Transcripts For BLOOMBERG Whatd You Miss 20170616

Past, russian claims have been inaccurate. Not decided ons the u. S. Troop increase in afghanistan according to the pentagon. Previous reports had stated the u. S. Was sending almost 4000 additional troops. General mattis says he does not have enough forces to help afghanistans army against a resurgent a la been. The rising threat of Islamic State is also fueling calls for a stronger u. S. Presence. Protesters crowd the town hall in london, demanding reform as from this weeks Apartment Fire roasted 30. Dozens are still missing. Somethorities say locals say authorities are understating the extent of the damage. Scalise remains in critical condition. Gunshot didays the substantial internal damage and the congressman needed many units of transfused blood with the doctor also said that predicting the length of his hospital stay would be difficult, but he is encouraged laste progress made in the 24 hours. Global news 24 hours a day powered by over 2700 analysts and journalists in over 127 countries. Im mark crumpton. This is bloomberg news. Julia live from bloomberg world. Eadquarters in new york joe scarlet fu is out today, and we are 30 minutes away from the closing bell. Has been all about retailers. Joe the question is whatd you miss . Julia amazon takes a serious stride into the grocery business. We dig into the 13. 7 billion offer, the largest ecommerce deal of its kind on record. Ask where that leaves your neighborhood kroger and costco. Hands are expected to president Emmanuel Macron a legislative majority, completing his takeover of the french system. President trumps actions on cuba will turn to russia and china next. We will talk to senator patrick leahy. Joe lets look at where major averages stand. Abigail doolittle standing by. Abigail thanks. We are looking at majorly averages, but the dow is creeping ever so slightly higher, not so far from putting itself on pace for a record close, but the nasdaq taking lower, down near session lows, so that is a bit of a divergence. It exists on the week as well. The dow is on pace for its fourth week higher in a row, while the nasdaq and s p 500 both lower on the week for a second week in a row. Perhaps probably on that tech selloff, which has really taken a backseat to the big news of the day, which we will get to in a moment. Here is that tech selloff on the week. Apple, alphabet, netflix lower on the week, but facebook higher by about 25 percent. The question here which side wins . Will the gains we are seeing from facebook continue, or the losses from those other sector names . Turning quickly to the big deal on the day. Of course, that is whole foods and amazon. Amazon buying whole foods are 13. 7 billion. Paul sweeney, a bloomberg agent, says amazon has been wanting to get into the grocery space. They have certainly done that disrupting not just whole foods, but many other retailers plunging on the competition, this massive threat from the 800pound gorilla. Our chart shows amazon is up in. Big way on the year walmart trying to trade higher but starting to sad within both kroger and target down sharply on the year, talking to the fact that the Grocery Store space is already tough without amazon. Joe thanks, abigail. For more, i want to bring in bloomberg deals reporter ed hammond. Thank you very much. This is a pretty serious offer from amazon. There has been some noise around whole foods for a while, that someone may come in. There has been some speculation. I think you could potentially see someone come in just to stop amazon getting it. The other grocers have been crushed on the back of this because amazon is kind of a guess the expectation is they come in and disrupt this whole model. You could see someone like walmart come in. Actually, one of the biggest shareholders in whole foods have come out softer. They do not think this story is over, so we will wait and see. Julia barclays thinks another offer will come in. They have rated amazon overweight. Obviously, one person looks isit, and that said, amazon such a serious buyer, it is hard to see someone coming in and bidding against. Target are looking at a which stacks of whole foods acquisitions. The key thing is you cannot even see those other ones on the bar really relative to whole foods. Amazon is not a company that may gigantic deals in the past. What does that tell you about amazons strategic needs, that it was really willing to do something really ahistorical by the Company Perspective . Ed it is a good point. The previous deals have been tiny. Everything it has done has been pocket change. It is a big deal relative to what they have done. But it is not a big deal if you look at it compared to amazon and the value that they had and the cash they have. It gets in scale and footprint very, very quickly in a market we know they want to get into. Own brickst their and mortar Grocery Stores would have taken much longer. They could have gone after someone much smaller like sprouts, but what would be the point. What would be the point . They get the immediate footprint, they get the brand and shorten into something even bigger. The question is do they buy even more . Isone point, a 6 drop equivalent at the Purchase Price. Today, we spoke about the deal. Listen in. As you see today with amazon taking over whole foods, there is value in the physical world. The different channels merging together, this mnichannelnel o presence. Everyone is going to have to merge into this ecosystem. Julia lets bring in the managing director