david: it's not just about me. it's about the team. amanda: we have another great ceo coming up. you talked about the technology they have planned. where the company is going. david: it was a great experience. we also have with us peter kraus. he will explain what equity managers are doing wrong. innda: we are going to check with our bloomberg team for in-depth coverage of our top stories. susanne walker barton is live on where the fed may raise rates. ryan chilcote talks about the oil company spending cuts. let's start with janet yellen and the fed. june appears to be out. september is not a sure bet. that's the take from investors. has beenonomy recently affected by a mix of countervailing forces. to expect reasons that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones. amanda: susanne walker barton joins us now. let's start with how the market is interpreting this. do we get a sense that september may even be off the table? >> it may be off the table. the bond market is now thinking the fed they raise rates by the end of the year. have recalibrated. -- they have recalibrated. july is off the table. janet yellen acknowledged the weakness in the may payrolls. and we have the brexit vote hanging around. the bond market is reading this as yes, the fed is going to be gradual and it may just be one rate hike for the rest of the year. amanda: often the bond market will ignore the political. not this year. it seems all markets are paying attention to the u.s. election. what does that do to september? does that keep the fed looking at the uncertainty in the presidential race? >> it does get tricky going into the end of the year because we have the elections coming up and that would seem a bit political if the fed moves around september. what's more in play is the state of the economy and the state of what's going on around the world. there are all these global factors. low information -- inflation, low growth, the brexit vote, china. all these other factors the fed is thinking about if it decides to move ahead. amanda: thank you, susanne walker barton. are alsoterest rates unchanged in australia and india. that move was predicted by all 44 economists in a bloomberg survey. the rupee is climbing. rastello inndrine mumbai. >> we have some clues. on the interest rate side i think what was very important for investors was a good news coming from the u.s. from the fed. the governor left the door open to more cuts. he says this tradition -- position is still accommodated. he said they would look for room to ease further. when it comes to his mandate there have been some talk that maybe he did not want an extension of his mandate. he was starting with a lot of humor. he did address that specifically. he put the ball back in the court of the government. now the government has to make a decision. david: the prime minister is meeting with president obama today at the white house. he will also be speaking to congress. what do the indian people expect to come out of this visit? lot. has been traveling a he's really hoping to get some investments to support manufacturing. there's a big need for investments in india in road and factories. in exchange tree has a huge market to offer for the biggest american companies. more than 1.2 billion people and potential buyers. david: thank you, sandrine rastello. amanda: we got some more clues in how shell is adopting to the slump in energy prices. ryan chilcote's life -- is live. >> the big tick away this morning was the focus that shall has on capital expenditures. the money they are prepared to invest oil and gas out of the ground. $29 year they will spend billion. a few months ago they were guiding the market to $33 billion. they are cutting that number back very quickly. the interesting thing is if they go much lower, they said that's where they start to cut into their own growth. we needately we believe to be roughly at a $25 billion level in order to sustain the company for the long run. we have to reinvest in order to keep this company strong and help a. you have to have asset that continuously decline. competitiveness that is continuously being eroded. we believe we can sustain and slightly grow the company and growth dividend overtime. in the next year -- what was very different about today is shells announcement that they a $25 billioneen and $30 billion band between now and 2020. they will not invest more than $30 billion to get morbid -- to get gas out of the ground. amanda: thank you, ryan chilcott in london. chilcote in, ryan london. it's interesting that there are not very optimistic about their plans. we are watching the premarket. julie: let's take a look around the globe and see what's on the move. afterrman dax is up 1.7% industrial production expanded in that country. overall gdp for the eurozone was actually revised higher to where it was a couple of much of. .6% growth and then it was cut to .5%. now it is back to .6%. also want to look at the rebound in the british pound. it has been incredibly volatile. onmoves with every headline brexit poll numbers. commodities some more action today that is worth noting. the biggest today increase in copper stockpiles 2004 is sending copper sharply down. crude continues to rally above $50 a barrel wti. brent also above $50 a barrel. amanda: we are seeing worldwide reaction to it janet yellen and what the fed is going to do. julie: yes. we have been seeing that speculation. she didn't say anything different but it seems to be causing reaction. let's get an update on what's making headlines outside of the business world. hillary clinton now has enough delegates to claim the democratic presidential nomination. that's according to the associated press. the ap is factoring in the won andes she has on commitments from superdelegates. she is in a tight race in california with bernie sanders. sanders is depending on superdelegates who do not vote until july 25. a car bomb, targeting a police vehicle has killed at least 11 people and wounded dozens more. no one has claimed responsibility. last year kurdish rebels and the united states have carried out deadly attacks in istanbul and oankara. insurance executives have met with government officials to assess the cost of the floods. the seine has fallen from its highest levels in more than three decades. a french railway says strikes and protests against the government's labor reform plans are costing it $222 million a day. david: coming up, could the long drought for energy service companies becoming to an end? ever for isi is here with its global enp midyear spending outlook. gm's annual shareholder meeting kicks off in detroit. how they plan to increase shareholder value. you will hear from ceo mary barra and the president throughout the program. deck.ore on ♪ amanda: mrs. bloomberg . i'm amanda lang. let's head to julie hyman. julie: pharmaceuticals is back in the news. this is the first earnings commentary report we have gotten from the new ceo joseph copper -- popper. earnings this year are going to 7.00 a share. 49.lysts were looking for $8. the first quarter results reflect in part the impact of significant disruptions in the organization over the past nine months. that's a bit of an understatement. the company has been targeted by congress, investors, and the shares slumped 90% before he took the reins. it has been dealing financial restatements because of what has been going on -- financial results as of earnings restatements. it said it will still follow those results by the end of the week which is the deadline. we are also watching oil stocks this morning. cuttingtch shell also spending plans further. also promising increased savings following its purchase of bg group. the games are not limited to royal dutch shell. we are seeing a gains in gas talks generally. all gaining along with brent and wti. we will stick with energy. crudes turning point. oil trading near the highest close since july of last year. a drop inasts shows crude stockpiles for third week. commodities retreated overall. joining us now is james west, evercore isi analyst. tell us what you found for the rest of 2016. survey my a colleagues have been doing since the early 1980's. we do it twice a year. it is published in december and the midyear update was published last friday. capital spending for 2016 is significantly. 41% in north america and 21% outside of north america. the positives outweigh the negatives because we are coming to a bottom. this is the first look at the second half of 2016 and about 2017. we asked about 2016. a third of the companies we surveyed suggested they would be up in spending by more than 10%. 25% will be up another 15%. that's a good case for at least the second half. david: substantially reduced spending in the united states and you end up finding a bottom. you found that spending is down more than in the last 30 years. is that driving the bottom? >> that is. production is declining. companies are seeing better cash flow now that oil has come up. they're starting to stabilize production. amanda: we have seen production shut in. the best cure for oil prices being lower oil prices. rig counts have been down. they actually seem to be on the way back up. once you keep oil at a certain band we expect to see a lot come on. >> that will drive some improvement in the rig c ount. in 2017, 73% of the companies we surveyed said they would be up in terms of capital spending year-over-year. nobody said they would be down. amanda: if oil prices stay a certain level. they are quite bullish if we think this level is a good price. everybody in canada would not they that -- say that. $50 is the average they are using. i expect that will migrate higher. the only ones that are still curtailing spending are the major oil companies. david: i wanted to talk about that chart. white numbers going down is the rig count. get highoint do you enough that the shale producers really come back online in a big way? $60 to $65number is per barrel. there's going to be constraints. we think it takes a year and a half to two years to stabilize production for the entire industry and then turn it around. amanda: we also showed the supply and demand an area globally. -- scenario globally. what is their expectation on this front? >> they are looking at demand forecasts that are stable. 1.3 million barrels of demand growth this year primarily led by india. a very positive and healthy demand out of china. they are comfortable with demand staying flat. unexpected averages that we talked about before and u.s. production coming off stream. david: is also inventory. perhaps crude is up today on reports that we will have another week of reduced inventory. where are they headed right now? >> we are at an all-time peak. the days of cover are around 44 days or so. that's actually very low for historical averages. 