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Speaker 1: Broadcasting live to New York, Bloomberg eleventh to Washington, d C.

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Speaker 1: Bloomber to Boston, Bloomberg twelve hundreds to San Francisco, Bloomberg

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Speaker 1: to the Country, Serious Exam General one ninety and around

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Speaker 1: the globe the Bloomberg Radio Plus Appen Bloomberg dot com.

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Speaker 1: This is Bloomberg Surveillance. Good morning. It is seven thirty

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Speaker 1: on Wall Street. I Black of McKay along with Tom Keane.

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Speaker 1: The headline of the morning so far in the corporate

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Speaker 1: world Salesforce dot com. I'm gonna buy demand where seventy

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Speaker 1: five dollars a share in cash two point eight billion

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Speaker 1: dollar net deal. UH Salesforce shares down two percent, as

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Speaker 1: you might expect. Demand where you wish you own that

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Speaker 1: this morning a fifty six percent right now. The Renault

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Speaker 1: Nissan Alliance is gonna begin hiring tech workers out in California.

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Speaker 1: Three D tech experts this month go on the payroll

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Speaker 1: as they try to lure workers away from Silicon Valley

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Speaker 1: to the car industry. Software engineers with experience in vehicle

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Speaker 1: connectivity and mobility services, that is what they say they're

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Speaker 1: looking for, shall me but nearly technology patents from Microsoft

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Speaker 1: the deal may smooth some potential legal tangles for show

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Speaker 1: me over intellectual property as it goes beyond China's borders.

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Speaker 1: The patents range of wireless communications, video, cloud multimedia stuff

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Speaker 1: part of a broader agreement announced Wednesday, Microsoft Office and

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Speaker 1: Skype will come pre installed on the Chinese smartphone makers devices. Now,

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Speaker 1: let's check out with Michael mar and get the latest

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Speaker 1: world in national headlines sp Mike, thank you very much.

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Speaker 1: Egyptian officials say a French ship has picked up signals

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Speaker 1: in the Mediterranean Sea, presumed to be from the flight

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Speaker 1: recorders the black boxes of the egypt airplane that crashed

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Speaker 1: last month. Eagy of their flight eight oh four crashed,

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Speaker 1: killing all sixty six passengers and crew on board. The

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Speaker 1: plane was heading from Arists to Cairo when it crashed.

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Speaker 1: Flooded Brass River already has reached the record height, and

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Speaker 1: forecasters say more flooding will take place, with rain coming

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Speaker 1: in the following days. The National Weather Services the river

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Speaker 1: is likely to stay in a major flood stage into

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Speaker 1: the weekend. Global News twenty four hours a day, powered

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Speaker 1: by our dred journalists more than a hundred fifty news

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Speaker 1: bureaus around the world at Michael Barr, Mike, thank you, Michael.

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Speaker 1: Time now for the land Over Parsippany Bloomberg NBC Sports update.

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Speaker 1: Here's John Stash all right, thanks Mike. Bullpens did in

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Speaker 1: both the Mets and Yankees. It was a Met bullpen

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Speaker 1: that actually included Noah synder Guard for the seventh inning

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Speaker 1: since his last start was cut so short when he

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Speaker 1: got thrown out. Problem was Hansel Robes in the eighth.

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Speaker 1: He gave up three runs, and the White Sox, who

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Speaker 1: had lost seven a row rallied from four nothing down

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Speaker 1: to win six four at City Field. Neil Walker in

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Speaker 1: his thirteenth on run the loss no decision for Stephen Matts,

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Speaker 1: who came in having won seven straight starts in Toronto.

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Speaker 1: Yankee bats again quiet only six hits. That's is twelve

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Speaker 1: in the last three games, a four one loss of

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Speaker 1: the Blue Jays. We've got three in the seventh, mostly

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Speaker 1: off Dellan Batansas, and the Yanks has now dropped five

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Speaker 1: the last seven since that six game win streak that

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Speaker 1: got into five seven a half games behind the Red Sox,

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Speaker 1: who won six two at Baltimore thanks to Mookie betsy

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Speaker 1: At three home runs. The Cubs six game win streak

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Speaker 1: ended by the Dodgers five nothing, a no decision for

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Speaker 1: Jake Grietta. The Cubs had won their last twenty three

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Speaker 1: regular season games when Arietta had started w NBA at

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Speaker 1: the Garden, the Liberty loss to unbeaten Minnesota sevente French

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Speaker 1: Open today, Serena Williams won her match, but sister Venus lost.