and Senior Analyst at wolf research. He joins us on the phone. A say amazon is losing Pricing Power and margins due to too much competition. Thats one avenue we will go down, but first, talk about this deal. I guess you like the brand of whole foods and amazon taking a potential bite out of a huge Consumables Market. Scott it is an absolute Seismic Shift in the industry. Coming after the 1 trillion Consumables Market. It is a unique market, and i think what they look at with whole foods is they get probably onet brands in retail of the best brands in retail. They are likely to add some pickup locations into some of those suburban stores, but the brand has to be with the company went four. Gives them immediate credibility, particularly in fresh. We were just asking amazon folks about a week ago, and they are clearly focused on the amazon fresh offering and being bigger in consumables. It is a Seismic Shift in the industry, really bad news everyone else but clearly good news for amazon. On mym looking at a map terminal, but it basically shows yellow,acilities in the whole foods facilities in blue. The key here is whole foods is not everywhere. It is an primarily welltodo, affluent areas, so it does not completely solve amazons grocery challenge. Could you see amazon potentially making another big purchase to expand its footprint in places whole foods does not currently operate . Answer toelieve the that is no. I believe they will use the whole foods footprint when i talked to them last week, they really did not want to become a massive bricks and mortar player in the u. S. They were experimenting with grocery pickup in seattle. I think they understand the Consumables Market is a little bit different. While some things are fine doing subscribe and save, others, it is much more immediate need. But they are also very high on amazon fresh. They are in 21 msas right now. We think that will expand in the next year or two to probably top 50, but whole foods brand, according to our research,. Erves mostly wealthy urbanites its brand resonates really well throughout consumers. They have dealt a fantastic brand. It has always been john mackeys dream at whole foods to bring Healthy Living to everybody. Thats why he opened a store in newark, new jersey and one in downtown detroit. In some ways, he is fulfilling his dream to really make whole foods, you know, the standardbearer for Healthy Eating for everybody. Julia but the problem is everybody is now doing it. That is the problem, the challenge that hold foods has. They still remain. The price point, particularly, nites. Ight four commo what does amazon do to change since the management will not change . Thats a great question. Whole foods has a price problem you are exactly right. Amazon will solve that price problem likely very quickly. They produce an enormous amount of cash flow. As big as this acquisition is, it is still not that big for amazon. What was a Huge Investment for whole foods to get those prices in line that is something i think amazon will take up pretty quickly. It is not great for competitors. Suddenly, you have whole foods, which was really struggling as kroger moved in and, to a degree, walmart moved into their territory. Quote you guys, the 800pound gorilla owns whole foods. A lot of whole foods problems just got solved overnight. i think it says something profound that i was going to ask about. One of the big concerns with this incredible rally we have seen in Big Tech Companies is the way they are sucking Economic Activity away from every other traditional industry in america. We see what is happening with Grocery Stores. Do you think there is concern maybe with some sort of regulatory response . Antitrust inquiry into the company and others that could be . Issue for amazon scott at this stage, i think the answer is mostly no. Amazon itself is creating a lot of jobs that seem to pay pretty well, but as far as ftc concerns and the size of amazon, believe it or not, as much as we talk about it, still not all that big. Its one key business is only a. Hird of the size of walmart not yet, but we said in our that eventually the power of the Company Might be such that the government steps in and breaks it up. We are a long way away from that. Joe thank you very much. We will be right back. From new york, this is bloomberg. Joe whatd you miss . The manager of the 54 billion the line return bond fund making headlines this week, saying the days of the volatility market nearly over. Bloomberg real yield went to the black rock Trading Floor today. Bloomberg asked if everything does seem rich right now across asset price. We dont see everything as rich. We are on the fixed income side, so in the fixed income side, it is not so much about rich or cheap. It has similar amounts to the downside you are taking. In fixed income, you do not get that. Do you think european credit is rich echo european credit is absolutely rich and highly affected by central bank behavior. Negative Interest Rates forcing people into underwriting levels that are not economic because you have a noneconomic driving force. A lot of people watching the program do agree with the premise. Some of the equity markets are less expensive than the fixed income markets, and there are areas within the fixed income markets that are more attractive. The key issue is we are valuing equities against an environment where you are not going back to a 5 or 6 Interest Rate environment. If you are in a persistently lower Interest Rate environment, the whole valuation