Fbi, the investigation done by the Senate Intelligence committee will continue on its current course as aggressively as we are able to do we continue to hold interviews. Mark the cochair of virginia told reporters today that the white house is not taking the investigation into russia and the election seriously. Russia is urging the u. S. To accept an iranian role in the safe zone plan. Russia also was the u. S. To help enforce the ceasefire and the deescalation zones. Russia passes middle east envoy says u. S. And iran need to show compromise and flexibility to help end the civil war. Global news 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. Julie scarlet im scarlet fu. Joe i am joe weisenthal. U. S. Stocks trading slightly lower. Joe the question is, what did you miss . Scarlet americans are been any spartan stores. Department stores. Results at the close. Could the lending crisis spread to canada . The Home Capital Group is reporting earnings after the bell. They have plunged after it was accused of misleading investors. Get ready for more oil in the u. S. Upping by four times. And a strategy to temper prices, has it backfired . Lets look at where the major averages stand as we head toward the close. Abigail doolittle is scanning by. Abigail thanks. We are looking at relatively small declines of the dow, s p are looking at very sharp losses for all three averages. The dow at one point had been down about 140 points at session lows. The nasdaq down nearly 9 10 of 1 . Paper, third day in a row, the first time it happened in a month. The first time that could happen, we will see tomorrow in four weeks. Helps to explain some of the bearish action we are seeing in technology, down more the company gave a disappointing forecast. Call climbed down 1 saying the company could justify a 120 bid price, about 15 above were current shares are. Investors may not like hearing that news. 10,w version of microsoft more friendly with other devices. Intel now down six days in a row. The biggest tech loser is snap. Shares of that social Media Company are plunging on the day after they put up a horrible First Quarter missing right across the board. They missed revenue and all important daily active users figure, growth was smaller there. There are some analysts actually defending the stock. We saw oppenheimer upgraded saying it is certainly a disappointing quarter but he thinks this is an overreaction. It is interesting stuff. Over at piper, he now sees it is overwhelming on the sidelines. Lets hop in and take a look at 8033 out of the election, the point to be made is the fact that in blue, technology, the top sector out of election overtaking financials today. Tech this year is really a this year. Tech is prevailing right now. Thank you, abigail. Health care is center stage at the inaugural forum where leaders are exploring the thergy before between two in industries specifically in the area of artificial intelligence. Is there with a special guest. Michael thank you. I have here with a founding franciscobased Venture Capital firm. He is involved in some of the biggest Venture Capital startups since you were an intern, you worked on paypal. You have been doing this for a while. Health care may be the last industry to be disrupted by technology. Hard to marry health care and technology. Our opportunities emerging now . It is an important question for everyone. Health care costs are skyrocketing. We will be in trouble. I would definitely say yes, there are a lot of ways in which technology and health care are intersecting in ways that were not popular even five years ago. While there are a lot of machines in the Medical Center nextdoor, health care is a deeply personal relationship between someone and their doctor. You want people involved and i think we will always have people involved in health care. How much you can get her doctor and how much you can spend on drugs, how much you can figure out in a technology to need fewer nurses and people. Those are all things data can help with. Data is a big opportunity but also a big danger. Americans do not like people to look through their records and with all of the leaks, doesnt it add a much greater layer of complexity when you talk about Something Like health care . I think cybersecurity with top people so people cannot live that, i think the other side is important. Health care costs will skyrocket and it will not get treated. Rather get better treatments with millions of people to not get the data at all. Quite what are the best ideas with the Venture Capitalist Health Care Space . It has to do with the fact that all of these computer scientists can work in biotech that they could not before. There are a lot of ways about cheaper consumers, but the most exciting area to me is how you can reprogram blood cells. Health care is a big part of your business but in general, tech startups, the news level seems to have calmed down a little bit other than getting earnings like yesterday. Youpeople still coming to with tons of ideas . There is even more going on right now. What is possible now and what is impossible five years ago, so much now as possible. Involved with a big sponsor here, and involved with helping millions of consumers get better prices, and all of these ways we have more than a five more of a five to 10 year but look out in five or six years. You will see a lot of these things. Has the money flow held up . Different two late stage. A lot of money doing late stage. They have gone down a lot partially because it is slow lately. For me as an investor, that is a good thing. That put more companies on hold as far as their equity exit strategy . Quite it is hard to raise a lot of money for the strategies. But i think you are seeing a lot of these ideas as well. For a ipo is the