Transcripts For BLOOMBERG Bloomberg Go 20160315

It, but lets go to first word with julie. Cane neither from runner win the nomination outright today. Donald trump and Hillary Clinton read john kasich was with a slightly to overcome. Polls show donald trump with a doubledigit lead in florida. A big loss there for marco rubio can put and end to his campaign. Clinton is expecting to increase her lead in the race. Russia says its forces have started leaving syria. T puts the pressure on his on syrian Bashar Alassad. From kimh talk jongun. Tovowing to dedicate detonate another nuclear warhead. He says he will test launch a Ballistic Missile capable of carrying one. It is a sign that the sanctions have not dampened his ambitions to build a longrange nuclear missile. Matt we are coming down a little bit with s p futures down 10 points. If you take a look at the s p year today or all of the majors year to date, we are only down about 1 after climbing a bit yesterday. The nasdaq off 5 . Stock taking the bigger hit with the other indexes basically recovered. Take a look at this chart. , a number ofws analysts came out on to this idea yesterday. Companies are above their 50 day moving average. We hit a low in january of about 9 . Now we are up to about 90 . Looks like the market is back full power here. Lets look at oil. Oil had a lot to do with that. Oil has lost steam. Down 2. 5 . Oil year to date, at one point, we were positive for the year. We now have a couple of down days with the new set and ran tons to that iran plans produce down to about 4 Million Barrels a day. I want to touch on valiant. Valiant came out with a earnings missing the mark. Shares down 13, 14 . Is a bigger story than just an earnings story. Stephanie they could put their credit packet risk. Dont want to say the hits keep coming, but this is extraordinary. They keep saying look at our sales, look at bausch on lawn. When they miss their numbers, changing the business model, you are not going to be an m a roll up universe anymore. To compliment you on the title. Pharma karma. Look at the ddi asks screen, it is important that they get it taken care of. They have a wall of debt coming. They need the money. Jon that is the stock to watch today. It is centralbank week. They kept the benchmark rate at 0. 1 . A survey showed more easing by midyear. What is interesting is the vote at this particular meeting. It looks like the support is coming around. The message was no change. When you see the shift in the voting pattern, it adds to the that we will see it. He gave little away and whether he will expand the program or cut the rates deeper. It has proven unpopular in japan. He had to go to some length to explain the policy. Economists are saying yes, but what exactly that will be and when is unclear. Is there any indication of why he thinks it is working . He is saying it is having an impact in the Interest Rate market. The second point was, it would take time to see flow through. Given time, he stood behind the policy. The thing to watch for wellbeing in april, they have new forecasts. ,f there is a serious revision he may feel he has no option but to go deeper with the negative rate. Jon we know what happened nine a april 2014. The economy slipped into recession. They are set to do it again in the spring of next year. I wonder if that gets pushed back more. The economists will be in on wednesday, meaning the policymakers. That he will be taxfreehe case for jobs. It will be interesting to see if policymakers respond. There is a wider view that the sales taxes only having a damaging and perverse effect. Watch what comes out of the meeting tomorrow for further guidance on the sales tax. Stephanie thank you. The Federal Reserves meeting. We are going to get that decision tomorrow afternoon. Looking at investor reaction, specifically in the Derivatives Market because it is a great forecaster. There is nothing more we love them bringing hr. There is not a lot of nervousness among investors. Our investors sending in cash . Is that why they are nervous . If you look at s p right now. It is one of the cheapest options you can own. We are seeing an increase in the demand for hedging. Overall, it is cheap. Part of it is if you are down for the year and you have nothing to protect, that will influence what you see in the options market. It is an opportunity. Are not seeing any pricing and the catalyst. It is an opportunity for investors to own those options and get involved. We are not seeing pricing and of any volatility right now. So many people have capitulated on the cause. D to do thehe fe same tomorrow. Think about where we were from the summer. That gives you some examples. The other thing i would say to that is that sets up for the to get a spillover volatility that is not expected. David a note came out that was not terribly optimistic, but was not pessimistic. It was more of a mark to market. It is going to take a little bit of steam out of their sales. Things look great. Household Balance Sheets are in great shape. They are going to be able to deliver rate hikes. Going to keep saying and showing they want to do more , but they are ultimately only able to deliver one more hike this year. Stephanie why dont they spend more . One of the reasons you see outsiders do well is because of these disenfranchised americans. Outhe consumers have been spending. We are tracking better than a 3 growth rate. Further than in the quarter of last year. Middle and lower income households held by laboring common lower gas prices. Upper income households dont like it when valuations fall. Last year, the s p 500 was down. Personal Savings Rates went up. The gas savings but also had the personal savings rate rise. It is called the luxury recession. Stephanie the apartment bill ackman bought, that is what is causing . Upper house holds. John is that a good gauge . Last year, we did not see a pickup in sales until about may. We have the initial kneejerk reaction that they are down. Restaurant sales boomed. We stop spending because we are skeptical they might turn back up. They have to remain the low for a time. We internalize that into our permanent income stream. That started may have less year. Retail sales report, i like to look at the line item that is restaurants ales, dining out. The kids are all right if that category does well. Whatever is going on in the elections in the stock market, if we feel like we are worried about finances, we pull back on that spending category first. I look to that right away. David thank you. Up next, china proposes a new tax that is riling up analysts. Julie valiant Pharmaceuticals Posted firstquarter earnings dead that missed estimate. The challenge of the past few months are not yet behind us. Shares have fallen more than 70 since last august. The sec has been investigating its business practices. Big changes at avon. Earlier this month, avon was left with a focus overseas. Pay the estate of the late Michael Jackson 750 million for his stake in their joint music business. His estate says he bought the almost 321985 from million. We are going to go to global go. Latest be the intervention by the government. It is a move that is not getting a warm reception from the market. Richard cross joins us with more from the market. The proposal does need Central Government approval. Given that this is china, Something Like this could happen quickly. What were we what we were told, is it set the rate at zero. One of the reasons they do that is because it allows them to refine the roles and send a message to speculators that if you are going to try and target our currency, we can wrap this up quickly. Clearly, an objective of the chinese is the internationalization of the u. N. Could this prevent them from doing that or at least provide an obstacle . The cost involved with providing documentation is going to drive up costs for your business. What it is going to do is make it less attractive to trade assets and could reduce market liquidity. It is not clear what impact it could have on chinas plans in terms of the imf. We tried to ask them, but they have not gotten back to us at this stage. There is new news. The white house about drilling. The president is reversing his plan to scale back atlantic offshore drilling. Atlanticng to bar coast oil drilling. This is important. The price of oil has dictated a stock. It is moving more and more towards oil. Putting together a plan. They had gotten some pushback from the pentagon. Now, theyre going to bar Atlantic Coast oil drilling. Initially they said you could and now they are saying no, youre not going to be able to drill. Matt in some places off the coast of the atlantic. This is something the environmentals will like. Matt it will possibly affect the price of oil and gas at the pump. This was adopted a year ago. Has been president making some of these decisions of the end of his term. This would be one of those things where you take one for the team. Thank richard frost. Thank you. So much to discuss. Three hikes in 2016, Morgan Stanley changed its call. They warmly raise once more this year. We will look at what has changed next on bloomberg. Morgan stanley remains says it remains to hide. Morgan stanley forecasting 1. 