the dow little changed, but the s&p and nasdaq bouncing back a bit more. the nasdaq was the laggard in particular yesterday. we have technology earnings coming out and beating estimates. shares upo networks 15% after the cybersecurity complete bounced back from what analysts called a disastrous second quarter. third quarter beating estimates and jpmorgan saying results showing the salesforce reorganization is off to a good start. ciena revenue beating estimates as well. and tech data beating estimates . we have potential deal news to talk about this morning. buying a german company for $5.2 billion. makesuild machines that asphalt -- mix asphalt. approached by conagra about a potential acquisition. suisse,g to credit conagra would be willing to pay a hefty premium for pinnacle . finally, a look outside the world of stocks here today. we see a bit of a bounce for the u.s. dollar. it is up .1%. yields up .2%. gold futures down. the vix is down as well. as we see stocks rise, we see a bit more of a risk on environment taking hold today. mark: a similar story here. stocks are up today after five days of declines. the five-day drop was the worst run since november. interesting may come up .75% for the european benchmarks. much for sell in may and go away. confidence rising, strong domestic demand, more orders, pmi at 56.7 in may. the highest in three years. the markets as growth is largely driven by domestic demand with the export backdrop improving in fits and starts despite sterling .4% drop solid new orders. biggest jump in the backlog of work in six years. nationwides here fell for a third month in may. the worst drop for the market in 4.2% in april, taking the annual rate of change to -- the weakest year-over-year growth. mortgage approvals fell to a seven-month low in april. , theis a wonderful chart bloomberg fear greed indicator -- turning sour after a positive run for sterling in the last two months. the last time such a change ever happen was in february, which proceeded the drop in the pound. are bound -- the fear greed indicator. what gems you find on this system. vonnie: unending, mark. here in the u.s. command decision day for participation in the paris climate accord. president donald trump tweeted "i will be announcing legislation thursday at 3:00 p.m." congressional investigations into whether trump or his associates had improper contact with russia are heating up. kevin cirilli joins us from our d.c. bureau. thet fair to say that ministration is preparing for all outcomes? now, i think washington isn't to spitting president trump will announce they are removing the united states from the paris agreement. -- washington is anticipating. elon musk emerging as the goto person in the business committee ar. has the president's e he is urging the president to not leave the agreement. citigroup,on, goldman sachs, morgan stanley -- all these businesses urging the president to not get out of this agreement. there are prominent heavy kh industries feel it would be in america's best interests to remove themselves from this agreement. vonnie: steve bannon as well wanting out of the accord. an outoes turn out to be decision, doesn't that put more work on everybody when nothing is getting done in washington anyway? kevin: the devil will be in the details. the president could have a series of options where he perhaps removed some salt the agreement but allows other folks to look into it. whoe were top conservatives pushed the white house to have more oversight over the negotiations, the global negotiations regarding regulations. while the president's for filling his campaign promise, should he decide to remove the united states from the paris accord agreement, he just broke with a major one. saying thees president has signed a waiver to ,eep u.s. embassy in tel aviv not move it to jerusalem, as he suggested on the campaign trail. fromwill receive criticism our very important allies in israel. this coming just days after the president returning from his first international trip which took him to jerusalem. mark: trump continuing to dismiss the russia probes. he's been labeling them all sorts of things from a witchhunt -- all sorts of things, a witchhunt. russia is just a playing card in the mystic politics. -- domestic politics. he's preventing him from performing his duty as president. putin also spoke today, saying he likes guys like donald trump. how likely that kevin: it is laughable. the assertion that russian financial institutions have engaged in questionablekevin: br is laughable -- the investigations are ongoing. the intelligence committee is going to be issuing subpoenas. over what is not a laughing matter. republicans are also raising serious questions. there is a frustration inside private wing and among advisors that they haven't been able to get out in front of this. they are setting up a war room to deal with the bevy of allegations. a collective nest in that they want to move beyond this and they realize they won't be able to until the results of the u.s. intelligence community are put forward. james comey testifying next week, as well as the congressional committees will be investigating. -- allse investigations those