if you look at what is going on with stocks, we are not being much of a positive reaction, but we will keep an eye on it and see if we see any kind of delayed reaction. not to mention the fact that the oecd is also cutting its growth forecast for the u.s. to 1.8% from 2%. let's take a look at the groups on the move. energy in the bottom spot, followed by materials, initials. we have a cyclically led decline in stocks at some of the defensive groups like consumer staples and utilities are doing better, but a relatively broad-based decline with the exception of those two group. i want to pinpoint what is going on with the auto sector. in general, sales we are seeing worse than estimated numbers, particularly at general motors where numbers plunged 18%. all four of the brands within gm reporting to clients at least 13%. for vehicle sales down 6.1%. fiat chrysler sales actually beat estimates, unexpectedly rising 1.1%, but that is not helping the shares. we are seeing them fall as well, so when you are talking about manufacturing and retail, those kinds of converging in the auto sector, we are seeing some weakness, this morning. betty: let's talk about commodities. julie: energy is the worst-performing group in the s&p 500 as oil rises are falling. 2.5% and whatwn we have seen over the past couple of weeks is that when either wti or brent gets close to or even about that $50 level, we see it fall back once again. something we should note that because of this holiday, we are going to get the weekly oil inventories tomorrow at 11:00, instead of today. prices are under pressure because of that manufacturing data and if you take a look at some of the other commodities we are watching, gold prices are trending lower. as we see more risk off in today's session, gold is not benefiting. copper is also trading lower. second,ocks down for a continuing your theme of commodities falling with basic resources down by 3.5% and oil down by 1.9%. every industry group on the stoxx 600 is falling, the biggest drop in a month, but we did have our third consecutive increase in may, the longest winning stretch. global growth concerns weighing on the stoxx 600. lackluster pmi data from the u.k. for the eurozone, china. the u.s. probably was not in that category, that is going to be something i explore later in battle of the charts, so watch out for that one. all hold earnings estimate shares by 2.9%. the judge grocery chain beating estimates, copper -- cost reduction, improving profitability, this is a company that is emerging with six and -- 6500 stores around the world. three quarters of those sales coming from the united states. investmentting banking positions as part of its ongoing plan to reduce costs across the company according to a person familiar with the matter. chief executive outlined his three-year cost-cutting plan to paris global network, by shutting money-losing businesses -- money-losing businesses. these are the big banks in the u k, in the last 12 months, we have seen lloyds fall by 12%, down by roughly 30%, standard chartered, look at that all, down by 50% and a plepler of u.k. tmi -- pmi data across the world. manufacturing in the u.k., eking out a small gain after declining the prime of the most in three years, but it highlights the fact that we are very much relying on the nonmanufacturing part of the economy as we approach the referendum, three weeks tomorrow, can't wait. betty: the countdown has begun, let's check in on bloomberg earthward news. we have more from the newsroom. >> a friendship may have detected -- a french ship may have detected blackbox data -- in the search area, the planes data and voice recorded are considered essential to finding out why the plane went down. all 66 people aboard the plane were killed. it has been a year since the eu began an anti-migrant operation. 103 votes have been intercepted in that time, almost 70 smugglers have been arrested. the u.n. is asking for iraqi troops and islamic state fighters despair children caught in the bottles of falluja. there estimates are that are 20,000 children still trapped in the city. more labor problems in france, some road workers have gone on strike and up to 40% of high-speed train services may be disrupted. the president is trying to contain unrest before the soccer tournament. -- russia has arrested 50 suspected members of a hacking ring that stole money from the nation's banks. the government says that since the middle of last year, lenders have lost more than a $5 million to hackers. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. the global economy risks getting caught in a low growth trap, that big warning from the organization for economic cooperation and development. the secretary-general of the oa pd told bloomberg television that global growth will not pick up, this year. >> it is going to be flat growth 2015, 3% 2016, a little bit of an improvement in 2017, but very gradual. overall, a rather mediocre or abysmal outlook. blame the oecd puts the squarely on the door of rich governments. just how gloomy is this economic picture? joining us now for an exclusive is the global strategic advisor at pimmco. they just released their own outlook for the next three to five years. how close is g -- is your view to what we heard from the secretary-general? richard: you look at the global economy just kind of muddling through and that is the consensus. the game is only going on because of massive quantitative easing, negative zero interest rates and emerging economies, so our view is that investors cannot get a false and security by extrapolating past trends, so you see a world that now appears to be stable, but is not very secure. takes it a step further and says we are falling into a low growth trap. we think we are already in a low growth trap and that is the status oh, there is a left tail risk that we do not keep up the growth rates now, and that is our horizon, there is a chance of a global downturn, there are not a lot of policy tools available in a global downturn. betty: what do you do in this environment? richard: investors need to focus on a couple of rings. it is an environment where active management will be key. we think it is a world where you have to take a stand on preserving capitals, no longer about double-digit returns, it is about preserving capital. if we get helicopter money or more unusual experimental monetary policy than inflation may be higher, that investors expect and we think you need to be in a world where you are looking globally for investment opportunities because volume nation will be key. which countries could implement helicopter money and which ones probably won't? richard: let's start with the ones that probably won't, i would put the u.s. in that category, the u.s. is the inevant leader, we look decent shape, we have had good monetary policy and have had close to full employment. more, thed well be exact dimensionality is that we would see helicopter money are complicated, but we have a large qe program approaching 100% of point, qe some infinity could become helicopter money. mark: you are saying the ecb will have to press the stimulus button once again. you label it lackluster, trend like growth in the next one to three years, but you are cautious and very selective within the eurozone, please elaborate. richard: the key thing is that it is growing, it has had two recessions, but trending growth is not going to reduce the unemployment rate. outside of germany, europe still has a big output gap and trend growth is not going to close that. the ecb is fully engaged, and we think that is a good idea, but then again, the eurozone, yorkie have negative rates. bake chunks of the european bond market already traded negative yield to the second market, so we are not predicting that the ecb is going to give up, we are saying that we are in a world of diminishing returns. you mentioned active investing, that hugging the benchmark is not going to be enough. that is a very different view from larry of blackrock. i want to play for you part of what he said. >> we believe there is going to be a massive shift more into pathos, so we believe it is going to create a huge consolidation that has been in the industry. betty: why is he wrong? richard: it is a huge global market and that will make sense for a lot of investors that have realistically -- realistic return expectations, billy when you get those in the world that we proceed, for many investors is going to be through active management, but it is a big capital market, and we believe active investors will be important. highlights ofhe your report says political populism and polarize asian. flash in the pan or secular reality? what is your answer to that? richard: our argument is that is not a flash in the pan. book will be the to remain and we will not be in the business of predicting the november presidential election, but we do think the populism and this widespread global view, the anger against the elites in the sense that the globalization consensus among parties is being questioned by big chunks of the electorate, we think that will be an enduring tension in the global economy for the next three to five years. mark: let's finish with china, because the pmi that we saw today began in china. pmi, thishe chinese is the chart, going back to 2007. manufacturing, services pmi as we know, manufacturing 2012,en flatlining since services are a bit stronger, is china making the case for a managed slowdown? richard: that is our baseline case. the most likely outcome is they are able to pull off this difficult transition to gradually slow the growth rate to be less reliant on exports, let's have no doubt, this is a challenging maneuver that they are trying to execute. they are trying to open their capital market, but they do not want to give up control of the exchange rate, so china is a huge part of the global economy. they are able to execute this maneuver, but there are certainly real risks to that in the three to five your outlook. -- five year outlook. mark: thank you for joining us. still ahead, we will get you caught up on the stocks moving. under armour cutting its annual or cast. we will look at how that is affecting other sporting good stores. ♪ mark: live from london, you are watching bloomberg markets. betty: from bloomberg world headquarters in new york, another beautiful day in the city, time for the business -- businesss flash -- flash. the family controlling viacom may try to out the ceo. redstone says the viacom shareholders want new management. overseeing ator trust that will eventually control redstone's empire. chinese mobile phone maker is trying to eliminate -- over intellectual property. they have bought almost 5000 technology patents from microsoft as part of a bigger deal that will result in microsoft office and skype being preinstalled on their phones. lack of mobile phone patents has kept them from expanding. david einhorn's main green light hedge fund lost money in may, even as equities climbed. einhorn's fun was down 9.9% -- fund was down 9.9%. the green light fund lost more than 20% last year. that is your bloomberg business flash, we will head back to the markets desk were julie hyman is looking at some specific stock particular, nike and under armour. julie: both declining for separate reasons. nike was downgraded. part of this has to do with the sports authority, and a company's bankruptcy and subsequent liquidation, essentially removing a big customer for both of these companies. a lot of new entrants are fragment the market in the case of nike, the challenges for mike years ofasting five double-digit growth, so there might be some slowing growth for the company. nike not done as much as under armour more than 600%, the company no expects revenue of $9.3 billion, the earlier forecast had been about $5 billion, so lower their. -- michael kors coming out with its numbers, revenue rising, the company also coming out with or cast that was above forecast, some of it has to do with a tax benefit. nonetheless, others are talking about the fact that the company released some of its products early, exclusively in its stores that were not available to other retailers. jcp coming out to making some commentary and saying recent business performance delivered positive sales through memorial day. the company plans to refinance and extend the maturity date. -- even as revenue came in below estimates, the company talking about deeper promotion in markets that have been a broad scene, and u.s. retail, more sales that news for these guys margins. still ahead on bloomberg markets, although ecf remains a small part of the 1.3 chilean dollar high-yield market, their gaining in popularity. we will break down why. ♪ betty: you are watching bloomberg markets. mark: i mark barton in london. -- i am mark barton in l ondon. -- trade like stocks attracted $6 billion of inflows remain 25th, that is the most since the fund was created 14 top -- o and on pace to coverse, alastair marsh the bond market, joining us now, on why this flood into the fixed space. is -- itight to say it has been an inexorable rise over the last few years, but bailey because of what's happening in the bond market, as you say, the streetlights starks -- the bond market is becoming more and more -- harder and harder to trade, harder to get a hold of the bond that you want mers these trade like stocks are cheaper than buying bonds, so just for ease-of-use and ease of access, they are gaining -- mark: does that mean it has a big role to play, going forward? >> i think it started out as a retail product, but you see more and more big institutional investors putting the money into these funds and the assets that they manage is going up and up, and there are some very big firms putting their weight behind it. betty: is there any chance that this could reverse if for some reason liquidity comes back into the bond market? scenario inee any which liquidity comes back to the bond market, so it stands to reason that this inexorable rise of continue, but that does not mean there are no risks, there sayingnty of people there could be real issues if there is a huge stampede out of high-yield. there are these high-yield funds that are offering liquidity, you can take your money out and -- any day you want, but the bonds themselves, it may take weeks for those to trade. betty: how big of a risk is that, the fact that it might be difficult to exit these investments? >> it could potentially be huge. it has not been tested, fully. well innds function stress conditions, but i think the stress conditions we store into glory of this year are nothing compared with what a more armageddon scenario of 2008 that might happen in high-yield. mark: a big shift in passive investing. >> exactly. that is partly because on the active side, you have to pay a theyer a lot more money have not done that well, whether as -- where is if you put your money and etf, you would have done ok. ahead, crude oil dropping for a fourth straight day, heading for the longest run of decline since april as opec members are arriving in vienna. we will get the outlook from one of wall street's top economist -- minds. ♪ betty: another beautiful day in new york. clear skies, sunny. mark: gray, overcast, that is london. you are watching bloomberg markets. we are getting some headlines from the vw chief executive in an interview with bloomberg. the rightat vw said hearing corporation