I think we having criticized for doing things too quickly in our being criticized for dealings to slowly. Maybe im right in the middle of the sweet spot, but the president hit the timing perfectly and i will tell you i. One of the block and tackle things was get the money right. He has picked a cabinet full of people that no Business Operations and business functions youre listening to the white House Homeland Security adviser while we await the question portion of the daily press briefing. How to bring and frank gordon from washington. Kevin is live as well from capitol hill. Greg, the president signed an executive order earlier this afternoon focusing on protecting federal agencies to develop a plan for cybersecurity. Office throughout this executive order is about . Of the most unprotected pieces of u. S. Government infrastructure after 9 11 has an the cyber part of it. It is shocking, shocking to a lot of americans how antiquated a lot of the government equipment is around town. The fbi computers in particular. Saying wenald trump have put up gates outside pennsylvania avenue and physical structures, but now its time to take care of the cyber. Scarlet before we move on to jim comey, was originally in rolling out this order was there a delay enrolling at this order . Craig im not sure exactly what the delay was. I think if you fellas at the back of the line in this vitamin one of them. Scarlet kevin scarlet we have Sarah Sanders starting now. Sarah sanders a few announcements and has promised it will get to all of your many pressing questions. I would like to invest the president also just signed another executive order establishing a bipartisan president ial Advisory Committee on election integrity. This will be cheered by Vice President mike pence. The president is committed to that the rope of registration and voting issues and federal elections. That is exactly what this commission is tasked with doing. It will be made up of around a dozen members, including current and former secretaries of state, the kansas secretary of state serving as vice chair. It will also include individuals with knowledge and experience in elections, collection management, Election Fraud detection and voter integrity efforts. Five additional members that have been announced as of today, connie lawson, secretary of state of indiana, bill gardner, secretary of state or new hampshire, matthew dunlap, secretary of state of maine, kim blackwell, former secretary of state of ohio, and critical more rick desperately mccormick and christie mccormick. And provide a president with a report that identifies system vulnerabilities that will lead to improper registration and voting. We expect the report will be complete by 2018. The experts and officials on the commission will follow the facts for they lead, meetings and hearings will be open to the public for comment and input, and we will share updates as we have them. Secretary news, perdue is in cincinnati to enough the agriculture departments plan for reorganizing to provide Better Service to the American People as the president directed in his march 13 executive order. With the barges of the ohio river behind him, many with containing products that are beginning a journey that will ultimately take them to markets overseas, secretary perdue will announce a new mission area for trade and foreign agriculture affairs, recognizing the growing importance of International Trade to the Agriculture Sector of the economy. United states immigration and Customs Enforcement will hold a press conference at 2 15 today. Not too far away. Announcing the result of a highly successful recent gang search operation. The president made enforcement of our nations Immigration Law top priority and todays announcement will underscore not only that commitment but his focus on targeting transnational gangs and prioritizing the removal of criminal aliens who pose a threat to public safety. Mattisoday, secretary met with the turkish prime minister. The secretary reiterated the United States commitment to protecting our nato ally in both leaders affirmed their support for peace and stability in iraq and syria. One other thing i wanted to point out, last night obamacare severed another serious blow. It is pulling out of the nebraska and delaware theirplaces, which ends participation in exchanges completely. They have sustained hundreds of millions of dollars of the last several years and is projected to lose more than 200 million in 2017. The company attributes those losses the structural issues within the exchanges, the atlantic coop failures and carrier exits and subsequent risk pool deterioration. Adds to theews mountain of evidence that failed theas American People and is no time to waste in repealing and replacing this law before it brings our entire Health Care System down with it. I know we have sent out a timeline regarding the former the firing of former director because of her misperceptions about the meeting between the president and the attorney general and the Deputy Attorney general on monday. I will read it to you all again just to make sure were all on the same page, because of what the sequence of event to be perfectly clear to everyone. The president over the last several months lost confidence in director comey. After watching director comeys testimony last wednesday, the president was strongly inclined to remove him. On monday the president met with the attorney general and the Deputy Attorney general and they discussed reasons for removing the director. The next day, tuesday, may 9, Deputy Attorney general sent his written recommendation to the attorney general and the attorney general said his recommendation to the president. Hopefully that clears up some of those things. With that, i will take your questions. Why did the president think james comey was a showboat and grandstand or . Sarah sanders probably based on the numerous appearances he made and i think its probably pretty evident in his behavior over the last year or so with the back and forth. I think it speaks clearly. Those words not leave a lot of room for interpretation. I think its pretty clear what he meant. Reporter when were these three conversations the president had with james comey about if he was under investigation . Was that since january 20 . Sarah sanders that is my understanding but i dont have exact age on the phone call to waste. Phone call took place. Reporter regarding the interview the president just did, isnt it inappropriate for the president to ask the fbi director directly these under investigation . Sarah sanders i dont believe it is. He said they happen at a dinner where the fbi director was asking to stay on his fbi director. Is that a conflict of interest . The fbi director sankey was to keep his job and the president is asking whether or not he is under investigation . Sarah sanders i dont see that as