About industry issues. We are going deeper than normal and i think that is good. We encourage that. There is always politics in the background steady. , you need to keep going. Plus, facebook reveals the project that goes beyond social. The coo says the company is ready to embrace it. Companies like ours should not make as many decisions as we do, we know that. It is all straight ahead on bloomberg best. Emma hello and welcome. This is bloomberg best, your weekly review of the most important Business News and interviews from Bloomberg Television around the world. Lets start with the day by day look at the top headlines and last weeks protests against an extradition law in hong kong continue over the weekend. The government responding to extreme public pressure. Hong kongs leader made a rare apology over her proposed extradition bill, this after hundreds of thousands of protesters took to the streets for a second sunday in a row. The government suspended the bill saturday, but that did not stop more mass protests, demanding complete withdrawal of the bill. We have not seen a full withdrawal of the bill, but we have heard from some over the weekend. Regina one of them. She said a suspension is equivalent to a withdrawal, because in a way, they dont have enough time to get this through in the current session. Many watchers are saying this could be a facesaving option for carrie lam in a way, a way to back down from all of this and basically let this law die a natural death. Mario draghi closer to pumping more stimulus into the economy, highlighting the case for action. Mitigating measures to contain any side effects remain part of our tools. He is certainly using his final few months to hone and even nudge the governing council in the direction he wants to go, which traditionally has been in the direction of more stimulus. It was a very clear message that this talk exists and by the way, you might have to use this soon. Dovish comments from mario draghi. Germany is negative. France at 0 , a record low. The u. S. Tenure hovering just above 2 , that key level. Taking a look at global Interest Rates, now down to 157, the lowest since december 2017. Equities really getting a boost from the idea there is more easing in sight. The euro is down. Catching the attention of President Trump. Donald trumps tweet then followed and i dont think it is wrong to say it was widely ridiculed among the central bankers, but now the macro man column comes out and says maybe the move was designed to preempt the fomc rate cut, to preempt a lift of the euro versus the dollar and that would maybe be the start of the currency wars. The g20 meeting next week in osaka, already the most recent most eagerly anticipated gathering of World Leaders in recent years. When donald trump talked about he and xis expected meeting, that raised the stakes higher. Seeing basically a big rally here. The prospects of easing Monetary Policy, and of course, we had trump saying he will meet with xi jinping. How is the market reacting . Is it trade, is it the fed . I think it is the trade news. The market rallied on the ecb news, but more post that tweet. The first day of the fomc meeting and the white house has grabbed some of the spotlight, President Trump exploring the legality of demoting jay powell, that is that is according to people familiar with the matter. The headline came out at 11 23 and the equity market stay calm. Stayed calm. There was not a ton of movement. Please tell me we are taking this in stride. It seems to be the one thing we are taking in stride. Trade headlines still seem to very much move the market, but this does not. And i do not know if it is because this is less likely to transpire or it is just the notion that they are convinced that the fed is Strong Enough and that any succession would be not enough to tip the balance in the Central Banks. Facing pressure from wall street, the fmocs latest decision and it jay powells address. Rising expectations that the fed will hold Interest Rate steady. Opening the door to perhaps a rate cut in the future. The fed doesnt cut rates, but they come close. Eight members of an open Market Committee saw the need for rate cuts this year, one voted to cut today. A majority of the Committee Sees to rate cuts, 50 basis points as appropriate by the end of next year. Although some wrote down cuts and others did not, it was clear that those who wrote down a flat rate path see additional accommodation has strengthened. The message is clearly we are getting more dovish, but at the same time, the fed avoided signaling a july rate cut, so at this point, i dont think it is a done deal. The market is priced at 1 for july and the only thing is whether it is a 25 basis for 50 basis point cut for july. For those types of odds, it if the fed disappoints on those types of odds, it wont be pretty. You wonder what the future for jay powell will be. I think the law is clear that i have a fouryear term and i intend to serve it. The president believes he can still get rid of jay powell. Jay powell not taking the bait in terms of making the calculations. He feels hes not going to respond to political criticisms or the president s thinking. It could have been a lot worse in