6 . Great to be with us on the program. You have come down with your growth forecast from three down to what down to one. They are not going to meet us i tied. It will take the better course of a year for them to meet us i die. They are to meet us i to i eye to eye. Seen steady gains in the labor market. That will keep them on a tightening bias. They would like to do more. They will do more if they can do more. Remind us what we type in to go. It saves a lot of time for us, those of us on the Trading Floor during the statements being released. We are able to see the median in the mean right away instead of calculating ourselves. To come it is going down. The mean will come down further, showing the dispersion of the hawkish thoughts are moving more dovish. They are going to show they intend to do more. They can only deliver one more rate hike because inflation is going to continue to be a foreign in their side. Has said inflation moving in the other direction would be four rate hikes. We have seen the peak for the year. That is an important point. It was buried in a footnote in one of the speeches last week. Peak for the year in january. When that is moving lower, it is difficult to communicate that you should do further rate hikes. Stephanie what picture was so different that people across the board were saying the sky is falling . Sentiment looked way overdone because this is not a 2008 economy. Some of the indicators had moved into 2008 levels. , lot of that is we hear you but how long can that happen if the industrial side continues to collapse . We needed an indication that the worst of the passthrough was being realized in the data and that we were going to be able to get beyond that and the economy would hold up. The nonmanufacturing sector, it also did not collapse further. That gave a lot of confidence. Stephanie thank you for joining us. Sharing a little Morgan Stanley insight. We will have that and more when we return. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. When it comes to the fithings you love,. You want more. Love romance . Get lost in every embrace. Into sports . Follow every pitch, every play and every win. Change the way you experience tv with x1 from xfinity. Equity futures are down across the board. Tom keene is joining us from radio. That is good news. Lets start with julianne first word. Julie news out of berlin today. There was an explosion. Police are investigating. Live pictures of the site of that explosion. Police are trying to figure out who the victim was and what happened. Off the areadoned and the investigation is continuing. Returned refugees have after trying to cross the border into macedonia. About 1000 of them were able to make it. Predicts a trade embargo with cuba will be listed under his successor. He travels to cuba next week. Said congress is building towards ending the embargo. He also said raul castro will take part in the planned meeting. The jon it is time for the morning mustread. Tom keene sitting alongside me. We dont do the horse races much. James is always worth reading. With the background that matters, the reality tv star, all need to be actors. You wonder what the actual be in cleveland. Country, we do a sevenyear political cycle. I remember sitting with Peter Jennings ages ago, watching a movie from Robert Altman be made on the floor. Stephanie there is tension. It makes me worried. I remember in chicago, there was tension. Stephanie we had to see Donald Trumps rally get called off because of his violence. Tom the two basic themes of the importance of florida and ohio is whatever happens in that, can any of the candidates shift to the middle . That is an assumption. Stephanie we have seen donald trump shift. It was as though it was a whole new we are all glad to be here. John says it is going to be hard for the people in this race not to drop out. If marco rubio loses florida, he is out. Im going to reach your a little bit. Ofald Trump Reminds me putin. He can say anything. He goes all over the map. Wants, alwayst he with a tough guy attitude. He comes out all sorts of ways on any historical issue. Tom i go back to the shock of losing. It a a race or is movement . It is a movement against the elites. Donald trump is appealing to the everyman. Tom looking at the correlations of his effort to the different demographic groups that are out there. It clearly shows the tendencies. At where the most influential are following, we have known Hillary Clinton has had a backing for some time. He has big backers. The guy who is pushing marco rubio, we have seen 10 million go into advertisements. That is from founder of td ameritrade. Theyre pushing against donald trump in a big way. Tom there is a wonderful new book out on conservative, where the right went wrong. Love the last chapter. There is a lot of is him out there with then our assumptions of where we go from this important tuesday to where we are to get to the conventions. Forget about getting to the election. Stephanie it doesnt matter how much money you have. If you live in the wright state and you have the right to vote, you have more influence. Valeant, this is a story i care about. They reported earnings that missed Sales Estimates and gave the Company Guidance that lowered previously estimated shares. We know who does not like that. Mr. Bill ackman. The first activist in this trade. These are tough days. Mike pearson back in the seat for 2. 5 weeks a lot of rich guys getting poorer this morning. Really interesting what happened. They came back two weeks ago. Them, theye one of came out, said nothing we have heard changes our positive you about this company. The Company Comes out in the cut the guidance by 1. 5 billion. They say theyre going to shave 25 . Lose to stephanie we have been talking about this company for the last 10 months. When we are dancing in the 50s, it is a different story. It says bungalow to it just about every line. Some of these businesses are not doing well and there are no cost productions to compensate. Bad things. All anybody wants now is this company to get on its feet, get stable, and deliver results. You are saying you cannot cut costs and on top of that, we are going to continue to have more problems . People get nervous about that. Matt while he was worth more than one billion dollars just at the end of december 2013, amir three months later, he has lost about 40 of his fortune. Do we have a sense of when we will have audited financials to look at . There are hard deadlines. Some of it is technical. Every creditor we have wanted to talk to, no one has said nobody wants that. It is going to create pressure for them to file, otherwise they go into these reconciliation periods. Look forwardhey with any kind of clarity . How do they do that . What is next from this company . Hiseported that he told employees no big surprises. I think investors are waiting anxiously to see that report. 1wood have guessed they would have wanted to bring in a fresh ceo. If they sold it off, what would the place look like . Bill ackman suggested that happened. The next day, he said not going to do it. It is not the biggest Revenue Generating part of their business, but it is profitable. Even have to ask what is the fundamental business plan. Clearly not the same business plan. Guidance as to where they are going . One of the fundamental issues is that it is a lowcost company. 1000 sales reps, get rid of the snacks in the cafeteria. Have one Communications Director they are dealing with. They are getting a lot of incoming calls right now. Jon thank you for joining us. Next up, Tensions Mount between the state and federal government. Who regulates Driverless Cars . Coming up, the former u. K. Ambassador to the u. S. , his thoughts on syria and the possibility of a grexit. Are julie you are watching bloomberg. President obama is expected to drillingis decision on oil off the Atlantic Coast. Governors and lawmakers had all back the plan to drill. Amazon is taking the next big step in cloud computing. They are launching a new service that will lead big businesses move databases online. They have been the leader in webbasedis is to services. Ari has agreed to buy grand marnier. Marniern half of grand s sales come from the united states. Senate commerce taunusees hearing on a car development. Tension has been mounting on how self driving cars will be regulated. There is a tussle going on here. With the automakers have to deal with lots of Different Levels and different states . They would rather not have any roles at all. Should we let the technology and the industry imagine the best solutions and try them out . Driving car have to have a Steering Wheel and breaks . Google has a vehicle going around the streets that has no Steering Wheel, no breaks. He said it is really scary to get in the thing and it just drives you around. Regulators in a position to make a decision about this . To beis going interesting. Starting to hear these issues and thing about what these things mean. There are difficult issues on aw to make a left turn across place we have pedestrians and two way traffic in both ways. Serious technological issues to be worked out here. The rules of the road are question marks here. Jon are they worried about the cost involved or the regulations . The fact that google is involved is interesting. You have Companies Like audi and ford, chevrolet spending lots of money on this stuff, trying to set new records and thinking about