standard tech Company Startup but what about a medical field . Do you go public or are you might more likely to sell yourself to a Public Corporation . Theyre more common in both sectors. The drug platforms, they will selloff or you will see a lot of m a like that. 10 billion, i guess. There are some of these data german platforms that i think might surprise people. Are one of the more politically active people in silicon valley. I know it was tough here after the election. Have feelings calmed down a little bit . I think it is not quite as intense as three or four months ago. It will continue until morale improves and people are pretty worried. If you were to make an argument to folks in washington for your industry, what would be the most helpful policy . It depends. I think forcing profitability especially for the systems the system to government pay for would be a policy that allows people that otherwise are not working right now. Really, Big Government getting involved in making things more transparent and allowing startups, it would help us a lot. That mays something get passed by congress this year. Visas. How important is that out here . You hear a lot about it cap it is really important. This is an issue ive been really involved in. Mistakenthere was a wetanding, trying to are trying to build the best Technology Companies to solve problems. If we dont bring these engineers, they will build these things outside the country and it will bring jobs outside the country. The stupidest thing you could do to not allow it and build our economy. Alexi were one of the founders and you are not associated with it anymore as a consultant. Interesting company. Everyone thinks of them as the guys who do the work for the government except Health Care Work as well. We saw a lot of similar data challenges. We are now doing things i think it is a great problem a lot of people are solving. How you work with data and to cut costs. Of the top ipo candidates, any information on when they will go . I am bullish. I do not think they are under any pressure. I would not mind going public in the next few years. We will see. Thank you very much for joining us. Will send it back to you, joe and scarlet in new york. Thank you. Michael mckee in california. Firingident trump us is of fbi director james comey threatens to overshadow the gops latest agenda on Health Care Tax reform and more. Live on capitol hill with the latest, from new york, this is bloomberg. President trump says he would have fired james comey to matter what the recommendation from the justice department. He expressed no doubts about the investigation into him. President trump he wanted to stay on as the fbi had and i said we will see what happens. He told me i was not under investigation. You are given all sorts of documents. I knew i was not under it. With us is Bloombergs National particle reporter. He joins us from capitol hill. Raised some conflict here over the timing. The only people interested now in the story are the people the press, Sarah Huckabee said. Is that true . The white house is cut editing itself here. What they was the president. Ired director comey today, we have the president telling nbc news, regardless of the recommendation, this is a white house with real credibility issues. Sanders also said the fbi rankandfile was happy. Anja mccain said otherwise and said i can tell you director comey enjoyed broad support in the fbi and still does to this day. Ets look ahead the acting fbi director, maybe he is in contention to be the permanent fbi director. Has the white house taken any steps toward looking at a replacement for james comey . There is chatter for potential names that could be considered but nothing is official so i do not want to get into speculation. We know Republican Leaders in the senate are already looking forward to getting a potential nominee. Some centers are also starting to float names at this point but it is early in the process. This is another thing congress has to deal with in a jampacked schedule going ahead to the rest of the year. It certainly does complicate President Trumps hopes of getting other items in his agenda through Like Health Care and tax reform and infrastructure. Joe lets talk about the policy agenda. That is a clear way the story could interact with markets. Sayounds like politicians it wont be a problem, that they can continue to pass all of these things without dealing with this, that they were never going to get any democratic votes anyway, and so republicans can keep moving the ball forward on the big legislation. I wish i had a nickel for every time a politician about hopes of getting seven big done. Of course they would say this. They will remain optimistic they will do everything they can and maintain a level of optimism and momentum for the things they really want to get done. I spoke to a senator of the chairs committee who the overseas taxes and health care policy. He says he remains optimistic about getting these things done. Fiasco willis comey not affect that. The Senate Majority whip told me congress can walk, talk, and chew gum at the same time. Does notis that this affect their agenda. Reality has a way of overtaking these hopes. Gorlet the reality is they on recess in august. Any discussion of of perhaps them not taking that recess . Unlikely. This is a pretty much sacred thing on the counter pyramid was go home for five or six weeks. I believe it is five weeks this year. It is a time for them to reconnect with their districts totheir states, to talk constituents or usually lawmakers make plans for this sort of thing. I cannot think of a precedent where that would be canceled. They have a jampacked december where they have to fund the government again. Was not easy for less time. Extended that for one week. They have to extend insurance for the Health Care Program also by december 30. Shortly after, they have to raise the debt limit. It gets to fundamentals about howmuch they would the much they would pay for an republicans have to disagree on this even setting aside the fact that democrats will be opposing them probably on most of the big things we want done. Bloombergs National Political reporter. Time for a look at some of the biggest business stories in the news right now. A french media merger in the works p or 4. 