investigations are very serious. mark: how devastating could comey's testimony be? they are planning for all options, so to speak. so many people want to hear from him. it's very unclear what he will say. we know the type of questions that will come up, including a timeline of what he believes he was fired that's why he believes he was fired -- a timeline of why he believes he was fired. what he feels was the true reason for why he was fired and the timeline for when we could get results from the investigation. vonnie: kevin cirilli, thank you. stay tuned at 3:00 pm eastern. we will have that announcement from the rose garden. the: let's check in on first word news. >> australia's prime minister saying no need to be concerned about his country's relationship with the u.s. they got off to a rocky start in january, in part due to a dispute over refugees. malcolm turnbull spoke with bloomberg tv. >> our alliance is stronger than ever. the australia-u.s. alliance is more important than ever. as president trump and i demonstrated, we will work commitment, the commitment of our two nations based on our history and shared values and mutual interests is stronger than ever. on chinall also called to rein in north korea, saying the regime is becoming increasingly reckless. prime minister theresa may is getting slammed for skipping last night's televised debate. may's conservatives were their lead by has dwindled to just three points. -- world's largest airplane in california, the microsoft cofounder unveiled the plane. it's designed to launch rockets into space from the air. it's expected to demonstrate its first launch in 2019. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. up, oil sliding. more on what is weighing on oil today. that is next. this is bloomberg. ♪ mark: live from london, i'm mark barton. vonnie: from new york, i'm vonnie quinn. this is "bloomberg markets." time for our features an in focus segment could mark: wti trading little changed on the day. ted seifried joins us. what is going on with oil? 50-60ne was telling us dollars. why are we below $50? opecnobody believes this cut stands. a bit of skepticism. plus, the u.s. is coming out strong with production. the margins are good across the board. the products are strong, we've tightened a bit, but profit margins are very good there. overall, it is just a negative bear market. we failed on the announcement of the opec announcement, we failed at key resistance of that $52 mark. that was a key area to fail. we've been responding to that. we were down fairly sharply yesterday. we are waiting and seeing what the eia has to say later today. mark:we were down fairly sharply what takes us down to $40? some say $40 is a possibility. what could take us down there again? ted: from a technical perspective from in the short-term, $46.50 is our target. without any real news coming into factor that. if the numbers aren't quite bullish today, we could get that quickly. in the longer term, i'm thinking $42.50. possibly $40.50. it makes a lot of sense on a technical chart. whole withty as a one or two more rate hikes this year that could be a big part of it. we don't see a lot of bullish information for crude oil at the moment o. a lot of reasons to be skeptical on crude at the moment. mark: are you one or two more rate hikes this year? beyond june, the probability goes down to 30%. is it possible that that could only go one more this year? why is the fed funds futures fedet not as hawkish as the doves? ted: the fed is watching closely. we saw jobless claims today. the fed is watching that very closely. they will be looking at unemployment tomorrow. we are looking at wage growth. if wage growth starts getting stronger like it has been trending, you will see the fed a bit more friendly to having that second rate hike later in the year. keep an eye on that. sector as aties whole gets under pressure as you get the risk of trade. mark: ted seifried. futures in focus. vonnie: still ahead, morgan stanley ceo james gorman says the trump administration needs to make progress on its legislative proposals. more on his comments, coming up. this is bloomberg. ♪ mark: this is "bloomberg markets ." i'm mark barton in london. vonnie: and york, i'm vonnie quinn. america --d bank of revenue dropped, taking shares along with it. abigail: we are watching this sector very closely. right now, they are having positive trading for the big banks in the u.s. the s&p 500 banking index just flip positive before this -- after down five days in a row. bank of america and jpmorgan are slightly higher. morgan stanley up more than 1%. a bit of a recovery after yesterday's selloff. was of these banks are lower on the year. the s&p 500 banking index is down. decline isfor that the sympathy in trading with the 10 year yield the 10 year yield in white is down 20 basis points, its biggest move down since 2014. falling yields drag on the expectations for the banking sector. we see in blue that s&p 500 banking index trading lower, down 10% from the peak back in march. the idea that fixed income trading is on a decline developing a. in blue, we have morgan stanley's fixed income trading activity and back in 2014, the