new Business Models that cars thate result of can drive themselves. All these things and what it means. How fast a they have to get to this point . How imminent are these cars . We are seeing more and more evolution of these technologies. It is happening really fast. G. M. Is investing in lyft to access to drivers their vehicles. Why would they be present at a hearing on self driving cars . They are all thinking about labor costs and the relationship they have with drivers. They think that maybe they will get a more efficient service. With u didnt see anyone ber on the roster. Is in a clear it has to be federally regulated . There is a National Standard and then you can add on to it. Because there are different rules and emissions, carmakers have had to respond to the most restrictive rules. California has led the federal government and led the carmakers down a certain path. We could have the same result as self driving cars. What is the best outcome here . Just isnt the outcome know outcome, just go for it. Congress cannot get anything else done. Is it midsouth . Is that where would come under . Click the department of transportation looking at this. Pent time at google and what it means for the future of cities. Jon thank you for breaking that down for us. Morgan stanley estimate of 49 million. A great example when you put in a prompter, and anchor will always read it. [indiscernible] stephanie we are talking about something i care about. About going to be talking a special tournament of champions that only bloomberg can bring together. It is all about march madness and a little bit of charity. Stick around. You are watching bloomberg. Stephanie time for a special contest we are having. For a cause. March madness is upon us. When you think about the amount of time spent watching the tournament, the amount of people , we have pulled together a group of ceos for the second year in a row. 10 grand apiece. Everybody puts in their teams. Whoever is the winner takes all of the money. Year, gary beat all of us. Is inand ill that she ohio guy. Take thedoesnt just money home and buy a ferrari. Wins, iwhoever have a very good bracket. This year, duke is in it. Duke is not expected to win. We are bringing together bill ackman. He might be losing money on valeant, but he still has 10 grand for it. Steve ballmer. Matt a lot of guys and women that know a lot about basketball. Is march madness. So much of it is a game of chance. Maryland is number five. That is the cursed seed. Number 12 is often a big upset. You can play with us. Matt brkfor your bracket. Stephanie dan gilbert is playing with us. His charity could win 400 grand. Would you like to know 1. 9 billion in lost worker productivity because of march madness, checking brackets. Gambling. In illegal only second to the super bowl. Matt this goes to a charitable cause. Am i allowed to enter without paying 10,000 . Stephanie you cannot be in our turn them in. But you can. Virginia is one of the top seeds out there. The arena is named after him. I am guessing that is his team. Matt we cannot see who they pick. Stephanie on thursday, you will be able to see it. March madness is upon us. The bank of japan keeps its negative Interest Rate. Today could be the final chance for some republican president ial candidates. Can anyone stop donald trump . Retail sales and Empire Manufacturing numbers all breaking in this hour. Welcome to the second hour of bloomberg. I am david westin here with Stephanie Ruhle and jonathan ferro. Jonathan we will make him talk about grexit and syria. It is a very poor comparison. Stephanie we are talking march madness. Sorry, john. Ceo making his first public appearance with investors star you now. Lets take you to julie hyman. Julie another big tuesday for president ial holders hopefuls. Illinois, north carolina, and missouri. Show Governor John Kasich with a lead over donald trump. Trump has a doubledigit lead in florida. For the democrats, clinton is expected to increase her lead in the delegate race. President obama is expected to reverse course for drilling off the east coast. Withdrawing its plan to open much of the southeastern plan for offshore drilling. Governors and lawmakers were in favor of drilling. A stunning move for moscow. The decision via by russian president Vladimir Putin put the pressure on Bashar Alassad to come up with a deal for peace talks in geneva. No sign of compromise from assad negotiators. Global news 24 hours a day. I am julie hyman. Over to matt on the market. Down across the board. Not huge drops. About 74 points. 73 points on dow futures. Atures have been down for second spirit watch for that. I want to show a chart that shows how calm and free markets equity markets have become. Visit us finally come back down below one year average for the first time this year. This calm is belied by the fact that investors are betting it would actually rise. Noteis an Exchange Traded that theyve it will rise. Shares outstanding are the the since february highest it has been all year since february of 26. I want to take a look at oil also. Over the last two days, a loss. Boost their production to 4 billion barrels per day. It started to drive oil down even as everyone in the world has called for a bottom in the commodity. A couple of stocks i want to watch today. Apple is one of them. You heard jon ferro tell us about channel checks Morgan Stanley has done showing apple iphone sales have done about 56. 5 million and a quarter. It is doing better than expected. Its salesnley cutting and profit forecast for the year. David the bank of japan held its new Interest Rate unchanged despite risks to growth. The governor reaffirmed the Central Bank Policy stance earlier. Continue toll explain our policy as im aware there are many opinions on negative rates. It is clear lending at home loan rates are falling on a the positive effect of negative rates to penetrate the overall economy and prices in the near future. David one of our colleagues yesterday used a term i had not heard. Fiscal eyes asian. The central bank stepping and where you would normally expect fiscals to settle things. I think of that has become a test to for the rest of the world prayer they keep on trying this stuff and they are not doing it well. We can see what happens. The government did not do enough. It is the same story everywhere. If you have a central bank playing by itself, completely up to, oneperson play by himself, it is no good. Previous Prime Ministers, but he has not been enough to help and that is the problem and i do not sense any real way of this going in the right direction despite what is said. The longer this goes on, the harder it goes out of it . It shows how deeply embedded inflation is in the economy. On the surface of things, this looks like a tight labor market. Kind of it is time a big issue . Youre right. It is the one thing. Its workers are getting if workers are getting more money, they will then did. If you keep on thinking something will be cheaper, then you are more likely. What happens because time is not on his side. Consumer sentiment is only worsening over there. How much more time can we give this before we see a turnaround . Negative rates we thought were working, i think everyone sees that as something when a case is not proving it not proven at best. Bankhappens if you are a and you have to leave money with the central bank . You start being more conservative rather than more lip will. That is another problem within this is some. Things make it difficult to youre right that at some point, it begins and that is the reason why the market is being so about it. Im not sure if you have seen the inflation monitor on the bloomberg. This is great because it shows inflation and countries around the world and get you if as well. To show and japan, just the change in flow, which i think is interesting area japanese inflation has come down substantially. We see a turnaround of u. S. Inflation. With such a turnaround like this, is it easy to change the behavior quick and . We talked about japanese savers want to leave their money in the bank. Dont you need a couple of quarters to change the mindset . It goes back to jonathans question. That chart tells a huge amount of the story at the moment. It can look back at the end of 2014, they were beginning to see inflation coming back in the system and have not managed to get it to go. Think there probably will nervous about going further because despite what he says, it is not clear whether it works as well as they think. This chart suggested, beyond whether it works, may actually be counterproductive . Up,yen ironically went which hurts their export. Exactly. Negative rates is one of those things, there was a test case for how to do it. It had a negative effect on banks and currencies. All of these Different Things in ways where economists looking at it before and imagine what would happen if you have negative rate. It is so different than what you had before. The negative effect has us thinking about broader markets across the morning. If you look at markets, global stocks in europe and asia are retreating from the highest close we have seen in quite some time. Jeffries came out with really bad firstquarter numbers. Equity and Leveraged Finance markets were shut down and if you look at myself, we are seeing the fed coming