42 would get us to a much higher oil price. amanda: oil service firms. when you take all of this, are they also hitting the bottom? >> absolutely. this group has already started to rally off the bottom. we saw a tremendous rally in the stock. that will continue as oil prices move higher. david: we had charles peabody who is an analyst with banks. he says we have not even begun to the the end of the defaults for the sector. companies a lot of that just cannot be worked out of these price levels. activity will be of it is not enough to save these companies at this point. we will have major restructuring. amanda: how much is driven by the economy in china? how much could that change? >> probably a third of that is the demand side and two thirds is supply. let year for low oil prices is low oil prices. evercore isiwest, analyst. thank you for being here. amanda: coming up, the most read stories on the bloomberg terminal. but first, gm ceo mary barra sat down with david weston. she will reveal their strategies to increase shareholder value and plenty more. >.at's all ahead on amanda: welcome back to bloomberg go. i'm amanda lang. time for a look at the top stories terminal users are reading on the bloomberg. what caught your eye this morning? david: brexit. the headline is brexit no issue for u.k. stocks. there were polls that came out over the weekend. the pound went way down. but the stock market is doing just fine. is that because the pound is likely to go down? or do they really not trust the polls? amanda: i think probably the latter. if you believe mark carney there is a great deal of financial pain that could follow a brexit. david: there is a lot of question obviously about u.k. kpolls. look at the election of mr. cameron. the bookies always know. we are getting glimpses of saudi arabia's plan to transform itself. it is a country not unlike my own that is dependent on resources. the plan is to cut the public sector wages 40% within five them to 40% of gdp. they want to diversify beyond oil. david: this is a step in the overall plan for the deputy crown prince. i think it's different from canada. i don't think 45% of your employment is government employment. is not asr economy dependent on resources. a country that's going to have a hard time reducing benefits that it citizens have received from oil. subsidies are going to end. david: and they will have to borrow a lot more money in the capital markets. they're expecting as much as 200 ilion dollars they will have to billion they will have to raise. amanda: its sovereign wealth fund already invest around the world. it will be interesting to see its latest bet. up, valeant. shares of the pharma giant are plunging following quarterly results this morning. what it needs to do to get back on track. more next. ♪ okay, ready? whoa! [ explosion ] nothing should get in the way of the things you love. ♪ get america's fastest internet. only from xfinity. david: this is bloomberg . i'm david westin. we will go to various asset classes and show you gmm. we talked about the german dax which is up. two greensalk about and a red. there's a lot of speculation today whether this was some accident in some algorithmic trading. for over -- whatever reason it is sure we will he a lot of volatility in the pound. the australian dollar is up because the central bank decided to hold firm on its interest rate. and the australian bond went down. the yield went up. people decided, we cannot wait around to get a bigger interest rate so we might as well hold on to those bonds. we are just two hours away from the opening bell. here's what you need to know. the economy grew faster at the start of the year driven by a pickup in consumer spending. gdp rose .6% in the first quarter. ontralia and india stay put interest rates. the rupee is trading at a three-week high. valeant shares are falling. now for bloomberg's first word news. >> new pressure on bernie sanders to exit the race. hillary clinton has enough delegates to win the nomination. delegates and superdelegates. california is the largest of six states of grabs today. she is in a tight race with bernie sanders. sanders is depending on superdelegates who do not vote until july 25. judges at the european union's top court had ruled in a case over whether the u.k. leaves the eu. asylum seekers can fight decisions to send them to another location. theof the biggest issues in brexit campaign is how the eu deals with those seeking us island. -- asylum. -- kitchen ski has a .2 percentage point lead. he promises to use his decades of experience to boost investment in peru. david: tom keene is with us this morning for the morning must read. i know you agree this is truly a must read. in. is a book that you are you are quoted on the back as saying i love a book. : ruchir sharma change the dialogue on the linkage of commodities in the markets. book, 20 pages in, you were wow. david: i have that reaction as well. i want to pick out this passage. the pressure on countries to make the most of their locations and attract a larger share of global trade is only likely to increase in the coming years. though we live in a more interconnected world, the perception that we live in an increasingly interconnected global economy no longer hold. s. with brexit going on and the presidential election there is a real issue with global trade. talk two hours just on that quote. what is the new globalization? one of the great ideas here is it will not be bilateral or even multilateral. based wherevery bloc- the logistics of trade will change into a new regionalization. david: gatt was supposed to be a global. now we increasingly go to things like tpp. can tpp even get through given the presidential politics of the moment? of the quoteeart you put up is there's a mystery among pros about what the new globalization is. we simply don't know. david: and england is seriously considering pulling out of the common market. what will that mean for trade in europe? tom: that takes us back to the 1950's. muchld not overweight so england being the same as asia. but i would say the tensions are all wrapped around subdued global growth. nothing solves problems like global growth and there's no real indication of that resurgence that makes for good globalization. or badstion is not good globalization or whether there's going to be discontent. the question is what kind of new globalization will we see? can i borrow a copy of this will -- book? david: absolutely, if you want. no pictures i'm afraid. thank you to tom keene from surveillance radio. with tom keeneay and mike mckee. amanda: valeant earnings this morning missed estimates. stock is down more than 14% premarket. 15% as you can see on your screen. drew armstrong is here. a good news is it is back on track filing its financials. was this a shock? >> i think so. people are expecting some kind of guidance cut. i don't think anybody expected it to be this ad. problems --aleant's the political stuff they have been into, the drug pricing controversy, the management issues. it is starting to look like in his earnings report like their actual problem might be the company's underlying is ms. -- business. that put all that chaos in the past. people were looking for a reset point. it may be that valeant is not as great of a business as people were hoping it was. amanda: and its ability to set prices and once on drugs it acquires has been threatened. that has changed. it wasthat sub business trying to get its hands around. is any of that going to change? >> you will see a continued period of adjustment. if you look at the main product categories they have, dermatology. they have this toe fungus drug. they are down 43% in dermatology year-over-year. that had been a major growth category. they are getting killed. other major categories are not growing at all. ophthalmology project are down -- products are down. it's bad from a sales standpoint. they have a fair amount of debt at this point. >> they have said they will be selling some businesses to pay that down. that puts you in the position of not generating as much cash. think they are servicing around $400 million in the quarter in terms of industry payment. it's a lot of money. it is the difference to them between a profit and loss essentially. amanda: there have been questions about its ability to service that and the strength of its balance sheet. does this increase concern? >> people have always been saying that this company can -- no one is worried that this company is going to go bankrupt. technical been filings for default and things like that. i don't think there has been the concern that this thing is going bankrupt at any time. it is not the markets overriding conclusion at all at this point. maybe this is just a mediocre drug company with some mediocre product. that seems to be the concern right now. david: there were reports of an earlier attempt of somebody to come in and buy them. does this make them a more likely target or act decision -- for acquisition? >> it probably does make them more vulnerable. but that article was from before we got -- they got a new ceo. this is just speculation. i'm guessing that was somewhat opportunist that given the chaos the company was in at the time. it does not necessarily prohibit someone coming back in now and saying, you need a savior. as the stock price keeps going down you will see people saying, something is volatile. how do you assign a value to this thing? tough untilly things have stabilized a little bit more. amanda: drew armstrong, thank you. david: coming up, gm's ceo mary barra joins me to discuss the state of general motors and where the automaker is looking for growth. that's next in a bloomberg exclusive. ♪ amanda: this is bloomberg . i'm amanda lang. make sure to stay with us during the next hour. we'll be joined by peter kraus in a bloomberg exclusive. that's coming up. ♪ >> verizon will did $3 billion for yahoos major internet asset according to the wall street journal. the second round of its was due yesterday. verizon is competing for the assets with at&t, tpg and others. samsung may come out with two new smart phones that have bendable screens. that's according to people familiar with the matter. one of the phones can fold in half. the other one has a five inch screen that unfurls into an eight inch display. -- was convicted of losing 5.6 alien dollars while he was a traitor. now he has scored a victory in court. a court awarded him more than 400 $50,000. : investors in general motors are gathering in detroit for the annual shareholder meeting. gm has come along way since bankruptcy and a government bailout in 2009. i spoke exclusively with ceo mary barra. ceo for over two years. give us a version of your state of gsm address -- gm address. we continue to refine. one of the things we are most proud of is the cars and trucks crossovers on the road today. we think they are the best we have ever produced. we continue to build the