followingellow anticipation of this big pop and then selling into a bear market as the trading revenues fell down. as we saw that fixed income trading revenue pop higher, the stock has been falling. it will be adjusting to see if the stock continues to drop. mark: we spoke exquisitely with the morgan stanley ceo, james gorman. the administration came out with a very bold agenda. repeal and replace obamacare and introduce major tax cuts and redo trade negotiations across nafta and china and the european union. reassess nato, reassess climate , encourage companies to bring jobs back to the u.s. is a world of legislative and regulatory change, potentially. not surprisingly for a new administration come it's been tough. they've had to get their own house in order, so to speak. the disappointment of the replacement to obamacare, the fact that there was more on the repealed in the replace has setback the agenda a bit. for the broader economy, we hope demonstration can pull themselves together. we need progress on some of these legislative programs. >> are you concerned about the u.s. economy? james: no, i'm very encouraged by the u.s. economy. u.s. economy is doing just fine. employmentlmost full , 4.6% unemployment. there's very little inflation, .ut we are seeing early signs we have done to rate increases and expect to do more. -- two rate increases. housing prices have recovered from the crisis. state and local government deficits are under better control. he was economy, if you look at it objectively, the u.s. economy is doing fine. >> do you think the markets are not pricing in that political risk? james: i don't think they are overvalued. they are trading at high multiples, but look at the earnings. they are up 10-12% year-over-year. at the macro look reflecting future cash flows, not the past. future cash flows suggest a growing economy. people are surprised the markets reach all-time highs -- by definition, with the same model and a growing economy, every day, you should reach an all-time high. that is an expected outcome. are we getting there because the multiples have been inflated or because earnings expectations are growing or because there's a lot of froth in the market? right now, i don't see tremendous upside without further confirmation in the earnings story. mark: james gorman. up next, we will hear from another chief executive. this is bloomberg. ♪ vonnie: live from bloomberg world headquarters, i am vonnie quinn. mark: this is bloomberg markets on bloomberg television. let's check in with first word news. >> top corporate executives are pushing trump to keep the u.s. in the paris climate change accord. he announces his decision today at 3:00 p.m. people familiar with the matter say he is leaning towards walking away. among those appealing for him to stay on board is elon musk and andrew, from dow chemicals. decides to keep the u.s. embassy in tel aviv. trump signed a waiver that will hold off the move for another six months. waivernts have signed a since 1995. initial applications for unemployment benefits in the u.s. rose last week by the most in a month. jobless claims were up 13,000 to 248,000. the government comes out tomorrow with the main jobs report. global news, 24 hours a day, powered by more than 26 hundred journalists and analysts. this is bloomberg. oil production dominated conversation at the st. petersburg international economic forum. erik schatzker asked about the shift in opec's role as the global price -- in oil. they used to have total control of the price and now they do not. got 5 million barrels of shale coming out of the united states. it could go to 10 million barrels a day. opec, the more they cut, the higher the price goes and then you have more shale going into the market. they keep going. that is why they don't have the control. they push it up too much, the shale oil increases and that is what is affecting the market. a tough one now. erik: how does it affect your business? >> we are not a big producer of oil. as innot as big comparison to the trade we do. we trade a lot. from the trading side, you like volatility, but you do not like daily volatility. whether it is up or down, you per for -- you prefer a trade. price, but it is better for the trading side. erik: the situation is a good reminder how quickly things change. i would like to ask each of you how you think things will look five years, 10 years from now. how will global trading , if, chinaps change continues to consume and grow more, dominate global commodity consumption. to suggest, the united states goes down a more protectionist route. those don't have to be preconditions. in five years time, they will stop. i believe they will monitor and make sure it is subsidized -- make sure subsidize commodities are not coming into the country. they will monitor that. it will have an affect on the market, people will not be able to export into the united states, but where do i see it going in five years? the move is going to be mining companies have been burnt. they had a good run in all the years i have been here. a big run between 2003 and 2008. everyone was struggling to play catch-up. commodity prices rallied steadily because we could not