out with their announcement tomorrow. As much pain as we had it beginning of the year, such a snap back and were looking at the nasdaq down after the announcement. Meetingtting tomorrows started. What you expect tomorrow . The market now moves far more that it of sentiment does with anything to do with data. Last time a number had an effect a long time ago. Were all back to trying to work out what it means. Were trying to work out tomorrow what yellen means. It has not have the full effect it might have hoped. People keep on following and waiting and waiting. Are having jeffries a tough time in the middle of it. It is hard to make money. Stephanie whether it is talking banks, eithernd in pain or sitting in cash, we see a snap back astromed. Despite the market generation, the Federal Reserve came out and did not really backtrack their forecast for the rest of the year. Federal this week, reserve communications is in focus at this point. They told us they were data dependent. Everything seems to be ok. Is there are things going on here. Streaming historically, communication has not been great. We find out when they make that decision. It has to match the eventual decision. At least in principle this time, it was as if they have got their ducks in order are more. Actually, maybe. Staying with us. Bloomberg covering the fed Rate Decision tomorrow with a special Program Beginning at 1 00 p. M. Eastern. Difference hour time in london. Talk russias withdrawal. A quick look at futures. One hour 15 minutes away from the open. Futures, negative seven and nasdaq futures up 12. 5 points. Julie Jefferies Group posted a loss for the First Time Since to the innate. Rading revenue fell 82 wall street watches jeffries result closely. They are frequently a sign of how our the investment banks will do and they report the numbers later. The changes on the way at avon. The cosmetics company. Shiftuts my 500 jobs and its headquarters to the u. K. In a costcutting move. A split off its american operations. A control of that business left avon overseas. David thank you. Were now joined by the former and back ambassador of the united states. We have three British Assets on the show. We want to Start Talking about russia in syria and turkey. Just yesterday, russia announced they would be pulling out of syria. What do you do that . Knowsm not sure any of us what to make of this. He did what he set out to do in the beginning. Now there is the political process and they are beginning to say, nothing more we can do. Or you a vietnam like quagmire to get out because the cost is getting too high. We do not know whether this was an act of good faith to the international process. We need to stop the slaughter in syria, or whether it is just. Etting away i think that many of us know the answers yet. Jonathan we dont. I will thrown another possibility that this may be has committed to coming to agreement , that the only way to do that is to come to an agreement as well. Classic could be. I was talking yesterday to putin price, hepact of the announced would not talk to anyone at all. We honestly do not know. Tradeoff between whether or not saudis will play the game of limiting output at a are talking about film 4 Million Barrels today. A little too sophisticated for what is yet another move by that leaves the rest of us slightly scratching our heads. The whole syrian game has been war by proxy. Arabia, how saudi they react to this . We wait to see. Turkey has been adamant about moscow and was regarded as a little more helpful than it ought to be. Seems to be the one group that has the best chance of getting rid of him. Turkey is no longer it is doing more to control the border could we do not know what the terms think about this. They will be pleased with anything more likely to go because them what that happens, the less the risk that turkey gets more of these awful terrorist attacks. Another complexity there, the last two or three were isil, but it is their own terrorist kurdish group. We do not know. Everyone has an interest in combing things down. We do not yet know. This a necessary condition to solve the ultimate regime situation in syria . Was it possible to address the issue . I think it was possible aded the iranians viable political outcome. Not just the rest of us, had to theude mapping part of solution when arrangements were put in place. If the russians were prepared to go along with that, i do not think it would have mattered very much whether the russians were still there. The cost of russian policy, a huge increase, bombing indiscriminately, anybody who is opposed to assad. Costs in thisreal russian intervention. Stephanie we do have three english accents here in the oped in the sunday times, eu, theo stay in the roles they would have, for those in favor of the grexit, the argument was made, we have a chart of it i would love to pull up. If you look at the unemployment rates of germany in the u. K. Of u. S. , the rest of the eurozone is way down. Urgent in relative the economy of whether they stay on. The white line is unemployment in the eurozone apart from it. I think it is the green one. The point is there is a diversion snow matter what. Peter i think it is not for me to tell people quite how to vote. Set up your mess for why people should think through themselves. My judgment is not to leave even though is a lot of work to be done. The u. K. Negotiation has been seen as an opportunity to make further improvements in the way the eu works. There is a divergence. One of the problems, but we should stay, is the more you the morehe eurozone, they think high unemployment, andgrowth, less innovation, we are doing pretty well, thank you very much, on the fringe of europe. I am with peter and i am very against the grexit. The one that makes sense is to say we do not want to get shackled to the eurozone going nowhere. I think the bad reasons would resonate heavily with britain. With migration problems or things related in europe by itself, that would have an effect. I think that is true. Going to be any more or less, a huge humanitarian crisis for all who happened to live in europe in area. We understand why there is a strong sense we must go. Playing passionately to the idea. F sovereignty nevertheless, i personally think to leave and go it alone and think you can tell itself out of the midatlantic and rejoin the world as a serious player and be entitled to a Global Leadership role and continue to have an on these significant negotiations in iran and world trade negotiations, sanctions on iran and russia in the context of ukraine and being part of the whole process in geneva, all of that, i believe, is part of the leadership role. We actually think you are going to be a diminished player and i think that is an important point. The people campaigning to leave, they were never going to be satisfied because it came down to people. A pillar of the european union, never going to be changed. The point about the debate that people,rested in is the plenty of them are going down the route. You do not know what would happen. This click quite clearly would be taking several years to work out. Given the relationship the u. K. World,h the rest of the we do not know where the trade members would come out if we did leave. Fearr than going on about and quantifiable future, there are specific issues here. Moveded to those who had and they say to me specifically, just doing this not because you got business friendly environment, any speaking which come all that is important but because you are bringing it to a single market. If you leave, we will look seriously at moving elsewhere. That takes a lot of Foreign Investment or it is an important point. It not just fear mongering. Classy you are just seeing the beginning of an arms race with the european Financial Capital just beginning to approach the financial banks. Madrid is very good. Have you thought about geneva . Asked her dam with your causes other big Financial Center. It is a quite understandable thing. He mentioned geneva quite rightly. Peoplespoken to so many fear the idea of having your employees in london versus paris in labor market flexibility and the idea that if im working in the city of london, i do not want to go to paris to pay those taxes. Why should we believe that a major bank which shifts some of their employees to likes of paris . The fear mongers who would say this would be armageddon for the city of london, that is not right. None of us are saying that here the point youre making his right. 350,000 bright young french people working to the jobs are there and the pay is good. Flexible labor market, and because it is still a Financial Center of the world. I doubt that would change your there are other able to get into the share of that market. If we are not in the eu thank you for joining us. We will be back with more in just a few. Bbed iie and economics editor peter. In a few moments, important members will be breaking, giving us a picture of what the consumers are doing. Empire manufacturing. Matt miller, kick it off. What are we expecting . Were talking about the u. S. Consumer having money in their socket. We have got jobs again. Matt we have the numbers out here. Men manufacturing, we were looking for a negative reading of 10 and five. We got a positive reading. Manufacturing has been a real problem since the beginning of 2015. It looks like Empire Manufacturing number has turned again, which is positive. We expect a drop of 0. 