is the first of many steps. he said that own another big strategy for the next 10 years and he says the company needs to become a provider of mobility. demand for expand on vwility solutions and that needs to consider the complexity of its product lineup, it is a car company in many brands, but it's namesake brand side big decline in its profitability in the first quarter, we announced that yesterday when we were talking about it. ae ceo says that the wc's sizable path of sales of its services by 2025. the big overhaul will be announced later in june and be will bring you the interview in the next hour and the european close, let's check in with bloomberg earthward news. and much andra has more -- and handrandra -- emma cah has more. -- the race is too close to call when a third party edited is factored in. libertarian party nominee gary johnson gets by percent and green party candidate joe stein gets 3%. president obama returns to the side of his first presidential trip. elkhart,ravel to indiana, a city being rejuvenated by a surging recreational vehicle industry. then employment rate has fallen from 19% in 2009 to a little more than 4%. the president should argue -- will argue that voters should put another democrat in the white house. theld trump is heading to u.k. after the referendum, his visit has nothing to do with politics. theill be there to open donald trump golf resort on the west coast of scotland. the obama administration is taking another crack and improving american diets. the spa released sweeping salt reduction goals, including everything from french fries to granola. it puts major pressure on food manufacturers and restaurant to cut -- restaurants to cut sodium in processed foods. -- that may lead to $10 billion in unpaid bills. that may result in schools not opening on time and prisons running out of supplies. both sides say they will negotiate a stopgap plan to keep the government running through december. illinois has been trying to resolve a $111 billion pension liability. day --ws 24 hours a global news 24 hours a day. betty: let's get back to how the markets are trading. oil prices on the climb for the workday in the row -- in a row. the cartel opec is expected to stick to its policy of squeezing out rivals by maintaining production levels. goldman sachs bobblehead of commodities was asked about his latest report which highlights the global supply versus global demand picture. he was question on whether we will continue to see the market swinging between oversupply and deficit. >> new term, we will stay there because of the temporary disruption that has driven this market into a deficit. think about what this market has been driven by, it is three factors. temporary disruptions and a strong increase in asian demand are going to be transient. in the endn supplies states, a rock, a ron and you have a macro backdrop that is putting downward pressure on the market through stronger dollar and the weaker china. when we put that together, what it says is near-term -- near-term, the market is likely -- but tight, but the will likely start to soften again which is why we have the market drifting down into the lower 40's by the end of this year, so it is more of a transient tightness than it is a persistent tightness. >> jeff currie's is across from me and talks about $30 crude and preaching storage capacity, storage capacity, here we are at around $50, i think chains -- things change radically. >> if you look at what the u.s. emp tells you and what what they do in terms of their hedging strategy, that line is drawn in the sand at $50 a barrel. we look at the hedging activity in the oil market and when that --k and got up and that 50 $50 range, you see an increase in hedging activity. it does not mean the market cannot trade above 50 and go up to 55, but we do see selling pressure when we get about 50. mark: -- >> how much is the backlog? >> inventory levels are still extraordinarily high. we just started to death the high levels that were put in place to it half years ago. it takes a while before you can get really bullish because you have to draw those inventories back down to the five-year average. we don't see that happening or another 12 to 18 month. >> we just heard ryan's take on the and i, what are you watching for? -- on the end of, what are vienna, what are you watching for? >> in terms of thinking about strategy going forward, the discussion of opec output ceilings or going back to the freeze, those are production levels much higher than what we are talking about right now, and we go back to inventories still being high, transient factors have pushed the market into a deficit and it would argue, do not put any more oil in this market, wait until we get those deficits. >> i'm going to send my i want toscrambling, put all of this together and button it up so that people hedging your the 2017 mark, around $50 crude, you have seen the major producers, big players, dropping off a cliff, how does the sheet of that curve really start to change in shape over the coming years, all the way out to 2022? would argue that the long-term equilibrium price is , then thearound 