core brands globally. and our brands in china as well. that is something we are very proud of and continue to work to refine. every segment we compete in around the globe we want to win. we are looking at ways to continue to grow the core business. , we cans financial continue to grow the core business even in developed markets. this is a transformational time in the transportation industry and auto industry. we all know that people are going to have to figure out how to get .8 .8. you see general motors taking a very measures to make sure we lead in that space. where not only making sure the core business is going well but we are branching into areas because we want to define the future transportation. david: it must frustrate you a bit that as successful as gm has in the stock price has not kept up. what does the street understand? >> there's an industry effect going on right now. particularly in the u.s. market. a large percentage of our profits -- there's a big concern of our we at peak and are we headed to a trough? transformation and sharing and autonomous, people are trying to say it's a cyclical business and as we come out of the cycle what will be different. we are starting to change perceptions. we are really disciplined and we have been talking to investors to make sure we -- they understand that we are well prepared. it's a very different general motors and the fundamentals are strong. we are doing things to get rid of the bottom of the cycle. david: to what extent have you anticipated the possibility of a downturn and what use is typically would do to make sure gm could weather that storm? >> to make sure we were even at a $10 million unit market. look at where the market is right now and what happened in the last recession, making sure we have a right even when at that level is very in orton. we are being incredibly disciplined in our inventory. when you start to go to a lower part of the cycle you really the inventory unwind. being disciplined in inventory is another way we are being very prudent. growth thatnstrated are than anyone in the industry on driving retail growth in the end date. is it difficult for you being at the top of the business and not having the dark price where you would like it to be? >> we are focused on what we can control. if we are running the fundamentals of the business and making it better, we are still committed to take care $5.5 billion of cost. seen dramatic improvements in material cost performance and getting that strong material cost performance while making sure we are improving our relationships with suppliers. that just came yesterday. we will focus on doing the fundamentals and making the business more efficient. putting cars on the road it people want and investing in technologies like autonomous and connectivity. fuel cells that will change and leave the transformation. that's what we focus on. david: that was part of my interview with mary barra. one of the things that struck me is she's got a big job. over 200,000 employees on all continents. she's trying to transform the company. last week they missed sales estimates and it was because in part of supply. she was talking about managing inventory. the problem is when there is an earth like in tokyo -- amanda: it disrupts. i really liked her frankness on where we are in the cycle. home. done well at it's not just about growing share elsewhere. the thing is if the cycle turns, what happens to them. she was very frank about that. david: they talk about being able to invest through the cycle. current their strategies to bring in more product. they don't want to interfere with that if they have a downturn. amanda: your question was great about the market misunderstanding them. people are wondering about the future of driverless cars. are trying to take this into driverless cars and electric vehicles. they also invested in lyft. amanda: we will have more from your interview. david: we talked for quite a while. we learned a lot. amanda: that's all coming up. also, a decline in china's fx reserves. not necessarily a sign of weakness. we will show you why next. and let's take a look at how futures are moving. building off of gains yet elsewhere, a nice bump higher for the dow and s&p and nasdaq. ♪ amanda: welcome back to bloomberg go. i'm amanda lang. there's a live shot of london today. can see the ftse showing gains. leading that are market higher. we have the view from royal dutch shell on its outlook. markets around the world responding to janet yellen and a rate hike seemingly pushed out for some time. time to bring it back for off the charts. declinedx reserves again. julie hyman is joining us with a look. we have seen recent declines. what is it telling us and our investors nervous? foreign-exchange reserves on an absolute basis and the ones that changed are the amber lines. this decline was not necessarily it acted. the number coming in a little bit lower than estimated. about $3.2 trillion is what was estimated. it was mostly because of valuation effect. many currencies that traded against the dollar will last month. if china held those currencies they had to adjust for that valuation. in terms of implications for the yuan it actually had its biggest two-day drop versus its peers in february. in blue you have the yuan versus the dollar. by other metrics you are seeing a decline. amanda: china remains the largest holder of foreign reserves in the world. at least three times bigger than any other country and a major holder of u.s. treasuries. we are not allowed to know exactly what is in their foreign reserves. those declines are perceived over the recent his trieste one-times cause for can turn that they will be a less willing purchaser. it doesn't seem to be a concern in this particular case. much more seems to be about the yuan itself and the chinese economy. the pboc weakened its reference rate against the dollar by the most in a week on tuesday and there's a talk about what it might now do when it is having these decline in foreign reserves. on the other hand if you're going to see a weakening dollar that might by the pboc some time. amanda: thanks julie. david: markets have not been all that riled despite the declined yuan. that doesn't for the first hour of . coming up, peter kraus joins us in a bloomberg exclusive. and we will have later from gm's ceo mary barra. how she plans to boost shareholder value. that's next on . ♪ >> climbing the wall of worry. the s&p points to a high. >> driving the future. general motors posting their annual shareholder meeting today. find out how the ceo plans to continue growth at the nation's largest automaker. >> clinton passes historic day. theary clinton becomes first female to win a major party. we will talk about what comes next for the presidential candidate. ♪ amanda: welcome. jonathan is off this week. ahead. big two hours more from the exclusive interview with the women leaving general motors. that is right. the shareholder meeting into choi kicks off an hour and a half from now. we will bring you more for my exclusive -- exclusive interview. growth with the company's new purpose on technology. on top of that, another bloomberg exclusive will explain a losing formula. first, let's go around the world. let's check with the bloomberg team. on hillary clinton, the democratic presidential nomination, shares her plunging premarket and david has the latest on china talks. hasd: the associated press reported that hillary clinton has secured enough delegates to secure the nomination. history ago back and -- the nominees rather than a primary. >> a.p. always runs these. yes, the ap has taken a little bit of thunder out of what was expected to be a huge night for hillary clinton when sheikh eclair herself as the womanptive nominee, first in u.s. history. i think a lot of people were scrambling. she is expected to have a tight night in california with bernie sanders and she refuses to go -- and we will see what david: exactly. let's say bernie sanders actually one california. is there any responsibility with his strategy to shake superdelegates loose? toto say i will still try get them loose. no question bernie sanders is getting to the last page of the campaign and the issue is how he chooses to exit. let's remember he had a call with the president on sunday where they discussed the future of the party, the future of the and what is sure to be generals and ugly election fight with donald trump. the issue is not just how but when. it to theke convention and keep his supporters amped up or will he try to move the youth that have peoplehind him in jokes, galvanize run issues like free college and income inequality and universal health., can he turn us people to get equal fire at attention to what hillary clinton will do? it will be a nasty fight. david: indeed. thanks, megan. amanda: u.s. and china dialogue continues as they discuss global economic policy and strategy. david joins us with the latest. david: a press conference with john kerry. he spoke a couple of minutes ago. this is a dialogue more than anything else. concrete steps the chinese agreed to. that has been highly anticipated for a long time. a date on when that would open up. the treasury department is -- secretary about lew discussing disappointment that he was unable to reach an agreement with the chinese. they just could not see i to i with chinese. the chinese agreed to have more talks with the u.s. amanda: it may be different characters at the table, but there is any talk about increasing trade? >> absolutely. for negative sectors. chinese prohibited from foreign investment. to thed to be delivered u.s. government in washington last week. he would not speculate on what sectors might be on that. secretary of state john kerry had a roundtable discussion with disney's leaders. i talked to one of the theciples in that meeting, ceo, and he said it was a frank discussion. chinese executives spoke of our regulatory burdens they face in and american ceo's's were saying it is still a huge hurdle for them. valeant missed estimates and cut forecasts. bloomberg news health care team leader, what can you tell us? company that question, 90% before today's , everything.rt everyone has really been waiting to see, how do we invest in it and is there an upside here, can ride, it get out and has just been hammered since august. everyone in the political process. if you look at what the shares are doing, people are saying no. the stock is down in early trading. at some point it is responsibility of the ceo. as you come out with a statement of where they are going. >> his biggest point has been we need to stabilize the business and there are things that we need to put in place, adding structure to this place to turn it into a realized operating company. plenty of times, you have a new ceo come in and they essentially playing nice target they can go out and beat by these