paradigm has to be rethought, and that is one of the issues when you look around where valuations stand. One of two things happen on bloomberg tv someone says they want to buy europe or they say they really like imaging right now. Is that becoming somewhat crowded right now . When you look at returns we had in the first half of the year, they are mostly driven by flows and this drop in volatility we see worldwide. Back to the idea of valuations, if you value emerging markets , its not that expensive. The significant amount of income o emerging markets, you one of the portions of the asset class is actually better priced, not that expensive. We are in a world by the way, volatility is ridiculously low. It is part of what the fed is pushing back on. By the way, low volatility and volatility rises does not mean things necessarily go down. Much of why we love the emerging markets the ecb is not buy and mexico, so you trade closer to equilibrium. What ends up happening do you buy places like emerging markets were inflation is coming down . You could get easier policy while developed markets are raising rates. People know why a lot of are saying they have to get into european Interest Rates at close to zero, but european equities, as jeff was describing, with the discount rate stays low and growth could be pretty good that you could drive the equity market up. It depends where you look. There is still value in fixed income. We like buying a lot of front end assets. Get away from the distortion, great alan in your portfolio so that you are not volatility picks up and you do not have too much data attached to your portfolio. You can catch the full real yield show from blackrock over the weekend. Julia President Trumps agenda in washington, but consumers are still optimistic. But now they are also growing weary as well. We have the chart from new york. This is bloomberg. Joe whatd you miss . We may be starting to see a little bit of a cool down in some of that postelection soft Economic Data surge we saw. Remember right after the election, all those surveys of Business Optimism exploded higher that the this is Todays University of Michigan Sentiment survey asking consumers how they feel about his nist conditions in the United States. There was a pretty precipitous drop from around 40 to 30. It turns out thats the biggest onemonth drop in this index in about six years. You have to go back to about 2011 to the last time we saw it plunged like that. Remember, we had the debt ceiling that summer. That was not the most pleasant summer for a whole lot of reasons. Other surveys holding up ok. Nfib holding up ok. We have seen consumer economic surprises turned negative, so it how be interesting to see these things develop. Julia i love how you tie those gaps therebetween the softer and harder data. What am looking at is the global credit imports from analysts at ubs. This is giving you an unhappy and bearish signal. Like a change in credit. What im showing you is china. Growth, theydit are going gangbusters. Gdp. Talking 30 of chinese we are saying that is not sustainable if you look at the relative change in change of credit. Go back to january 2016, and you can see the impulse was positive. Now it has fallen back to the flat line. I think that this stage, something quite concerning to watch. Oe i love that chart i assume at the Second Derivative is plunging, its only a matter of time before defer affects before it affects the first derivative. Julia and you have it. As we had 20 break, you can see the market tipping to the data to the downside. More to come. This is bloomberg. Amazonsg story is 13. 7 billion purchase of. Whole foods. I am joe weisenthal. If youre tuning in live on twitter, we want to welcome you to our coverage every weekday from 4 00 to 5 00 p. M. Eastern. We begin with our market minutes. We have to begin with amazon and whole foods. We have been talking about it all day since the news broke in the session. That was the big story. There is that movement and the dow and the s p 500. West today was the first day that trump was pleading. It, lets have a theyat amazon and all expected to counterfeit 48,000 based on their of ways. This is just under 2. 5 . Amazon is now the grim reaper for staples retailing. Lets look at some of the competitors in this space to give you a sense of what we saw. As you can see, we are down 4. 6 . That is the entire Purchase Price of whole foods. It wasnt just about the food grosses. It was also about the potential purchase possibilities for amazon. Look at the pharmaceuticals. Also, walgreens, here. We have cbs also with the pressure down. Foodsout some of whole supplies . Think willt people be amazon tapering with some of the supplies. These guys are representing 34 of revenue according to bloombergs supply chain data. Thinking ahead, this is also a real estate story, as you can see, one of these are down 6 10 of a percent. Lots of questions being asked. Joe a great overview of the amazon bloodbath. This was decidedly not the center of the action today. Nothing too dramatic. In the of a stronger pull back in the twoyear. It looks like there is no more tension surrounding the next leg of this bailout deal. It has been a good spring for europes stability. The 10 year yield is down to five points 6 5. 