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Speaker 1: With the Bloomberg NBC Sports upbeam, I'm John Stashandler. Thank

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Speaker 1: you John Well. Right now we're looking at a rough

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Speaker 1: morning for risk It is a risk off day with

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Speaker 1: features lower and oil prices lower. Opec starting a meeting

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Speaker 1: this week. West Texas six down one three same percentage

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Speaker 1: shop for Brent crude right now at fort nine twenty

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Speaker 1: four okay, not expected to take any action, however, always

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Speaker 1: a surprise possible out there and whether or not that's

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Speaker 1: weighing on stocks or not. As we mentioned, we're looking

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Speaker 1: at a down day for stocks, a realm the world.

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Speaker 1: This is Bloomberg Surveillance. I Michael mcketh along with Tom Keane.

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Speaker 1: The numbers on the markets. The stock six hundred off

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Speaker 1: by four points one as features off by eight points,

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Speaker 1: four tenths down, Features down sixty seven points. Also for tents.

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Speaker 1: Time now for the Bloomberg n j I T STEM Report,

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

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

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

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Speaker 1: more at Stories of Innovation dot m j I T

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Speaker 1: dot EU. Here's Bob Michael, Good morning. Here's what's making

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Speaker 1: news and science, Technology, Engineering and math. A collection of

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Speaker 1: salary surveys wants to a bright outlook for compon station

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Speaker 1: in the life sciences field, but some areas jumping in pay,

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Speaker 1: although salaries in some job positions remain flat. Deloitte's sixteen

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Speaker 1: Global Life Sciences Outlook finds the sector continues to grow worldwide,

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Speaker 1: but there is steady pressure to reduce costs, increase efficiency

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Speaker 1: and prove value. The shortage of skilled workers and the

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Speaker 1: difficulty in retaining them continue to be a top operational challenge.

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Speaker 1: According to the Deloitte study, New technologies and retiring baby

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Speaker 1: boomers are creating shifts in skill sets and organizational needs,

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Speaker 1: creating further difficulty and hiring and retaining necessary talent. Meantime

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Speaker 1: of study from Randstad Life Sciences finds positions related to

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Speaker 1: drug safety have increased in demand as a need for

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Speaker 1: patient safety grows, and the top salary in a survey

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Speaker 1: by the industry publication and website the scientist goes to

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Speaker 1: a PhD working as a full professor specializing in biotechnology

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Speaker 1: or clinical research. Microsoft unveiled a new platform based on

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Speaker 1: its Windows ten software catering to virtual and augmented reality

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Speaker 1: technology to up by other companies. When does Holographic will

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Speaker 1: enable rival headsets to interact with each other, The company

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Speaker 1: expects over eighty million virtual reality devices to be in

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Speaker 1: use by and that's Sporting's Bloomberg and j I T

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Speaker 1: Stem report Michael. Before long, we won't have to interact

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Speaker 1: with anything real. It's it's as long as you stay real, Okay.

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Speaker 1: I don't want to sit next to a robot here,

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Speaker 1: no comment Tom Kine are well. It is a big

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Speaker 1: day for economic data, and not just here in the US,

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Speaker 1: but around the world. A lot of purchasing managers indexes

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Speaker 1: get a view of the health of manufacturing around the world.

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Speaker 1: We get ours the I s M Manufacturing Index at

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Speaker 1: ten am. The forecast is for it to drop to

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Speaker 1: fifty point three from fifty point eight. We've seen a

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Speaker 1: lot of what you would call me I don't know

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Speaker 1: if that's an economic term, uh numbers so far around

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Speaker 1: the world in Europe, a little bit of a decline

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Speaker 1: in the UK, a little bit of a rise in China,

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Speaker 1: no change at all, and that was considered a good

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Speaker 1: news for the day. Joseph Lake is the director of

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Speaker 1: Global Forecasting from the Economist Intelligence Unit. He joins us

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Speaker 1: Now and Joseph the The comment of the morning may

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Speaker 1: have come from Japanese Prime Minister Abbe, who said one

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Speaker 1: of the reasons he is postponing the sales tax increase

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Speaker 1: in Japan is that there does seem to be a

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Speaker 1: global slowdown coming, and then manufacturing numbers certainly would add

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Speaker 1: some weight to that. How do you see it at

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Speaker 1: Eiu Well, I think that Abbe is comments. I means

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Speaker 1: it's always much easier for a prime minister to blame

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Speaker 1: developments outside of the domestic economy and external shock or

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Speaker 1: something like that in a global slowdown. It's it's often

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Speaker 1: the full guy for difficulties at home. For us. The

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Speaker 1: global this year looks pretty similar to so last year.

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Speaker 1: We're in the middle of a change in the global

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Speaker 1: economic cycle. So staying here in the US, it's really

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Speaker 1: at the forefront of the economic recovery since the financial crises,

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Speaker 1: and the Eurozone is doing a lot better than it

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Speaker 1: has done for several years. Japan is muddling along. It

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Speaker 1: has bigger issues to face with this, with this horrible demographics.

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Speaker 1: But the real damage that's been done this year is

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Speaker 1: in the emerging markets, and they've been hit by a

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Speaker 1: couple of factors. Really. The FED rate rise has led

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Speaker 1: to a lot of capital fleeing emerging markets, led to

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Speaker 1: a lot of currency depreciations, so all of the bricks

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Speaker 1: are going through a tough time of heart. From India,

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Speaker 1: and we're seeing the Chinese slowdown is having a big

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Speaker 1: impact on a lot of emerging markets as well. And

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Speaker 1: then finally we're probably around the bottom of this commodity

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Speaker 1: price slump which has been coming for the last few years,

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Speaker 1: and that's hit a lot of commodity exporters. So there's

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Speaker 1: a lot of headwinds to the global economy right now.

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Speaker 1: But actually the developed countries, the rich world countries are

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Speaker 1: are doing okay. I would say at the moment. Well,

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Speaker 1: there raises a lot of questions about the outlook going forward,

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Speaker 1: because the FED is considering another rate increase, has the

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Speaker 1: image been done to emerging markets or is there more

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Speaker 1: to be concerned about. Well, the FED rate increase, I

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Speaker 1: think that tells us two stories, really, And the first

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Speaker 1: story it tells us is that the US economy is

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Speaker 1: in very good shape right now, better shape than it

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Speaker 1: has been for for almost a decade. And that's a

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Speaker 1: very straightforward story here where we've got this incredible consumer

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Speaker 1: spending story. You saw the data released yesterday would show

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Speaker 1: that consumer spending in April increased by the most in

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Speaker 1: one month for seven years. I mean, that's really an

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Speaker 1: incredible month for the US economy. However, it's being weighed

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Speaker 1: down a little bit by by week exports and weak

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Speaker 1: business investment, and that's the oil price story, and that's

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Speaker 1: particularly concentrated in the energy market. So the overall US

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Speaker 1: macro economic outlook right now is very good and that's

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Speaker 1: why Janet Yellen is moving towards the second rate increase.

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Speaker 1: What that means for emerging markets a bit more difficulty

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Speaker 1: for the next few months. We think that this year

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Speaker 1: emerging markets are are going to have another quite difficult year.

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Speaker 1: Next year at the turning points. So twenti seventeen, we

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Speaker 1: see commodity prizes starting to rise at that point. That

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Speaker 1: will help out a lot of countries, think Brazil, I

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Speaker 1: think Russia, in places like Saudi and Nigeria as well.

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Speaker 1: So the commodity price increase will help them, and it

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Speaker 1: will take a little bit of pressure off the exchange

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Speaker 1: rates and we'll see a bit of a rebound and

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Speaker 1: business investment across the emerging world. Then let's come back

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Speaker 1: with just like he is with the Economist Intelligent Unit,

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Speaker 1: he's the director of Global Forecasting. And it is a

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Speaker 1: day when everybody is looking to the economy, the global economy,

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Speaker 1: from Prime Minister Abbe to investors here in the United

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Speaker 1: States to try to figure out whether it is a

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Speaker 1: risk on or risk off day. So far, it is

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Speaker 1: a risk off day. As we mentioned, Futures are lower,

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Speaker 1: bonds are higher. Bond yields have been falling significantly on

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Speaker 1: the short end, which is interesting because of course that's

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Speaker 1: the most sensitive to the FED eighty seven basis points. Yesterday,

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Speaker 1: at this time we were at ninety three. Bloomberg surveillance

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Speaker 1: is brought to by Bank of American Maryland, seeing what

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Speaker 1: others have seen, but uncovering what others may not. Global

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Speaker 1: Research that helps you harness disruption. Vot to top Global

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Speaker 1: Research from five years running, Maryland Pierce Center and Smith

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Speaker 1: incorporating Global business News twenty four hours a Day's Bloomberg

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Speaker 1: dot Com, the Radio plus Mobile Act and on your radio,

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Speaker 1: this is a Bloomberg Business Flash and I'm Karin Moscow.

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Speaker 1: This update is brought to you by Sector Spider e

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Speaker 1: t F, whom I buy a single stock when you

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Speaker 1: Michael Core's Holdings reporting fourth quarter earnings that beat analysts

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Speaker 1: estimates after new products helped draw customers to its stores.

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Speaker 1: It's up six point three percent in early trading under

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Speaker 1: Armour down too and a half percent, cutting its annual

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Speaker 1: forecast after one of its largest customers, Sports Authority, moved

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Speaker 1: toward a disruptive liquidation of its stores. National Bank of

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Speaker 1: Canada does, saying fiscal second quarter profit fail forty eight

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Speaker 1: percent After sending aside more money to cover soured energy loans.

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Speaker 1: The lender raised its quarterly dividend one point nine percent.

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Speaker 1: US DOCK Index futures are falling after the SNP five

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Speaker 1: hundred captains longest monthly rally since 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 down six points. Now he made a futures

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Speaker 1: down fifty nine and NASA documty futures down about twelve.

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Speaker 1: The decks in Germany's down eight tenths percent. Tenure treasury

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Speaker 1: of six thirty seconds, the yield one point eight two percent,

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Speaker 1: nine max scrude oil down one percent or sixty one

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Speaker 1: cents to forty eight forty nine. A barrel comics gold

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Speaker 1: up a quarter percent or three dollars ten cents to

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Speaker 1: twelve twenty sixty. Announced the euro a dollar eleven sixty nine,

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Speaker 1: the en one oh nine points to six, and that's

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Speaker 1: a Bloomberg business flash. Tom and Mike Karen, thank you

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Speaker 1: very much. We're talking with Joseph Lake. He's the director

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Speaker 1: of global forecasting for the Economist Intelligence Unit, and we

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Speaker 1: mentioned at the beginning what Prime Minister Abbe said about

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Speaker 1: a global slowdown in training. He was obviously speaking as

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Speaker 1: part of his announcement that he is delaying a sales

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Speaker 1: tax increase in Japan until two thousand nineteen. They are

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Speaker 1: worried that that would slow the economy there as the

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Speaker 1: Bank of Japan continues its efforts to restart growth. Does

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Speaker 1: this make a significant difference in the outlook? Just sure?

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Speaker 1: I mean, it definitely does, And I think was the

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Speaker 1: right move. I think that introducing this or increasing the

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Speaker 1: sales tact at this stage would have been very harmful

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Speaker 1: to Japanese economy, and I've already had no choice in

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Speaker 1: the matter. He was faced with weak growth and even

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Speaker 1: weaker inflation, so he kind of had to do this.

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Speaker 1: And he's also announced a fiscal stimulus as well. And

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Speaker 1: we're going to have an election now over the next

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Speaker 1: couple of months in Japan as a result, which will

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Speaker 1: really be a debate around ebonomics and how successful it

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Speaker 1: has been. Well. The opponents, the Position Party in Japan,

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Speaker 1: argues that the Prime Minister Abbey has not really accomplished

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Speaker 1: a whole lot, and he's contributed to income inequality there.

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Speaker 1: But do they have any ideas about what could be

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Speaker 1: done differently or better? Right? So, I mean, I'm as

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Speaker 1: you know, is based on three prongs or three arrows.

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Speaker 1: There's the monetary side, the fiscal side, and the structural reforms.

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Speaker 1: And what we've seen is Japan has really run up

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Speaker 1: against the limit of what it can do on the

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Speaker 1: monetary side and on the fiscal side. And another stimulus

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Speaker 1: package that has been announced again, but that's really not

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Speaker 1: going to do a whole lot for the long term

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Speaker 1: sustainable growth outlook in Japan. And so what we need

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Speaker 1: to see is more progress on the structural reform side.

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Speaker 1: And but there the government really faces quite strong opposition

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Speaker 1: from lobby groups and lawmakers within the coalition because some

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Speaker 1: of these reforms are really quite contentious. So we're talking

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Speaker 1: about deregulating the labor markets, revamping the agricultural sector, and

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Speaker 1: restructure and corporate governance. These could all do a lot

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Speaker 1: to increase the long term potential of the Japanese economy,

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Speaker 1: but they faced really opposition. Something that you do so

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Speaker 1: well is this, So, what what is the soul? What

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Speaker 1: for our listeners worldwide and particularly across America about the

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Speaker 1: confusion of abonomics in the chronic lethargy of Japan. What's

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Speaker 1: the soul? What for us? So whatat for everybody around

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Speaker 1: the world is Japan is still one of the biggest

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Speaker 1: economies in the world. So when we see slower growth

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Speaker 1: in Japan, that means lower demand for US exports, That

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Speaker 1: means lower FDI in the long run to a lot

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Speaker 1: of countries around the world. So Japan is such a

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Speaker 1: big economy and so important to the overall global outlook

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Speaker 1: that even a small movement in the Japanese growth rate

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Speaker 1: to commean waves around the world for for every economy.

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Speaker 1: So no matter where you're living, and this has your future.

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Speaker 1: What is the measurement of the urgency today? I mean,

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Speaker 1: the Prime Minister was out front G seven in saying

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Speaker 1: the world economies in crisis of some level. I think

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Speaker 1: you got some serious pushback on that. He recapitulated that

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Speaker 1: this morning. What is the immediacy to the Japanese people

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Speaker 1: to do something? I don't see it. I agree with

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Speaker 1: you there. I think if you're living in Japan and

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Speaker 1: you've got a job, you're you're looking pretty safe right now.

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Speaker 1: And that's the sort of that's the two stories here.

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Speaker 1: There's one. If you're a Japanese worker, unemployment is extremely low,

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Speaker 1: life is generally quite good. The immediacy is really in

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Speaker 1: the long term, to be honest, and so We've got

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Speaker 1: this long term debt problem in Japan which will have

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Speaker 1: to be faced at some stage, but like a lot

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Speaker 1: of politicians around the world, that will be kicked down

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Speaker 1: the road and delaying the consumption tax will be good

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Speaker 1: for the economy in the short term, but long term

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Speaker 1: it creates another big hole in the fiscal accounts. I

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Speaker 1: think you made it a very interesting point there about

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Speaker 1: life is good for people who have jobs in Japan

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Speaker 1: now because we've got an election being fought, uh viciously,

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Speaker 1: shall we say, over the lack of opportunity for people

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Speaker 1: that has developed over the last five or six years

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Speaker 1: since the global economic crisis. But Japan has been in

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Speaker 1: this kind of more ass for five or thirty years,

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Speaker 1: and yet there's no um that we don't have the

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Speaker 1: kind of public protest that we're seeing here or even

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Speaker 1: in Europe over the economic situation. Why is that? I

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Speaker 1: think that one of the problems with looking at Japan

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Speaker 1: from the outside, and one of the mistakes that a

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Speaker 1: lot of people make because they look at the economic

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Speaker 1: growth rate and they think that's been terrible for the

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Speaker 1: last two decades. Life must be awful. But a lot

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Speaker 1: of that growth rate is explained by the very weak

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Speaker 1: demographics in Japan. So a much better method of comparison

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Speaker 1: is to look at GDP per capita or or growth

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Speaker 1: per head, and in that measurement, Japan actually looks pretty

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Speaker 1: similar to a lot of European economies and not too

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Speaker 1: far removed from the US. Over the last couple of

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Speaker 1: decades though, so in terms of per capita growth in

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Speaker 1: Japan has done quite well. But that means that does

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Speaker 1: not um that. That's not to say there's not a

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Speaker 1: problem here. There is a problem here, and it's to

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Speaker 1: do it and debt over the longer term, and the

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Speaker 1: amount of debt that the economy is holding right now,

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Speaker 1: which is a threat to the long term health. You

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Speaker 1: excuse me, You have done a lot and this American

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Speaker 1: election and looking at the unfavorables in favorables, what have

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Speaker 1: you learned in your forecasting about the relative unfavorable nous?