expectations increasingly well and surpass them in the coming quarters. it might be the investors were not expecting them to go this commont it is relatively for there to be this kind of adjustment reset point. david: now we will go to julie hyman for a look at the market. julie: u.s. futures are higher and the s&p hundred close yesterday just 1% below the closing record from last may. the german dax is really the .tandout, of 1.8% we had to make economic data out of europe. we had janet yellen speaking yesterday. should know the interest-rate futures moved significantly on friday after the jets are or and janet yellen confirmed the now conventional wisdom that the fed will not moving in june following that data. rebounding onund grexit pulls and income bodies stocks roseities, the most in 2004, down 2%. wti trading above $50 per barrel. lyft european shares could help stocks like you did yesterday. here is shery ahn with bloomberg's first word news. >> a car bomb in turkey has killed 11 and wounded dozens. no one has claimed responsibility so far. and the islamic state have been blamed for a number of deadly attacks in turkey. speaker paul ryan is coming out with policy plans as a way of united republic -- uniting republicans divided. the first proposal is overhauling a program, calling for changes in welfare and food. the idea is to set the stage in case a republican is elected president in the future. global news powered by more than 2400 journalists and one and 150 news bureaus around the world. coming up, peter krause will join us to talk about why equity managers are doing wrong. another bloomberg exclusive is coming up next. ♪ david: a dismal performance. active managers when to stay relevant. erik schatzker is joined in an exclusive interview. : you are here to make the case that your industry needs to undergo a painful restructuring. peter: four years, this group pretty handily without much conflict. i think we have reached a level of size and a number of managers that has outgrown what we could deliver. if you look at the actual results, it would not be appropriate for investor to say i'm not satisfied with the industry and what it is providing. it is clear they not performed above the bench most -- benchmarks and what we see it what are we doing that is not fitting the bill. they are two hasek problems. one is that we have grown too far -- too large. as you grow larger, a manager generally diversifies their holdings. you undercut your ability to continue to use the returns that got you there in the first place. i think we are both talking about the same thing. active funding managers. it is a different -- difficult thing to answer. each manager putting the capacity restraints on themselves. that will likely create a reduction in the industry of some magnitude. 30%, what the number is, perhaps. we are talking about china's of dollars. peter: a huge amount of money. we of the epiphanies is cannot actually manage all of the money in the world. there is a limit. there will continue to be and should be a passive world. active managers should also play capacity placing constraints. they will grow over time as markets get the dirt. -- get bigger. the reaction can reduce returns and produce the investment objectives that people give us money for. >> something you just said may not necessarily contradict what people thought but it may not be what the thought. what iy have heard thought before and thought you were against it but you are not. >> no. there are certain costs i would like the industry to be more aware of, but i do not have a problem with etf's. we employ etf's and we will continue to. think passive is bad and i do not think it should go away. of the smart and exotic data and things that go with it. these are tools. as we get smarter about investing, the tools will change. 50 years ago, we did not have those tools. why doesn't a be do what blackrock did? peter: blackrock bought a large scale business. we did not. -- we believe in active management. there is no right or wrong way here. you can go in a number of different directions. to produce returns for fundamental investing. profit organization doing that. we do not have to be the biggest asset manager in the world. that is not our objective. it is to produce performance and higher strategies. i am saying is other asset managers have to think about not just growing for the sake of putting on their balance sheet, but how fast can they grow and still produce those returns? that means capacity restraints? erik: what is too big? peter: it comes down to -- to capacity. have 10 managers, you will have to be a lot smaller. of the problem of composing capacity restraints on the industry means someone has to impose that on themselves, which by definition constrains growth opportunities. if you are a publicly traded company, investors demand growth . peter: i believe investors demand a growing income at the rate of the market. that bys you can get effectively adding new investors and those have a capacity constraint. business diversified that allows us to have more than one place to get returns and those constraints will lead to better returns. not every manager will be at capacity constraints. each manager has the capacity restraints. you as they as you should be? peter: i think we could be bigger but i do not think it would be much more than 30% bigger. our investors would be very happy. erik: you have described the role that blackrock place as a risk to the market. do you think blackrock should be classified in the city? i do not have a view. definitionnt out the applies to those organizations that have a capital risk, and neither vanguard or blackrock have capital lists here i do not think they would qualify. a big argument in a big discussion. i do not think it makes sense to of blackrocksize and say you're too large and cannot get any bigger. it is for them to regulate their size. largerd runs to very businesses. those are highly scalable and can be quite large. risk.is an to t each one of those organizations, if something were to happen to that organization, some technology operation, that would impose a significant risk. the business does not in and of itself pose a risk. peter: there is a question we need to all debate, what is the size of the passive world relative to the fundamental world where the passive world gets too large. we do not know the answer to the question here it is an existential question and not easy to answer. for: what will it take asset managers, on balance -- you know what the studies show. overwhelmingly, sometimes by a very wide margin. moving they is balance of the markets is going to be german by whether or not the asset management steps up to the challenge and produces returns. you will see the performance and the darwinian movement will change. erik: in a near zero why are we talking about outperformance in the context of the benchmark anyway? why should the asset manager like you not change the >> we have two absolute return to many dollars are focused there. hedge funds as an example. multi-asset managers fit in that. to ability of managers invest in any asset classes they want at any point in time have said that. those are demonstrably different. objective is to deuce the demonstrably different. thank you. nice to see you here. is peter kraus, the ceo of a b. back to you. david: thank you. coming up, just over an hour until the u.s. open and futures are pointing to more games. which stocks are more likely to drive the market. plus, stocks might be near record highs, but the market is such a new -- stuck in neutral. coming up, gina martin adams reveals what will get stocks moving again and this time, it does not have to to do with the fed. next.s coming up ♪ julie: you know me, g martin adams reveals why -- stocks of all the concerns out there. more next. ♪ hii'm here to tell homeowners that are sixty-two and older about a great way to live a better retirement... it's called a reverse mortgage. call right now to receive your free dvd and booklet with no obligation. it answers questions like... how a reverse mortgage works, how much you qualify for, the ways to receive your money... and more. plus, when you call now, you'll get this magnifier with led light absolutely free! when you call the experts at one reverse mortgage today, you'll learn the benefits of a government-insured reverse mortgage. it will eliminate your monthly mortgage payments and give you tax-free cash from the equity in your home and here's the best part... you still own your home. take control of your retirement today! david: we line up all the different things on red and green. let's start with commodities. you see copper well down. gold is down somewhat. crude is up some. states are in united expected to decline. you recall yesterday, it went into a bold market. let's take a look at the geopolitical list. the british pound is up today after being down yesterday because of polls that came out. up german dax, you see it outstly because industrial the numbers exceeded expectations over in germany. thanks. we are an hour away from the opening bell here on wall street. as thecusp of history -- firstial nominee woman who is a presidential nominee of a major party. two decisions were widely anticipated, trading at a tv cai this morning. not so high, valeant shares blending -- plunging after they missed estimates. one pipeline company tries to get back. here is shery ahn. bomb killed at least 11 people and wounded dozens more. , seven are among the dead. no one has claimed responsibilities. the islamic state has carried out deadly attacks. in thenomy grew faster first quarter than previously estimated. the european union says gdp rose .6% in the first part of 2016, the fastest pace in a year. this is due to more investment and a pickup in consumer spending. is said to have projected european union to shield from sanctions on iran according to people familiar with the matter. europe, russia, and the u.s. have list -- lifted sanctions for prescriptions on dollar-denominated with iran still in place. global news 24 hours a day powered by our 2400 journalists and one and 150 news bureaus around the world. david? david: financials have had quite a past few days. rebounding yesterday, paring most of their losses. the morgan stanley analyst joins me now for today's meeting. start right there. are the banks basically condemned to follow whatever they have to say? arehat is not how we ranking the banks. several levers for bank stocks. consumer withrong little opportunity to celebrate. we have capital concern over the next several years. we are fairly conservative on our view of when the fed raises next. david: how concerned are you about possible regulatory fix? somethingefinitely that has been on our radar screen for many years now. we did speak with the fed governor last week and the fed governor had put out a