2 retail sales. We got a drop of 0. 1 . You take out auto and gas and we of 0. 3 . In retail numbers are a positive surprise. The manufacturing number of use is a positive surprise. 0. 2 , demand of food and energy was a gain of 1. 2 . A slew of economic information. Manufacturing, better than expected. Stephanie what do you think here . Better than expected but it is not amazing. A slow, gradual crawling of the consumer confidence. Home improvement and that sort of thing is a big driver. Those were up 12 . We have seen that home depots and loads. Lowes. As long as the house and market does good, we will continue to see that. I am guessing those are not great just from what we have seen. Straight to the bloomberg and expected to see yields a little higher. I expected to see a stronger dollar. What i can see is some ugly revisions of 0. 4 to the prior month when we were looking for 0. 2 . It is not pretty. It seems to be with the market initially was looking at. 2016, i did not expect to see the retail numbers i saw. We are talking about retail sales. The emirates spending their money away from retail. Cannot talk about it enough they are spending it on travel, entertainment, eating out, some of the restaurants, casual dining is doing well. You get aaa out of the picture. They are not spending on new stuff. They are spending and of course saving. That leaves a lot of the retailers scrambling over this limited spending. They are also spending less. It is not that the number is off so much, but in the discounting spiral which is bad for retailers and good for consumers, they are buying but they do not need to spend as much, thank you amazon shopping. This year, it cost them 2 last. Jonathan makes an important point. It is better to take a look over time. That tends to be a small month. You want to look at the yearoveryear change in wholesale prices and the price index shows that over the year, we are still seeing the impact. The monthly change was a little different. We do not know it will have obviously. Shows were not at the point where the said which is meeting today and tomorrow, we can look to the numbers and say red alert, time to raise rates. There is a fascinating debate emerging at the Federal Reserve. A debate between read on the board of governors. It says there are downside risks. They cannot give the governor to make a decision together. The board of governors tends to be a little more united. It is usually the 12 Regional Bank president s. The fact that even within the board, janet yellen is hearing different voices, i am sure it is a lively meeting right now. I am talking to rich, bloombergs own economist. It is basically suggesting a manufacturing slump may have ended. That the u. S. Ort economy is in fact growing. You talk to Business People across america coming death, america, you get that feeling. But the general trend is mild positivity. It is somewhere in that level. The bad thing is there is room there to say, look at this there is room for people on the other side. Being on this gray level. A point on consumer confidence, Sporting Goods music sales up 8 . He says if the consumer is feeling that, they will not spend money. You can go thank you for being on the program. Matt miller, what have you got . Matt we will get our morning meeting after the first leonard rough as ive ever heard on bloomberg television. Congratulations on that. Economists currently holding at a 19 chance of a recession here by the and of the year. Morgan stanley gives us its taken on the state of the Global Economy and the chance of a recession globally. London. Me andrew from you dropped a bombshell on markets yesterday with not only aur increased probability of recession but also your forecast for rates. 1. 45 by the end of september. Why do you see us going almost as well as low as a record we hit in 2012 . A couple ofhere are factors. The rates in the rest of the world are a lot lower than they were in 2012. We think about the ecb taking rates further than negative territory in the bank of japan taking rates further into negative territory. International comparisons are lower than where they were in the previous lows. I think it matters. We are dealing with an International Bond market. Treasuries are still neil still near lives. That is a reason why we could get that to those levels even under a scenario that does not necessarily involve an outright recession. Youre getting into treasuries. You mentioned other Central Banks going negative or what about a shortage imminent papers . Is that a bullish sign for treasuries as well . I would not say that is the primary argument here we are mindful there is a lot of talk about at this time last year. We all remember when the ecb announced qe for the first time and bond yields got down to seven basis points. Later there they were almost 100 basis points higher. I do not the supply is the main thrust. A lot lower than where they were before and other dutch under our previous forecast. We had the fed a lot more slowly moving. Move going this year with the can that the fed what i june, september, december. Only hikesk the fed once this year and into december. That is another reason we think those yields are lower than where we thought they would go. Matt one hike from the fed is still a diversion from the ecb going negative and Japan Holding a negative rights. I assume that plays into your call as well because you are still dollar bowl. Bull. The factors for why we think this market has further to run. Not a more meaningful turn. It is an important assumption. There are those out there who believe that market is over and that is a reason to favor , butingmarket equities that is not our view. We think for the rate diversions and the Economic Performance diversions and the pressures contribute to moving higher. Great to have you on especially after that earth shattering report their. Thank you. Next up, voters in the key states of illinois and ohio and. Issouri the markets, 50 minutes away from the open. Futures down by 12 point. Let me get you up to speed about what is happening across asset for the retail sales number. Treasury yields across the curve as well. Yields are down by four basis points. A weaker dollar soaring at this point. Percentagene full point. Yen centralbank week. The fed decides tomorrow. Im here in the green room with cory johnson. He will take on matt miller with the battle of the chart but first, we will talk politics. Matt a couple of thoughts i want to look get moving in the premarket. One of the biggest movers is valid pharmaceutical after forecasting sales and profits that missed estimates. A stock we will watch at the open. It cut four Million Dollars off of the ceos well. Michael pearson was a billionaire before last december. In three short months, he has lost a boatload of cash. Johnson, aok at company that makes Nutritional Products for babies and mothers expecting to have babies. It has working been reported, looking at outside interests. The stock is up 10 in the premarket. Neutral, the analyst at tiffanys citing the recent low. Evaluations call has come up too quickly and you can see it come up slightly in the premarket. The race to the white house, all eyes are on the primaries where the focus on ohio and marco rubio and john thishs can they take takedown donald trump. Donald trump is expected to take the victory in all states except ohio, where governor kasich is expected to win. Still holds an substantial lead in delegates over Bernie Sanders, stressing the importance of todays elections, meaning it is super important to bring in mark calpine journey us now. Elizabeth warren chiming in with this antitrunk movement, saying how dangerous mr. Trump to be for the american people. Able to would not be tell the democrats from the republicans now regarding their attitude toward donald trump. That does not speak to the question of whether he will be the nominee because he still has a huge advantage can play out 1000 scenarios in almost all of the mend with donald trump at the republican nominee. Stephanie how different is that from previous elections . You could take political leaders across the board and they all seem to be antitrump. That is absent of what voters are doing. Classic cuts the other way. If donald trump were a normal republican frontrunner, you would see republicans endorsing him, pressure on everyone else to get out of the race. Instead, starting tomorrow after whatever he does well tonight or someone well, we will see efforts to not get on board with him, although there will be some of that, but to figure out what is the best way remaining if there is one to stop him. Isnt ohio the key on both sides, certainly for trump . The only one who does not pass kasich winning ohio. There is one possibility left to stop him, the oneonone race the ted cruz to vietnam in the race coming up. That is the only possibility left of that point. Andhe democratic side, ohio illinois, if Bernie Centers has a chance, he has to win at least two did tonight and probably three. Florida, but sanders has a lot of states coming up. Tonight is his last bad night. In much better chance to win. He cannot go backwards in terms of momentum. He put the republican