catch up. we saw the boon calming and everyone started to build new minds. new production came in post crisis. we ended up where we ended up. spending $75 million a year, we are spending 25 million dollars a year, so there are no new expansions. china is strong. southeast asia is strong. you have demand. demand for commodities will continue and we will not increase supply. someone has to do something about it. the chinese are doing it already. i think you will have the chinese building minds in africa. they will go to new frontiers where mining companies are not going. mindsll see chinese owned around the world. if you say in 10 years time, i think china will produce their own commodities in other parts of the world. mining companies may be sidelined. it will take time for that to occur. it takes five to seven years to build a mine. we could have a good run on commodities. producing a lot of their own commodities in new territories, i believe they will go to africa. they may have to come to russia where you have reserves. if the russians are not prepared you may have china trying to get in to make sure these mines are being developed. a reminder that the -- aman of bloomberg lp senior executive at glencore. let's go to erik schatzker, who is in st. petersburg. theesume you talked about -- in the company. erik: glencore approached the u.s. agricultural and wasies of bunge rubber up -- was rebuffed. there is a hole in glencore's portfolio. they want to be bigger in agricultural commodities. they don't consider themselves influential enough. to be bigger in north america and latin america. bunge fulfills that requirement. to fact they have said no glencore does not mean glencore will not come back for another bite at the apple. badked if he wants bunge enough to go hostile and he says he cannot talk about it. we were not able to establish whether he is prepared to go that far. proves if bunge resistant and glencore is unable to buy it, there are other companies he may approach. glencore has options. he said they remain opportunistic when it comes to expanding other parts of its commodity portfolio. the company is active and 90 different commodities. it could be anything from coal, to fairest or nonferrous metals. -- two ferr -- to ferrous or nonferrous metals. does he believe trade is such a hot topic right now? does he believe the u.s. and china can avoid a broad trade battle right now? erik: he does. he said so in the course of the , that a tradeon war between china and the united states is unlikely. he added there are areas in which china and the united states might share concern that would answer some of the issues donald trump has raised. he has said the united states may have to take major action to combat steel and aluminum imports that the commerce believes may be unfairly subsidized. isfar as the president concerned, that is an issue of national security. the -- g berg said lasenberg defined a zombie companies as companies that cannot make money. if the chinese president wants them to go out of business, and see through with that, he would, at the same time, be answering donald trump's concerns. cooperation on the issues donald trump has concerns, itrity is an optimistic view. mark: we will come back to you. schatzker is back next. coming up, tom barrick finding himself in hot water. ♪ vonnie: live from new york, i am vonnie quinn. mark: this is bloomberg markets. business flash. some of the biggest business stories in the news now. ford posting a sales victory over general motors last month. sales rose 2.3% thanks to deliveries liveries to rental car companies. out gm by about 2900 vehicles. overall u.s. sales slowdown for a fifth straight month. deere is buying roads building equipment. paying $5.2 billion in cash for the group. shey plan to keep wirtgen' existing brand. ppg has withdrawn its proposal and will not make another. akzo rebuffed their bid. they wanted the company to hold talks with ppg. that is the latest bloomberg business flash. we provide context and background on issues of interest. we are looking at climate change. scientists are arguing about whether humans are warming the planet. the globe is on track to exceed the 3.6 temperature gain the united nations aims to prevent. the paris climate accord came in to a plan to cut emissions that trap heat in the atmosphere. during his campaign, trump questioned the science of climate change, vowing to pull the u.s. from the paris deal. his decision on the matter is p.m. wall street time. countries like china and india are the biggest polluters, but they claim fossil energy is the fastest way to take poor people -- here is the argument. companies and homeowners are installing more solar panels, switching to energy-efficient lighting. the cost of renewable energy tumbles. -- risingareness awareness has been field by an expanding body of research that predicts global warming will take its toll on the economy. there is an army of global warming skeptics who lobby politicians. delivering $100 billion 2025. from 2020 through you can read more about climate change on the bloomberg. finds himselfack in the middle of tax fraud claims. he is denying an italian hesecutor's