6 . The dollar is on track for the Third Straight losing weight. The Housing Stock is not helping. Even sterling, i am double reports,that, despite that theresa may will give up ground, they will have trade talks at the same time as the divorce settlement. It looks like it will give ground to the eu and do that afterwards, just a quick mention. You can see what we have is a dollar weaker versus the life of turkey, poland is also making gains against the euro. Commodities,ly, on looking at gold and oil, both of a little bit. Gold is hardly moving. Still below 45 per barrel. Foods, izon and whole want to bring in our tech reporter in San Francisco and the stock reporter Oliver Renick here on set. The Market Reaction is fascinating. I cant believe you did that. Interesting. It was exciting because otherwise, there were a lot of events during the week. The end of the week, we ended up unchanged. As you pointed out, there were a lot of things that were really interesting. The angle we chose to take is looking at all of those moves. These not grocery moves. Pharmacies,f these cbs and stuff. Up so much swallow of its original core area that now youre getting a move that creates some market cap. Overall, it destroyed a lot on the way. Francisco, you and your Bloomberg Technology team have done a lot of extraordinary reporting on amazons physical retail ambitions. Should all of companies from pharmacies to groceries should they all be trembling in fear . I think trembling is the last thing they want to do. What they want to do is look with a fresh eye at the mechanics of their business. The grocery business has been resistant to change. It has been the last category two embraced the internet and make the checkout lines smoother, make their employees more efficient. Free them from the mundane task of running a physical location. Amazon has a lot of experiments out there from the amazon fresh Delivery Service to amazon prime delivering from other stores. To their prototype stores in seattle, maybe you dont need a cashier, you just let something from a shelf and incense is what you have any charges your online account. Amazon will bring all these technologies and efficiencies to bear in 400 plus stores. I think the competitors need to look at their own businesses and how they get more efficient. I get that this is a 1 trillion consumers market. If we look at the struggle going on in the broader retail sector, the pricing pressures, the margin pressures we are facing, i have to wonder if for amazon, if this is not more about the data and the access to the customers that whole foods represents, the opportunities that there are in groceries, more broadly. What are your thoughts . Mine are more abstract than that, go to the simplest thing, amazon wants to be it was to gives its customers what they want in the lowest prices at the shortest amount of time. They have done that well in hard goods. It has made incredible waves and apparel. In apparel. By grubhub, uber eats 20 of whole foods businesses are those prepackaged meals, the burritos, the sushi packages on one side of the store, amazon can apply its expertise to that. Amazon is an expert at getting things fast. You dont really need toys or books, it is nice but you dont need it, your meals, your groceries, food, you need that fast. That is the last thing for amazon. This is speaking to what you are writing about. Distributionnequal of market share. Not quite as cashrich as other Tech Companies out there. Yet, investors seem to overwhelmingly like the deal. The analysts are in. What does it say about the faith investors have in amazon . It signals that there is a market that is very welcoming to risk taking. They want to see that. Theyre for amazon really trying to take companies to the next level. Either big disruptive transactions, the companies have been trading at disrupting companies or the willingness to go out and spend money or borrow money and say we are still willing to take advantage of low rates and do a deal like this. It does seem like it makes a lot of sense but i think there is some linchpin in the market. Logging companies are very highly valued based on what they have an expected growth. This will signal pregrowth. That means that investors are paying for something meaningful. Lets talk about jeff bezos. He was tweeting looking for philanthropy. What is his vision of what amazon looks like in 10 or 20 years . Mind but i read his think the most visible proof is the shareholder letters every year. He is remarkably consistent with them. He talks about finding big areas for growth. Apply the amazon mindset, that is investing in the longterm, bringing the strength of technology in, they have three areas of enormous strength. Prime, themazon Enterprise Software division, it was last year that he talked about looking for a four. We now see what it is, it is food. We have seen these at the washington post, we saw it with blue origins at the company, we will see with this election we will see if this philanthropy is a longterm approach. Using technology to make up for deficiencies. Being tied in with what the customer wants. And it comes to food, customers want options. To put things they always use on a habitual by. To an alexa say device that they want something. It is another big area of growth for amazon. That is why i think investors are reacting so optimistically. Your piece where you are talking about the on equal unequal Wealth Distribution it is a fascinating way to look at this. He brought up this idea this distribution becomes lopsided. This was the matchup of 2. 