and democrat establishment in a be able towould not tell the difference. If you put them in a room and put clinton and trump and said, this is it, make your mind up, what will it take . Like they do not know. There isok at donors, the Chris Christie camp, a small camp today but eager if tomorrow does well tonight. There is a mitt romney cant that says i will never vote for him and i will write him when and if i have it. Then there is a middle group, the Largest Group in the establishment establishment, basically trying to to decide come if rubio is out of the picture, are they for john kasich, trump, or deadlock and find someone else. Jonathan if you are they republican mastermind, and you want to stop trump, what would be the best way . Mind says tod her marco rubio, stay in your race and keep the delicate. To get john way kasich very strong and keep ted cruz strong and keep trump below in the state spirit you look at states like indiana, it is easy to see a scenario where trump is held below 50 and then try to stop them. That is what they are trying to do. Pastwonder whether the tells us anything about the present or if they just ripped up all the books. Thethan if you look at sort of people we went around and analyzed, basically conservative america. Brilliant. It must be my birthday. Sadly, it isnt. , the tribes of conservative america, to some extent what you are seeing now is youre seeing some this is that coming out of control. The links between the establishment and the back room, things that karl rove builds up repeatedly, if you decide very hard to bring immigrants into that and they failed, the Republican Party ended up with guys who have not got much hope. Within that Republican Party, it is not a great base to elections. If john kasich was ohio and rubio loses florida, is it game over for them . Then you are recently basically reliant on ted cruz at that point. Stop trump from getting a majority. A must ted cruz consistently beats him, it would be impossible. Next is battle of the charts. East coast versus west coast coming up. We have got a little east coast versus west coast battle in today policies battle of the charts. John is here to be our guest. Houseohnson is in the from san francisco. He has got to take on mr. Miller. We will let you take off. Resultse is reporting here it is doing amazing thing. If you are wearing a tie, youre trying to impress. Making a massive shift. They are changing the way it runs. They have shown terrific growth, 28 in sales, all cloudbased software. Miracles smaller cloud business, 400 million per quarter, it is growing at a much faster pace. Were looking at the numbers and looking at the chart, we can see that oracle is growing software sales, Cloud Software sales, much faster, faster than the 28 of salesforce is growing. See tonight if they continue to grow at a faster play faster pace. You have an anagram. That is fancy. Dont you have to put into perspective were oil oracle is coming from . It has been dominant. A bigger business on the cloud. Oracle is a much bigger business overall. They have got the sales and they have got a good chance there. It would be interesting to see how they grow this. You could talk sales all day long. Matt i have to give you credit for quoting carl. Changingis quote about the engine . You cannot you can change the way the engine runs but it is hard. Matt number 559 on our Bloomberg Library chart, you can access the entire library. It shows you all of the smartest who caught a world bottom in the oil price. Harold called the bottom back in the end of 2000 15, even andy hall called the bottom back then. You have taylor the bottom there, jpmorgan calling the bottom here. Note. An put out a that is correct. Oil may have bottomed out. Who do you like . Your favorite chart . Probably mildly, apparently met loses every time. Hospitality which showed. I would mildly go with cory. Im going with matt. Stephanie i am going with cory. Sorry. Whod you pick . Matt. Matt miller is the winner. [indiscernible] jonathan a big thank you. Thank you for joining this program. More bloomberg is next. Bend me shape me, any way you want me as long as you love me, its alright bend me shape me, any way you want me. Shape the best sleep of your life. Sleep number beds with Sleepiq Technology adjust any way you want it. The bed that moves you. Only at a sleep number store. Jon data on the biggest part of the u. S. Economy. , down 82 . Jefferies company isn says the facing challenges. Jon we are 30 minutes away from the opening bell. Im joined by david westin at Stephanie Ruhle. And Stephanie Ruhle. David we have all the center ral banks this week. Stephanie today, right here for us, the cohead of the credit 60 billions onl her management, we have a lot to cover. Before you get into todays news, lets get a quick check on the markets. Matt we have been eight out of the last 10 days on the s p and dow. S p futures are off just 10 points from the highest level so far this year. The Dow Jones Futures are off about 72 points and the nasdaq futures are off 13. 25 points. Since it is february, were more the s p, since february, we are up 10 . Ine a look at the compact terms of companies that have risen above their 50 day moving average. The point is, in january we dropped to only 9 of s p 500 companies. We are their 50 day moving average. Nowadays 90 . That is a real come back from the lows in january. Im going to come across assets really quickly. Because of the news out of iran. Run has had an incredible the lows in december. It is the third down day for gold. Take a look at the euro right now. The ecb meeting, we can all admit as a much more exciting than the fed meeting is going to be. Amazingly, the euro is still how your. N dollar . 11 right now 1. 11 right now. We saw a little drop in the yield, the market did not like that retail data. Now i will go to julie hyman who is here with first word news. Julie thank you. Win thefront runner can nomination outright today, but donald trump and Hillary Clinton can take big steps forward as five states hold primaries. Ohio has become the crucial battleground for republicans. John kasich has a slight lead over troubled. Donald trump. In florida, a loss for marco rubio could put an end to his campaign. Killer clayton is favored over Bernie Sanders in four of the five state. Hillary clinton is favored over Bernie Sanders in four of the five states. President obama is expected to reverse his position on drilling for oil off of the southeastern Atlantic Coast. Calls from communities at environmentalists had opposed the plan in the pentagon. Minister making a rush trip to meet with president obama. He will hand the president the traditional ball of shamrocks. He is trying to persuade his rivals to document for another term. I am julie hyman, david i was not familiar with that particular tradition. David exactly. Timor. It is time now for the three stories that matter to the markets. Number one, Commodity Prices brady leading global stocks lower. U. S. Futures pointing to a lower open, disappointed retail sales data. Commodities never struck me this morning. When we looked up and when we woke up and look at the bank of japan, we thought that everything was going to be good. But now i cannot make the connection. Commodities are going into the global slowdown, coming out of china. It is really boiling our markets on a global basis. We are not terribly surprised that japan did what they did. What is affecting our business is we are seeing Insurance Companies and pensions plans searching for yields and coming to the u. S. And investing in our markets. They are looking for yield, they tend to go on a defensive basis. Further up the capital strike. More secured. News from if you get the ecb that they are starting to like investmentgrade Corporate Community see japan pouring into investor grade corporate, what will that do to the market . Liquidave a 3 trillion noninvestment grade market, so we have the ability to absorb the tremendous amount of capital. Capitalist time, the coming in, but other capital is leaving because of the regulatory changes that europe and the u. S. Are forcing honest. That market is tricky. You have some capital leaving the market and be supplanted with longerterm, more thoughtful institutional capital. Stephanie what are we not going to see poor returns for the First Quarter of this year . If you look at november, december, january, high yield has been decimated. Distress for highyield investors who are going to look are goingbers, they to be bad given what the markets argument and the fact that energy took 30 of that market. Yes, there was tremendous amount of volatility in the first portion of this year. January, february was awful. Highyield was terrible. Oil prices mobile fundamentally affected our markets, but technically it was a lot of forced selling. Flipside, in the beginning of march you start a huge rally. That really lifted our markets up. 10 foot 1 , and it went back down to 8. 