list of done, he needed to get putting the dodd frank act together. that was maybe a year and a half ago. minimum was in the among those things he had been talking about for many years now. it is in expectations some investors and myself that we will have a tougher test. that theyth a view will be changing some of the elements of the past. this is something that, in our we have many of our other banks at the time. payout ratios are relatively low. room, especially in some of the larger pieces, for payout ratios to arrive even as we get some incremental rules from the federal reserve. another thing, and what that will mean for the banks. i have heard a lot about it and read some about it. this something to guarantee securities against cyber securities, or is there a new business model here? >> the first question is, why are we talking about it now after one of the original ideas, bitcoin, was lost. there are a couple of different reasons why we are talking about it so much. you do have a pressure on bank returns. capital goes up, returns, if you do nothing else, could potentially fall. doinging the industry is is investing in proof of concept to get moreer efficient. that is on the offense of side. of -- offensive side. the hyper ledger project is another one that has 20 it, both banks and technology companies. everybody's time to get more efficient. there are a lot of concepts underway right now today. i would highlight there is a little bit of playing defense as well. that is coming from folks in the value chain who are interested in expanding their footprint and expanding the revenue pool in a tougher environment. said that a couple of times. does that mean less jobs? think it means less jobs per se. i think it means higher value add jobs. let's be clear about what it is right now today. concept, aoof of group of institutions trying to by takinge efficient routine protocols going on in banks and sharing it more efficiently. an example which might bring it home, an area where there is a lot of proof of concept going on is in the post-trade settlement environment. if you have two sides of a trade, you have got many people working on not only verifying, but dealing with any issues, problems, questions, concerns, regulation, and as a result, if you have a shared distributed ledger, you can be more efficient in the process. david: thanks very much. the sideways market testing investor patience. the s&p 500 up around 1% from the all-time high, is this the range bound market? security equity strategist. the options dividend, it really is that high. back off rather significantly. what is going on here? >> a couple of things. first, we are lucky. we look at stocks from a global perspective. to be near that high it is pretty phenomenal. struggling still. what is going on still does not make anybody feel that great. the market has struggled with commodity price structure. those are somewhat over. we look forward and we are struggling to find the growth. the result is tolerance. >> we can show you the total return kumal looking at the s&p total return. once you factor in the dividend over that same time, it gets a lot less volatile. the downturns are not quite there. how much of, when we hit the high and back off, is people saying we should not be higher? there is a genuine concern of value asset dividends. >> there is reason for that concern. appropriate positive factors, we are already trading at 18 times earnings. there is good reason to be valuation.bout the bulk of the valuation expansion has come from the , indends pain stocks particular those in consumer staples and utility companies trading well above historical norms. where we see the opportunities emerging is much more cyclical stuff. goes back to the story. risk tolerance is limited and not a lot of investors are willing to take risks, pile in trade, higher dividend trade. david: it must be frustrating for people managing the economy. ,hey try to encourage people which should lead to the grove you are looking for and yet it has not worked. what have the transmission mechanism broken down? andlobal growth expectations have really broken down. if you take yourself back to the last cycle and what drove the self-fulfilling economic cycle, you had a number of factors driving growth. the housing market, the emerging market growth engine driving a lot of optimism and capital spending. those things have faltered quite a bit and we are struggling for the next engine of growth to develop. it is a lack of prospects as it is anything else. when you say you are shifting to cyclical, we heard people say that you might want to get away from cyclicals. what is your rationale? we are mixed at we are overweight industrials and telecom right now. the reason we like more cyclical sectors is that is where we see earnings momentum starting to build. the sector looks very expensive to us, utilities in particular. financials do not appear to me to have the prospect to have the prospect we're finding pockets of earth where they exist and applying strategy to those. amanda: thank you so much. speeding intoup, the future. mary barra joins me to discuss a wide range of topics, including steps they have taken that may lead -- two last month. find out where gm is looking for untapped growth in part two of our bloomberg exclusive coming up next. ♪ amanda: stick with us for the next hour. ♪ david: profit at general motors has served along with record auto sales in recent years. investors gathered at the annual meeting today and want to know where the automakers are looking for future growth. that is something i asked the ceo about in this exclusive interview to the answer includes china, technology, and midsized trucks. a -- an ability to grow and with the element on onstar, we are putting technology and applications and services into the vehicle that will improve customer -- is moreugh china volatile than it has been, we see tremendous growth between now and 2020. we have over 60 new models coming between now and then. in a typical emerging market, we think it will be a little more volatile but we see tremendous growth opportunity there. can you get the margins up in china? >> we have strong margins. it is a joint venture. we sell a different product listed i am proud of the margins and one of the casings continuing to maintain the margins as the market becomes more volatile and as they shift, and we intend to do that. of the new models we will have between now and 2020, 40% of them will be suv's. that is more profitable and something that consumers are really moving to. >> midsized trucks have become increasingly important. how far could that go? >> we learned that everybody said it is a shrinking segment aired we put a capable products with not only the chevrolet colorado but the gop canyon. we see the market responding. we look at, you tell me what gas prices will be in one year and five years, we have a capable products that for most people, even if it is part of the work life where they just like driving pickup shots, we have got an outstanding vehicle or truck for them. they will be for a very long time. >> as you make projections about the vehicle, how sensitive are they to the price of gas? we want to make sure it is the most fuel-efficient. we understand with the regulatory concerns and being responsible, we are making investments. you cannot make decisions based , with somees today technologies, even longer. we are alert -- working for the most efficient fuel efficiency across a full range portfolio. david: almost from the day you stepped in as ceo, you want to change the culture. what part of that culture do you need to leave behind and which ones are you -- >> i talk about behavior. i cannot come in and say i will work on this part of the culture appeared what i can do is change the way i behave. one thing is we got the top 300 leaders from around the globe together and said, one of the most important behaviors to move it forward, it was about transparency and being candid and owning each other's problems and really creating a relentless desire to win, we agreed that were going to leave the next day and demonstrate those behaviors and challenge each other. i told everyone if you see , being inconsistent, call me out. that has really permeated the organization quickly. another thing people do not realize is in the past 24 months, 25% of all employees have only been here 24. 25% of all your employees have only been here 24 months. that is correct. people joining the company, they are bringing a new spirit as well as those of myself who have been here for over 30 years. that is what we are driving, and do whatountable we say we will do. we have to work together because if my scorecard is green, and yours is not, it does not really matter. what are we doing when the customer picks us here that is what we are focused on. another area we are working on is need. we're not first to market, if we do not get into the customer's hand, we do not win here in those are the -- win. that is what we're focused on. up, we will show in the bad economic data battle of the charts. ♪ what we're looking at here, three lines, a little hectic. the white line goes up positively and goes down when it is bad. the purple here, this is looking at the chances of a june rate hike. what is happening is this was a very interesting moment here in mid-may where we had at comic index positive. the chances of a june rate hike soaring as the fed got more hawkish and the s&p went up. i cannot remember when it led to that market move. these are reversed. we had that bad report and a weak eyes and number and the june chances are now basic zero. a stock market pushing highs above 2100 and it raises important questions. stocks are headed both ways. can they stay up on bad economic data? you're seeing a result of positioning more than people relying on economic numbers. this chart points in the direction of the s&p 500 going down. time, i think this is a result of a lot of positioning and that is keeping markets slow. >> interesting. >> stay in the game. >> we're talking about oil. be in the sweet spot for shale? that is a range of prices on crude from 50-70, which allows them to be profitable once again. you have the teal and purple lines coming back. then you have the u.s. count, working down the last week, there was the addition of nine rates. only the second time the recount has gone up this year. producers behese able to resist the siren call of higher oil prices and keep the recount down or will they increase it again, which will hurt profitability? david: two good cards -- charts. it is so clear, there is a sweet spot and we see the price hitting it. it is very clear. there is speculation. past. diverged in the as kind of a crystal ball, i like it. itid: i have questions about . it is a mystery. >> congratulations. you won. thank you. up, negativeg rates, currency moves, and grexit. overseas more than 20 billion in more than different emerging markets. that is,. -- coming up next. ♪ ?c+sv amanda: valeant shares are plunging in the premarket after the ceo cut 2016 earnings forecast. the company recorded a big job in sales in two of its categories. >> general motors is holding a shareholders meeting today. with himxclusively about the driverless car. ♪ we are just under 30 minutes away from the opening bell in new york. i am david here with amanda lang. jon ferro is off this week. amanda: oil sitting at a 10 month high and the euro gdp rising more than previously estimated. all is to discuss this the head of the emerging markets and chief global strategist. thanks for being here. fed. focus on the is it overdone in terms of every twitch in the market? has the market started to pay to much attention? >> unfortunately not. the markets have been hooked to the entire liquidity issue. the real change in the fed how muchhas been attention there is on global events. last few months, it has become acutely aware of the fact that it is central bank or of the world. we are seeing that the weakness in the global economy is affecting the u.s. economy and something which is preventing the fed from where it -- really getting on with the process. it is a big factor holding the fed that. quite see run a longer the center of the world? iswhat happened to the fed the dollar has never been this widely used in the world. look at the prevalence of the dollar in both transactions. or you look at it in terms of the dollar debt in the world or you look at the share of the dollar. you put it together and the dollar has never been this widely used. is the big disconnect the world is facing, that the u.s. economy is much smaller than it used to be 20 or 30 years ago, 25% of global -- global gdp. the dollar has never been this omnipresent and that is what it is dealing with here. as the principal guardian of the dollar and the supply of global liquidity, it has such a pronounced effect just like china. is reason they were able to the fed is much more dovish. >> the fed wants to give itself maneuvering room. it takes the stimulus out. there ever be enough growth from china and the eurozone if the fed watching those things, people raising rates? knowledged that interest rates in terms of what is a neutral rate has come down a lot. as a need to keep coming down further, the bond in the u.s. seems to think so. negative about global growth prospects. oil.: crude is holding near a 10 month high to show stocks have dropped for a third straight week. in canada and nigeria, they have cut supplies at 90% since lows on february. is this a supply issue? >> a lot of attention to supply and demand. that goes back to the dollar. here is why. to thousand. three times global demand. that is the amount of financial , 10 times from where it was 10 or 15 years ago. the correlation between the dollar and oil is extremely strong. the dollar weakens in the price of oil tends to go up. supply and demand we focus on an undoubtably, supply has been .ationalized the fact that the dollar has been weakened in the past few .onths is something that helps should i infer that people are buying and selling oil futures without regard to , becomingn at all essentially a coin to trade back and forth? >> yes, this has taken place in the last 15 years. it has exploded. since 2009, it is even more so. the solution in trading has been even more, and the correlation, between the dollar and oil, you will see what it has become since 2009. in canada and australia, it matters for your energy producers. want oil to be? should we not want it at rock-bottom prices? be very good. >> people want to keep up savings after the financial crisis and stuff. at one level, it has crashed. here is what we think. if we look at the long history, inflation adjusts slightly above the industry. it is the anchoring bias. because we crash from a high level, it appears low. the year 2000, the price was about $20 per barrel. historically, the price of oil today is not that low. it is in line or slightly above his long-term historical average. amanda: good news for europe, increased estimated in the zone. investment helps make it the fastest growth in a year for the area. it expects growth will slow in the second quarter. we are not getting a parade for .6% gdp growth. glimmers of hope? >> i think so. europe will suffer two recessions in the last 7-8 years. there is catch up going on, a lot of pent-up demand. there is some normalization. growth in europe, and the entire global economy has moved lower, but what is happening in europe tothe outside, suffering recession in the last seven to eight years, there is catch up going on. amanda: are you optimistic? >> on a regular basis. to speak about it on st is. alternativeto other countries or relative to where it has been? >> more in terms of distance. every single region of the world, the growth is lower when it was before the financial crisis. it is something we will speak about later today. across the world, and in europe, on a relative basis. better after catching up in the last seven to eight years. now to julie hyman. julie: the stock is down 11% this morning. ralph lauren saying the company will have a percentage sales klein in the low double digits. iselatively new ceo there embarking on a big restructuring three layers about of management, cutting jobs and calling it his way forward plan. amount toassociated as much as $400 million. the company is saying all of this in a statement. thatin mind the company's sell its goods, department stores, we will watch those as well. retail has been broadly trouble. the latest in the saga of who will acquire yahoo!, the wall street journal reporting that verizon will have $3 billion for the main business, trying to edge out at&t, ppg, other potential buyers out there. those stocks are trading slightly lower this morning. elsewhere, we are watching drug stocks this morning of valeant pharmaceuticals. with apany is coming out forecast for the full-year well below what analysts had been anticipating. it is a forecast coming from the new ceo of the company. valeant says it will file a financial statement by the deadline. the decline has been accelerating this morning, now down by 18%. releasing the results of a study with an experimental drug to treat multiple sclerosis. that study is not very encouraging. it is one of the key drugs in the pipeline which explains the magnitude of the drop in shares this morning. timeout to go to shery ahn. >> thank you hillary clinton has enough delegates to claim the democratic presidential nomination. that is according to the associated press. delegates,n the clinton has one and commitments from super delegates. clinton got the news from california, the largest today. she is in a tight race with bernie sanders. sanders says clinton is depending on superdelegates who do not vote until july 28. hoping to change their minds. car bombing in turkey has killed at least 11 people and wounded dozens. authorities say the bombing targeted a police vehicle and no one has claimed responsibility so far. kurdish rebels and the islamic have been blamed for a number of deadly attacks in turkey. the u.s. is said to have onected a bid from sanctions iran according to people familiar with the matter. russia and the u.s. have let the sanctions linked to iran and the nuclear program. sanctions are still in place to global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. david? coming up, the future of the central bank governor has come into question for the next rate hike. sharma remains positive overall. we will explain why. later, my exclusive interview with dan. ♪ david: in your new book, the rise and fall of nations come you outlined 10 factors that identify winners and losers in the global economy. .ne of those winners is india one of the potential losers is china. let's go through this. why do you think india might have a bright future? >> my line has been it has consistently disappointed the optimists and the pessimists. the good thing is the expectations, the hype about india has really been deflated a lot. there was a lot of hype about realism.now there is for companies that are too hype, cautious, there are countries people are ignoring and those are the countries where you are likely to be rewarded going forward in the next five years. what i feel, which is fine, is the fact that in india, the , ablems are not as acute relative game as well. southeast asia is beginning to do better. even other countries like pakistan, those countries are beginning to do better. david: going in a little bit, into the populations going, that is good, the locations used in geography, thick of this location. it has notr hand, worked out yet the way you expected and also government regulation, there is a lot in india. >> yes. there is a lot of state meddling which happens in india. very focused on that. i feel it is somewhat reducing. all of these focus on change. you look at the snapshot, including the environment, you -- remember, one country today -- >> when you say it is improving, you should tell that to apple and tim cook great now. they cannot get in india because of ownership. is thething about india base is so low, $2000. in china, the problems it faces are very different at such a low base. >> one of the item -- other items is the quick billionaire. i love the term. china does better on the billionaire front, maybe not by much. what is good about billionaire's? >> a focus on income inequality. my entire point is when does income inequality become such an issue that it begins to affect the economic reforms with the country? a backlash because all of the wealth being created is benefiting a few people or billionaires. good billionaires and that billionaires. it tries to assess what does that tell you about the country? case, all the billionaires who are rising, they are the people who may be inherited their wealth, such as real estate, mining, and commodities. case, a lot of the rise of the billionaires has been contemplated in the good industry. david: so why are you so skeptical about china's future? debt, every single economic miracle in history has ended when a country has accumulated too much debt over a short time. what china has seen since 2009 is no other developing countries history has accumulated as much debt as china has done in the last few years. one statistic, today, it takes six dollars of debt to create a dollar of growth in china. at the peak in 2008, it took three dollars of debt to create a dollar of growth in china. in the united states. massive amounts of debt. it is not have china used to be. 2008, china's debt ratio is relatively stable. the change in the last few years. i have gone from being bullish to now being much less optimistic. take a quickve to break but we should not be smug about rising debt growth. >> america has stabilized luckily. the financial sector and a household has reduced the debt ridden -- burden. is similarthat today to america's even though america is five times richer. it is a problem for china. for both parties, you would not have that conclusion. -- i guess not. you do not want debt to keep rising. i'm focused on the overall debt. and thencial sector household sector, debt levels have stabilized. amanda: all right. ruchir sharma, you are staying with us. 's take get ruchir sharma on other global investment risks after this. ♪ amanda: there are a lot of global uncertainties weighing on investors including when the feds might hike a negative rates and the upcoming referendum. she's global strategist, you are back with us. of concern. different polls. you see the stock market, ignoring it. >> i feel relatively confident that in democracies when you get these kinds of outcome comes the change is not as dramatic as we think. it brings us back to what is happening in the united states. in any other country, a leader like trump is rising so rapidly in emerging markets, you have the financial markets. a belief that there is not much to change balances. i think the grexit is much more concerned in the financial markets. that is my feeling somehow. the geography is key for growth and it matches for them. i am not that worried about it in terms of what is happening with grexit. amanda: that is true. companies find out, dramatic jobs lost. >> yes. if you go through all that we spoke about, especially geography changes, as we mentioned, -- that hase thing changed is negative interest rate policy. >> i think it is bizarre. we have a whole history of deflation in the 19th century and we never really had negative interest rates back then there it i think it is a bad idea and who benefits? we speak so much about income inequality. in these policies in general. policies in general have really benefited the rich much more. wealth has gone up so much. weakest economic recovery and one of the strongest stock .arket in history the mega straight -- negative rates, one that has been widely discussed is the deferred profitability of tanks and on the mechanism. having too much easy money really sows the seed for the next bubble. speak, the prime minister is visiting washington. speaking to congress. banky respected central governor. will he leave or stay? >> i think he will stay. political games are going on india. it is a story we do not need to spend too much time on on a global level. i would say he would stay. amanda: he has done a good job. >> absolutely. under control a lot and the fact that the macroeconomic stability is something associated with him taking over in september of 2013. david: thank you very much, ruchir sharma. author of a new book out today. heading for a positive open. ♪ get ready for the rio olympic games by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. amanda: this is "bloomberg ." we are moments away from the opening bell. are faringat how we in the pre-markets, tracking overseas. the s&p and the dow futures have been pointing higher and we have watched the overseas markets moving higher universally. the ftse is gaining although it lost a little ground. germany is also higher on positive industrial data out today. let's take a look at some of the cross assets that we are watching today. you can see the euro-u.s. is slight and to the upside. 1.71. year is back at we have seen moves higher at crude with a 10 month high for that commodity. julie, what are we watching as stocks get moving? julie: a little bit of an advance with the s&p out of the gate up a point in the half. it's about a percent below the record close now, which was 21.30. it is 20 points away from that level. it does not look like we will make it there today, but the trajectory is going in that direction. , sodow gaining by 30 points percentagewise a little more of a gain. the stocks could get abov another boost from energy prices today. crude i'll trading just above $50 a barrel, giving energy a boost. energy was the best performing sector in yesterday's session and that could be repeated today. however in terms of what could be holding stocks back today, ralph lauren, the company coming out and saying the sales this year will decline in the low double digits. the ceo making some restructuring changes to the company. i want to look at some of the companies that by ralph lauren and sell ralph lauren goods. they are not down by too much. and nordstrom, are some of the biggest customers for ralph lauren. it also sells goods for its own stores. we have a deal that we have been talking about within the medical device industry. boughtdings will be for about a billion dollars in cash. this unites a maker of various types of replacements for hips and joints for a company in the spinal device industry. we are also watching hurts this morning. filingahn revealing in a on june 2 and third that he bought nearly a million shares, 983,000 to be exact. he already has a 15% stake in the company. surged yesterday after the company approved the separation of the car rental businesses. they are extending those gains today. amanda: during the 2008 financial crisis, many banks were looking to unload the toxic securities, but it seems that citigroup found a way to make money after so-called collateralized debt obligations. how do they do it? i love the story because not only did they not unload, but they loaded up. at a time when everybody was getting government money and was in danger, citigroup was the most in danger of really being threatened. they were buying cdo's. >> that's what makes this interesting. basically the same day or week that they were announcing write-offs, they would go off to write off billions of dollars more, leading them to take the biggest bailout of any u.s. bank in the crisis. they decided they wanted to keep cdo's alive and well and wanted to step it up. it shows a little bit of courage and a little bit of aggressiveness. david: did they get smart or did they get lucky? chuck prince was the ceo and on his way out and the thing was melting down. who made the decision to say that was a good investment to double down on cbs? cdo's? dakin: good question. the president of the bank now, from what i understand from my reporting, he and his lieutenants thought we have a specialty here, we are good at it. we will put this guy in charge and we trust him. he is good at managing risks and we think if we put him in charge and grow it slowly that we can do it. amanda: it is easy to kind of say they were risky folk staying risky. at moments like that, you need liquid these empires for these assets. i was intrigued by your story to learn that they bought a fair amount of the stuff from the federal reserve bank of new york. they probably have offers insight citigroup right now. it's not like they do not care about risk and capital requirements. this is fairly legit buying on the dip stuff. dakin: everything they bought at that point was on the dip. all the ceos that got citigroup into trouble at the same time they decide to go along, they took all those cdo's and give them another group and said, hey, you guys think about nothing else but trying to limit losses on this portfolio of bad assets. we are going to give this other trading group an opportunity to find value. david: amanda makes a great point buying from the new york fed. could the new york fed allow them to make this trade today? if they were to go to the fed and say we are going to invest a lot in cds and down market, what would happen? dakin: good question. we know that regulators are aware of this and they know what's going on. it's not a question of that, but the optics of this, which we get into in the story are not great now. they were not great in 2007 either, but i think when they up ind to build this team 2007, nobody knew how bad it was going to get. obviously a different decision been then it would be now. they are doing it and making quite a bit of money and they're looking good. david: a terrific story. thanks so much for bringing it to us. at this moment in detroit, general motors is scheduled to kick off its annual shareholders meeting. all day on bloomberg, i am speaking to top executives. here is dan ammon. >> i want to talk about technology. david: general motors is making fairly big investments in technology. explained the theory of investing in this technology for general motors. that we will see more change in our business in the next five years then we have seen in the last 50. what i mean by that is that we have seen comfor customer preferences are changing in urban environments where customers want the availability of getting from eight to be in a car, but often times they say they do not want all the hassles that come with an ownership of a car. we see transportation as a service emerging quite quickly here. you see that the rideshare. lyft business is growing rapidly as an example. we believe that change is not something going to happen but something already happening. we want to dissipate in that change and we frank we want to do more than that. we want to be at the forefront of that change. technical add some capability that we do not have internally today, so we are looking to build a complete set of capability we need to really lead and transportation as a service in the longer term. david: would you be making the big push you are making if there was not brough ridesharing? handridesharing on the one and autonomous on the other is each interesting in its own right, but they only get interesting when you put those two things together. we believe driverless technology will fundamentally transform what we call the traditional rideshare business model. david: is that move into autonomous put with sharing a defensive move for your company or an offensive move? dan: we see it as an opportunity for us. we make a significant majority of our profits outside of urban centers. we make a lot of money selling pickup trucks and suvs. those parts of the business that generate most of our profits today we think will be some of the last places that we see this kind of disruption. we think where disruption begins and where the opportunity is therefore in the early stages will certainly be in the urban environments. for general motors, it's an opportunity. a moment we got to where people were sharing their own cars rather than owning cars, that would reduce the demand to buy cars? dan: we think it will increase likely the most numbers of miles traveled. when you think about the scale of the business in terms of vehicle miles traveled, we think the business grows. if you think narrowly in terms of how many units of volume sold, it might go flat. we don't know. we think it's very important to put ourselves in a position where we are focused on number of miles traveled. david: can general motors