid of their nuclear arsenal. let us been making. david: i'm david westin alongside alix steel. alix: no jet lag, tweeting up a storm. the latest has to do with oil. oil prices are too high, he tweets. opec added again, not good. if you talk to market participants, there is a conspiracy theory that saudi arabia and the u.s. worked out a deal. you are going to help us with oil prices. davi i don't know if there is
antrh to that, but president trump will say that is why you elected me. i made a deal. alix: it feels like them pumping more is a done deal. it just depends on when and how much. that will be the question ove the next few weeks. .1%nt is only done by on that tweet. s&p futures modestly higher. it will be study as she goes heading into the fed meeting. .01%.ollar up by 2/10.is points for the a half hour from now, we will get u.s. producer price index data for the month of may. then at 10:30, we get the eia crude inventory all report. that 3:00, the federal reserve releases its rate decision. we will bring you special
coverage here at bloomberg beginning at 2:00 eastern time. 7:00 in london. let's hear what's ha outside the business world with emma chandra. the soccer world cup is coming to north america. the sport's governing body today awarded the 20 26th edition of the tournament to the u.s., mesko, and canada. the u.s. will host 60 of the 80 matches. the final will be played at metlife stadium. president trump says there is no longer a nuclear threat from north korea. the president is back in the u.s. after meeting with kim jong-un. he says everyone can feel much different now than the day he took office. meanwhile, there are disagreements on wt ll happen to north korea until it gives of its nuclear arsenal. german chancelr angela merkel says that u.s. needs to take another look at trading with
europe. she indicated she lobbied the president to keep imposing tariffs on cars from being exported from europe. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. the markets think they already know the federal reserve will rise -- announce a rise in rates. what they are not sure about is what comes after that. this chart will show you what the markets are projecting. you got this. david: anyways, what it shows is g for rkets are year it is much 50/50. next year, a little bit better than 50/50. two rather than one. joining us now is david donabedian and michael mckee.
david, what do you expect, three or four? it will be for rex hikes. we continue to see the economy strengthening. you look at what has happened since the last fomc meeting, st of the economic data has suggested accelerating growth over the next few quarters. when it comes to inftion, the core pce data that the fed focuses on, that is about the only inflation indicator that is slightly below 2%. and employment cost, already about 2%. the fed tot lee's averaging one rate hike a quarter this year because they don't want to get behind the curve or when they inevitably need to react to a weaker economic environment. david: do they have to worry about inverting the curve? if the long and doesn't go up, don't they have a problem? >> that is a potential outcome. i don'think th fed music that
way. they look at they can control what they can control, short-term interest rates. our view is we will see intermediate and longer-term yields shift tire as well over the course of the year and into 2019. we don't expect to see an inverted curve. alix: the question is what happens to the neutral. if you look at the chart in my rminal, said andre versus neutral, we know it is close. is it close and then we go above it, or does the fed pause? mike: don't forget you have the argument from the new president of the new york fed president, the neutral rate will rise as the economy strengthens. that is the question as well. you said you could do a good foreign accent. i will not do that. alix: that was during the break. so much as not
question of whether they will announce a move to four rate hikes. they would not say that, but what kind of clues are they going to give us today? one of them might be in the th are two the below lines in the statement that have been may drop out.rs now that they one is the stance of monetary policy remains accommodative. if we are getting close to neutral they may start to tweak that. the other is fed funds rate is likely to remain for some time the low levels expected to air run. if they drop those, that means they think they are getting closer to neutral. they have to start signaling to the market that maybe we are getting close to the end. david: that is something to keep an eye on. david: do they need to do it now? they can go into the fall basically assuming september they will rise, but then they can keep the other one in the back pocket. david: they can. the dot plots will either
slightly tilt toward three or four. i don't think that is what is important. the conversation about the neutral rate is. i look at it today and still see a negative real fed funds rate. they are not that close to that so-called neutral rate. that is one of the reason why i think the pace of rate hikes might be a little faster than the consensus. but you are right, they don't need to lay it out for us today. alix: shocker, not here, but jeff gundlach warning about those higher rates as the fiscal that widens out. this is what he had to say in the webcast yesterday. >> this seems like a suicide mission. we are increasing the size of the deficit while raising interest rates. at some point, you will run into an interception with a collision. alix:hts on that? have the question i would asked jeff -- and maybe he we have ait --f