a conflict of interest and neither do the legal scholars and others that have been commenting on it for the last hour. No, i dont see that as an issue. Reporter i ask you directly if the president already decided to fire james comey when he met with the Deputy Attorney general. You said no. Also the Vice President of said directly to the president acted to take the recommendation of the Deputy Attorney general to remove the fbi director. Sean spicer said directly it was all him, meaning the Deputy Attorney general. Now we learn from the president directly he already decided the fire james comey. Why were so many people giving answers that just were not correct . For you in a dark . Was the Vice President misled again . Sarah sanders i know you would love to report we were misled and we want to create hold on. I let you finish and read up every single one of those ailments. Statements. Unless you want to trade places, i think it might turn out. I have not had the conversation directly with the president to say. Several conversations with him but i did not asked directly if he made the decision. I went off the information i had money answer your question. I have since had a conversation with him right before i walked on today. He laid out clearly. He already made the decision. He had been thinking about it for months, which i did say yesterday and many times since. Wednesday i think was the final straw that pushed him. The recommendation i guess he got from the Deputy Attorney general further solidified his decision. Again, it reaffirmed he made the right one. Reporter was the Vice President in the dark . Sarah sanders nobody was in the dark, jonathan. You want to create a false narrative. You want to talk about contradicting agents and people that were maybe in the dark, how about the democrats . You want to talk about them, here is what democrats said not long ago about comey. Gary reed said comey should be investigated by the senate. Chuck schumer said i dont have confidence in him any longer. Senator Bernie Sanders said it would not be a bad thing for the American People if comey resigned. Antipolice he said he was nancy pelosi said he was not in the right job. Debbie Wasserman Schultz said she thought comey was no longer able to serve in a neutral and credible way. Just yesterday representative acting waters that Hillary Clinton would have fired comey. You want to talk about people in the dark . Our story is consistent. The president is the only person that can fire the director of the fbi. He serves at the pleasure of the president. The president made the decision. It was the right decision. The people in the dark today are the democrats. You want to come out, they want to talk about all these they love comey and how great he was. The facts dont lie. The statements are all right there. I think its extremely clear that, and frankly kind of sad. In washington we finally have something i think we should all been able to agree on and that was the director comey should not have been at the fbi. The democrats want to play partisan games and i think that the most glaring thing being left out of all your process stories. John roberts. Reporter he said from the podium yesterday the director lost confidence in the rankandfile of the fbi. Directlyl hill, mccabe unpredicted that. What lead you in the white house to believe he had lost the confidence of the rankandfile of the fbi when the acting director said exactly the opposite . Sarah sanders i can speak to my own personal experience. I spoke to countless members of the of the at the yard that are grateful and painful for the president of the decision president s decision. We have to agree to disagree. Im sure there are some people that are disappointed but i heard from a large number of individuals. That is just myself and i dont even know that many evil in the fbi. People in the fbi. Really the democrats in james comey after the october 20 announcement he was reopening the investigation as far as a clinton emails. Their point is timing is different. This was in the middle of an investigation. Do they have a point . Sarah sanders not at all. I think mr. Mccabe made a point better than i could today when he said there has been no impediment to the investigation. As i said before, any investigation taking place on monday is taking place today. I think that is again another sad story by the democrats they are trying to peddle. Comment fromther the hearing today. The acting Deputy Attorney general said that im sorry, mccabe said he considers the investigation into russian meddling in the election to be highly significant. He said the investigation was a hoax and he questioned recently whether it mightve been china. Has the president consider this to be highly significant . Sarah sanders i think he would love nothing more for this investigation to continue to its completion. Thatnk one of the reasons the hoax component is the collusion component, the false narrative you guys have been pushing for the better part of a year. I think that is the piece he is repeatedly talking about being a hoax. Reporter in terms of threats to National Security, he takes that security seriously. Sarah sanders of course he takes National Security seriously. Is toints he does not misunderstand this president completely. From the very moment he stepped onto the Campaign Stage to the day he took the oath of office to become president , he has talked about National Security. He made at one of the biggest priorities of the administration. You just saw tom talking about cybersecurity on all fronts, whether it is securing the border, protecting people abroad. The president has been focused on that. I have not had the chance to ask him about that. I think we are waiting on the final conclusion of that investigation. I think any time we have somebody interfering with our election, that would be considered a problem. I think the president would certainly recognize that. Vice president pence yesterday said the firing was based on the recommendation of the attorney general and Deputy Attorney general. We know that is not true. Was the Vice President misled again or did he mislead the American People . Sarah sanders i believe i have answered that question. Reporter i dont think i caught it. The Vice President said yesterday the president supports the decision of the Deputy Attorney general and attorney general. Sarah sanders he certainly accepted the that doesnt mean he would not still except his recommendation. They are on the same page. Why we arguing about the semantics of whether or not he accepted it . They agreed. Im not sure how he did not accept the Deputy Attorney generals recommendation monday agreed with one another. Reporter let me switch topics. If the president knew he was going to do this, why ask for the memos to begin with . Why not fire comey . Why have the memos put out the next when he did it because of the memos, but he was going to do another way . Im confused we even got the memos. Sarah sanders i think he wanted to get the feedback and the Deputy Attorney general, the director of the fbi reports to him. And further solidifies the decision he made. The only person that can fire comey was the president. He made that decision. It was clearly the right one as evidenced by all the comments, both by house and senate democrats, republicans, and many people within the fbi. I think instead of getting so lost in the process that this happened at 12 01 or 12 02, he fired him because he was not fit to do the job. It is that simple. Did should not be a collocated process. The president new director comey was not up to the task. He decided he was not the right person for the job. He wanted somebody that can bring credibility back to the fbi. That had been lost over the last several months. The president made the decision. He made it, moved forward, it was the right one. I dont think the backandforth makes it much difference. Reporter did you call on me . Thank you. Going back to what you said. Some democrats said comey should have been fired, but why now . Even though the Deputy Attorney general recommended it, the question is why now . Sarah sanders i think i have answered this. I hate to again just keep repeating myself, but we are getting lost on the same questions. He decided he was not fit. There was never going to be a good time to fire someone. Whether its on a tuesday or friday. He decided he wanted to get director comey a chance. He did, and he felt like he was not up to the task. Reporter monday, sean spicer at the podium said after the he saidy of yates, there was no collusion. He also said they need to be a timeline for the Russian Investigation and said yesterday it should continue. Which one is it . Should it end . Yesterday he said it should continue. Sarah sanders we wanted to come to its completion. We want to continue until it is finished, which we would like to happen soon so we can focus on the things we think most americans frankly care a lot more about. I think the people in this room are obsessed with this story a lot more than the people that we talked to and we hear from every day. We would like to be focused on the problems they have. Thats the point. We would love this to be completed but we want to be completed with integrity. Thats one of the reasons frankly i think the decision the president made was the right one, because i think it at credibility and integrity back to the fbi for a lot of people were questioning it. Reporter we know the president fired the fbi director with six years left on a 10 year contract. How important is the next fbi director not be a show boat or a grandstander . How important is that this person show loyalty to the president . Sarah sanders i think the main factor they are looking for is there loyal to the justice system, loyal to the American People. This president is looking for somebody who can come in independent and has the support across the board, whether with republicans, democrats, members of the fbi and certainly the American People. It was not just one thing that caused the president to make the decision. A large part of why he made the decision was he did not feel like director comey was up to the job. It was just an erosion of confidence he had in his ability to carry out the tasks that needed to be done. He is looking for somebody to do that. Jordan . Reporter i want to follow up on what john asked about the rankandfile fbi. Do you think the acting director has a better and on the rankandfile and you do . Sarah sanders i will not get into the backandforth and who is a better handle. I heard from multiple individuals that are very happy about the president s decision. I know it was the right one. I believe most of the people we talked to also believe it was the right decision to make. Reporter about the meeting yesterday between President Trump in the Russian Foreign minister, could you walk us through how a photographer from paper orrussian state the russian government got that meeting and got those photographs out . Sarah sanders the same way they would, whoever the president was meeting with when it comes to a foreign minister or a head of state. Both individuals have official photographers in the room. We had an official photographer in the room, as did them. Reporter the independent media in the u. S. Is typically invited into those meetings. Why did that not happen . Sarah sanders it varies. Not always, particularly sometimes the protocol when its not the head of state. And prior to the meeting that would not always take place. Again, proper protocol was followed in the procedure. Reporter has the president been questioned by the fbi with regard to the investigation into russian interference in the election . Sarah sanders not that i am aware of. I have not had a chance to ask him a question. Im not going to guess of what he reporter there is a general protocol that discourages conversation with the president about the fbi director on anything that might involve the president. Thats the general aspect of the protocol usually required to ensure there is no confusion about political interference or any kind, or even the impression or appearance of political interference by the fbi. Scarlet you are listening to Sarah Huckabee sanders at the white house. If you want to continue listening to the proceedings, check it out on tv. Here andme analysis some summary of whats been discussed. A lot of questions on the process, that is how she put it on the firing and james comey. What do we learn from this press briefing . Kevin nothing new. To try to make the argument the press is playing a game of semantics for metro successful she wasnt making the case. The bottom line is this is the white house this is President Trump provided that made his decision based on the advice of the attorney general and the Deputy Attorney general. As a result of that, he reached his decision. We heard from the acting fbi director and just heard from President Trump himself in an interview saying that was not the case. He decided he was going to fire erector comey regardless of the advice director comey regardless of the advice. The second point of contention is the adVice President trump god suggested that g got suggested director comey lost the confidence of rankandfile fbi directors. The acting director testified and said that is not the case. The fbi had supported director comey regardless of what was written in the attorney generals memo to President Trump. Regardless of all these semantics and the rhetoric, why this matters is how much Political CapitalPresident Trump could lose, not amongst democrats but his own his own party. Among his own party. Some more moderate senators began to continue pressing the administration, and airing frustration with the white house, why would they be likely to work with him on health care and tax or form . Thats why this matters. Asked the acting Deputy Director of the fbi the bottom line. Did the firing ultimately matter to this investigation . The acting Deputy Director said no, its not going to impede the investigation. That matter surely. Kevin there has been no effort to npr investigation to date. I think that is something republicans will rally behind, arguing director comey was the point person, the goto person to lead the investigation. On the flipside of that, there has been acting directors continue on with that investigation and it has not impacted that. I would suggest and i think we heard this from Sarah Sanders, this white house will pounce on it. Democrats will pounce on these discrepancies. Scarlet what evidence do you see a more republicans questioning what the president is thinking, the timing of this decision to fire james comey . Have there been new names added to the list . Kevin so far no call for a special prosecutor from house republicans. Democrats are united for calling a special prosecutor. Watch next week when former director comey will meet privately with the Intelligence Committee. Ahead, we have the commodities close. Toc numbers will agree expand production later this month. From new york, this is bloomberg. From bloomberg World Headquarters in midtown manhattan, this is bloomberg markets. On julia chet lay Commodity Markets are closing in new york i am julia chet lay. Commodity markets are closing in new york. Gold is higher for a second day too, following the longest losing streak since october, but the haven asset remains near a twomonth low. Oil continued to rise after jumping more than 3 yesterday. All opecalgeria say members support an extension of opec cuts. Opec raised its estimate for supply growth. Chart. Ake a look at a it shows how world supplies of corn are forecast to shrink. That is according to the u. S. Department of agriculture. The bars represent world corn stockpiles. Too soon to turn bullish on corn. Harvests are still very close to records, something that has depressed records in recent years. On where more insight oil prices are headed as opec members meet this month to discuss production cuts. Joining us is mike mcglone. Thanks for joining us. We heard that opec is considering extending those production cuts, but it feels like those have been that has been discussed for a couple of days now. Mike the lower prices brought that out. I think rude oil has turned into a good example of a market that is responding to prices. Prices go down. Opec jawbones. Prices go up, and we hear about supply. Its a good example. This week is telling us that crude oil might be a meh market, as my kids say. What about shale here, as well . Mike if prices go up, more production, more supply. That is the ongoing dichotomy in crude oil. It looks like it is locked in an established range for a long time, and it might not matter until it breaks out of that range. Opec and nonopec locks on the lodown side. Scarlet, i know you are showing a chart here. Scarlet it really illustrates that range you were talking about. The bottom of that range was earlier this excuse me earlier in the First Quarter of 2016. Though we have come off those lows, we are still pretty much capped at about 60. Mike 40 to 60. If you narrow it down a little bit, 45 last week, 55 earlier in the year what happened was, last year, we established a low, and this year, we are establishing the range. We are done. I think we are stuck in there. How closely should we be watching the Inventory Data . We keep saying, wait for the Inventory Data, but it looks incredibly volatile to me. I cant see how that is helping you trade it within the range. At that as a lot of trees and noise in the forest, and i try to focus on the big picture for us. How long is it going to take to break out . You can kind of put crude oil to the wayside. Its only going to matter if it can sustain below 40 or above 53. Very quickly, china demand, really strong. Mike strong, that overall, that is what has been happening. Globally keepes having to be revised down. That is a trend that is not favorable to prices. Scarlet we keep hearing about how emerging markets are doing better. If its not china, wont to the other emerging markets we could look at india and the other countries will we not see demand pick up enough there to keep prices buoyant . Mike yes, we are supposed to. I remember hearing that 10 years ago, peak oil. [laughter] the back and look at forest, and the forest is, yes, it is supposed to be happening, but demand is actually declining. Bottom line here, in the range [laughter] in the range. [laughter] scarlet our thanks to mike mcglone. Check on the a bloomberg first word headlines with mark crumpton. Nbc in an interview with news, President Trump called fired fbi director james comey a show boat and grandstand are. Virginiamark warner of said he was offended by the president s comments. This is a continuing pattern of disrespecting the men and women who serve in our intelligence community. I think the president would be better served in supporting the i. C. Rather than continuing to question and repeatedly calling into question the leaders integ rity. Marc senator warner said the firing will in no way hamper the committees findings in russias with the 2016 election. Mike rogers is a former chairman of the House Intelligence Committee who retired from congress in 2017 after seven terms to pursue a career in talk radio. He advised the president ial Transition Team on National Security issues but was asked to leave. The European Unions chief brexit negotiator is reassuring ireland the bloc will fight to ensure that there is no return to a hard border with Northern Ireland after the u. K. Leaves the eu. However, Michelle Mark gave suggested that keeping the border free of controls could be complicated and, noting that customs controls are part of eu border management. Ireland is the only eu country that shares a land border with u. K. U cap with the v. A. Secretary David Scholten says reducing the number of homeless vets nationwide from roughly 40,000 to 10 to 15,000 is, in his words, an achievable goal for the trump administration. Homelessness among vets has been effectively ended in virginia, connecticut, and delaware. Global news 24 hours a day powered by more than 26 hundred journalists and analysts in over 120 countries. I am mark crumpton. The new issue of Bloomberg Businessweek looks at a murder in kansas and what it tells us about race, immigration, the Technology Industry, and americas future. From new york, this is bloomberg. This is bloomberg markets. On julia chat lay. Scarlet i am scarlet fu. Lets take a look at the Consumer Discretionary and retail sector. A lot of red. We have been talking a lot about retail, broadly the xly. Today. F by 0. 5 that is one of the worst performing groups on the s p 500 today, really dragging it down. The specifically, the xrt, spider retail etf, down by more than 2 . This all has to do with retail store earnings, and it really, macys is the biggest drag. Look at that loss, 15. 5 . That loss has been accelerating after macys says samestore sales fell more than anticipated. This is an issue for mallbased retailers like macys. Nordstroms reports after the close. It is down 6. 5 . Kohls is reporting numbers that investors are saying were not as poor. Those shares are down 6 , and l brands is also trading lower. Many of the suppliers that sell their merchandise through Department Stores are down sharply. Not all of these are in the xly, but we are seeing some big declines. Alph lauren, michael cores, a michael kohrs, as well. This looks at the yearoveryear percentage change in retail people, i should say, so moving in and out of the stores, and youve got the zero line right about here. The traffic has been falling since early 2015. On the top, you have online sales. Obviously, we have seen the growth as retail traffic has been diminishing. One more chart has to do with the stocks we are watching. Youve got Department Stores in the blue color. In yellow, specialty retailers. Apparel manufacturers had been doing ok. Amazon is the big juggernaut. That is an purple, which illustrates what has been going on, at least in part within retail. I know you are going to be talking about retail much more in just a few moments. Scarlet thank you so much, julie. Now to the cover story of Bloomberg Businessweek. It looks at the case of a shocking murder in kansas and what that says about race, immigration, and the Technology Industry in america. Joining us is the editor of bloomberg Bloomberg Businessweek megan murphy. So many angles in this story. Set the scene for us. Megan this is a story that looks at a shocking shooting at the time where a man walked into a bar in kansas and opened fire on two indianborn engineers working for the company garmin. One of those engineers died. Another was seriously wounded. The rationale is unclear. What we want to do is go to this town, this town, which is one of the fastestgrowing in job growth, an Unemployment Rate of 3. 2 , a Median Income of ,80,000, and chart its success how that community has grown up, how it has become this cultural melting pot in a place where a lot of people would not be familiar with. To we wanted to show how that may be under threat by some of the nativist rhetoric we are seeing. It shows how some of these fragile committees are. Scarlet you mentioned garmin. Its like its its own character. Who founded the company, and how did its ability to adapt to a new environment symbolize what the community is like . Megan garmin essentially grew up in l. A. 3000 people are based there. Its not just garmin. Its sprint. Centerser technology that have used the h1b visa, which has attracted workers all over, highly skilled tech workers and how that has proved a tremendous boon to towns like this. They are competing for global talent, and it tells the story about how garman and other companies are cleaning up the global talent. Kansasson this part of has been successful is that it is cheaper to live. Its a peaceful way of life, and how that way of life was interrupted by this night. One of the things it is the population growth, 41 up since 1995. What portion of those people and the is the influx into that rege naturalborn americans . Talking to the people there in light of what happened back in february, to what extent do they has beenolitics changing this shift to more nationalist politics since the election . I tell people about this story, a lot of people have read a lot of stories about trumps america. This is a picture of a americas america. This is what it was and what it always has been. 8 indianamerican, double what is normal for that area of the country. Next Significant Group of immigrants is mexicanamericans. There is a sikh temple, hindu temple. People feel fearful about what the change is going to be. Can we move on from this incident . Megan we see incredible resilience. People believe that america has given them opportunities and opportunities to better their families they dont get anywhere else. It is such a fantastic story. We implore you to read it. Great to talk to about it, megan murphy, editor of Bloomberg Businessweek. The new issue is available at newsstands, online, and on mobile devices. Scarlet lets get you to the Bloomberg Business flash, a look at some of the biggest business stories. Wells fargo is doubling costcutting from 2 billion to 4 billion. The deadline was extended until the end of 2019. Ceo tim sloan has pushed to rebuild shareholder and customer trust. Last years fraudulent investigation cost of the firm 445 million in fines. Bombarded eight chairm chairman iss a member of the founding family. Suffered auber setback in its fight to be regulated as a traditional taxi service. And adviser to the European Union has rejected the argument that uber is nothing more than an act. The opinion is nonbinding, but it gives an indication that uber might not be able to shake off National Research ands. That is you national restrictions. Macys prices, plunging for the most in over five years. The department store, falling far more than expected. We will look at a drag on the sector. This is bloomberg. This is bloomberg markets. Scarlet i am scarlet fu. It appears macys ceo has a tougher job ahead of him than wall street imagined. ,osting yet another sales slump slumping 4. 6 . On macys miss is dragging the entire sector. Scherzer jcpenney, kohls, and nordstrom, all deep in the red. Were joined by our correspondent frot. Thanks for joining us. I will start with you. I have been looking through the numbers here. It is tough to find a silver lining. Its not the core business. It is real estate. In general, they came out with even worse numbers than they were previously expecting. People have been bringing down expectations of how macys was going to do. They came in even worse. The eps they came out with was significantly worse than expected, but if you go back to a year ago, the downgrade weve seen, its quite significant. This is getting worse, not better. What can the ceo do . For one thing, i thought the ceo should come out with this grand proclamation, a little more energy. Macys comes out and says, we are trying on these new things. We are trying to boost the stores. We are trying to stabilize the business. People dont want to hear that. Scarlet we have been hearing about costcutting for quarters and years now. I feele years ago, everyone was praising macys for its on the channel strategy where people could buy online, pick it up in the store. Also, the inventory. What happened to that Success Story . All of that is still true. The problem is, that is no longer a differentiator for the company. What they have to do is something different. Their biggest challenge is traffic, and the biggest challenge to drive traffic is the fact that they are on the mall. Kohls, which is 90 off the mall, macys is almost entirely on the mall, and people are not going to the mall. Scarlet if we look at a chart of macys, you can see how the stock prices really struggled over time. You have also looked at how other retailers are faring. H m and zara, we know they are expanding in the u. S. Are they making the same mistake as u. S. Retailers . I think it is certainly a problem with real estate. You are not going to want to expand as quickly as people did in the past, and you have to create a business strategy, which is not only based on adding new stores every single year. That is going to be the key for them. What you are seeing with h m or zara, they are almost becoming the new department store. They are adding home. They are adding beauty. They are adding all of these things. They are getting to consumers faster without having to wait. These things are really displacing stores like macys and kohls. The ceo of macys says the u. S. Is overretailed compared to other regions, but you were talking about the fact that h m and zara are making a push. Is it adding more damage, or is their capacity for everybody . You have to look at perhaps someone like nordstrom, 20 of the revenue coming from online, and that differentiation matters. You dont need as many stores as you once did. Goingg as people are online, especially to buy certain basics, you are seeing people pullback, but macys says they are closing 100 stores. What they dont mention in the same breath is they are adding stores, these offprice stores. Theyre adding blue mercury, their beauty store. Is macys closing as many stores as they need to win their opening up these new stores . Scarlet is that a strategy that is going to backfire on macys . They relate to the game on that one. Nordstroms was way ahead of the curve. Marshals and tj maxx have got this down to a science. It is something that they have to be very careful. They are not expanding as a standalone store. Will that pull away share from their fullprice shoppers as they get exposed to backstage . I want to talk to about Abercrombie Fitch. You said it wouldnt be such a bad buy if you were looking at it. What are your thoughts on this one . Thats an example of a retailer that hasnt been relevant since the 1990s, but surprisingly, if you look at the price of where they are at, that stock has come down so much to the point where it might be an attractive asset for someone, mainly because of their hollister stores. Teenagers still like hollister. That is growing. The secret fashion a thing right now is people are still shopping at hollister. They are secretly buying jeans from american eagle, and this is what teenagers are doing. How to could figure out buy hollister and do something more creative with the abercrombie assets. Scarlet Abercrombie Fitch the brand itself is out. Hollister is fashionable. Doesnt it come down to the fact that within this sector, apparel, footwear, accessories, all of them are subject to fads and whims . That is actually absolutely true. Its all about fashion. Its about speed. Its about being current with the customer, and that is a challenge for most retailers. The retailers who can do it, they are doing well, and they will continue to do well for as long as they can be receptive to the consumer and provide them what they want when they want it. Scarlet i think we are very fickle. [laughter] me too. Thank you. Coming up at 4 00 p. M. Eastern . , wen whatd you miss will be speaking with Gilbert Harrison. Scarlet coming up, an exclusive erview with berkley ceo barclays Ceo Jes Staley. From new york, this is bloomberg. I am julia chatterley. Scarlet in ims scarlet fu. I am scarlet fu. Welcome to bloomberg markets. Julia we are live in bloomberg World Headquarters in new york. Right to the top stories on the bloomberg and around the world. In markets, one hour left in the trading day, and stocks are falling to the most in three weeks. Spiking asis disappointing earnings raise doubts. On wall street, prosecutors are investigating markets it we will have a closer look at white hedge funds are suspected of inflating bond valuations through fees. And an exclusive interview with barclays ceo just staley. What he just staley. Staley. Lets check in on markets. It is red. Earlier inas red as the day. Down because of disappointing earnings from retailers, but we have bounced back to some extent. The fix is higher today. It is still suppressed by historical levels. There is concern about what that low volatility means. We are seeing high volatility when it comes to retailers. Macys down 16 , the worst single day for macys going back to 2008. It is trading at its lowest since august of 2011. The Company Reported samestore sales were worse than estimates. We have been talking about the face of retail. ,ordstroms reported numbers and kohls were lower than estimates. Anything having to do with retail is lower today. The dow has come back the most from its lows of the session. We have some out performers within the dow, including caterpillar. Bank of america raising the stock to a buy. Merck getting a boost after one of its drugs was added got approval to be added for diagnosedfor newly lung tumors. Exxon mobil raising, along with the price of oil. If you look at what has happened this year, you have had a switch. The s p 500 growth index is an white. The s p is the basement in yellow. The s p value index is in blue. A lot of this has to do with technology in the app performance that group. Julia thanks. Scarlet lets get to one of the most widely read stories on the bloomberg u. S. Prosecutors investigating one of wall street s darkest markets, scrutinizing hedge funds that allegedly solicited bogus bond price quotes from brokers. Isning us from San Francisco matt robinson, a Financial Fund reporter. Did us a sense of what we know about the extent of this probe. How wide ranging is it . Are there big names . Matt the probe is looking at a lot of structured credit hedge funds that invest in illiquid bonds that rarely trade. There is a lot of wiggle room that hedge funds have in trying to figure out there valuation. They can go to some friendly brokers who can turn back prices to them in hopes of winning business. We know that multiple funds are being investigated. Come out of some other criminal probes into the market. Scarlet the government has already prosecuted people on this, going after traders who lied to customers about bond prices. How did that lead to the hedge Fund Investigation . Matt there have been more than half a dozen cases on the sell about theers lying price they bought bonds at and then selling it at a higher price to clients. Part of that investigation led to hedge funds, same market but different kind of abuse. Instead of valuing a bond or the market probably has it at 85, they can call a broker and try to get it at 87, 88. They can boost returns and get higher fees and keep assets in place. Julia before the financial crisis, regulators were pretty handsoff on the securitized bond market. Investorsed both the and sellers here were pretty sophisticated. In the financial crisis happened. The involvement focused more on the equity rather than the bond. Where do you draw the line here, and how big could this be . Rarely take ars look at this market, and that came undone when this same market was looked at at the spark of the crisis. The reason this market is ripe for abuse is that there is a lot of gray areas. Just about anybody can look up stock prices. Bonds trade so in frequently that there is a lot of ability to move prices around. Julia there have been prosecutions in similar cases, as mentioned. What are the polluted tease what are the penalties they are looking at here . How stringent are the authorities being . Stringent. There was a case earlier this year that a jury turned around a guilty verdict in less than two hours. That is very quick for a complicated whitecollar case. That is one instance. In testimony earlier this week, we know that the feds are looking at other hedge funds, and folks are cooperating. Scarlet i am gradually image and that authorities had been looking at equity hedge funds. Does this mean they have shifted focus entirely to bond hedge funds . Matt they are probably still looking on the equity side. With Insider Trading and options, there is a lot of technology and data regulators can use to stop it. On the debt side, it is more complicated. The pricing is so opaque that they have to rely on whistleblowers, knocked on doors and try to get people to talk about how they value the securities and why. Scarlet i am glad you talked about the opacity of the debt market. Dont trade for months at a time, distressed securities. Matt that is right. When the government has good evidence if you have a good argument is a this bond is worth 90 and the government does not have evidence that you think otherwise, that is ok. Or you are in a better situation. The issue they are looking at now is they think it is worth 85, and they are going around and calling folks to sort of get independent quotes to juice the returns. Scarlet thank you so much for joining us from San Francisco. Lets get a check of headlines. Mark the senate voted moments ago to confirm robert light hiser to be u. S. Trade representative. The vote was 8214. Administration officials complained about how long it was taking to get him confirmed as it looks to be in work on renegotiating nafta. President trump today continued his firing of fbi director james comey. In an interview with nbc news, the president called comey a showboat and a grandstander. There was an elaboration in the White House Briefing today. It is probably pretty evident in his the hazy or over the backandforth evident in his behavior. I think it speaks clearly. Those words do not leave a lot of room for interpretation. She said she has heard from countless fbi employees who are thing full director comey was fired. A new poll gives President Trump the lowest Approval Rating of his own presidency, just 36 of people who responded to a poll say they approve of the job the president is doing. 58 disapproved. U. S. Backed Iraqi Forces Surrounding mosuls old city today it week after a push to drive Islamic State militants, and that is according to an iraqi officer. The operation began in october. Half of the city was retaken earlier this year. Mosul fell to Islamic State nearly three years ago. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is Bloomberg Julia coming up, the best of our exclusive interview with berkeleys Ceo Jes Staley. Hear what he has to say about the banks growth and the whistleblower debacle. This is bloomberg. Scarlet this is bloomberg markets. Ceo jes staley has apologized for trying to unmask a whistleblower. He spoke to erik schatzker, admitting he made a mistake. Jes i respect the regulatory construct of the united kingdom. I think the bank of england, the ca i think executives should be held accountable. I think the senior managers part is important for regulation and the united kingdom. You know, since i have got here, one of my goals was to be very transparent with regulators. We are partners in trying to avoid the next financial crisis. Very constructive dialogue between barclays in the bank of england and the pra and fca. That is very important to us. I respect the Regulatory Framework here, and lets see how this plays out. The unthinkable happens and you are deemed unfit to run barclays, does the bank have a plan for succession . Jes i have full support of the board. You saw the shareholder vote today. We will let it run its course and see what happens. Erik what i still cannot understand, and i speak for other people, as well, is, what would motivate you to exercise that judgment . Um, you know, there are so many things going on in front of a chief executive officer with a bank with the complexity of barclays, decisions taken everyday. I thought i was trying to protect a colleague who is vulnerable from a malicious attack. But i should not have gotten involved as i did. That was a mistake erik lets just put it this way your friends, your colleagues know jes staley to be passionate but eventempered. As a person who pride sums up on high ethical standard and a High Standard of conduct as a person who prides himself on a standard, with that same jes staley be vince will or emotional be vindictive or emotional at times . Think i amot vindictive. Erik your actions put a chill on the people you need to come forward one way of phrasing it is, why would anybody pick up the phone and call the whistleblower if there was not a guarantee of anonymity . Rules areleblower important for maintaining and regulating control. It is very important that people feel comfortable to contact the bank or the regulators with full protection to talk about conduct issues at barclays. We will do everything we can to make sure we have a very robust whistleblowing program, and were going to do everything we can to maintain the scale and cap of the program. The scale and depth of the program. All signs that there is no change erik and you put safeguards in place have you put safeguards in place to make sure people are comfortable . Jes lets let the regulatory part work. Whistleblowing is very important to this bank, and we respect it. Scarlet later, just Staley Staley assessed the growth trajectory of the bank. Jes having that anchor consumer business in the u. K. Is very important to us, and then having a global footprint for the corporate and Investment Bank. It is based on the strategy