2 billion for an advertising firm. A billionaire who controls both businesses orchestrated the deal. If finalized merger would connect is a is this is with marketing and advertising units. A chairman will surrender executive duties but remain on the board. This follows public protests over the companys decisions to raise executive pay while cutting thousands of jobs. Withheld their support for the election. Of the founding family. Twitter and the nfl are teaming up to provide football programming on the microblogging site. This follows last seasons experiment. In addition to video clips, there will be a live show and pregame coverage. Bloomberg news full disclosure, it is among one of their partners. That is the Bloomberg Business flash. Joe up next, currency like the russian ruble and the peso typically correlate with a particular commodity. 2017 has seen these relationships. We will look at these changing dynamics next. This is bloomberg. Metals so often oil and is not having as big an effect as you might think on the countrys currencies as of late. Its take a look at the chart here. These lines represent thirtyday correlation the pink line the chilean chilean peso, copper in red, and light blue. You can see that the relationship between the commodities and countries is fairly weak. New the bottom, it says no relationship. We are not anywhere close to that. The closest one would be the russian ruble. Far below the perfect correlation. A fascinating move here. We continue the fallout from the commodities drop. One currency is the canadian i am not showing you a chart of the canadian dollar. I am showing you a chart with the committee and bank. The far biggest story we see download downgrading concerns about, misleading disclosures, he is saying a better way to be bearish is the business and credit cycle, it is to receive canadian rates, you can either do it out right or you can do it against the United States if you believe the fed will deliver on the rate hike. I am excited about the home cap earnings after the bell today. Bringing it back home, i like the fact that we can chart President Trumpss Approval Rating on the bloomberg, this is based on the real clear politics average. The Approval Rating is falling again over the past couple of days. This blue lines disapproval and white line is approval. Going in the wrong direction for President Trump. On the bottom half. , you have to go back to the laste of april for the time of the spread between approval and disapproval is so high, we were talking about extent,genda, to the the recent fiasco effects the policy agenda, you might want to watch those charts. Determine it might interesting weather not it saw improvement, the amendment the Health Care Bill doesnt that seem like a long time ago . This is the new normal now. At the market close. The dow had fallen 145 points. Just 28 pointsff at 28,000 915. The s p retreating from its record high and so is the nasdaq off by 1 5 of 1 . This is bloomberg. U. S. Stocks closing slightly lower after the dow dropped 145 point retailers were on pressure under pressure. Joe if you are tuning in live on twitter, we want to welcome you to the closing bell coverage every weekday from 4 00 until 5 00. We begin with market minutes here the dow fell 145 points. Downnly close closing we will be asking each other where we were when the dow fell half of 1 in the morning. Fore have to looking volatility for a dramatic move to richard to form, the market has not given that but in of the trading day. If you look at different sector groups in the s p 500, there are only you can see consumer discretion the only groups that are positive, media and household durables. Other than that, a red day for the consumer sector. Lets look at individual movers with the s p 500. This takes a look at the best and the worst performers. Besides 71 of the s p 500 numbers declined, retailers make up the lions share of the big decliners here. Macys is the worst performer down by 17 . Coal is down 9 or i should say 8 after disappointing any moment now, and you also have an target as well. Certainly a bad day for retail. Another name we want to highlight, as a publicly traded company, a disappointment here at 166 million. 2 million short of the estimate. It was an improvement for the fourth quarter, but growth is what investor wants to look at. , it wentee it down public at 17 per share. Joe lets take a quick look at the Government Bond market. Not an active day in the u. S. Yields coming down a little bit with the modest selling back low, 2. 4 two. 3 . Government bonds falling after an unexpectedly Dovish Reserve Bank of new zealand announcement. Twoyear yields falling. For now, a mixed bag. The bank of england meeting, a disappointment as people were expecting in than one dissenter calling for a rate hike. The only got a 721 vote here. The bank of england suggesting brexit may not be a smooth as people were hoping. That is the case. We are hitting a new high today. Peak,e back down near the which i am showing you there, sensitive to what is going on. A lot of different aspects to the story right now for the canadian economy. A quick mention for what is going on as well. A bit of a disappointment there. Investors were hoping they would see a shift away from keeping rates on hold for longer. They did not change the bias here. A lot of people are getting not getting result what they were expecting. Finally, on commodities, looking across the big ones, crude oil is gaining a little bit,. 