collision, it produces probably a recession and interest rates go down again. are we going to hit that 6%, this collision happens, and then rates fall and we start over again? that is what is not clear to me from what he said. obviously, at some point the deficit will cause a problem, but nobody knows what that is. so far there has been this insatiable demand for u.s. paper. alix: the other issue, in the backdrop of all of that, ian feels like -- em feels like it is falling out of bed. the southfunction of rican rand, mexican peso, wrubel, all getting hammered. maybe if you are not going to be short the treasury market like gundlach is, but this is still an issue if you are an emerging market investor. the u.s. is raising interest rates, the u.s. will start to begin to raise interest rates. -- europe will start to raise
interest rates. a lot of emerging markets have dollars in -- money in dollars and euros. they need to make policy for their own countries. they will take into account with feedback loop maybe but they will not stop raising rates if they think it's justified. if we get the inflation that dave is taing abou and the fed needs to raise rates, they will do that. they will not worry too much about what happens to the rand. alix: is that a reason to get rid of your emerging market holdings? david: when we look at emerging market equities, we have been underweight. you look at the 10, 12% correction we have seen. we are not ready to up our allocation but we are getting morenterested if we see a continued pullback. what is a little concerning on some of the currencies you mentioned, it is not like the
dollar had a massive rally. a little just retraced bit of the losses and experience in the pr. what it is really doing is lashing out the weaker players in the emerging markets. they may come under more pressure. it doesn't mean all emerging markets will. mike: one more thing that may come out that is important for the markets and nobody else will understand it. ira jersey loves this whole thing. alix: is this ioer? no! will give you $10 if i can understand tmike: the white line upper bound of the fed's target range. the blue line is the reverse repo rate. funds rate actually trades.fe it trades in the midpoint all the way until you get to the last rate move, and now it close to the top of the line. the fed worries if we get there, they lose credibility because people think they cannot control the interest rate. they will probably -- if not
today but the next meeting -- will announce they will not raise the interest on excess reserves as much as the target rate. ofy 20 basis poin itead 25. sounds like a small move but important to the markets. maybe a signal in there because it could be there is a shortage of paper there pushing operates the more it could be that the banks are starting to run out of excess reserves, coming down faster than the balance sheet. that may mean the end of balance sheet reductions. definitely something the extent come market will watch closely. david: did you get that straight? alix: i cannot tell you how long i spent right to figure that one out. michael mckee, david, thank you. don't forget to tune into bloomberg, our special report, the fed decides. we have a great lineup. david: there is news breaking
right now about stryker. they have id at not in talks with boston scientifi for a merger. this was reported that they were considering putting the two companies through a huge merger. what is interesting, the analysts came down on the reports equally divided. either saying it would be great, transformational, others saying there are no synergies, no overlap. we are not sure why two plus two equals five. trade coming in right before the potential deal was announced? david: exactly right. alix: yesterday we were talking about wall street beat -- somebody got ahead of that. maybe now they are feeling some pain. david: this is bloomberg. ♪
david: president trump returned from his summit with north korea's kim jong-un in singapore. comes next, even as open issuest remain on u.s. trade relations with china, canada, mexico, and europe. we welcome pat toomey, republican of pennsylvania, a member of the senate finance committee. thank you for spending some time today. want to talk about trade and the relationship between congress and the president. we have to mention the summit. give us your thoughts on what you thought was accomplished, what the senate can do to support this effort. >> i think what is accomplished is conversations have begun, that is really all. what we need to see is very concrete, verifiable, irreversible steps of denuclearization. obviously none of that has happened yet but the discussion
apparently has been launched. insist that this is entirely verifiable and a reversible and that ultimately there should be a treaty that should be presented to the senate for ratification. these were absent features in the famous iran nuclear deal. we didn't have an adequate dismantling of their nuclear infrastructure, did not have adequate verification, and congress was completely left out of it. that was an acceptable then. i am certainly hopeful that we would not go down a role lik that now. is to be this irreversible, verifiable, and presented to the senate. a time in mywas mind when there was a division between the commercial aspects of trade and geopolitics. they seem to be increasingly intermingled, with respect to north korea increasingly. where we are -- where are we may have chinaow
support affected the deal? we know that the senate is --to attaching alix: and attaching something to the bill. defense already in the authorization bill. probably a more partisan of you in systematic violation of u.s. sanctions against iran, knowingly and repeatedly, that that warrants a death sentence for the company. .hat was the initial punishment that was then negotiated away for reasons that we are not clear on. senate the view of th will be to take a hard line on zte. david: traditionally, the president has had a pretty free .and when it comes to trade certainly congress has a role but really has been diverted to the president. is that in the process of shifting?
i know you gave a speech on the floor about these national security provisions, dealing with steel and aluminum tariffs. is there a shift going on between the two ends of pennsylvania avenue? >> i hope there is a shift. i would just clarify your observation with the reminder that the constitution is quite unambiguous. it is congress that is given the sole authority to establish and duties, tariffs,ndegulate trade between the u.s. and foreign nations. there is no ambiguity about that whatsoever. it is true in recent decades congress decided to shift to that responsibility to t executive branch. i think that was a bad decision then, it's been bad ever since. this is a goodoment to begin to reclaim the constitutional responsibility that we are supposed to have. i disagree with the use of the 232 terrace. i do not believe imporng steel and aluminum from canada and mexico, for instance, where we happen to have trade surpluses, but that is a
threat to american national security. i don't believe that is the case at all. we should not be invoking that as a justification. i think the policy is wrong and the goal is wrong. n't think the administration seeks the same expansion of trade that i would sk. i think this is an important moment for congress to reclaim the responsibility that the constitution gives us in the first place. david:ngs are developing pretty quickly, including the g7 meeting that did not come out very well. can the congress act quickly enough to affect the decisions from the g7, discussions with nafta, china, to take back some of the authority, as you correctly say was given in the constitution? >> i think this will be a long process. it didn't happen overnight, the congress using its authority to the executive branch. we will not claim it overnight. it will happen hopefully in steps. and inow, senator corker
are trying to get a provision added to the defense authorization bill that would give the final authority for implementing section, the so-called national security tariffs, give that authority to congress. we are running into some resistance from some republicans who do not want that voted on. this will not be an easy process of storm responsibility where it belongs but some of us -- feel strongly about pursuing it. david: always good to talk with you, thank you. coming up, teslaayof it workforce as part of a major restructuring. will visit the automaker turn a profit? we will talk about that next. this is bloomberg. ♪
we want to bring in our opinion columnist. we,m struck by the telling david the conspiracy theory is that the u.s. made a deal with the saudi's, that they will pare back some of the iran deal in exchange for loyola prices. what do you think of that? >> the tweelf can be explained by anything. it depends on what the president was watching on tv. he sent out a similar tweet a couple months ago. he may be hason the midterm elections, gasoline prices, which were above three dollars in a lot of cities in the u.s.. in terms of whether he has cut a deal, that is an obvious explanation. clearly try to put pressure on the saudi's. they have changed their tune in the last couple of months. the other thing to watch is russia. russia is kind of the main player going into thispec meeting. they definitely want some kind
mainly because $80 oil is not so good for their economy, starts to impact the ruble. their costs are low and it is, so they would rather see the price around 60. david: that is the commodity story. we are also following tesla. yesterday, they announced they are laying off 9% of their workforce with elon musk tweeting, difficult but necessary. tesla reorg underway. how theyk about treated after the announcement, not so well. what is going on here? sort of news that perfectly illustrates the kind of stuff that tesla is. , this ise a tesla bull a smart move. the workforce has basically tripled since the end of 2015, rgely because they bought solarcity.
on that reading, he is taking sensle steps to bring st down, he says in the email we have never been profitable, it is not what drives us, but in order to be credible, we need to do that. on paper that is valid. if you are a skeptic, you may look at th a after an where the message was bullish, talking about new giga allories, the model y, sorts of expansion. david: they hired a slew of people. they also acquired about 12,000 when they bought solarcity. what was interesting in yesterday's announcement, they also announced they are getting rid of this joint marketing venture on the solar panels with home depot. alix: four months after. >> exactly. this is part of the issue here. on paper it is sensible to rein
in costs and everyone should erand, the is an air of suddenness tyear about tesla. the birth rate on the cars, this kind of move. it just seems like they are managing things in the short-term to get through the model three crisis. david: a little ad hoc. my first reaction was what changed and analyst call to now that all of a sudden made it more -- we want to be profitable kind of conversation. drivenou have not been by profits the last 15 years, why now? alix: thank you for coming in. ppi numbers are coming in. this is bloomberg. ♪
market, a mix dollar story, flatter u.s. curve all as we go into the fed meeting today. basis points now is the spread you have between thve and 30. lots of supply in germany that did not get a good bid. the latest read is out. taking out ppi, backing out food, energy year on year, coming in stronger than estimated, 2.4%. final demand year on year is over 3%. 3.1%. the core read on a monthly basis of by .3%. my take away from that is producer prices coming in a little hotter whereas consumer prices coming in in line with estimates. there is a mismatch and someone will pay the price. david: you call that a profit squeeze in that keeps going. you cannot charge more but you have to pay more for your costs. alix: which one will wind up getting the ability to pass on the price?
david: it will show up in earnings in that keeps going. healthcare services rose by 2% year on year, so that is a big jump as well. it is a stronger number across the board. year on year coming in at 2.4%. overall increase on a monthly basis is .3%. anding us now is ira jersey the david donabedian. ira, your take? ira: this is consistenwith what we saw yeerday with cpi. ppi continues to rise, particularly the core measure, that could have an impact on margins. margin 10 to be driven by input costs. ppi is a measure of some of those. generally speaking this is consistent. yes, higher than expected, not crazy higher-than-expected.
i don't think you will get a huge market move at this one for we will have to watch on margin store you mentioned. david: there is nothing in here that is a yellow or red light for the fed on rising rates this afternoon, right, given these numbers? david: i don't think this changes anything. the month to month number was a little higher than the consensus but if you look at thaan trend of pbi runn a 2.4, 2.5% range, so it is right within expectation. it does support the notion that if you take a broader look at inflation indicators, almost all of them have sown -- shown some exhilaration. inflationry rates of by any means but there is an uptick in the numbers, and that is part of what the fomc will be taking into account. alix: i want to see where the price increase came from. mill productseel climbed over 4%.
that is the biggt vance w have seen since february 2011. the cost of fuel surged the most in about three years. we also had some bottleneck issues, firms citing transportationotenecks and lack of truck drivers forcing them to pay more to get the goods delivered on time. a lot of the specific input costs being raised for certain companies. ira, how does the fed manage that when you have a bifurcated inflation and not a lot of pricing power? ira: the fed is more worried about producer prices -- consumer prices than producer prices. that is somethat t f re of. i don't think they are worried so much about margins. happen tof margins contract because prices in general are going up, we have to fight that. we don't want companies to have as much pricing power may be as -- because it is the consumer
and household sector that get hurt. cpi you saw yesterday's number and you saw that real wages were zero euros year, wages after inflation have not gone up at all, that is something that will be keenly aware of. this makes this potentially worse. now that you have higher ppi, maybe companies will think about .ncreasing prices more that puts more pressure on those real wages, puts pressure on consumption, and that could lead down to a slowdown in the economy. alix: yields moving higher, so let's continue. from the equity perspective, dave, i want to look at this chart, s&p profit margins is the daite line, estimated ebit margin in blue. that has slipped below the profit line. what sectors have the pricing power that you may want to invest in, what don't? some of the sectors where
we are overweight are actually the health care area, and that got more interesting with the , potential fornt mergers and acquisitions. are out of we think, the crosshairs of a margin issue , in fact, have a very positive change in the regulary environment. good underlying economic growth. those are a couple of areas that i think are away from the industrial pricing areas you are talking about. alix: ira jersey, great to catch up with you. dave, stay with us. we want to speak with somebody whose business is affected by the rins and impacted by trade, and that is levine gandhi. the company is one of the world's largest suppliers of nonstick coatings with products d bnds liktcid and pyrex, and does business in
the eu, mexico, and canada. local sales from those regions could be hurt by steel and since theiriffs products are made with those materials. good to catch up with you. the ppi number talked about those rising steel costs, rising fuel costs, rising cost of transportation for goods. how is that affecting you? year has been particularly challenging. we have seen costs go up in certain solvents, pigments, resins that we use, almost five, 10%. we are a big supplier to this industry of houseware. it is really challenging to pass these costs on. every one of my multibillion-dollar american clients has sophisticated sources and they don't really pt well price increases. no one wantso d up at the consumer but i think that will
happen. david: as you compare input costs, compare products and wages. putting more pressure on your margins? >> i would say products from an input cost. we are seeing historically tight labor markets. right now between the binary choice, i would say input, product inputs. alix: how the wind up hedging that in general? looking at the cost of steel mill products. daegis increase since 2011. is there any way to mitigate these losses in your business? >> what i hang my hat on is innovation. we have over 50 r&d chemist who e innoving. of course they're trying to increase quality, but to your point about hedging, we are try to push cost done by sourcing materials, specialty engineering. these are highly educated people. most industrial sectors have an r&d component.