terms of what the fed ultimately does. It was not ideally what the president wanted, but it couldve been a lot worse. We are waiting for the bank of england, coming out with a Rate Decision right now. They will want to keep the key rate at 75 basis points. The vote was 90. You did not see any dissension today. There was tension. The fed is talking about of the ecb is talking about easing and the market is pricing in the easing into the expectations for the bank of england. That is really what the bank is noting when it talks about the tension. The market is clearly pricing at a much bumpier view of how the brexit story will develop. The market sees a completely different way at the moment and it is putting the bank of england in the context of a Global Economy at the moment, and in the context of a tougher brexit. Tensions between the u. S. And iran escalating, as iran shot down an american spy drone near the entrance to the persian gulf, which supplies one third of the worlds oil. The president tweeting out that iran made a big mistake. All eyes are on the white house and the president s twitter feed. As you know, late last night and overnight a flurry of briefings for the u. S. To try to understand what happened. The iranians insisting this happened over there airspace. Their airspace. The usa saying clearly it was over international space. The expectation is it will require a more substantial response by the president right now. President donald trump seems, earlier today, to downplay the attack, suggesting that a loose individual may have been responsible. You do not hear washington giving tehran the benefit of the doubt frequently, but i think there is an effort to dial back some of the tensions that led oil prices to surge on this latest attack. I think the president has, for now at least, calmed fears that a military strike is imminent. As we hear that closing bell, we are closing the books on another day of gains. This after yesterdays fed driven advance. You see stocks rallying, but im looking at bond yields. The tenure down 2 . How significant is that . It is a psychological level, as i like to say. Something that everybody is watching. And i think the real key will be on the front end because the market is getting far ahead. Every time the fed gives a little bit, the market pushes it further. What is to stop the market from going back again and again . Nothing, unless jay powell says that is enough. Protesters in hong kong resumed demonstrations today. Thousands gathered outside the city headquarters. Demonstrators are calling on carrie lam to stop to step down. What are the chances that because of the protests, carrie lam actually resigns . She has given no indication she has any intention of resigning, and that is not sitting well with many of the protesters here. They not only one carrie lam to resign, but they also want her to withdraw, retract the controversial bill. One protester told us, the point is to paralyze the government today, because they do not respond. So far, fairly peaceful and police have stayed at bay. In a series of tweets, trump said when he was told the planned attacks would kill 150 people, he stopped them. You have john bolton and secretary of state mike pompeo who are quite hawkish and believe the u. S. Needed to send a very firm message to iran, but you also have the president , in 2016 in no uncertain terms, he campaigned on the idea that he would not bring the u. S. Into more costly wars. I think one way to think about this is these are all negotiating tactics. What the president wants is a new deal with iran and all of these moves he sees as a way to achieve that. Emma still ahead as we review the week, interviews with top executives in aviation at the paris air show. Plus, blackstones Steve Schwarzman and a conversation with Federal Reserve vice chairman, richard. Why are we speaking of cutting Interest Rates . Especially in the last six or eight weeks, there have been elevated uncertainty about the outlook. Emma coming up, more of the weeks top business headlines, norways and centralbank hikes rates. The policy is expansionary. Emma this is bloomberg. Emma this is bloomberg best. Lets continue our global tour of the weeks top business stories in the u. K. , where there is a field of conservative contenders to replace theresa may narrowing to a final two. Boris johnson versus jeremy hunt in the title round to be final round to be britains next prime minister. They will spend the next month battling for votes from the conservative party before a winner is announced in late july. Boris is very much the pick. Some have suggested that the battle was deliberately crafted to give boris an easy ride. He is the overwhelming favorite, although polling data we have suggests that boris will be the runaway winner in this contest. It is interesting, he had a broad amount of support. He has been trying to unify the party, but ultimately i think he will be relatively pleased going up against jeremy hunt. He looks like a continuity candidate. Lets focus on iran now because they may be close to breaking a landmark agreement. That was, of course, meant to keep it from developing nuclear weapons. They say they will exceed agreedupon limits on june 27. What exact part of the agreement is it about to overstep . Iran has warned it will pass the agreed limits on low enriched uranium. This is about a 3. 