9 , well below 50 still at the lower end of the broader range. Or is still weak, still the story of industrial commodities selling off probably due to what is going on in china down another 1. 4 . Todayss market minutes. Now, you can find our charts using the function at the screen. We need to switch with retail. I love this chart. It is simple but tells a story. As a percentage of total retail, basically Online Retail sales as a percentage of total retail sales. Currently about 10. 7 . Picture directory is notable. Is we find fascinating are at 10. 7 you look at retail sales, it is not necessarily things were purchased online. Say footwear or electronics, this would be so much higher than it is now. Chart, which tells us the story of who is benefiting the most. Ceomber the Dunkin Donuts saying to week, it is the amazon. Ffect you can see the share price, the purple line, really since the of 2014, the blue Line Department stores, Speciality Retail in yellow, all of these guys struggling relative to the likes of amazon, in terms of not only products but how quickly they can get it to you. A real determining factor. Retail. Ging face of with some retailers, they may not be changing enough. Breaking news from nordstrom. Earnings per share, it is . 28. Revenue, 3. 3 5 million. 3. 3 3 million billion dollars. In unexpected drop. It was a drop of. 8 . Jumped more than 2 and looking for a drop of more than 1 . More than 2. 8 after hours, this is the ultimate jump. The stock fell four dollars per share during the trading day. Does note seeing here even get it back to where it was in the middle of the day today. We see it is not even holding that much. Sales missing even with ultra low expectations going into and we now see stocks have turned red. Quarter sales auction actually online. A differentiating factor. Those sell. Worse than expected on that front. Andocus on retail businesses, perfect timing. We have got the nordstrom numbers. Told the wall street journal,. Ont count it out difficult. Youre talking about all the but what youores dont take into account is actually Consumer Spending is up and people are spending money in different areas. 24 this year. International is up 7 . Footwear, wholesaling is up. 27 , household products 10 , a lot of supplies, ecommerce of course is up 10 . A whole different shift in Consumer Spending. They are not spending the money the way they used to. Why . Because there is not a differentiation. Nothing exciting. Meeting withrom a a client. The stores have to reinvent themselves. Everyone realizes that and until they do that, how many suits do you need and how many thais do you need, how many shirts do you need . Are going to restaurants. Try to get in a restaurant any place. It is crowded. Take a look at travel and entertainment. Dollars are there. Thatt neglect the fact changing is there. Ecommerce has also changed the landscape tremendously. It is shifting from the stores to ecommerce. The biggest upset or around is amazon. Billion ino 26 apparel this year. Of 280 billion. Joe i think it is interesting what youre saying about the changing nature of human behavior. The story is pretty well trodden by now but the idea that people do not care as much about clothes as they used to seems to profound. As i said, number one, there is nothing exciting. They find out what is cheaper so there is not many of the stores do not have service. You have to have the store personnel going after the customer up it you have to identify top customers and go after them. All of these things are critical to getting the consumer back into the store. The other thing when i was looking at the earnings report, they really dont break out ecommerce sale because many retailers are looking at on the channel and everything together. The storesack from and pay commissions based on sales associates. So it is a different world. I want to jump in and you off more is down now than 5 or comparable sales were a drag. You are saying Consumer Behavior is changing. We look at generation x and y, it will probably be worse by 2020 given how millennials behave. This is what you are speaking to in terms of digital. How . Do they have to sell Different Things . One thing we have seen with canrtment stores this they only put in aspirational brands. They are trying to find two new brands that will bring in the consumer, that try to do things so they get millennials at an early age and continue to bring them into a store in the future. They have entertainment, put more restaurants in the stores. Everything we see in all these years, old and new again. You have to relook at things. Certainly, investors are thinking this way as well. Is who isn to you buying retailers these today . When you look at the track record, you have to think good returns financially but not necessarily when it comes to the operational performance. First of all, we have seen slowness in people buying apparel. We have seen slowness in people buying stores. We have been selling a lot of Beauty Companies and home companies. This is where people are out there. They continue to look for growth potential. Numbers speak for themselves. You talk about the need to reinvent reinvent. Are there any you can point to and say this is the shining light of how to go about it . You see some but not enough. If you talk at the top of luxury, some of the things they are doing to bring themselves back, they had a problem with their energy. Even though they had it down quarter, with they had just done, the athletic leisure of what they put into the 5th avenue store, with