55 front end begins the flatness toward 55, but we don't see that happening or another year of the front and getting up to around 55, we would expect the front and continues to deal with the high-end that david was referring to, which we think will continue to weigh on this market for another six months. the front and we would argue would stay in that 45 to 50 range and not until deep into 2017 to be expected front and two,. betty: that was jeff currie, the global head of commodities research at goldman sachs. mark: the environment for global investment banks getting tougher, leading to cuts from goldman sachs at hsbc. we will have the details, next. ♪ mark: this is bloomberg markets. it is time to get you caught up on the market action around the world. let's start in asia and how the markets traded and initiative the day. you saw that rally that we saw in china, that actually pared back, part of that had to do with chinese factories. chinese factories showing some resiliency as the latest gauges further stabilized. stephen engle reports from hong kong. >> china's official manufacturing pmi health eddie at 50.1, the same reading as april. factories have shown some level of confidence, another gauge of private sector manufacturing in china shows more pessimism. the index came in line with forecasts at 49.2, but is still the eighth consecutive month below 50, indicating bearishness. this shows the recovery in china is tenuous as -- tenuous at best. banks tend to report cash at the end of quarters for regulatory check and that causes cash crunches. there might be a double whammy if the fed rate -- hikes rates. china pmi manufacturing data setting the tone for markets across. the glow it was not alone in releasing manufacturing data. have a look at how the equity markets are faring in europe, right now. second day of declines after five days of gains. the stock euros 600 down by over 1.07%, a harsh assessment from the oecd. there are the best and worst performing industry groups. there are not too many positive ones. just the one, health care, marginally higher, basic resorts down on that -- basic resources down on that china move. oil falls for a second day. in the currency markets, sterling, the biggest drop on wednesday against the dollar since march, there was a poll showing the lead camp in the referendum -- the lead camp in the referendum is ahead -- they'll leave -- the leave camp in the referendum is ahead. in the bond markets, the german 10 year yield down a basis point, .13% p.m. eight -- pmi data arising in germany. above the 50% level, but still lackluster at 50.1. let's go back to abigail doolittle with the latest from the nasdaq. abigail: the nasdaq is down ever so slightly, about 210 of 1%, but snapping a day winning streak, something to watch as the day goes on. anare looking at titrating effect of the best-performing stocks is up just about 4%, to not really any dramatic moves. as for one of the worst performers in the nasdaq 100 are the shares of biotech companies trading lower after the company announced it will be pulling an application in europe for its ms drug following a main meeting which indicated that the opinion was more likely than not to be negative. we have a few price targets taken down on this news market. both analysts remain positive. mark: that is the biggest laggard on the nasdaq 100. what is the best performer? the second best are the shares of whole foods, the stock is higher by nearly 4%. all of this after it was upgraded, shares were upgraded --an outperform at credit likely to be a successful turnaround and believes an attractive entry point is provided by the fact that -- that the stock is down roughly 50% from its record peak. he sees about 20% upside potential, but there is a fairly high interest -- there is interest of 13%, so it is important to watch to see if that is the story and the stock can turnaround in 2016. mark: you will see that breaking news box in the top right of your screen, volkswagen of america says auto sales in may l by 17.2%. confirming the view that volkswagen has yet to recover from the diesel emissions scandal that are updated, last year. don't miss our interview with the chief executive. let's talk about job cuts. goldman sachs is said to cut dozens of investment banking jobs across london, new york and hong kong in the last month. -- slowing, adjusting to this slowdown in deal activity. we are joined by ruth david. what is the reason behind the latest rounds of job cuts? ruth: it is something that banks have been fighting for a while. saying all of the banks that the market environment, they are looking at rising regulatory cost us, they have deal activity falling down to is why investment banking is taking a cause, sue of you look at m&a activity, you run the numbers, it is down 80% m&a. equity markets are down and you are thinking the big banks that have hundreds of people with teams on the ground, how do they make your cost work in a market like this? was the topbc story of bloomberg , earlier this morning. ruth: there are looking at about 25,000 job cuts in the next three years -- they are looking at about 25,000 