7 . This is not material that can be used in a nuclear bomb. It is material that could be used in a nuclear reactor. A much more provocative step will be if they say they are going to start seeking to produce highly enriched uranium. That will be a major red flag for the United States and all the partners in the iran nuclear deal. Bloomberg releasing its forecast for the power sector. Among the findings, europe will make the fastest transition to renewables with china and the u. S. Playing catchup. That is the main highlight, that europe is well ahead of the pack. We might have known that already, but what is taking so long for other countries and continents to catch up . Europe has certain things that help it to get a bit of a lead, namely that they have put a price on Carbon Emissions to start with. In other parts of the world, there are other reasons and china has an enormous amount of coal generated power built that will be economically competitive for years and in the United States, an enormous amount of natural gas and that will continue to be very price competitive for the next several decades. Generally speaking, about two thirds of the country, we see renewables as the lowestcost source of generation in terms of adding megawatt capacity. Todays bank of japan giving keeping Monetary Policy unchanged, but for the first time in more than two years, a majority of economists predict the Central Banks next policy move will be to increase stimulus. The 10 year Government Bond yields falling. The banks governor was not too concerned. There is no need to take an overly strict view on the 10 year yield range. I think it is appropriate to allow a degree of flexibility. With the dollar dropped, the dollaryen, how does that play into what the boj will do next . People have to realize that he was in charge of the Foreign Exchange for five years and he intervened around 500 billion during the late 1990s, so he is a tactician and an expert on global foreignexchange markets. If the dollaryen breaks 105, the boj is going to have to ease quite significantly. The central Bank Delivering its third Interest Rate hike in september and signaling there is more to come. The move further widens the gap between the bank and other Central Banks. Many other global Central Banks talking about easing. You are hiking. Does that worry you . The short answer is no. Of course, we are affected by everything happening internationally and we follow closely the expectations going forward. But then the background for the increase is in the policy we have made, that growth in our economy is happening. Inflation in our case is above the target. And i will add that Monetary Policy in our case is expansionary. The policy rate is still quite lower than the neutral rate, normal rate, so we are stimulating the economy and of course, our policy rate and Interest Rates are definitely affected by what is happening internationally. European leaders have abandoned the formal candidate for the next Eu Commission president and it will start from scratch with less than two weeks before the selfimposed deadline. We are back to square one. And all the front runners, they are out of the competition. They cannot be the Commission President and the fundamental continues. The only agreement and this is between the french government and a german government. Angela merkel continues to thank the parliament and an and a Emmanuel Macron thanks it should be a much more open competition and we are back to square one with two weeks ago. The deadline is now seen as july 2, but there will be a summit on june 30. Facebook unveiling its own cryptocurrency called libra come expected to debut in 2020. This is huge news, not just for the niche of cryptocurrencies which have a market value of about 500 billion, which is minimal compared to the foreignexchange market. This is facebook taking that technology, infrastructure and applying it to payments and potentially has very big consequences. Facebook has over 2 billion active customers, which is more than china and the u. S. Have citizens. If this can be plugged into an Online System like Facebook Messenger or whatsapp, that is a big deal, not just for , but the Global Economy is slow. As well. When facebook announced plans to launch a cryptocurrency, washington pushed back with calls for hearings. Meanwhile, facebooks chief operating officer at a festival in france, along with many leaders. In an exclusive conversation with bloomberg, she insisted facebook is not looking to avoid regulatory responsibilities or restrictions. What we are calling for regulation, not just saying we are dealing with it reluctantly. We are working with people around the world on meeting a gdpr like privacy. We not just want to be at the table, but notice and acknowledge. Companies like ours should not make as many decisions as we do. New rules need to be written for the internet and we want to help make that happen. You think that realistic rules are being talked about . It seems like the eu has the blueprint. The legislative process is never linear and so we will see. Heres what we know. We do think it is a blueprint for privacy legislation and we are also not waiting for legislation. In the united they there was a bill that is not passed and what it said is that in political elections with political ads, you should be able to see who is paying for the outcome how much they spent, who is behind your ad. That build enough past, but we built the tools. It was up and running for the e. U. Election. The gdpr controls, they passed in europe coming out around the world, but we made them around the world available. We are very much trying to usher in the next era. Until then, we are going to keep working and try to move ahead because we know people need protection and we want to be part of that. You can find much more of that exclusive interview with Sheryl Sandberg at bloomberg. Com and coming up on bloomberg best, more of the Weeks Company news, including slacks venture into the Venture Capital market. Boeings ceo struck a tone of optimism. We are making good, solid practice on breaking max back up. This is bloomberg. Were the slowskys. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. Emma welcome back to bloomberg best. I am emma chandra. Aviation executives came together this week for the paris air show, an annual opportunity for aircraft buyers and manufacturers to meet and make deals. The spotlight was on boeing, still reeling from the grounding of its 737 max, and airbus, hoping to take advantage of the setbacks and trade tensions to gain an edge on its u. S. Rival. Bloombergs guy johnson was in paris and spoke to ceos of both companies. Dennis we are making good, solid progress on bringing the max back up, working through the certification simulation flights this week. We hope to schedule the flight tests shortly and get the airplane back up in the air. All of this is being done through the lens of safety, and we will take whatever time is necessary to make sure it is safe. Guy 2019 . Dennis we expect it to happen before the end of the year. We are making good, steady progress. But i wont give you a specific timetable. Guy so 2020 . Dennis we expect it to happen this year. Guy are regulators going deeper then you anticipated . Is this a more thorough examination and you expected . Dennis its a very thorough examination, and we expect and encourage it. We are working with regulators around the world, china, brazil, canada two weeks ago the faa hosted a multiregulator network in dallas. We are working around the world, and its important that we do this in a very thorough guy you keep emphasizing thorough. Are the regulators getting further, and then you would have expected initially . Dennis i think we are going even deeper than normal, and i think thats good, we encourage that. We are looking at every dimension of the software update, not only the airplane itself, but also the training and education materials and the endtoend design and certification process. Its a very holistic effort. Guy we have a trade war. We dont know how it is going to be resolved yet. Do you get a sense that we will be seeing more orders coming for airbus aircraft out of china . Can you see any advantage . Guillaume we have a historical relationship with china, we have produced more than 400 planes, and this is a very strong commitment to china and the chinese market. We continue to serve the needs of china, and i think we are perceived as a strong and loyal partner of the chinese ally. Guy do you see yourself having an advantage . Is President Trump giving you an advantage in china . Guillaume we have a strong product advantage. The a320 is the best successful plane, it has been a big game changer. This is from feeling the market demand. Guy so politics play a part of it. Guillaume there is always politics in the background. You need to keep going, keeping your eye on the ball. Emma staying with the topic of global trade, blackstone ceo and chairman Stephen Schwarzman has dealt directly with the leaders who will meet next week at the g20 summit to try to jolt u. S. China negotiations out of their stall. He shed insight into what the two sides are looking for on surveillance. Stephen i think with the president is looking for and i am not his spokesman, but what hes looking for is the equivalent in terms of open markets and tariffs and trade, theres not a real desire to entrench the United States in some way. It should be a fair competition. All of these issues that are being used as tactics, if you will, are done to bring people to the table, so that you can get to equal. The best products win, the best price wins. If the u. S. Loses, so they lose. If the u. S. Wins, that is good, but i do not think there is another agenda. Tom right. Right. Stephen i dont think theres another agenda. It is really just an evolution as developed Market Countries like china get to parity tom ok. You are a great listener of the leadership of china. What are you hearing from the leadership of china, if they go to g20, if they deal with this president . Whats the nuance you can give us right now . Stephen each of the two countries, as you have seen, and we have all seen, seems to be bifurcating, going to their corners and scaring the Business Community and creating an adversarial situation. And that will continue unless it is changed by the two president s. So the meeting in japan is quite important, because they have the ability to reset expectations. If that could be put together in terms of a framework, then the trade negotiators can go back to work and perhaps get something done. Emma this week, the Federal Reserve appeared to scrap its policy of patience. The fomc didnt cut rates at its june meeting, but the committee set the stage for cuts in the coming months. On friday, fed vice chair Richard Clarida offered insight perspective on their path forward in an exclusive conversation with bloombergs tom keene. Richard we had very strong growth in the First Quarter north of 3 . We could see moderation and growth this year, but the economys baseline outlook is good. We have sustained growth, a strong they were market, and inflation near our objective. Tom then why are we speaking of cutting Interest Rates . Richard well, tom, because in this environment, especially in the last six to eight weeks, there has been elevated uncertainty about the economy is hitting crosscurrents. There has been a marking down in Global Growth and there is uncertainty about international trade. There is some evidence it is weighing on sentiment. We are monitoring that closely. We will act as appropriate to sustain expansion. Tom if we have one rate cut, two or three, what does that accomplish for the American Economy . Given your 2 statistic for growth. Richard first of all, let me remind your viewers that in our most recent meeting, we made no adjustment to policy, but we did say we were monitoring closely the crosscurrents that are facing the economy, and some of these uncertainties. And also, as chair powell indicated, i think there is broad agreement around the table that the case for providing more accommodation has increased. Clearly we are going to be looking and be very attuned for the incoming data flow. The important thing about our policy is we have the tools necessary to sustain expansion, a strong labor market and strong stable prices and as , appropriate we will deploy those tools. Tom how has this responded to the gossip and innuendo of a demotion . Richard you know, tom, we have known each other for 20 years, we are just doing our job. It helps that we have a clear mandate and an excellent staff and 12 reserve Bank President s from around the country. We stood around that big table across the hall. We have an objective, we have the tools, and we have a very collegial committee, and we reach, we think, very good decisions. Emma you are watching bloomberg best. Im emma chandra. Time now to resume our round up of the weeks top business stories, with a focus on company news. Slack went public this week, but not with an ipo. The Workplace Communication Software maker became the latest Silicon Valley firm to taste test the wall street waters with a direct listing on the new york stock exchange. An investor in slack spoke to the bloomberg Venture Capital arm. Emily another unicorn hits the public market. Slack soaring in its trading debut. The Company Shares opened at 38. 50, 40 above the reference price. It came back down, closing the day with a market cap at 19. 5 billion, more than double its last valuation on the private market. Can slack fend off the big guys . Steven well, this might be more of a question can microsoft fend off slack . The way the Industry Leaders have talked about, slack is viewed as the leader by a bunch of actives, millions users and so on. But i think they are in a really great position. Emily what problem are you really solving, stewart, by a direct listing versus traditional ipo . Stewart the first one is no need to raise primary capital we came into the process with 100 million on the Balance Sheet and the solution we did get a little more freedom in how we tell the story so in addition to a roadshow, but instead of only having a roadshow and private rooms with investors we are able to do a day and make it available to everyone, and that puts us in a better position. Matt Deutsche Bank is reportedly considering setting up a 50 billion euro bad bank unit. The plan is seen as part of an overhaul of their Trading Operations as ceo christian sewing shifts germanys biggest lender away from Investment Banking. Bfp also reports that their equity in rates treating businesses outside of europe may be severely shrunk or even closed. Steven if you want to cut a certain area of the bank, its a natural decision to take assets you dont want anymore because that part of the business you are closing or shrinking, you put them into a bad bank, which changes the way you operate with those assets. Then people have an incentive to work within it so they are still profitable. It also changes the way you work with the stuff in there. Nicholas it was clear for a couple weeks that there would be cuts coming, and the equities, in general, are a candidate for that. The question is to what degree do european clients still want to maintain access to the u. S. Capital markets. They have to maintain at least some way of offering their european clients access to u. S. Equities. Anna Deutsche Bank is