that make a total difference. People are trying and people are looking. Thank you for having me on. Coming up, a jobs data point that we have not seen in decades and we will tell you what it is next and what it means for the economy. This is bloomberg. Mark time now for first word news. President trump is considering mike rogers, a former congressman and a pih from comeyan, to replace james as fbi director according to a white house official. Rogers is a former chairman of the house Intelligence National security issues. Has closed for republicans in congress to use it once obscure law to resend rules issued by the Obama Administration to gop leaders were able to roll back 14 regulations using the congressional review act, failing just once. The act have been used only once before successfully. Saudi arabia is said to be ready to invest in unprecedented 40 billion in u. S. Infrastructure according to people familiar with the matter. The two nation nations and did entered a turning. 1 President Trump welcomed the prince to the white house in march. The announcement could come next week. Airline passengers fly from to several u. S. Airports, down so far this year, blamed part on President Trump these tough border wall talk. Now a group partially funded by the federal government is starting a Marketing Campaign to laura mexican tourist back. Mexicans are the Second Largest Group of visitors to the u. S. , 20 billion a year spent here. 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. Joe u. S. Continuing jobless claims making its lowest since november of 1988. Btv 1227 p are talk about initial jobless claims a lot. This is continuing jobless claims. We virtually have never been lower in the history, except for a few weeks here and there at this level of low jobless claims. Tasha crosses to in the 70s. It is pretty remarkable tightness seen a labor market. I want to bring a more thought pine bridge investments chief economist. Thank you very much for joining us. Is theis the economy firing on l cylinders or doing good . 2010, that is not particularly good. Where the strength of the recovery has shown up is equity markets. You point to the jobless claims. They were thatt low, clearly a reflection of supply issues in the labor market. On monday, we have the small and one of the biggest issues right now is to fill open job positions. That is the highest level since 2000, at two recessions ago. Fill hard for companies to the open position spared if you think about what we are trying to do, we are trying to with morethe economy fiscal spending. If a structure program, saudi arabia trying to invest, no workers are filling these positions that are coming out. It will be interesting to see if reallymp Administration Pushes fiscal stimulus into the economy, what the labor market will do. We dont seem to be able to achieve some kind of sustained productivity. You can talk about job hiring but you can hire as many people as you like. Youre not unfortunately, that has been the missing piece throughout this recovery. That is true but also a really complicated issue economists are trying to do with. To deal with. Everybody was laid off during a recession, but that is not really, given the capital to work with to be productive. A lot of things are going on here. To measure productivity and social media. How do you measure the productivity of something from all the facebook and google inventions . We are hiring people to do Apple Service but the productivity happens outside it asia where production takes place. Understating with our own numbers. Productivity is something the fed has been concerned about. The fed was concerned about those numbers. It looked right past it and investors are looking at a rate hike baked in for june. Spread, looking at 96 probability of hiking, we can make it bigger as well to show the big move up in the rate hike expectation. What happens after this rate hike . For all the talk about Balance Sheet reduction, is that when the fed starts to think about mixing it up between rate increases and balance reduction . What is a very good question. The ratele imagine hike pace will continue over the next two years. The fed is telling us that. But you are right that it is two things. It is a debate about the Balance Sheet. Telling usves are know, it has nothing do with Monetary Policy tightening now. The Vice President said that in a speech the other day. We believe in the second half, what is becoming more important to the fed is the volatility in the market members. The slowdown happening again in q1. The Inflation Numbers we seeing this week are very confusing. Down 2. 5 . The ppi is up 1 . It makes very little sense. It will probably turn around again in the next. There is so much market volatility, i expect to get close to the point where the fed will want to wait a moment and see what they so far have done. Finally, let more data coming out tomorrow or the days ahead. Cpi estimated that 2. 3 percent, retail sales expected to pick up, expect Consumer Sentiment to be pretty high. What is the key data of that rebound is now what everybody is looking for. The market is pricing in much of that already. There is more downside than upside risk. So much. You coming up, the troubles in venezuela and its economy are wellknown. What about the currency . The market tells another story. This is bloomberg. You miss . Did an unprecedented depreciation in venezuelas currency. I am looking at the blackmarket rate of venezuela boulevard. An indescribable collapse. It has lost 99. 