5 billion added to amazon, about 3 billion added to whole foods. From consumer discretion. Billion ofbout 35 Market Capital erased from a market. A lot of people dont argue that the price wass not big, this is creative destruction. At the end of the day, a lot of ceos are hurting bigtime. Hated famous for hitting profit margins. The more amazon dominates, the lower margins are for everyone. I personally love the ideas everyone has been in hopeless in new york, we just pick up our stuff and go, it is really exciting. It has a meaningful impact on our lives. There is a little bit of a reverse in trade. It is pretty clear. Brad stone in San Francisco, and the bloomberg stocks report Oliver Renick. The dow closes at a new record high. We dig into the biggest market moves. This is bloomberg. Be in a scalise will hospital for weeks, requiring additional operations. Last 36mproved over the hours. The doctor says that when he arrived at the hospital, he was critically injured with an imminent risk of death, adding that he was as critical as you can be when he came in. His wife thanks Capitol Police officers for hero is him heroism at the scene of the shooting. Signed a newmp policy with cuba that rolls back parts of president obamas historic deal. While many are applauding numeral, democratic opponents are strongly opposed. Patrick we spoke to patrick lee spoke to kevin cirilli. Havew that people who never been to cuba, they dont understand cuba, that theyre trying to do is fulfill a campaign tweets, this is american foreignpolicy, and they know sense. The new policy includes a ban on doing business in cuba. Tos trust completed a deal create the james a Farley Police office building, it is part of a 1. 6 billion plan to create a modern transit across eight avenue from the overcrowded penn station. The project could be created by late 2020 and help believe pressure and crowding of the people who use penn station every day. Andrew cuomo one of the summer of hell as amtrak which owns pen stray should penn station should have tracked working done. Track work being done. Initial negotiations will focus on the terms of the uks departure a future trade deal will not be discussed at the same time. Are scheduled to begin on monday. This is bloomberg. You probably did not miss the roller coaster week in stocks, ager indexes hitting an alltime high but a resurgent tech selloff dragged the nasdaq down. To wrap up the market action, lets bring in double ramsey. Minneapolis, it is perfect that this week ended with amazon news cause tech is in the spotlight. Where are we contact . Is this a peek . Is it a temporary blip . What is going on here . What i do think it is a fee for the broad sector. Rather than a mega caps off tumbled this week, the are very attractive and it is interesting, there has been a lot of talk in recent months about this being the tech bubble. I couldnt disagree more. The feedback and march of 2000 24 60 times, trading around versus 71 at the peak. Two thirds lower. Most of the broad market evaluation. I dont feel a bubble there at all. Applicability is almost double what it was at the peak of 2000. I dont see it. That is coming from someone who has talked about the hazards in the broader markets. This is spectacularly premature to talk about bubbling in tech stocks. But when Goldman Sachs comes out and suggests that when you look at the volatility of some of these things, they trade more like consumer staples. Does that give you pause for thought . I guess volatility is more helpful to us in our sentiment work and our technical work. To extremelyn drop depressed levels and remain there for a very long. Very long time. We are seeing that would volatility stocks. Very richlyecome valued over the last several years. Now joining that group in terms of being in market favor is the tech stocks. You can see the trend index as well that sees the Underlying Health of the market and International Markets as well. Are listening to you at this moment . It could be a relative judgment. It has been flat from where it was six months ago, still moderately bullish to the way we use this. We have the ability to shift equity exposure between 30 at a maximum bearish extreme and 70 on the upside. We are 60 or 70 on that exposure. Right near the maximum exposure allowed under our portfolio guidelines. If you would have told me the market will be up 9 or so year to date in the tech and leadership sector after this weeks tumble is still of 16 or 17 i would have suspected that maybe that would be enough to tip the work into neutral territory. The whole thing has been very uniform in the sense that just this week we made a new high on the doubt. Tuesday, highs on the snp. You could argue the financial stocks labor a little bit above the high. That is the only problem area i see among all of this group of indexes that we consider to be leading groups or bellwethers. That is a pretty cohesive market action. There is a good evidence of a broader process, even having begun. We may see that over the course of the summer or the fall. Hink that the key phrase the key term is process, it will unfold over a number of months and it is debatable over whether that has even begun. Great stuff. Thank you very much for joining us. Coming up a centurylink blowing was fired for the was a the highpressure sales culture. Bloomberg scoop next. From new york, this is bloomberg. Is under fire for charging customers for counseling didnt request, similar to the wells fargo scheme. Give us the rundown of the details. My backup question would be what does this mean for the countrys current merger plans. What we have heard this week is that the loss of the files in arizona from a former employee behavior similar to what happened at wells fargo with incentive plans, she reported to the ceo during an internal message board q a. She claims that she was let go from the company two hours afterwards after reporting said behavior. She has filed a wrongful termination suit as a result of that. Once we heard wind of that and the story hit the markets, they can see that this was based they dropped. It still has yet to be seen what this means for the merger. Whistleblower alleging that the company did incentivize salespeople salespeople . E look at the stock dropped. 4. 5 on her screw. Stories like this and the wells howo one make you wonder pandemic this is across all companies. This is one whistleblowers allegation. You do wonder how widespread this is across corporate america. It is a key question. They need to be Testing Companies to make sure that this thing isnt happening. Particularly in light of wells fargo. Im just looking at some of the details, this goes back to february of 2015. That is all on that, plenty more to come, we will talk to amazon after this. This is bloomberg. [ mooing sound ] [ laughing ] its drivng me crazy come on. [ spitting from tongue ] time for my secret weapon. Sports, movies, tv, ah. Show me music to distract a minion. [ voice remote click ] [ pharrell starts to play ] ahh. Im pretty smart ahhh [ mooing sounds ] [ minions laughing ] show me unicorns. [ voice remote click ] together ahhh. That works too. Find your awesome with the xfinity x1 voice remote. See despicable me 3 in cinemas in june. Im mark. An encouraging update on Steve Scalise who was shot on that virginia ball field. There is a good possibility that he will make an excellent recovery. He will likely have another operation within the next 48 hours. Statuscongressmans remains critical. We are encouraged by improvement in his condition over the next 36 hours. His vital signs have stabilized and we have control the bleeding. The doctor says that he was at an imminent risk of death when he arrived at the hospital after that shooting. The top democrat on the Senate Judiciary Committee Says that she is increasingly concerned that President Trump will try to fire special counsel robert rosenstein. Rob mueller is investigating russian u. S. Electionsto and possible ties to the trump campaign. Confirmed that he was under investigation and called it a witch hunt. Dianne feinstein says that the president s tweets send the message that he doesnt believe the rule of law applies to him anybody who thinks us was else was otherwise will be fired. The senate should not let that happen. Traveling to miami with President Trump is Vice President pence. He was advised to hire legal counsel. Havanalittle neighborhood, he said it is very routine. Mr. Pence also confirmed that he retained counsel. Angela merkel has come out against the proposed expanded u. S. Sanctions against russia. The plan passed in the senate with target Energy Companies doing business with russia. Gasould threaten a planned pipeline between germany and russia. Anyla merkel says that plant should not harm europes economy. 2700ed by more than journalists and analysts in more than 27 countries, this is bloomberg. But review lets review a recap of todays market. You can see the doubt and the s p 500 closing in the green. This is a fresh record for the dow jones. It has been an incredibly to incredibly choppy week for te ch. Amazon bought whole foods. Let me give you a look at what happened in terms of share price performance. Amazon is unusually high. Hope those is 29 . This is the first analyst to slap a 48 price tag on whole foods and say that we think this isnt the end game here. There could be a competitive rate coming in. There are Research Analysts saying that amazon is now the grim reaper for the grocery sector. There, see the reaction they estimate that around 60 of all those locations are within a 10 mile radius of krogers stores. They had had a shocking 24 hours. Look at cbs, it is meaningful what does it mean for look at cvs, what does it mean for other retailers out there . It is been a wild week in washington. President Donald Trumps decision to limit u. S. Citizen possibility to travel and do business in cuba bloombergs chief washington correspondent. I remember the days when i was a prosecutor. I would take the account away from him. I would say that if youre going to treat that, i can represent you. Every time the president tweets, i can see the prosecution in oneot what he says play or to tweets, it is a combination. Look at where this is all headed, most people, you can see right now, there are charges of obstruction of justice brought against the president. I think you can look at what is going on, i dont know what mr. Mueller has done so far. I dont know what is in the attorney generals office. Certainly there is enough to give a prosecutor reasonable concern. Generaleputy attorney signified that he might have to recuse himself. Do you agree with that decision . What do you make of the president and the administration suggesting that they may have to fire Robert Mueller . When you start firing the people investigating you, this is what Richard Nixon did during watergate. I would be amazed if anybody was to go back to that precedent. Everyone knows what happened to Richard Nixon. And if you can fire somebody, sure. The president will those people who love been supportive of him here on capitol hill. You will end up with a special Congressional Committee that he can fire. President trump aversion some of the policies under the Obama Administration