job cuts in the next three years. they are seeing huge falls and profitability, they are seeing that the markets are not that good, what do you do with all these bankers? betty: looking at share prices of both, clearly goldman still has done better, stock wise then someone like -- a company like hsbc. i'm curious why with all the cost-cutting, they are not really being given any credit by shareholders. ath: i think we should look when they have their annual of the, shareholders most opposition since 2009 to their compensation plan which --ld have included making the most highly paid ceo on wall street. they probably don't believe that bankers should be paid the way they are being paid. you need to keep in mind that it they do 5% every year and these investment banking jobs are over and above that. betty: it sounds like shareholders want even more, so what are people -- what are analyst telling you, what are others in the industry saying, where goldman could cut next? ruth: they have already done about 10% of their trading moreess, so could they see cuts in investment banking, especially if deal activity does not pick up? the president saying that this is the market for m&a to pick up, but if it does not, there could be more cuts in investment banking and other operating segments. i definitely think this may not be the end of the story. mark: we will have you back, then. time for the bloomberg business flash. casino revenue and macau saw more than expected last month, getting receipts were down 6.9%. mad cow has been hurting for two years now. cau has been hurting for two years now. oh will hire at least re-hundred tech experts this month, most will be software engineers with experience in vehicle connectivity and mobility services. automakers are trying to compete with google's self driving car project and right hailing cap over.- ride hailing app -- company already removing artificial flavors from zone its pizza -- from some of its pizza, last year. says preservatives will be removed from more of its -- all of its meat by next month. artificial preservatives in cheese will be cut by next year toppingsen used as will be free of human and have alex by march -- human antibiotics by march. pies? call pizza's betty: we do, we call them both highs and slices. pies and cicely's -- slices. ahead, looking for a unique vacation spot? find out how you can rent this beautiful home. ♪ betty: fans of original celebrity chef julia child who dreamed of mastering the art of french cooking -- they now have a chance to do that in the place where it all began. her country cottage is listed as a vacation rental on airbnb, this summer. -- what that story so interesting, i would not have thought that her house would be a museum, not up for rent. >> her original kitchen from her cambridge home is at the smithsonian museum, but another replica of that kitchen is in she also used it to entertain friends and have guest stay in, kind of as a precursor to airbnb back in the 70's. mark: if julia child's hadn't owned it, would you want to stay there? that is the big question. >> this is a lovely and humble home. it is a three-bedroom cottage, and a gorgeous little town. you would absolutely want to stay there, but for a luxury traveler, there are much grander options out there. you're really staying there for the history and to cook in julia child's kitchen. there is a lot of demand as one would expect, but the home is available on airbnb. it is available for rent like any other home would be, 600 and sleeps610 a night, it -- six. this is a great entry-level deal, but i will say it has been very popular, it has been on the site for about a week and is already booked up through december. mark: i'm not sure about the hidden cameras. while i want to stay somewhere where there are hidden cameras? price youart of the have to pay, there is one camera in the kitchen and it is meant to ensure that you don't take any of her utensils or steal her rolling pin. all the footage is destroyed after you check out and it is a security measure. betty: the pup karate is always following mark around, that is why he is sick of cameras. mark: coming up on the european close, we have an interview with the vw chief and ticketed. we will get his reactions to earnings that showed the emissions scandal is hurting profits. stocks,ook at european trading lower for the second consecutive day. we are 34 minutes away from the close in europe. the stock europe 600 is down by 1%. ♪ betty: it is 11:00 a.m. in new in london and 11:00 p.m. in hong kong. mark: there's 30 minutes left for trading in europe today. you're watching the european close on "bloomberg markets." we take you from new york to london in the next hour. continues to face an uphill battle after its massive emissions and scandal. sits down withr bloomberg television to talk about what his head for the automaker. betty: the opec meeting kicks off tomorrow and the oil producers are showing some optimism overpricing, adding that demand is growing faster than anticipated. mark: we bring you an exclusive sitdown with the south african finance minister. plus, global issues like brexit. betty: