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Speaker 1: Broadcasting live to New York, Cloomberg to Washington d C,

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Speaker 1: Bloomberg to Boston, Bloomberg twelve units to San Francisco, Bloomberg

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Speaker 1: to the country's Exam Channel one, and around the globe

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Speaker 1: the Bloomberg Radio plus a Bloomberg dot Com. This is

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Speaker 1: Bloomberg Surveillance. Good morning, seven thirty on Wall Street. I'm

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Speaker 1: John Tucker, two hours away from the opening Dell. Yeah.

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Speaker 1: Let's get you updated on the news. You need to know.

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Speaker 1: The aftershocks of the UK's vote to leave the European

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Speaker 1: Union reverberating across the financial markets after a weekend. The

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Speaker 1: political turmoil, the Pound extending its records, sell off, European

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Speaker 1: equities dropping to levels last seen back in February. Italy

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Speaker 1: is considering injecting capital into some lenders after the vote

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Speaker 1: by the UK to leave the European Union sparked to

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Speaker 1: sell off among banks and mid tronics. Says it will

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Speaker 1: buy HeartWare International for about one point one billion dollars,

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Speaker 1: gaining technology to treat heart failure patients. It Let's get

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Speaker 1: news from around the world now, and here is Spoomberg's

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Speaker 1: Michael barr Son. Thank you very much. British Prime Minister

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Speaker 1: David Cameron will meet with members of Parliament. It is

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Speaker 1: his first meeting since last week's Brexit vote to leave

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Speaker 1: the EU. Meanwhile, Secretary of State John Kerry has meeting

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Speaker 1: scheduled in Brussels and London today. On the Brexit, Kerry

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Speaker 1: urged Britain and the European Union to work together to

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Speaker 1: call markets. One West Virginia residents said her community smelled

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Speaker 1: like death. More storms are forecasts for flood of ravaged

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Speaker 1: Rest Virginia. People are trying to survey the damage caused

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Speaker 1: by the flooding, including one man who lives in Rennell,

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Speaker 1: Michael Mitchell. Come in here to vote to rescue people.

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Speaker 1: Last week I got nine kids that you know have

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Speaker 1: to look at me as a fog of their figure

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Speaker 1: and also as a hero. You know. My daughter thanks

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Speaker 1: that I'm better than Superman. At least people were killed

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Speaker 1: from last week's letting. The holiday weekend could be very

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Speaker 1: busy on the nation's roadways. Triple A says a record

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Speaker 1: forty three million Americans planned to travel this Independence Day weekend.

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Speaker 1: The Triple A says, with gas prices about forty six

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Speaker 1: cents cheaper than they were a year ago, more families

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Speaker 1: are taking trips this summer. First Lady Michelle Obama and

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Speaker 1: her daughters are set to arrive this afternoon in Liberia

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Speaker 1: with a start of an overseas trip promoting education for girls.

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Speaker 1: Global News twenty four hours a day, powered by more

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Speaker 1: than twenty journalists and analysts and more than a hundred

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Speaker 1: twenty countries. Michael bar this is Bloomberg. Thank you, Michael,

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Speaker 1: and two well Street Now with the Bloomberg NBC Sports

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Speaker 1: update is Rob Bushka, Marty John. Yankees continued their five

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Speaker 1: hundred ways as they fell to the Twins seven and

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Speaker 1: one at the Stadium, and they conjured up just two

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Speaker 1: base hits. New York trailed one nothing entering the six

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Speaker 1: when it came unraveled for Nathan h Valdi. Is he

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Speaker 1: fell the six and five years take for five runs.

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Speaker 1: Eight Yankees struck out, drawing no walks. They did take

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Speaker 1: two or three. Doesn't get an easier to best record

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Speaker 1: in the American League comes to town tonight. The Rangers

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Speaker 1: pay a visit Chiechi Gonzalez battling Ivan Nova. Similar tune

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Speaker 1: for the Mats falling five to in Atlanta. No run

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Speaker 1: support for far Tootal Cologne tough luck losses. He allowed

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Speaker 1: just one run in seven innings, met still three back

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Speaker 1: of the Gnats. They had to Washington tonight. Noah sinder

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Speaker 1: Guard gets the call. Giants have one thirteen of fifteen

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Speaker 1: hottest team in the Big leagues as fell to the Angels.

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Speaker 1: Copa America play second time in as many years. Chili

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Speaker 1: beats Argentina in the championship match. They do so on

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Speaker 1: penalty kicks. And that is your NBC Bloomberg Sports Update. John.

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Speaker 1: All right, thanks so Rob, and now let's get you

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Speaker 1: up to speed on how stucks are faring. Check the

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Speaker 1: markets every fifteen minutes during the trading day right here

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Speaker 1: at Bloomberg, and the U S SMP futures right now

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Speaker 1: fourteen points lower. That's down seven tenths dal E Many

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Speaker 1: futures down one d twenty two, the Nazeka futures thirty

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Speaker 1: seven points lower. That's down nine tenths of a percent.

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Speaker 1: As we check a sterling for your now British pounds

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Speaker 1: really one thirty two thirteen, that is another three point

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Speaker 1: four percent decline. And uh comis gold up eleven twenty

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Speaker 1: thirteen thirty three sixty. Right now, you're listening to Bloomberg Surveillance,

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Speaker 1: Welcome back to Bloomberg Surveillance and Michael McKee, along with

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Speaker 1: Tom King's special edition from Washington d C. Today. Later

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Speaker 1: an interview with former FED chairman Alan Greenspan. Stocks are

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Speaker 1: grinding lower. We should say SMP features down by fifteen

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Speaker 1: right now. The foot sea in London is off a

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Speaker 1: hundred and fifteen points and the pound going for one

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Speaker 1: thirty two ten at the moment. The low for the

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Speaker 1: day one eighty six. The Bloomberg n j I T

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Speaker 1: Stam Report brought to you by New Jersey Institute of Technology,

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Speaker 1: investing more than a hundred and ten million dollars a

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Speaker 1: year and applied research to solve problems and to improve life.

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Speaker 1: Learn more at Stories of Innovation dot n j I

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Speaker 1: T dot e DU. Here's John Tucker. Yeah, let's see

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Speaker 1: making news and science, technology, engineering and math. Michael Baltimore

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Speaker 1: based Centrixion is developing a new generation of non addictive

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Speaker 1: pain killers, and hot peppers could play a role. The

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Speaker 1: problem with narcotics is that in treating pain, they affect

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Speaker 1: an area of the brain that registers intense pleasure. Centraxians

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Speaker 1: drugs are designed to target pain directly without triggering the

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Speaker 1: brain's reward system. The company says it's developing an injectable

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Speaker 1: drug to treat arthritis and foot pain that contains a

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Speaker 1: synthetic version of capsican substance and chili plants. It's the

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Speaker 1: furthest along of five drugs, Centrexion has in development and

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Speaker 1: could hit the market by Comcast, A, T and T,

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Speaker 1: Verizon and other Internet service providers are trying to sway

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Speaker 1: the FCC to abandon proposed privacy rules that would hamper

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Speaker 1: their efforts to use and share customer data for advertising.

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Speaker 1: The rules let I s p s use the data

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Speaker 1: only if users opt in. The Internet service providers want

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Speaker 1: given opt out option and say the rules are un lawful.

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Speaker 1: The rules would apply to I s p s, but

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Speaker 1: not Internet and add companies such as Google and Facebook.

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Speaker 1: That is this morning's Bloomberg and j I T Stem report.

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Speaker 1: Mike John Tucker thinks, so, mu's Tom Keene here with

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Speaker 1: Michael McKee in Washington. We will speak with Alan Greenspan

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Speaker 1: medal and all right later in the morning. It has

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Speaker 1: been a blur, Michael, Let's do a quickick data check

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Speaker 1: before we get to sir Martin. The idea of futures

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Speaker 1: negative fifteen, down futures negative one twenty nine. As you

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Speaker 1: said earlier, this is not the panic of Friday, but

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Speaker 1: nevertheless we got to do more data checks. Yeah, it's

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Speaker 1: definitely a grind lower. On the day the tenure guilt

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Speaker 1: yield in England goes down below one percent for the

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Speaker 1: first time ever basis points. We have any number of

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Speaker 1: themes with Sir Martin Sorel of w PP, but there

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Speaker 1: can only be one theme today, which is how Sir

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Speaker 1: Martin will look revers his team at w PP in

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Speaker 1: their new world. Sirmartin good morning, thrilled that you could

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Speaker 1: take the home of those false percentage pretenses. Tommy, I

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Speaker 1: feel you me here. You're in Washington, Well, we were

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Speaker 1: in London, Mike, and I have been thank you British.

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Speaker 1: I mean we were going to take a surveying his

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Speaker 1: advertorial native advertising. Maybe we'll come back to Britain the

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Speaker 1: way things are going where their data, Sirmartin, we can

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Speaker 1: let's get to brexit the more. What do you tell

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Speaker 1: your leadership at WPP today, Do you just go in

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Speaker 1: and say cut costs by five percent? No, no, no,

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Speaker 1: the reverse of anything. So we say, first of all,

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Speaker 1: we regret the decision because from a personal point view

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Speaker 1: made it quite clear I thought we were better in

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Speaker 1: than out. But putting that to one side, the electorate

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Speaker 1: that is spoken, we said top top out of our

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Speaker 1: top ten markets, TOM four in western continental Europe and

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Speaker 1: ignoring UK, which is the second largest market. Germany is

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Speaker 1: number four, France and number six, Italy is number nine,

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Speaker 1: Spain is number ten. These are really important markets for US.

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Speaker 1: They have g dps of between two and a half

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Speaker 1: and three and our trillion dollars each and they're not

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Speaker 1: going to go away. So even given the uncertainty because

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Speaker 1: we may have Brexit type referenda in Europe itself, but

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Speaker 1: given that under even given that uncertainty, those markets are

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Speaker 1: important to us and we have to increase our presence there.

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Speaker 1: And last but not least, whilst some people have views

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Speaker 1: about Brussels and the bureaucracy and the government there, they're

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Speaker 1: important and Belgium is important in that context. So those

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Speaker 1: five markets markets where we will increase our presence. As

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Speaker 1: far as the UK is concerned, we have to see

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Speaker 1: what happens in terms of economic growth. Clearly Brexit will

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Speaker 1: have a negative impact on GDP growth, in the UK

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Speaker 1: probably the most significant impact on the EU as well,

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Speaker 1: even X the UK or the EU X the UK,

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Speaker 1: and on the world's economy. I see the Chinese Premier

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Speaker 1: making the comments that he made about the impact of

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Speaker 1: Brexit on the Chinese economy. Does does bring to bring

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Speaker 1: it home? You've seen other comments in relation to India

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Speaker 1: and Mexico and all points in between. Does bring it home?

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Speaker 1: How significant a decision this isolation is, decision has been

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Speaker 1: or can be. And then we have the uncertainty, I

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Speaker 1: mean business, the tests uncertainty. It's the enemy of growth,

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Speaker 1: as you know, Tom, and we're going to have uncertainty

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Speaker 1: for a significant period of time in the negotiation. I

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Speaker 1: think it's inevitable. It's going to take a long time.

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Speaker 1: One ex member of the Foreign Office said to me

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Speaker 1: that it would take ten years to read negoat this

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Speaker 1: is before the vote, ten years to renegotiate all those

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Speaker 1: trade agreements that we will have to do on an

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Speaker 1: item biaum basis. This is exactly where we want to go.

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Speaker 1: We just have a minute left, Sir Martness is like

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Speaker 1: all we but how long does he uncertainty last? At

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Speaker 1: what point do you have to say, let's just get

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Speaker 1: on with it. Well, you have to do that when

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Speaker 1: you're running a business. You have no choice but to

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Speaker 1: make decisions or you have to do lay decisions as

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Speaker 1: a result. But just look at the unsentences in front

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Speaker 1: of us. We we will have a new prime minister.

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Speaker 1: We'll have a question about whether there be a general election.

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Speaker 1: There's a question over Scotland and a referendum, even question

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Speaker 1: whether Scottish will block the Act of Parliament that has

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Speaker 1: to be enacted post the referendum decision. Problem in questions

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Speaker 1: in Ireland, Northern Ireland, Ireland, questions in Wales. Then you

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Speaker 1: switch to Europe itself. Will we have the Spanish results

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Speaker 1: were quite interesting. The electoral results yesterday could seem to

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Speaker 1: indicate sort a little bit of a switch from the

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Speaker 1: popmast the populous trend. But we've got an Italian constitution

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Speaker 1: national coming coming up in October. Angler Merkel has to

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Speaker 1: decide where you're gonna have a fourth term or not,

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Speaker 1: which I think is that's important. Let's come back with

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Speaker 1: Sir Martin and his dis united Kingdom. What you needed

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Speaker 1: all right now is a tape deteriors futures negative sixteen

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Speaker 1: futures negative onety six from Washington Michael McKee and Tom

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Speaker 1: Keen Bloomberg Surveillance. We are counting out of the opening bill.

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Speaker 1: the Radio plus Mobile Labs, and on your radio. This

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Speaker 1: is a Broomberg Business Flash and I'm cared Moscow. This

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Speaker 1: International of Framingham, Massachusetts for about one point one billion

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Speaker 1: dollars getting technology to treat heart failure patients, and HeartWare

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Speaker 1: International is up almost nine this morning. The aftershocks of

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Speaker 1: the UK's vote to leave the European Union reverberating across

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Speaker 1: financial markets after a weekend of political turmoil, with the

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Speaker 1: pound extending its records sell off, and European equities dropping

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Speaker 1: to levels last seen in February. We checked the markets

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Speaker 1: every fifteen minutes throughout the trading day. On Bloomberg SNP

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Speaker 1: eveny futures lower down seventeen points now even a futures

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Speaker 1: down a hundred forty two NASADAC, even a futures down

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Speaker 1: forty one The decks in Germany's down two point one percent,

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Speaker 1: the cat in Paris and the foot Sea one hundred,

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Speaker 1: both down more than one point eight percent. Ten Your

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Speaker 1: treasury up twenty eight thirty seconds, the yield one point

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Speaker 1: for six percent yield on the two year point five

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Speaker 1: six percent NIMAX Scrude oil don nine tenths percent or

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Speaker 1: forty five cents to forty seven nineteen. A barrel COMEXS

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Speaker 1: gold is up one percent or thirteen dollars seventy cents

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Speaker 1: to thirteen thirty five sixty announced. The euro at dollar

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Speaker 1: oh nine nine two, the British pound a dollar thirty

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Speaker 1: one seventy one and the yen one oh one point

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Speaker 1: five six, and Italy's government considering injecting capital into some

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Speaker 1: lenders battered by a fresh sell off in the wake

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Speaker 1: of the UK's decision to leave the EU. That's according

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Speaker 1: to people with knowledge of the talk. As a Bloomberg

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Speaker 1: business flash, Tom and Mike Karen, thanks so much. Michael

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Speaker 1: McKee is gonna come back with Sir Martin Sora. We're

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Speaker 1: in h Washington. But I need to give some of

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Speaker 1: the vectors the first and second derivatives to that wonderful

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Speaker 1: data check that Karen did two s ten. Spread is

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Speaker 1: flattening out this morning. We really didn't see that on Friday.

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Speaker 1: We did, but nothing like you would have thought that

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Speaker 1: changed this morning. Eighty nine basis points. What you need

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Speaker 1: to know is a curve is flatter this morning, and

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Speaker 1: that is a new occurrence. A yen so far has

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Speaker 1: been very resilient. It is not moved stronger. Is safe

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Speaker 1: Haven a one oh one ft Yes, stronger, but maybe

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Speaker 1: not like I would expect it to be. And we've

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Speaker 1: got legitimate dollar strength. Is Karen mentioned Sterling as a

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Speaker 1: life of its own. It is just spiked down to

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Speaker 1: one six one low for the day one thirty one

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Speaker 1: fifty eight. So we're watching Sterling obviously is a core

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Speaker 1: data point correctly, But my I would suggest is Dean

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Speaker 1: current brilliantly said, I think it was on Sunday. In

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Speaker 1: this blur, you've got correlated markets away from equities, and

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Speaker 1: then equities catch up. And we're seeing that right now

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Speaker 1: futures negative eighteen. We're starting to see a lot more correlation.

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Speaker 1: Sir Martin's al is where this. He is the CEO

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Speaker 1: of w PP and you are based, Sir Martin, normally

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Speaker 1: in London, London, and you actually to be fair about

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Speaker 1: a third and the third and the third the third,

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Speaker 1: But the corporati I'm trying to get at the financial

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Speaker 1: headquarters because the question domiciled yes, yes, then yeah. The

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Speaker 1: question I want to ask is how do you reorganize

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Speaker 1: or do you reorganize the business to uh to deal

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Speaker 1: with the situation in which you find yourself? Now, what

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Speaker 1: are companies domiciled in the United Kingdom going to do? Well? You? You?

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Speaker 1: I think actually honest that is you have to wait

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Speaker 1: and see how then do you make rash decisions or

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Speaker 1: quick decisions. We have a decision on a referendum, it

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Speaker 1: has to be implemented. We don't know how long it's

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Speaker 1: going to be implemented. There are other other forces at work,

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Speaker 1: both within the United Kingdom and outside in Europe that

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Speaker 1: you have to see through as we talked before before

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Speaker 1: the break. But basically what we are doing or in

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Speaker 1: the already doing as of Friday morning is we will

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Speaker 1: ironically up our presence in those top four markets of

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Speaker 1: our top ten Germany, France, Italy and Spain rather than

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Speaker 1: reducing them. They're important to us because of their size

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Speaker 1: and their scale, and that there are four of the

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Speaker 1: top ten markets Belgium and Brussels is important to us

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Speaker 1: because it's it's the home of the EU administration even

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Speaker 1: without the UK. So ironically or paradoxically, we're actually probably

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Speaker 1: going to invest more in those markets as a result

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Speaker 1: of this fracture and and fission now as far as

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Speaker 1: far as the UK as so we have to see

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Speaker 1: how it sorts out in terms of GDPB growth and

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Speaker 1: advertising as a proportion of GDP growth. How that how

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Speaker 1: that turns out will affect our jobs. In employment, the

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Speaker 1: number of people in w PP has increased the seventeen

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Speaker 1: thousand people in the UK alone in the last three

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Speaker 1: or four years through growth. Do you buy the argument

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Speaker 1: made by the Leave Care that as a as a

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Speaker 1: corporation you will be better off DAMSILD in London after

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Speaker 1: a divorce from the EU. Well, you know, somebody, the

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Speaker 1: CEO of the Leave campaign, made the argument on another

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Speaker 1: channel this morning that you know, he likened it to

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Speaker 1: American independence. Where I found that analogy interesting but bit nonsensical,

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Speaker 1: is that we're a few hundred years on and the

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Speaker 1: world has globalized. It is far more interconnected than in

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Speaker 1: the in the eighteenth century, So it's a nonsense to

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Speaker 1: make that comparison or absolutely and we're not We're not isolated,

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Speaker 1: We're all interconnected. I mean, for the Chinese premier to

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Speaker 1: make the comments that they made about the to Brexit

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Speaker 1: on the process of the Chinese economy is not of

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Speaker 1: itself extremely interesting, bearing in mind that Britain has not

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Speaker 1: penetrated the Chinese markets our third largest market, but generally

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Speaker 1: that has not been the case amongst amongst businesses, so

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Speaker 1: that the tragedy here is interconnection. The answer to your

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Speaker 1: question about domicile and where you'd be located, the banks

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Speaker 1: clearly are going to be the financial services sector, which

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Speaker 1: is so important to the UK economy. Services as a

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Speaker 1: whole provide about third of GDP. The financial services sector

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Speaker 1: is a large element of the growth of employment. Job

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Speaker 1: that is the one that's going to be impacted and

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Speaker 1: has been impacted by rumor already as of Fronda, where

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Speaker 1: the bank starts this morning, Yes, well, where the banks

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Speaker 1: are worried about their passports for activities. I believe correctly

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Speaker 1: if I'm wrong, but you are a card curring member

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Speaker 1: of the British elite. That I'm a second generation immigrants,

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Speaker 1: so so therefore therefore that this campaign actually was rather

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Speaker 1: important from me. When you point when you have dinner

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Speaker 1: with the Duke in Duchess of Cambridge and New York,

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Speaker 1: I guess you're part of the elite. What does the

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Speaker 1: elite need to do to change the dialogue and message

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Speaker 1: with the people of your United king Well, the trouble

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Speaker 1: was the elite were talking to themselves. I mean, for

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Speaker 1: the private poster of the Prime ministers say to say

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Speaker 1: that they were ten points ahead on on Wednesday night

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Speaker 1: for Remain shows how out of touch we were. And

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Speaker 1: if you look at the southeast of England, I thought

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Speaker 1: it was fascinating only five constituencies in the southeast of

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Speaker 1: England voted to Remain. So outside London in the southeast

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Speaker 1: would you would have expected just the intuitive to beavor

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Speaker 1: the older people wanted to remain, younger people so I

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Speaker 1: wanted to leave and the younger people wanted to remain,

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Speaker 1: so it was it's a very split nation. Now. The

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Speaker 1: answer to your question is is a very difficult one

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Speaker 1: because there are bubbles. I mean the London is a bubble.

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Speaker 1: It is driven by forces outside the UK and there

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Speaker 1: has to be greater harmonization. And my own view at

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Speaker 1: the end of the day is what this is all

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Speaker 1: about is fiscal policy, not about monetary policy. What we've

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Speaker 1: had since two thousand and eight since Layman is a

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Speaker 1: focus on monetary policy and close to zero or low

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Speaker 1: interest rates. What we need is infrastructure, investment of Arkansian

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Speaker 1: stimulus to stimulate employment and reduce that inequality. Globalization is good,

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Speaker 1: but we haven't been able to explain effectively the impact

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Speaker 1: on car workers in Detroit when they lose their jobs

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Speaker 1: to Chinese car workers. We have to retrain, subsidize, recreate

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Speaker 1: redeveloped industries. And the other big issue is does the

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Speaker 1: web and new technology create employment or destroyer? Can I

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Speaker 1: ask you this as you go forward? What is w PP?

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Speaker 1: What is British business going to do about trying to

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Speaker 1: influence the Brexit negotiations. Will you have people in Brussels

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Speaker 1: lobbying how how does it work with a devolved and

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Speaker 1: yet semi federal kind of organization such as the EU. Well,

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Speaker 1: it's it's gonna the negotiations will take place at governmental level.

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Speaker 1: I'm sure that there will be governments will be asking

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Speaker 1: on both sides for input from from business. But essentially

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Speaker 1: it's down to the civil servants on either side to negotiate.

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Speaker 1: And one civil servant used to be in the Foreign

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Speaker 1: Office in the UK said to me before the election

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Speaker 1: that we just don't have the resources in the UK,

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Speaker 1: the talent about ten people, according to him, who could

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Speaker 1: renegotiate these trade agreements. It will take in his view,

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Speaker 1: and he was writing the teeth of it before before

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Speaker 1: before he retired. It will take ten years in his

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Speaker 1: view to renegotiate his agreement. So the answer your question

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Speaker 1: is extremely tough. From that, we don't have the administrative

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Speaker 1: capability yet to be able to do it now. Smartin

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Speaker 1: thank you so much, Smart, Thank you, Tom p and

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Speaker 1: we look forward to speaking him inner studios in London

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Speaker 1: and in New York. Is well, Mike, we've got to

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Speaker 1: do a day to check here. Extended out a little bit, Mike,

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Speaker 1: why don't you start, because I really don't know where

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Speaker 1: to begin. I'll start with Sterling in the city. With

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Speaker 1: Sterling one sixty seven. It's off its new low of

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Speaker 1: one tht one fifty two, but it keeps grinding lower,

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Speaker 1: as we said at the top of the show. And

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Speaker 1: the foot see is at one down one and thirty

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Speaker 1: one points two point one, and the correlations rising with

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Speaker 1: the US futures. There's more people come into the office,

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Speaker 1: volume increases, SMP futures hand down seventeen again. Finally a

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Speaker 1: touch of strength at one one fifty five. It's a

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Speaker 1: point six seven UH move, nothing like Sterling, but going

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Speaker 1: the other way as a safe haven. Yet one on

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Speaker 1: one fifty five. Let me get up Deutsche Bank here

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Speaker 1: on the wonderful Volmer Bloomberg apparatus that we have UH

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Speaker 1: today and the basic idea of Deutsche Bank just just

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Speaker 1: over just over twelve euros UH down eight and three

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Speaker 1: quarters percent. Yeah, with a little bit of a fragile

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Speaker 1: bid right now. Uh SB futures negative eighteen, down futures

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Speaker 1: negative seven with more data checks this morning this Monday

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Speaker 1: from Washington. This is Bloomberg's Surveyance,