considering a senior job shakeup. This comes as the ceo is purging executives under his predecessor. He is considering replacing his finance chief and Investment Banking head. This must make uncomfortable reading for Senior Executives over at Deutsche Bank, but will it come as a surprise . Steven it does come as a bit of a surprise. There has been a lot of speculation about the head he , was on his way out last year and then instead got off on a promotion. He has stayed on since. The cfo speculation is really new and is a big surprise and , definitely they are considering a big shakeup, and we will have to see if it turns up as big as hes considering. Guy Deutsche Bank reportedly facing criminal investigation over Money Laundering allegations. According to the new york times, they refused to comply with laws meant to stop Money Laundering. Some of the transactions been reviewed are linked to president Donald Trumps soninlaw, jared kushner. What is new here . Sree this is one of the strands trends of several overlapping investigations against Deutsche Bank, and this one really examines what Deutsche Bank did in terms of complying with whats known as suspicious activity reports, or sars. At issue here, did Deutsche Bank comply with regulations that required it to flag these transactions or did it not . Rishaad the fallout from remarks by the ubs chief economist has widened. One of chinas biggest date out biggest states of Infrastructure Companies conference paul donovans use of chinese pigs when discussing the outbreak of swine fever. Paul i made a mistake. I used insensitive cultural language. John the big worry is that China Railway corp. , a huge stateowned conglomerate, very important in terms of Infrastructure Construction does this signal to other chinese issuers i think this would be the danger. Chinese companies are selling lots of bonds and stock, and theres an opportunity to make lots of money on those deals. Wealth management has about 20 trillion usd worth of private wealth that needs to be managed, and if this derails ubs strategy of getting into that market, it could be a big deal. Nejra nomura planning to buy back up to 8 of its shares for ¥150 billion. This comes as pressure has been building on the ceo. Gareth nomura announced this afternoon there was that large buyback which is pretty significant, and the second the instituteis which is a think tank, a , Technology Consultant firm had a 37 stake and they will sell 160 billion yes stake at ¥1750 per share. It will drop to just over 23 . It will remain an equity affiliate of nomura holdings. Tom President Trumps blacklisting of huawei is starting to hammer one of the companys most important is important businesses. We are told huawei is preparing for a 40 to 60 drop in International Smartphone shipments. Those are huge numbers. Selina they are huge numbers. And this comes out to about 40 to 60 million smartphone units predicting a drop just this year. And thats a big portion of the International Sales which comprises almost half of their total smartphone sale units last year, which is about 200 million. And so after this ban from trump, the big issue is they cant get access to critical components, hardware, and software. On the hardware front, they are ok because they are using their. Wn huawei chips it is on the soft Side Software side where they are getting hammered, because it means new consumers cant get access to the android update greater we have heard from internal forces that executives are even considering pulling sales of this new phone if they dont perform well in markets. Taylor there has been a lot of talk about the effects of the u. S. China trade dispute on apples business, including talks from apple itself. The nikkei reports this morning that the company is asking suppliers to take a look at shifting anywhere from 15 30 of their Production Capacity out of china and into southeast asia. Is this a good strategy for apple to hedge their bets against a very unknown future . John absolutely. My sense is, taylor, that they have been doing this for a while. These are probably not new discussions. Foxconn, as it is known, who they have been talking to about shifting to other regions, you cant just lift out that final assembly and test to get the moniker of made in the philippines or malaysia. Youve also got to move a lot of the content out of china as well and they are talking to suppliers in china and saying, hey, if we move final assembly and tests to malaysia or the philippines or mexico can you do the same, so we can dodge these potential tariffs in the u. S. . Taylor pfizer will buy array biofarma technology for nearly 11 billion, gaining promising new medicines for cancer. The new drugs could limit the use for punishing chemotherapy. I have to ask, why . When the big pharma giant goes in for a biotech company, its all about the pipeline. Cynthia thats quite right. It does have some drugs on the market already and whats interesting about what array is doing in cancer they are developing what are known as targeted therapies. Traditionally we thought of cancer, where the tumor shows up in the body, but increasingly scientists are discovering commonalities that might show up. They target melanoma but also have promising results on colon cancer. They are targeting a mutation that as they study it could have broader applicability to treat more patients. Vonnie auction house sothebys is having its best days since going public back in 1988 on news they are to return to private ownership. 