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Speaker 1: If that's a word of Secretary Clinton and Mr Trump

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Speaker 1: o god, well, I think this is These are two

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Speaker 1: of the most unpopular presidential candidates in recent history, and

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Speaker 1: we're looking back over the last third years. It's difficult

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Speaker 1: to find two more unpopular candidates. And I think both

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Speaker 1: sides are quite happy with the person that the other

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Speaker 1: side has chosen. So Clinton is a very beatable candidate,

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Speaker 1: and further repose skins, which they're grateful for because they

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Speaker 1: have chosen Trump, who is the most unpopular candidate in

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Speaker 1: recent history. And for me that one of the most

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Speaker 1: interesting aspects of this is how this has been viewed

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Speaker 1: from abroad. So I go to Asia quite frequently, and

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Speaker 1: there there are very strong concerns that the U S

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Speaker 1: could elect a president Trump and what what that would

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Speaker 1: mean for the global outlook, what that would mean for

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Speaker 1: trade and the trade and investment environment around the world.

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Speaker 1: And there are very strong concerns around the world about

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Speaker 1: this US presidential election. Does he does uh, well, we

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Speaker 1: get back to what we were talking about earlier. Does

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Speaker 1: Janet Yellen have to function in as sort of the

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Speaker 1: leader of the U s economy in absentia? Is monetary policy?

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Speaker 1: All we get, well, the US has been overly dependent

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Speaker 1: on monetary policies since the financial crisis. It basically saves

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Speaker 1: the US economy back into those in eight and nine

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Speaker 1: and still now it's provided an enormous courts the US

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Speaker 1: economy in the absence of any political leadership. Congress has

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Speaker 1: not been functioning really for the last a few years,

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Speaker 1: and so Joanne Yellen is is the best we we

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Speaker 1: have right now. What we would ideally like to see

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Speaker 1: is a functioning political system that looks unlikely to happen

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Speaker 1: in the near term. Even after November. The likelihood is

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Speaker 1: that we're going to face a divided executive and Congress,

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Speaker 1: or at least a divided Congress, with the Republicans likely

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Speaker 1: to maintain a majority in the House and with the

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Speaker 1: Democrats looking likely to retake a majority in the Senate.

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Speaker 1: So we cannot expect any sort of kickstart to the

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Speaker 1: economy from from Congress or the US government anytime soon.

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Speaker 1: And so monetary policy is all we left with, and

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Speaker 1: that's that's slowly but surely going to start to be

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Speaker 1: removed as a support to the economy over the next

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Speaker 1: couple of years. Just like thank you so much with

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Speaker 1: the economist intelligence Unit. This morning, Michael Yen put on

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Speaker 1: a bid stronger yen, lower number dollar again and it

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Speaker 1: won't let up one oh nine two. We're not near

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Speaker 1: the one oh eight watch, but we're getting there. Move

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Speaker 1: so far probably not what the Prime Minister wanted to see.

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Speaker 1: Mamby takes a managed pause this morning, but certainly last

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Speaker 1: five or six days we've seen weaker Chinese one. I

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Speaker 1: haven't even looked at jp Y for those of you

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Speaker 1: with the terminal in your car, jp y c n

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Speaker 1: Y currency. And I would take it, Mike, of course logarithmically,

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Speaker 1: of course you would. I would of course do that.

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Speaker 1: And it's just a persistent rhythmanity weakness. Wow, that's that's something.

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Speaker 1: And they end strength. I mean, there's all you need

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Speaker 1: to know about obi nomics. Here's an interesting it's a

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Speaker 1: well behaved time series. Interesting story up from Bloomberg Goldman

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Speaker 1: Sachs cutting investment job, investment banking jobs. Dozens of managing directors,

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Speaker 1: executive directors, and vice presidents across the mergers and debt

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Speaker 1: and equity capital markets teams have been called called that's

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Speaker 1: a new one. I've never heard the wood in York

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Speaker 1: called No, it doesn't. That was that was well, actually

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Speaker 1: it does. Yes. Annually Golden sax Uh calls five percent

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Speaker 1: of its employees. And I'm like the young guy, unlike

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Speaker 1: the young guy you are. We used to say laid off, which,

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Speaker 1: of course so here and nobody's laid off anymore. They're

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Speaker 1: called this is Bloomberg's surveillance. Hopefully we're not called