in regards to cuba, do you disagree with that . It is a colossal mistake. If you ask the american people, they would say it is. He is doing it because of an announcement during a Campaign Rally in miami on Foreign Policy in this country. For 50 years, we tried to stifle cuba, it did nothing for our security and it did nothing for theeirs. The private business is expanding, young people are getting a better understanding of the United States. All the actions of President Trump it will have them say that we cant trust the United States and they will turn to russia and china. Would love tona have the involvement in cuba that we are turning down, they would love to some their noses and say here, you didnt know how to have elections with cuba, we do, here we are, looking at you from 90 miles away, it is a mistake upon mistake upon mistake upon mistake. What about the u. S. Businesses who have been expanding . Are they going to be hurt . You can turn something on ourring something off, country wont say no. Can go to saudi arabia and all these other places no problem, cuba, 90 miles off our in the the only country world where america has to have christian permission democrats ared passing legislation to change that. I think that is a colossal the stake mistake. None of the people have ever been to cuba, they dont understand cuba. What theyre doing is trying to fulfill a campaign tweet. This is american foreignpolicy, it makes no sense. That was senator has her leahy. I want to bring in kevin cirilli. Kevin, earlier today, donald trump tweeting that im being investigated for firing the f ei director by the man who told me fbi director, witchhunt. What does he mean by that . Apparently he is saying that he is being investigated for that decision. The legal team surrounding him is urgent oaks to preserve people to preserve any and all documents from the campaign in case the Congressional Committee should start issuing subpoenas for those documents but also, of course, the special counsel. The president returning from his remarks earlier today in miami, they are facing a weekend where there are dealings with russia that are very much on going. The chief washington correspondent has had a very busy week. Would be if he didnt, coming up in france, they had back to the polls for the second and final round of in legislative election. We take a look at the expected outcome, next. From new york, this is bloomberg. France holds the second and final round of his parliamentary elections. The Emmanuel Macron party will win a decisive majority. It is a Stunning Development for a party that is only a year old. France, some political observers have compared the new french president to jupiter, the king of gods, someone with great very silent, rare public appearances in the media. Emmanuel macron could actually reinforce his powers, is on track to get three quarters and 80 of the seats at the national assembly. The lower house of parliament in france. The Main Opposition Party will be likely to be republicans, the Rightwing Party that can get between 18 and 100 80 and 100. It has been decimated in the first round of these on sunday. They would only go between 30 and 50. Than five get no more or 10 in parliament. The this majority at national assembly, Emmanuel Macron will be able to push through on france, especially the one that everyone is one over thee big summer. Some have expressed concerns that the lack of a strong Opposition Party is not healthy for democracy. Some unions have called for strikes and demonstration across the country on monday. The day after the runup of the safety election. Bloomberg news, paris. More ahead on france and the election and the u. S. Latest on the u. S. U. K. Elections. Great to have you on. If we look at the projection, he could win 400 seats, it will be an incredible landslide, assuming he does that, what is day one on his agenda . It would be a stunning victory for macron. He only started his Party Last Year and his march has been unstoppable. He has hard work ahead of him. There could be a lot of domestic reforms. France is economically struggling. There is very high unemployment. The first challenge will be Domestic Labor market reform. Going by the history of the president trying to inform the labor market in france, we know this will be a challenge. He also faces a lot of challenges on the european stage and the shifting geopolitics of europe and its neighborhoods. Mack brown has very High Expectations for him to deliver. Laurels ofst on his victory yet. Assuming he gets a huge win in the parliament, can you talk about what is on his agenda . I think he came in on a platform of change, he had been the economy minister for history now. He disassociated himself with it. Liberal market reforms are necessary in france. This has been an area where other president have tried to reform and failed. Background is in a position where he has an advantage given the huge majority he will have in parliament, if he doesnt reform and he is unable to timothy economic fortunes of france, the bigger question is what happens in the next election in 2022. Though sheen even did not do well, she still won millions of votes in the first round of the president ial, theres a lot of anger and discontentment. If macron cannot be successful in his economic program, it will haunt him down the line. We see strikes, the tension that labor reform takes, i guess we will see. I also wanted to get your opinion on brexit and the u k e negotiations as well. Reporters towith discuss the