57 . Emma yes, 57 up today, almost wiping up the 40 drop over the past year, now down around 5 or 6 . It is selling itself to Patrick Drahi for 2. 7 billion. 57 per share. Some of the biggest Share Holders owned about 50 of the stock, one activist investor netted a profit of about 85 Million Pounds on this. The company has been public for about 31 years and has gained more than 500 in that time. There is a great function that i just discovered, it is mipr, and its a global overview of implied policy rates within a year. All you need to know is that red means lower Interest Rates. Emma there are about 30,000 functions on the bloomberg and we always enjoy showing you our favorites on Bloomberg Television. Maybe they will become your favorites. Heres another function you will find useful. Quic it will lead you to our quick takes, where you can get important context and fast insight into timely topics. Heres a quick take from this week. Smartphones have altered our daily life so much that many of us do not remember life before them. There are an estimated 3 billion smartphone users worldwide. Over the past decade, we have seen smartphones get larger, faster, and loaded with more features, like fingerprint technology, improved cameras, and digital assistants. But the pace of innovation is slowing, and smartphone sales are declining. Manufacturers are scrambling to find new ways to conjure up excitement. This is your bloomberg quick take on the future of smartphones. In 2007, apples iphone ushered in the modern era of the smartphone. At the time, Text Messages and slow data were almost all Wireless Networks can handle. Then carriers moved to 4g. Downloads got faster, phones got more sophisticated, and growth exploded, surging 40 in 2013. But 2017 saw the first contraction, and the trend continued into 2018. Devices arent making a big innovative leaps like they used to. Phones are also getting more durable, and some of the biggest markets of smartphones are reaching saturation. Most chinese have a smartphone now. What would be the next growth driver . Some of the worlds Biggest Smartphone makers seem to think it will be the foldable screen, which doubles the size of the display without making the phone gigantic. Companies like samsung, huawai, and xiaomi are betting on it, but the technology isnt quite there. In april, samsung had to delay the launch of its foldable phone after early users of the 2000 galaxy fold reported that it failed after only a few days of use. The screen stopped working after people peeled off the special film that looks just like a screen protector. It was a pretty devastating blow so early in the process in the release of foldable phones. What was unique about the samsung fold was that it folded inward, like a book, whereas huawei had one that without that folded out words so the , screen is on the outside. What that means is not so much a crease, but while companies are experimenting with how they will design these devices, they might start going more for the huawei option. Or maybe the game changer will be 5g. The rollout could be slowed by geopolitics and security concerns. 5g networks promised to be so fast that it would only take a few seconds to download a featurelength movie. Samsung has released a 5g phone in south korea, and huawei has one in the works as well. What it will do is support all of the other technologies that are emerging. For Driverless Cars to work, the world is counting on the capacity for Wireless Networks to carry that data. For the internet of things to work, which lets you connect your fridge to the internet or Remote Control the lights in your house when youre not there, that requires a lot of bandwidth and a lot of data. But experience has shown it usually takes more than one improvement to get people to shell out for an upgrade. Even when we went from 2g to 3g to 4g, it was a combination of things. The ability to Download Data made all these extra uses by the consumer so much more possible, but not everyone used their phone the same way. What you need to see is a capacity for people to start using their phones in new and different ways to justify people spending more money. Emma that was just one of the many quick takes you can find on the bloomberg. You can also find them at bloomberg. Com, along with all the latest Business News and analysis 24 hours a day. That will be all from bloomberg best this week. Thanks for watching. I am emma chandra. This is bloomberg. David was it the hardest job you ever had . Gen. Kelly it was very hard but very meaningful. Not very enjoyable. David your family was a bluecollar family. Gen. Kelly very bluecollar. My dad was a world war ii vet. Greatest man i ever knew. David you were in combat. Did you expect that you would survive . Gen. Kelly its a lot of shooting and bombs and whatnot. We are marines. David did you ever say to the president that maybe the tweets are too much . Gen. K