accusation that evaded taxes when he sold luxury properties. let's go to vernon silver. what is this investigation focused on? it revolves around the golf courses for a reported $600 million a couple of years. the italian taxman contended barrack and colony owed back taxes in the way they structured the deal. what they have done is come back and say what they have done is normal, saying the prosecutor does not understand the way different eu countries and tax regimes can help them structure their deals. the prosecutor is finished. the next step would be an indictment. is that what happens? is colony, thest investment company, has already settled the tax bill, paying italian5 million to the tax authorities. the prosecutor has continued with his part of it. it will be up to the prosecutor and the suspects in the case, of which there are many, have a chance to respond. charges in the case, which there be none at this point, would the next step, and not even a step that is assured. embarrassing is this for him and his associate friend? that is to be seen? this case has kicked around for a while, a couple of years in italy. it got attention now because of who is in the white house and one of his friends and advisers is involved. it is much different from some of the big american tech companies that have used creative ways to lower their tax bills, but none of them has a friend as a sitting president. mark: thank you. vernon silver keeping us up-to-date with tom barrack. lead and the polls may not mean anything for theresa may. ships still steering the towards a majority. this is bloomberg. ♪ vonnie: live from london and new york, i am vonnie quinn. mark: i am mark barton. theresa may and her opponent firming up there positions as the better leader to navigate brexit. they have to ask not about who they voted for before, but who they want to see leading this country through the brexit negotiations. >> netting the right deal, one that secures our country's interest will be challenging. a matter of serious planning and negotiation. >> i don't think jeremy corbyn is up to the job. he has not got a plan for building a stronger economy. >> i don't do personal attacks. r's brexit team, no one has said to the people about spending money because of brexit. only one of two people will be prime minister, me or jeremy corbyn. you cannot trust the tories. [laughter] of the certainty of the outcome of the election is increasing. rob,ore, let's bring in who was on a brilliant q and a. --'s say there was cobblednt and labour together a coalition, what impact would it have on brexit? >> jeremy corbyn was asked about his coalition, how he felt about coalitions. it is astonishing how far we have come. that is a realistic question. who knows? answer.the first it is unlikely the smp wants to --.nto a coalition with it is more likely you would look out what we thought we were going to get in 2010, confidence and supply, something where parties unite to keep the conservatives out. throughey vote stuff bit bybour -- for labour bit. it makes of the case for independence in scotland. is what we are likely to look at. what would that mean for brexit? mark: no brexit? ago, you asked me months are we going to stop brexit, i would have said you can do it by voting for the liberal democrats . happened.ot there is no evidence in the polling or campaigning that liberal democrats think they are going to gain seats at all. that is off the menu. , liberald a labor smp democrat, whatever coalition you want to call it. peopleossible those are who think a hard brexit is a bad idea. they would have a different attitude to it from the conservatives. second, it is possible they would put some kind of deal to the public in a referendum. it is tricky because referendums destroy the people who call them. it is possible to imagine. mark: what have we learned about this election? it what is being termed as the demented tax? -- dementor tax? suggesting a majority of 140, 150, or maybe more. what has caused it? the tories thought the majority window was between 100 and 200 seats. the polls might be wrong. , and they are ahead in the polls, that could still happen. but, they are not privately talking about 100 to 200 seats. theresa may has had a bad campaign. having built her campaign around vote for me, they did not mention the conservative party. it was all about theresa may's strong and stable team. has had a good campaign. he has a lot of experience campaigning. he enjoys it. hisure to follow commentary. a wonderful q and a today. ♪ mark: it is 11:00 a.m. in new york 13 minutes left in the trading day from london. i am mark barton. vonnie: i am vonnie quinn. this is the european close on "bloomberg markets." ♪ mark: just about to come out in the u.s. oil up today. what is it looking like? julie: $6.4 million is the drop in crude oil inventory. much larger than the 2.7 million estimated. big drawdown in cushing, oklahoma and in gasoline inventories. nearly 2.9 billion -- 2.9 million barrels as well. rising at 293 -- 294 thousand. it looks like these numbers are bullish for oil and we are seeing a little bit of a leg up here now oil up .1 -- .9%. we will see what happens in the coming