5 of its value under the president. I think what this shows is a Nations Capital c is truly a shared hallucination. What gives currency its value . That everyone agrees. When you see a society collapsing, it basically makes sense the entire value of the currency is just completely disappearing. This chart shows the concept nicely. The reality, the rhetoric is on my bloomberg terminal. I just pulled it up and the official quote, and it looks very different. If we could pull that up, there you go. This is currency gp classes the official number which has no bearing to reality essentially. This is the attempt to maintain the hallucination and it is clearly not working. Dont quote me, but i will look it up and come back to you. Up next, opec is upping its tradition of output for rivals by four times. More with the Global Energy economist and Credit Suisse securities next. From new york, this is bloomberg. Mark i am mark crumpton. It is time for first word news. The new acting fbi director is already at all the President Trump on at least one issue. Andrew mccabe refuted the president s claim that director comey lost support among the rankandfile. Has been thet greatest privilege and honor of my professional life to work with him. I can tell you also that director comey enjoyed broad support within the fbi. And still does to this day. TodayPresident Trump continue to justify his firing of mr. Comey. In an interview with nbc news, he called comey a showboat and a grandstander. Deputy press secretary Sarah Huckabee sanders elaborated during the briefing today. Is sanders i think it prevalent with his behavior over the last year or so, the backandforth. I think it speaks pretty clearly. Those words dont need a lot of room for interpretation, but it is clear what he meant. Mark sanders said she has heard from what she called countless fbi employees who are thankful director comey is terminated south koreas new president is trying to mend fences with china. In told president xi jinping he is aware of concerns over a Missile Shield deployed in south korea. In a phone call, president moon told president xi it may be easier to settle differences over the Missile System if the north stops its provocations. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Scarlet lets get a recap of todays market action. The s p and nasdaq retreating from record highs. Dow pairing record losses. Theindexes had fallen to lows and spend the rest of the day reducing the losses. We close around the highs of the session. Joe we have after the bell earnings out from nordstrom, down 4 , and that stock was down significantly on the days action on a very ugly date for retail. Selloff,l, this comparables instore sales down Comparable Store sales down. 8 . That seems to be the number causing the selloff. Seen thatrowth fullyear growth still seen as 3 to 4 . Julia you have to wonder whether the forecasts are a bit ambitious, but we have heard that from other retailers, too. Whatd you miss . Opec has boosted estimates and growth 64 . The projection is four times higher than in november, when opec an ounce of Production Cut to rebalance the oil markets. For more on where the oil prices are headed, lets bring in jan stuart of credit squeeze securities. Increasedid we seek to in estimates, but we also heard from 2 opec members saying they were likely to extend the cuts, opec and nonopec. Where does that leave oil . Jan opec are really, really good at what they do. Statistics and energy are not really their strong suit. They were behind the curve in november and seem to have caught up. There is growth from throughout the organization. Probably not as much as they say. The critical question that the market keeps asking itself is are we a deficit now . Therefore the opec cut that might be extended kind of doing what it is supposed to be doing in a slow, messy sort of way. If they extend the cut we are in a deficit julia are we in a deficit . Jan yes. Julia we are . When you look at those numbers, they are eyewatering and we worry about them on a weekly basis. They are going to come down . Jan they are. For such a long time, so eye watering. The inventories we see in america and report on every single week, those are fairly slow to come down, and they were way up in january. That those inventories have begun to shrink and now maybe finally they have begun to shrink here. Scarlet ok, that is the supply side of the equation. What about the demand side . Firstquarter demand was a bit disappointing. Can we not extrapolate for the rest of 2017 will be just as we . Jan correct. I learned this a long time ago. I used to be in journalism school, and in journalism school, we had one day, that is a story, and two days, that is a trend. Scarlet you gave away our secret. Oh, my gosh. [laughter] jan shortterm events like, i dont know, a bunch of flooding in california, bad whether in february in america, had gasoline down a little bit. January and february. The world over, gasoline demand industry all right. Seems to be a lie. Oiled seems to be all right. Oil demand seems to be a lie. Not as buoyant to come those trends havent fallen away, either. Either or is not a good lead indicator for the chinese economy. Julia what about shale . One of my favorite topics of conversation. Another reason to be gloomy . Sorry. Jan the market clearly is on your side. The market is very, very gloomy. Say in allrying to those stories that i write is actually a little bit difficult. I am effectively saying that so far, the market hasnt been all that right, and we are going to prove that to be a little more right. What im really time to say is, growth, no fantastic question, but not as much growth. Joe we have a chart on my terminal. 