needs gets where it needs to get without partnering with a tech company? deepthere's a very software capability in the driverless area and we believe that combined with the existing technical capability that we have with them the company gives us a really strong foundation to launch driverless vehicles. david: is that something that gm cannot have developed itself? dan: we already have a huge amount of software and every vehicle that we sell. what we wanted to bring in was this particular capability in the driverless area. we are very open-minded as to where we do something internally or if we can find a faster and better way to get there externally to pursue that as well. that is what we found in this instance. david: if you look out over the next five-10 years, what portions of the market will be fully autonomous, semi-autonomous, and maybe not at all? dan: i do not have specific percentages for you. i think there will be different technology applications for different customers and requirements. fully driverless capability is essential to unlocking the value of the rideshare business. a bigo know that there is segment of the market where a semi-autonomous technology to relief some of the day-to-day driving capability will be interesting for a lot of customers. david: that was a lo part of my interview with dan ammann. amanda: what a radical change in a business model. if they can do it, it's like netflix saying we are mailing them now but streaming them later. david: that momentous of a shift, we will see if they can pull it off. lloyd blankfein and michael bloomberg on her the next wave of october nor is later today, but a new report shows it's not an easy environment for small business. details next on "bloomberg ." ♪ david: this is "bloomberg ." i'm david westin and the green room. coming up in over an hour, portugal's finance minister will be joining us. shery: verizon will bid $3 yahoos internet assets. that is according to the wall street journal. the second round of bids was due yesterday. verizon is competing for the yahoo! assets with at&t, tpg, and others. clear and other regulatory hurdle blocking its takeover of beer maker sab miller. they have proposed enhancing a south african employee share program. hose unhappy plan to appeal the decision. he was convicted of losing $5.6 billion as a trader at france's coat their general. he has scored a victory in court. he won his lawsuit accusing ,ocgen of unfairly firing him awarding him $510,000. that is the latest business flash. amanda: julie hyman has a look at some of the early movers as we get trading here. i'm starting with valeant. i've forgotten when i'm doing here. italians called just ended and one of the most remarkable thing said on the call is that it is not able to really accurately predict earnings on a gap basis. though shares accelerating declines once again, down more than 20% after the new ceo came out with a forecast for the year that was well below what analyst have predicted. we should note that the company predicts it will make as much as seven dollars a share for the full year. it is not like earnings are going to zero, but analysts have been looking for about 8.49 a share and that was around the lower end of the prior forecast from the embattled specialty pharmaceutical maker. now back on track to the analyst calls. discovery is down by about 4% that the debtaid is "too darn high." he is changing his valuation methodology for media to look at enterprise value and away from price-to-earnings multiples. that is where this change conference. the stock being downgraded to underperform to market perform. there is a tight call out of goldman sachs onto stocks. you can see it is being raised from neutral to sell, up 1.5. and then a contract electronics maker is down 2% after it was downgraded to sell. and with that goldman talking about the company's exposure to industries like handsets and printing. that is creating revenue weakness at a time expenses are rising. zillow is paying $130 million to news corp. as part of a settlement having to do with a couple of executives from move, which is open by news corp. analysts upgraded the stock to equal weight, saying this is a better than anticipated outcome in terms of the amount being paid. move was originally seeking to billion dollars in damages. by comparison, $130 million does not look too bad. david: let's go to abigail doolittle, live from the nasdaq . abigail: another big day for giants. make the studyo . this has caused joshua schwimmer to make changes at biogen as it relates to r&d. we look at the one-year chart and we see that the stock has spent much of the year at a trading range of uncertainty. downtock is firmly back in that range/ .. fairly better of the stocks of surrender therapeutics. they asked for information related to the decay muscular dystrophy drug. she is upgraded shares to an outperform from a neutral and $736 price target, suggesting that shares could infect double from yesterday's close. that is what is happening here at the nasdaq. amanda: later this afternoon, the next touch of entrepreneurs will do graduating from the goldman sachs 10,000 small businesses program, a program cochaired by warned andren buffett michael bloomberg. loyd blankfein surveyed the challenges facing small businesses today. small businesses are the engine of the economy and of job growth. anything surprising about what they say they are worried about was at the top of the list of impediments? >> what was really interesting about this report and we are so proud to be issuing this report today was that we heard the same thing from a number of the small business leaders who had gone through the goldman sachs 10,000 small business program, which boston college had designed could we know that they are growing faster than small businesses in the u.s. today, and yet they were still expensing a number of impediments that we expected all small businesses are experiencing throughout the country. first of all, access to capital. all small businesses need funds to either grow or to hire new workers and to the degree that you still can't get that, they are in trouble. we found that the average amount that the small businesses were asking for was $100,000. they were only getting $40,000 on average, so access to capital is a big one. another big one is regulation. all of them were spending way too much of their time dealing with government regulation in various varieties, on average four hours a week. it adds up to an entire month a year at least for most pompous is. and that issses being done by most owners in most cases. david: i wonder if those two things are related in some ways because there is a lot more regulation now on london for banks -- lending for banks that may make it difficult to loan even if they want to loan for small businesses. kerry: exactly right. regulation hit small business owners twice. they not only have the regulations made themselves how to comply with, but when they go to the bank, they deal with the restrictions that bank still feel about lending to small businesses. amanda: a problem in many developed countries is a skills gap. when people want better jobs and full-time employment, they are not the right skills for these businesses. kerry: this is one of the most interesting findings of the report. by far the biggest problem confronting small business owners is that they cannot hire workers with the skills that they needed. it was not that they did not have enough money to hire the workers they wanted or any of these other potential problems. it was that the skilled workers were not there. this is a huge opportunity for government and also for business , but mostly for government to look at this and say what can we do to help make sure that our workers here in the u.s. have the skills necessary to create this big engine of job growth? amanda: these are not businesses that can apprentice or train people. they need people ready to go. kerry: they were doing as much on-the-job training as they could, but when they won top hire new people, we are seeing that the small business is actually create 60% of all the new jobs in america each year. it is important they have the workers they need to hire. david: a lot of what you found leads back to government. have you had any discussion with government officials and there reciprocity to do anything? kerry: we hope they take it seriously. 99 for some the businesses in america are small businesses and they employ half of america. if they do not take care of these concerns, we are not going to be a strong as we can as a nation. ryvid: many thanks to ker healy. next is "bluebird markets" with -- "bloomberg markets" with vonnie quinn. >> will portugal be asking for the same and how are the banks faring? how are they going to get out of that one? we are also going to be speaking with the u.k. energy minister because she is pro brexit. tople say it will take years actually figure out these trade agreements with other european countries. why exactly is the former chief secretary of the treasury pro brexit? we will have some of your interview with mary barra, talking about changing the culture at general motors. david: more "bloomberg " is coming up next. ♪ amanda: this is "bloomberg " david westin. let's take a look at the markets. we are watching the s&p 500. 21.34 would be an intraday record. we have in the past hate it and bounced off of it. you can see the dow jones moving off a third of 1%. a couple of big names as we heard being hit today including biogen. that is no doubt heavyweight in that market affecting it. still managing to stay positive. david: it may not be a heavyweight, but valeant down 20%. they are really struggling. i was struck by what he had to say it was interesting about what he had to say india versus china. amanda: also fascinating is your interview with the gm executives. david: really fascinating. let's look ahead now. we have prime minister moshe of india visiting with obama. the ap has decided to the democratic candidate is. amanda: she is not taking it yet though. david: does offer "bloomberg ." -- that is all for "bloomberg ." ♪ vonnie: it is 10:00 in new york. i am vonnie quinn. barton and this is "bloomberg markets" on bloomberg television. ♪ vonnie: we are going to take you from new york to london to detroit and the hour. stocks are rallying after janet yellen's latest comments. investors adding to bet that u.s. interest rates will stay lower for longer, keeping growth on track. mark: david weston's exclusive interview with mary barra on the automakers plans for the future and why she is focusing on china, technology, and trucks. vonnie: valeant shares falling 20% after the drugmaker cut its 2016 earnings forecast. the new ceo revealing sales of key drugs are plunging, but he is vowing to say valeant.

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