that being diversified between wholesale and consumer is the safest place to be, in my view, for a large financial institution. , you that are arguing know, lets separate consumer banks from wholesale businesses, my experience in the last 37 years is that is a much riskier proposition that allowing banks to diversify their portfolio. Erik whether that is considered here or the United States . U. K. , it is recognized that diversified business can be a healthy think we have to convince the regulators and the community that we can run an Investment Bank safely. Erik some of the shareholders do not see an easy path to growth. How is barclays going to grow . Jes one, the return on equity in our u. K. Business is a very profitable business. Mobile banking is changing things dramatically, changing what we can do for customers. One of the things about this payment business is payments also translate through the data. We probably have the richest data pool of what is going on economically across the united kingdom. Street to street, building to building, business to business. The challenge is how to take that payment data and turn it into valuable information that customers can use for your benefit. Erik what about those other concerns . The u. S. Car business may do poorly in a recession if we have one in the near future. The consumer business is not a highgrowth business. And the issue of a Corporate Investment bank. If i ample ask concerned about the profitability of the corporate and Investment Bank. The answer is yes. You have consumer businesses both in the u. K. And the u. S. Generating extremely strong levels, and that is when you have to remind use of that Consumer Credit is part of the business. Given how well we are doing with the u. S. Part of the business, and we just picked up part of the American Airlines account, as those businesses grow, keep in mind unsecured Consumer Credit is a great business, but around the corner is a downturn. Put a couple pennies a way to make sure youre protecting yourself. Erik are you doing that now . Are you growing more concerned . Jes we look at that. So yeah, i think you want to be thinking about the downside. Scarlet that was barclays Ceo Jes Staley speaking with erik schatzker. Julia now it is a time to look is some of the biggest business stories in the news. Will delaymical ceo his retirement to oversee a historic merger with dupont, remaining on board until july 2018. se merger combines the u. S. Two largest chemical makers and has faced regulatory delays since 2015. It is expected to close in august. Offered,omething being overnight ground delivery almost anywhere in the country starting next monday. It is called the airbnb of warehousing. Merchants tos companies with warehouse space. It allows brickandmortar retailers to maintain Customer Contact without a Huge Investment in facilities. And that is your business flash update. Scarlet still had, options insight. Market volatility or lack fightf one traders for the russell 2000 etf. This is bloomberg. Julia this is bloomberg markets. Scarlet time for options insight. Julie joining me is chief options strategist at interactive brokers. We have been talking about the depressed volatility. We have seen it spiking today but still below 11. You likened today to a heat wave. Explain. Think about a heatwave. You are sitting around and it is 90 or 95 degrees. You just sort of wonder when it will break. I think that is the feeling a lot of traders have in the market. Nobody is really happy. The market is more stagnant. If you are a volatility trader, this is awful. You know that this is not sustainable, but you wonder when it will break and how it will break. Is it a normal rainstorm or will it be a bigger storm . Julie what do you think are the candidates for what could cause it to break . Of the is one challenges. A lot of the things i could have caused it to break really have not. Think about the political turmoil we had this week, and the market just yawned. The thing i think is next on the horizon that is most likely to cause some angst is the fed. That is in spite of the fact that the probability of the fed doing something is close to 100 . Sometimes when you have that great of a consensus, i think it is much easier to upset the apple cart, as it were. Julie what would upset it, if it does not raise rates . I think it is how they say it. I think the fed is savvy enough not to get everybody into the mindset of we are going to raise rates and then pull a fast one on the market. I think that is not the way this yellen fed operates. But there is always the adage, three steps in the stumble, and this would be step four or five. Basically, you are at a point where what they say will start to matter much more, whether it will be aggressively hiking or beyond. I think there will be some fatigue. It will rainu know soon but you do not know when or how. Julie and the other question is, when will it rain the most . The trade were looking at has to do with small caps, and it tracks the russell 2000. Do you think the small caps could be harder hit . I do, and that is why i wanted to talk about that today. I think youre seeing an increased concentration, whether it is the saying the fang pushing the nasdaq higher, and i think it is of a broadbased index being more economically sensitive to small caps would be the towel in this case. The gdp numbers. Thealler index compared to larger cups, more domestically focused. It would disproportionately affect the constituents of this index. Julie you are looking at buying of the puts. 1. 34 134. You see a downside of about three dollars or so on this . Hic is another pickup cup type of trade. It is playing a small pullback. A protectionally in case something happens. All right, thank you so much. We will be watching that. Julia thank you. Still ahead, tough day for retail. Results from macys and kohls dragging down the entire sector. We will talk to Industry ExpertGilbert Harrison about how long this rout could last. This is bloomberg. Mark timeout for first word news. Was hist trump says it decision to fire james comey of fbi director. The president said he was going to do it regardless of the recommendation from the justice department. Trump i was going to fire comey. It was my decision. I was going to fire comey. There is no good time to do it. The president said director told director comey told him on three different occasions he was not personally under investigation by the ei. Will notg fbi director confirm President Trumps account that fired director comey told him he was not under investigation. He testified today at the senate Intelligence Committee hearing on National Security threats. Afterward, the chairman says he and cochair mark warner are in 100 agreement on one aspect of the investigation into russian interference in the 2016 president ial election. Happensdless of what