2018 crude production expected to be at the 50yearregardless of what opec does, the oil is flowing out uncontrollably there is nothing they can do. Least goodis in at part right. America is ready to become the superpower of oil again. There is effort behind it. Balance, theur shale fits and leaves room for opec. It needs room for things for inventories to draw with the shale growth. Joe there is an interesting element with the u. S. Market, the connection between Oil Production and Interest Rates, fed policy. The idea that easy money of the last several years allowed a lot of explorers and drillers to get borrowing and put the straw in the ground, as i crudely put it. Does that come in your view, effect the trajectory of the story . Jan a bunch of things are coming together to affect the trajectory of the u. S. Story. There are easy points to make. Mr. Einhorn made one of those points. The shale industry as such isnt making money. Where are the equity moneybags going . They are transporting trains of sand or gathering stuff. The trajectory of shale it goes up, and eventually begins to flatten out. We will continue to grow fast. There will be some second or third derivatives slowing down. We think that perhaps as early as two or three years from now, it all fits because demand doesnt fall off a cliff. This is a really cool debate. For the moment the market is winning. Julia we had a conversation earlier that oil was stuck in a range between 40 and 60. That everything you just said to us, people should be long oil . 47 a barrel . Jan im a classic technician. It is easier to be in that range. We should be long oil. The range isnt all that bad. We have in our longrange forecast Something Like the low 60s, the goldilocks number. That, tooher than many stores in the ground. Stuart, all right, jan Credit Suisse, thank you very much for joining us. Jan anytime. Scarlet we have some breaking news. Approvalning a judges to walk away from the anthem merger. The Obama Administration had opposed the deal as anticompetitive. The court has ruled that cigna can walk away from the merger, or should walk away. Once again, cigna winning the judges approval to walk away from the merger. Joe it means anthem could be on the hook for 1. 3 billion of breakup fees and 18 million in damages to cigna. Interesting to see the target fallout. Julia we see what is going on after hours. Very little movement. I think this was pretty much on the cards here, unchanged for those guys, expected today. Joe coming up, we look at the stress for the Canadian Housing market. The troubles with the Canadian Mortgage lender Home Capital Group, spreading with downgrades of six major canadian banks. This is bloomberg. Julia i am julia chatterley. Time for the business flash, the biggest business stories in the news right now that the dow chemical ceo will delay his retirement to oversee the historic merger with dupont. He will stay on board until july 1, 2018, and serve as chairman of the new company. The merger combines the u. S. s. Largest chemical makers the deal is expected to close in august. Wells fargo is doubling costcutting from 2 billion to 4 billion. The deadline is extended from the end of this year to the end of 2019. The ceo has pledged to rebuild shareholder and customer trust. An investigation costs the firm 445 million in fines. Will offerindows 10 a friend earlier upgrade than before. The new software will allow you to sync different devices including iphones and androids. Microsoft says it understands many mobile gadgets do not run windows. Customers can access the future through microsoft account. That is your business flash update. Joe whatd you miss . Moodys Investors Service downgraded canadas banks for the first time in four years. It a recent run on deposits and the alternative Capital Group that has sparked concerns over a broader slowdown in the real estate market. Joining us from toronto is bloombergs luke,. A couple weeks ago no one had heard of this group in the u. S. , and now the stories are coming fast about this trouble company. How did things fall off a cliff for home capital . Luke things fell off a cliff for a disclosure issue, and alleged disclosure issue, from april 19, the Ontario Securities Commission said that three of its former executives, they alleged that they misled investors because when they were blaming the weather for dropoff in originations, that was actually because they knew it was brokers that they had suspended from doing business with them, due to fraudulent documents omissions after there were allegations, and at that point, there was a bit of a run on deposits. The highinterest savings accounts that investors had with the subsidiary of the Home Capital Group, people started to flee them. They didnt want anything to do with them. What that has done is call into question, how are these guys going to his wife when they are lending at 3 , 4 , but Interest Rates they are paying is north of 10 . Scarlet right. Certainly a big question, and on as well, is its an isolated case or an early sign of cracks in the Canadian Housing market . Connect the dots between what happened at home capital with the movie downgrade. Moodys downgrade luke the real reason has to do with a home capital issue. Tell me something we didnt know what we could go, month ago, a year ago. That is the rationale for the downgrade. It could happen at any time. The connection is that, to my mind, this is a time when lending standards are training tightening, borrowing is at the lower end of the spectrum, there is a squeeze on home margins and lending standards. At the upper end, the government putting in macro credential policies, a lot of charges about the foreign buyers driving up home prices, pricing canadians out of the market. All about home prices in toronto and vancouver. Theou want to call on canadian cycle come when you get the squeeze on the lower end, why not . And what we got from that moodys report, the senior Vice President of the agency said, expanding levels of private sector debt could weaken asset quality in the future, continued growth in Canadian Consumer debt, and elevated housing prices leads consumers and canadian banks more vulnerable to Downside Risks facing the canadian economy than in the past. Julia can i ask you what you expect home capital to say today . The have had one delay on the earnings announcement. As you pointed out, all the issues with the temporary loan they have achieved. They have been hemorrhaging deposits at the same time. They have a battle going on with an activist shorting a stocks. They had the other shareholders significantly increasing the holding. There is so much going on at this company. What can they say today . Luke today we are getting the earnings sometime after the close and it might be going on while we are talking. One thing i do expect them to talk about and reinforces the shift in strategy, that is a big unexplored territory where they used to take deposits. Now they are switching to a model where they will get other people to get off the Balance Sheet. That is not great for margins, but keep coming through the door fit that will be the big focus, because what that is his they are asking rivals who did not want much to do with them when they were in trouble to step up and say, yeah, we will find this, we will have your back. Theyre trying to get into the relationship at a time when the brand name has been tarnished by the allegations. Julia what about the possibility of some kind of significant buyback here . One of the criticisms the project was actually shorting the stock is saying, and i will quote him here, if you add in all the guys, the senior snagement, the execs, he horts more than these guys own. Luke yeah, that is amazing. What he is trying to say is this is how much faith i have that the company will fail, versus how little faith of the company will succeed. It is meaningful. Do i expect that executives will be hand over fist buying right now . Especially these members of the new board, they have been added as part of the governance. These allegations that is possible. In terms of the buyback, i dont think that is in the cards. Kawa from toronto, via facetime, thank you very much. Julia a grand gesture from the board members. He looks like an angel there, didnt he . [laughter] julia halo glow. Scarlet very resourceful. Will beg Technology Like from general electrics new temporary headquarters today at 5 00 p. M. An interview with ceo jeff bornstein. This is bloomberg. Scarlet whatd you miss . Ecommerce is driving American Warehouse operators into the robot business. For decades they were focused on shipping products to retail locations. Online orders require shippers to cap boxes with a diverse set of items and route them to customer homes. That shift has given way to collaborative robots, where the workhouse employee works alongside an autonomous machine. Bloomberg went to see how one robot is making the job easier. Meet chuck. An autonomous warehouse robot that helps employees fill online orders. Chuck guides workers down aisles and shows a screen where items are located, how many to pick, and where to go to complete the next task. At this point the chuck has stopped new the location im looking for. Therter the cofounder of massachusettsbased startup. We are a bostonbased company and proud of our origins. Reporter it is part of a solution for ecommerce, traditional retail, and thirdparty companies. We designed this is a collaborative solution. It is more economic than people alone. The same person can complete two to three times as many orders a day. Reporter and breaks down to about 30,000 per robot. Me 18. 2 seconds to take the item with two seconds of walking. Reporter chuck isnt alone. When ecommerce giant amazon bought kiva systems in 2012, now known as amazon robotics, it ended the commercial sale of those robots that the warehouses and retailers have come to rely on. Kiva, amazonxit of robotics, from the commercial market place, it left a void for other companies. Reporter a void that set up in arms race among nextgeneration robot makers. There is a company in san jose, california, and a growing number of massachusettsbased startups. It is a very significant margin. Ecommerce spend alone in this space, about 1 billion to 2 billion. A lot of money is being invested in automation and we are hopeful to get our percentage of that. Hasrter six River Systems raised nearly 7 million of funding to date and plans to double the number of employees to 35 by the end of the year. Scarlet all this week, Bloomberg Technology is live from boston with an indepth look at regional innovators. Tune in live on Bloomberg Television and radio. This is bloomberg. Scarlet coming up to miss this. Out in a 30due a. M. Tomorrow and Consumer Sentiment data at 10 00 a. M. Joe the chicago fed president and philly fed president. Julia and dont miss the jcpenney report. Firstquarter earnings tomorrow can they bust a trend . Scarlet that does it for whatd you miss . Julia Bloomberg Technology im Alisa Parenti from washington and you are watching Bloomberg Technology. Thats a start with first word news. President trump said it was his decision to fire james comey. He said with nbc news, he was going to do it regardless of the recommendation of the justice department. President trump i was going to fire comey. My decision. You made the decision before President Trump i was going to fire comey. There is no good time to do it. Told him onid comey three occasions that he was not under investigation. Gop leaders were able to roll back 14 regulations using a congressional review act, failing just once. The u. S. Oil industrys recoveries threatening opec attempts to clear the worldwide glut. The cartel is boosted estimates for growth in rival supplies by 64 . While fighting rages on in syria, russia is urging the u. S. To accept an iranian role in the