progress of the government and where they are going next in terms of negotiation. You about to start in negotiation, we set out very clearly, our desire. Then the article 50 letters that we sent. Negotiation, debt my clearview, the view of the majority of people in britain is that we should prioritize protecting jobs, protecting Economic Growth and protecting prosperity. How diplomatic. Not necessarily being honest. Has had to give ground and rather than coordinating future trade talks with the divorce process, that will be staggered as the eu has always been threatening, what is the latest . The general election certainly through a curveball into the ua negotiating position. Theresa may has been very much weakened. There has been any other Political Party or leader who can go to parliament with a strong vision for what frexit is to look like. Like. Xit is to look it is very difficult to negotiate with the eu if you dont know what youre and negotiating game is. Or indeed if you have the Political Capital to sell that deal once it has been negotiated. Havee other hand, what we it is the possibility of it either remaining in the ea for the Customs Union as a transition area. Transition area period. The fact that the eu has said that there are talks that will be staggered, it shows the upper hand is indeed with the eu27. They have been weakened by the general election. A veryesa may is already weak prime minister, that is assuming that she can cobble together a deal. Now have this horrific fire in a tower in london that has been having political ramifications were protests against theresa may. How does this Impact Politics . The tragedy in london has been very sad to watch unfold. I think theresa may has obviously come under heavy criticism for her handling of the immediate aftermath of what happened, she has already come out of the election very much weakened. There is a lot of anger at the government. There are cut in the Public Service sector that have this record tragedy. Forward,hat going theresa may, she will try to hobble on as prime minister, that has a lot to do with the fact that her own party is afraid that if they launch any district challenge, labor woodwind. Although theresa may is not the most popular candidate in her party, number one, there is no clear idea of who her successor should be and number two, the concern is that any new election would mean them getting ousted out of power. I think we will see a weak enter intotrying to some of the most, lets negotiations that have been undertaken in decades. It will be extremely difficult for the u. K. Great to talk to. I was to point out the images that we were shown you with a protester outside of the town hall in west london where the Apartment Building was chanting that we want justice. That was the death toll. Up, bob iger talks to bloomberg about the prospect of u. S. Tax report, highlights of our conversation with him next, this is bloomberg. Spoke with bobe iger about the importance of maintaining relationships with neighboring countries. It is by those us that not only the environment of the United States remain healthy, whether it is economic or political or regulatory in nature. Completehe ability to compete successfully. There are so many factors that taxation, to that trade, healthy relationship with other countries. It is very important to multinationals. Our movie business is a great example of that. Maintaining open relationships with the countries of the world, we can bring movies around the world, support jobs in the United States as part of the process, it is very important. If youre doing business in the world, think it is important that the world remain healthy. This is something that companies should accept as a responsibility. You talk on tax, that is clearly part of the policy agenda. Does it concern you that the agenda is being stalled . Say if im concerned about whether or not something is being stalled. For a companyty that pays a high Corporate Tax what i see on the near horizon for the u. S. Economy i will have anything specific, it is a generally healthy economy. We know that it is fairly low. Consumer confidence is decent enough. Interest in our business is quite strong. The advertising marketplace is not too bad. Advertising is ok. Generally, the American Consumer is healthy enough. There are certainly interested in disney, that is great. Another record high for the dow this week. Bought whole foods, no doubt we will talk about that next week. Vote in a new parliament. Im looking at fedex, reporting earnings next week. Dont miss this, existing home sales on wednesday and new home sales on monday. Bloomberg technology is up next. You are watching Bloomberg Technology. We saw that president is rolling back some of the cuban policies instituted by former president obama. Banned commercial dealings with cuba upon smith military. He put new travel restrictions on u. S. Citizens visiting the island. He challenged cuba to come up with a better deal than obamas. Leader steveority scalise is remaining in the hospital for weeks while the continues his recovery. That is according to one of his surgeons who said that he arrived at the hospital with an imminent risk of death. Defense secretary jim mattis has not decided to increase troops in afghanistan, that is according to the pentagon. Previous reports said that the u. S. Is any more than enough troops there. Mattis says that he doesnt have enough forces to help afghanistans are made by the taliban. Rod rosenstein now has lance to recuse himself