i found in my company 10 years ago. any oxford or who will be that if you are not literallssed with cost control, you will select yourself for extinction. i have a lot of aggressive competitors out there that are always trying to knock me out, underbid us. this is capitalism. control, you will select yourself forinnovation is the bt prescription i would give to anyone in any sector to keep ahead on cost. david: explain your business to me a little bit. e you have any intellectual property protection that gives you some protection? ip.we definitely have that is a huge component of our business. moat, but honestly, it is a dog eat dog world. even though we have ip, my competitors have ip. everyone tells a story about why our products are the greatest. we supply to pretty much every household brand in america but
ultimately it comes down to cost a lot of times. if my sales team has to go into walmart, one of our clients that supplies to walmart, tell a are going up,sins so prices are going up 8% -- it is just crickets in the room. the only way clients ever consider a price increase is when there is incontrovertible, a repeatable evidence that prices are going up across the board. we're in a situation right now were in my industry this evidence is coming from all quarters. david: how much downward pressure do you get from the size of your buyers? for example, talking about walmareroat, buyer, as opposed to the technology that comes across because of the internet. where does the downward pricing pressue from? >> walmart and amazon.com are the 2000 pound gorillas each.
i have been in meetings with the walmart buyers, and they are highly aware of the impact they have. theyre very smart about it. they say if we bring your product in our outcome it makes a big footprint in the industry because they are the largest seller of housewares in the world. is way that i run my company , when i talk internally, i say we know we are going to get pressure to not raise prices but reduce prices. talk to me when i'm in a lab meeting about how we are going to keep costs down. we plan three to five years in advance because we always have to worry about things like this. from our vendors, we get a letter saying prices are going up 8%. if you have not already hedged that, you will have a probm. talk about the trickle through, dave.
what struck me on the cpi was the pricing pressure we are starting to see for household appliances. we are still in negative what struck me on the cpi was the pricingterritory but we havd higher. do you feel the consumers and retailers can handle the price increases we are seeing for these durable >> i think we will find out. we are finally at the point wage spited of mini -- price spiral may be developing. you have aeneration long era of low inflation. it takes some time for everybody to adjust to the fact that pricing pressures are actually rising. when you start with wages and see enormous amounts of anecdotal evidence that wage pressures are rising, i think we will see that show up in the official data. i think that will lead necessarily to a number of industry is trying to push through price increases. i think that will be challenging for a while. ,hat may mean that we have seen sometime in the next year, a
peak in broadscale margins in the economy. gandhi, david donabedian, thank you. thank you for being th us today. alix: i just want to recap the numbers. really interesting things coming out. core ppi year on year up 2.4%. oddly basis up .3%. trade, sell the short end of the curve p that is what we're seeing in the markets. yields on the 2-year up by 1.3 basis points. we are paring some of that selling but nonetheless it feels like it is a faster inflation story on the margin coming into that fed meeting. at&t's bigng up, win. how the takeover of time warner could change the futures of mergers and acquisitions. as you commute in today, listen to our colleagues on the radio. bloomberg surveillance can be all across the u.s. on
emma: this is "bloomberg daybreak: americas." coming up later on bloomberg markets, an extensive interview with carson block. now to your bloomberg business flash. siemens is considering a possible sale and options for it struggling gas turbine operation. the company is looking at all companies -- possibilities
including a combination with a rival. seriously they said the turbine part is not a part of their industrial core. iss parent parents of zara benefiting from advances in technology. of company's improvements and in stores is helping to contend with amazon's move into fashion. chinese telecom maker zte took a dive today. the stock fell 41% in hong kong after the company agreed to u.s. demands to pay a billion-dollar fine and revamp its management. the settlement allows zte to resume business after a two-month hiatus. david: thank you. parties spend millions in laers so that he could write a 172-page decision. told itnd, at&t was could buy time warner. as the judge put it, i conclude the government has failed to
idea that the merger would lessen competition. this due to future mergers and acquisitions >> we are fundamentally in an unprecedented m&a market. we are on track for 20 being the best ever market, surpassing 2007. >> people are still looking to be on the front foot. part of looking at this my business, do i want to get rid of this, add this? the idea of impryour siness model and making the changes that i suggested to your innovation or adding scale are the driving factors that we see all the time. ultimately the market will determine it is not working and there will be sales away from that, breakups. right now there's a big concern that you are not big enough.
david: we welcome in erik gordon. here in new york, brooke sutherland, bloomberg opinion, list -- columnist. government wanted to go out and make a new president on rd transtions. hasn't actually gone backwards? when you read the judge's decision, it is pretty just about everything theon of government argued. real beat down. the government probably made a mistake on this. if anything, they got the anti-president. -- precedent. the judge basically said, i like this idea, this merger will be a good idea. it is about the worst possible result for the government. what message does that send to ceos out there who might be thinking about a deal? is this encouraging them to pursue m&a deals. we were told some of them were being held up. >> i want to be measured about this, i don't want to overstate
it. if you are in an industry that needs the organization, like the media and entertainment industry, then you are encouraged. where the merger horizonta or so-called vertical, if it makes sense for the iustry and the not have anti-competitive effect, you can probabthe al. i think it will be fairly particularized but it does take away that cloud that's been hanging over some of the deals because of this case. on that, that up you need to do the restructuring. for the media business, isn't it getting a little late? lix isetting bigger on 18 months and bigger, amazon is getting bigger. i wonder if traditional media companies are arguing over scraps off the table. >> i think they are a little bit late. may be the judge even thinks it is a little late. he said to the government, don't feel it. this has dragged on too long,
let us go forward. and the&t, time warner rest of them should have reacted more strongly to the netflix and amazon's but it is today and you have to do what you have to do. i thk we will see more of them. alix: you have to do what you got to do. , what do companies have to do? >> you have cigna, express scripts definitely reacting to the news yesterday as investors expected a path would be easier this time around. then you can really think outside the box. a few months ago we had talks of walmart buying humana. retailers getting into more gistics as amazon ramps up its efforts. could you see some sort of logistic deal with a retailer? could fedex be a target for one of t behemoths? all of these possibilities are now open to buyers. when you talk about merging into different parts of the supply chain, industries that the
company specializes in. david: all those that brooke mentioned are vertical. the fact that you can do it does not mean that it is a good idea. how often are these vertical mergers successful in practice? >> they are really hard to integrate. when you integrate horizontally, you arinhe same biness, have some idea what to do. when you integrate vertically, you are by definition getting into a new business. as tough as it was to get past the government, now the real work begins, and there will need to be some industrial logic. i don't think we will see companies merge just because we can. i think they will merge the cause they think they can make it work. of course, what ceos think they can make work and what actually works is often pretty different. david: what are we expecting next? cvs and aetnas already on the table, fox and disney. what are people talking about on the periphery?
>> i think you have to change your calculus, when youth think about potential m&a targets, you have to think much more broadly. digitization of different companies. they are looking to get bigger in different areas. if you years ago, you never would've thought about general electric investing in software but it is. amazon buying whole foods. companies are looking for different have is to find growth you have to broaden your spectrum. ,ut just because you can doesn't always mean it's a great idea. david: erik gordon, thank you for joining us. also, brooke sutherland of bloomberg opinion. alix:esident trump is going after opec yet again. more on what i'hing y again, heading into that putin- bin salman meeting at the world cup. interact with us on tv in the bloomberg terminal.
alix: i'm obviously watching the but what i'm really watchg is president trump going after opec yet again. there is a tweet this morning. oil prices are too high. opec is at it again! this follows a tweet a few weeks that was very similar. surprisingly to see more of a down mood on print -- brent. there is a push for saudi arabia to increase their output as venezuela is decreasing theirs. david: were they doing that already? alix: there is a discrepancy about how much. russia wants to implement going back to where they were in 2016, so basically wiping out any of the cuts. that would let them at 300,000 barrels of oil a day. the saudi's don't want to do
that, they don't want to go that high because they still need higher prices. their fiscal breakeven would be 87 or something hat, so they need a higher oil price. this sets up for a very contentious energy meeting on friday. david: are the russians complying? the problemfair, with russia, it is so hard to start of their operations because of the weather conditions. they need to start now to pump in 2018. coming up, the open with jonathan ferro. they will be looking at the fed. this is bloomberg. ♪ retail.
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jonathan: coming up, the u.s. economy looking solid, powell and the bed preparing to deliver fed preparing the to deliver another hike. at&t and time warner expected. tesla pushing into the black. elon musk, 9% of the workforce. the market, 30 minutes away, on a three-day winning streak, s&p 500 futures firm or, a tens of 1%, ahead on a 10 year yield in the treasury market. --ket participating anticipating another rate hike. investors weighing in on the decision in the future of the fed. in the nearhike term is one less to do in the future. >> at this point the fed has been overtaken by events. >> the market is pricing that