5 . There is a tremendous amount of volatility, but the key is picking entrance and exit points. Addinge boj refrain from to its stimulus, keeping it s benchmark the same. My question for you, as you raise an interesting point to be saying the money is leaving japan and coming to the u. S. Credit market. It is something the boj does not want to see. They want to see going out on the risk curve in japan, not the u. S. The other thing i would add is we are running a story about the cash deposit, the amount of money going into it. Surely the boj does not want this. What does this mean for Monetary Policy . What you have seen over the course of the last year or two between europe, japan, and negative rights, which i hope you we do not go that direction in the u. S. , is how powerful that policy really is. Is it achieving what they hoped to achieve . And i do not think you see the stimulus coming back, the spending. We are not seeing it in the states with all of the qe we had. Japan is looking for 2 inflation, they are nowhere near states we the united are nothing inflation either, so the company do not have Wage Inflation yes. We are seeing commodity inflation to see the least to inflation, we are to say the least, we are not even seeing it globally. Not achieving, it may have the reverse effect. They focus on the financial aspects, rather than the underlying economy. We are not investors in japan. We are generally not Companies Invested in, opening new plans, hiring new people. Were seeing people have their numbers by Cost Reduction, efficiencies, but we are not seeing people grow into higher numbers. That is one of the issues we are seeing. Stephanie you know who is not growing in the First Quarter of this year . Jeffries. They tumbled 82 in the fiscal year First Quarter, leading to the firms first lost for this time since 2008. Equities are down 99 . Jefferies ceo and share with putting a positive tone in the press release. He said while we are early in the Second Quarter and one can never predict the future, it appears markets have not only stabilized but aggressively snapped back. I will sayet yellen, they are ok, but as you said before, they are extraordinarily volatile. If we saw leverage finance highyield market get decimated in january, february, and then a great snow, that does not help investors. They had gotten chewed up, especially a Hedge Fund Long only guy. Terms of jeffries, all of the banks are really challenged in this space in terms of the what they can and cannot do versus five or 10 years ago. Stephanie they are one of the big fakes, you could make yard with they are in the sweet spot. Of the big banks, you could make the argument they are in the sweet spot. They have beenut restricted from going into a long the markets they used to play in, and also lenders underwriting stocks and bonds. That removes profit opportunity for them. It shifts that business to our markets. Our ability to set the funding gap that a lot of the banks used to do that is highly profitable, highly secure lending business. The banks are not doing as much as they used to. A lot of that is coming into our world, we can underwrite the business. We are in a challenge position right now. Stephanie do you have the money to do that . Hedge funds had a terrible year in 2015 while they were making this many said they would step in and take business away from the banks. How will you do that if youre not performing . We are growing consistently since our founding in 1997. Markets tend to be our friend. Moree more conservative, bottomup investors. We are also focused on longterm capital. We do not have a lot of capital that is shortterm in nature. We have longterm marked up capital with patient investors. Our point is we want to be able to invest three cycles in this market, attract capital of those who are looking for the longterm opportunity. Jon i wonder what this means for you investing in the financials. A lot of sleepless nights. Means you really need to be focus on giving people the right credit. Through a sevenyear bull market in noninvestment grade credit where almost everything went up. You are in a credit pickers market today, and to give you a sense, look at the stress ratios. A spaceld bonds created in the treasury. Today, they are 27 . It was all commodities, now it is broadbased. Both very important to stay on a micro basis stay focused on the right credit, and second for a micro basis can finding the right sectors you want to be a and what you want to be underweight in the market. , we have the best opportunity we have had in distressed since 2008. Stephanie we were going to talk about that a lot more on bloomberg. Those are the stories that matter to markets. We have a lot more to cover. We are just 17 minutes away from the market open. Much more ahead on bloomberg. We will look at one stock that is moving in the free market, valeant. Underway. S still the stock has lost three quarters of its market value since the august the. We will have more on that and the latest from the Earnings Call later in the hour. Pharmaceutical, big volatile year, specifically for value. Valeant. Julie this is the Bloomberg Business flash. American state away from the mall the first few months of the year. Retail sales dropped in favor, and has been revised to a decline. Gas prices fell as well, saved the money rather than spending it. All that four of the 97th economist surveyed by bloomberg predicts the fed will keep the benchmark Interest Rate unchanged. Watch for our coverage of the conference all over bloomberg. The janet yellen News Conference following at 2 30 p. M. After the decision at 2 00 p. M. Hascentral bank of china drafted new rules on foreignexchange transactions. Currentmed at harvard speculation, but could undermine the governments pledge to increase the role of market forces. Now to premarket movers with match. Matt lets take a look at a couple of these. Valeant pharmaceuticals, the call is still ongoing. The Company Forecast 2016 sales and profit that are below the street estimate. As a result the stock is down almost 20 in the premarket. This knocks off more than 4 billion of market cap. 23company is now worth billion. It will be less than 20 billion if it opens at this level. Overnight we were talking about hundreds of millions of dollars. You can see the value act overnight, if we are down almost 180 million. Paulson down 159 million, just overnight if they sell the holdings they had. I want to talk about apple as well. The march quarter iphone demand has been tracking well according to Morgan Stanley. Unitsws 56. 5 million moved in the First Quarter, ofsus the implied guidance 49 million. Beating all of those estimates. Abouty, i want to talk dsw, a giant Discount Shoe store. Is it fair to say it is discount . I have been in one of these in ohio. The stock is up 9 now. The company put out earnings that beat the street estimates. They put out an estimate that the the street estimate, they put out sale that the street estimate. Dsw is up 10 in the premarket. The cohead of Ares Credit Group says that investors are seeking more and more opportunities in nonliquid credit. We will talk more about that investment opportunity. David this is bloomberg. Here with us is greg who manages more than 60 billion as the cohead of the Ares Credit Group. You said alternative credit since 2008 which is a powerful statement. Why do you say that . We do not think we are reentering in 2008 timeframe for a whole variety of reasons. The point is across our credit sectors, whether it be oil, liquid, liquid, for the First Time Since 2008 all of our Asset Classes are offering attractive risk adjustment deals. Over any point of the last seven or eight deals, it is attractive. The regulations that have gone on in the u. S. And western europe have really changed the game in terms of what banks can do and our ability to step in and defend. We have created a letter volatility in the marketplace which creates opportunity for us. That createets purchasing. If you can find returning , that is great. Stephanie arthur certain sectors you like more than others . We focus more on companies. We are looking at who has exposure to Foreign Exchange moves, who has Commodity Exposure . Stephanie who do you like . We are avoiding the sectors and companies that are overweight in any of those. Them butoiding generally speaking, oil and gas, metals and mining in our direct lending space today. There is a lot of opportunities on the drift size, but on the performing side we are not there yet. We think there is more paid to be felt in those markets. We are being very careful on retail and we are also careful on companies within retail that are going through sector changes versus just temporary changes. Within general industrial, homebuilding, anything related to the, certain parts of the consumer were very global toward power generation. Jon youre doing a lot of bottom of analysis. Last week the ecb came out and said we are going to buy nonbig investmentgrade debt. What does that mean for your world right now or in the future . Will be interesting to see if they come down into the noninvestment grade space at some point in time. It is just more proof that as as they try to stimulate the economy, it is not working. That is why today, on the liquid side, we are overweight u. S. Compared to europe, but on the air liquide side to on the direct lending sizable we are finding opportunities on both. David what about the energy area . We have had people say there will be as many as 500 ifo this year. What does that do to your business . Does that create opportunities to buy . A document but the oil and grass will be lower for longer. The key for us when we to invest is finding companies that are in the right basis, with the right management teams that have the access to the right data. And most importantly, they have the capital structure to make it through the other side. Inphanie and youre still cielos . We think that it is a huge opportunity. Equity, we think there is a technical investment today. Part of that is driven by regulations, but the primary has dropped dramatically. Jon the open is next on bloomberg. Just a few minutes away, futures are going around negative this morning. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. When it comes to the fithings you love,. You want more. Love romance . Get lost in every embrace. Into sports . Follow every pitch, every play and every win. Change the way you experience tv with x1 from xfinity. Jon this is bloomberg. Features going into the open, just about 30 seconds away, negative. Lemon look at the other Asset Classes for the dollar you just off. On the ¥, a stronger japanese yen after the jamaica japan remains on hold. But the stock to dollar story a few data points here in the u. S. And lets bring it back here. Cohead of the heirs credit group with us, also the chief economist for bloomberg intelligence, carl. Lets talk about those retail sales revisions. Revisions are the core of this report today. February sales just eking out a slightly better than expected outcome. Rescissionsdownward in january, and that puts us on a very soft flooding this start of the year. A slow start is not good news. Up hope,n to give because we still have job gains. If the labor market is firing on all cylinders in creating a lot of jobs, that is going to bring. Eight pressure the data that we are seeing now is not supporting. You do not twist and turn with every are merging data point. David what do you make of the manufacturing data . This is a small, Regional Survey we have been seeing evidence of conditions in the factory set her, and now the empire survey, if it is followed through by the philadelphia theey later this week and Industrial Production data, could be an important signal that the factory sector is not thinking into a recession. It had a rough year last year, but it is a loaded term. There are some green that i can see for you. David master metellus were the markets are. Matt down across the board. European markets are down about 1 right now, the s p down about eight point eight points. You can see to thousand 10, 2011. He limo the levels the nasdaq down about a third of 1 . Take a look at oil. This is giving us direction, although we were able to eke out gains on the s p and the nasdaq. Oil has been down for a couple of days after iran said it would more oil into the system. At 36. 59. Trading i will say are a win in battle of the truth, that rarely happens. ,f you are one of those people use this chart. It shows what smartest people in have basically called bottoms in the oil market. You can see a lot of them have not been correct. We still have a long way to go with all of this supply getting pumped out of around. I want to take a look across currencies right now. Andeuro was at 1. 11 change. The pound is coming down a little bit at 1. 41. 113 for the yen. Yen. 13 for the we have been norwegian central tok, and others coming out make decisions they can not only concerned bonds. Morgan stanley thinks we will thetilde 1. 45 percent on twoyear by september, because those other central legs around the world continue to cut into negative territory, and were going to have at least one hike. The market sees that happening in june. Onally, i want to touch valeant. This is an Earnings Call that is ongoing. They have missed estimates, and 25 . Ve seen it is worth 17. 7 billion today. Massive drop in market cap. Am reading some of the readout on it, and it appears that the analyst to like this, are now on their own thing wait a second of you told us it would be better than this and they are turning on him. Said wee valeant has are changing our business model, so even if we are not going to be in the role of m a business, if you think about our core sales they are still strong. Now we are looking at those core sales numbers, and they are not strong. He the investigations, people are not comfortable. Matt he himself has no loss of about 900 million in this we have a list of investors that have lost just two days hundreds of millions of dollars. Pershing square, he may have disagreements with Michael Pearson as to bausch lomb. Lost a lot on this drop. Lets go to africa will do little. The nasdaq trading lower this morning after the slightest of gains yesterday. The last of tight trading, including the loss of the reversal from red to green. Stock bucking the bearish trend is ample. Apple. Iphone demand is tracking well. Sell 56. 5 could units in the march quarter, compare to the guidance of 52 million. Morgan stanleys of estimate of 59 million. This will see if it works off information between them and the investors. It can take the stock up in the near term, but they deliver their second fiscal quarter on april 25. David thank you. Lets get back to the cochair of aries group. I am not going to ask you one janet yellen is going to do. I want to ask you a different question. We see a convergence among the Central Banks. It is easy, going where they are going. How does that convergence Central Banks affect your business . . Of the things were talking about. If we are very careful with companies with fx exposure, that can really affect earnings from the last 12 months, and how it affected us. Companies that is clearly going to be a focus of over the next 12 months as well. Our domestic exposure and our global exposure is. Stephanie you are looking at youcompanies that manufacture and sell products here in the u. S. We can look at European Companies that are more at focus, and theres opportunities to play on both sides of the key is eating the right location. Are expert bases certainly going for this because they want more domestic size. Jon i just want to become your thoughts on retail. I just want to dig into what you do not like retail. Quite different in many ways, going long on the retailer. Of the retail sales are interesting, but they are two macro to actually capture what is going on on an individual basis. There are some companies that are performing quite well. There are some companies that are temporarily on a cyclical or temporary basis underperforming. Consumer areas, weatherrelated, and then others are going through absolute technical changes. They are getting squeezed for both ends, how fast fashion is affecting the specter, and how companies are looking at the economy. Portions of the retail sector, we are very nervous about, the ones that are secure base, as opposed to the ones that are temporary. Weather is always stephanie it is always the excuse, no matter what. If you look at this right now, Public Companies Growth Strategy is international. So international is not what youre looking for, and you Want Companies that are predominantly based here or in europe, what are they going to grow into . We are in a very benign growth environment. It is numbing her going into a recession that we believe it is a benign growth environment. That iflem with that is you have a company that is leveraged six or seven times, gdp growth, a. 5 lot of those companies will suffer at struggle to grow into the Capital Structures and you have the dislocations from the credit market. That is why we are pointing to the next 12 to 36 months as an opportunity in both the liquid and nonliquid. Stephanie this is kind of a bummer. But we have to give a correction. Our control room says that were talking about valeant earlier having a negative day. We may have misspoke. It is the biggest fall since 1994. The lowest price since 2012. Waiting to qualify things. Things are very negative. They are only moving in one direction, but let us make it clear where these numbers far and where they hit historically. The Federal Reserve, tomorrow they write a statement, and try to condense this into one paragraph at the top. How on earth will they do that . Looking at todays data, i think that shakes their assessment of conditions. Im guessing this is a game changer by any means, but in that assessment they say Consumer Spending is progressing at a decent clip that has to be downgraded in what were seeing in the first of this year. The big question is the risk assessment. The balance of risk which they conspicuously suspended in january, saying we have removed it as we are evaluating conditions. That comes back in tomorrow. But will it come back in his only neutral . Be very specific as we go into these meetings. How important is it to janet yellen to keep june open as a possibility . If she does not dividend, she will not get another chance until december. It does not to do it in june, she will not get another chance until december. She could have july. David that is the middle of conventions. June is very important. As if the progress continues q2, she get another hike under her belt because she does not want around election day to be regulatory. Stephanie thank you for breaking it down. Econ recon. Thank you for joining us. Up next, shares of valeant plenty more than 25 in early trading. Biggest oneday drop we have seen ever in the history of this country. Being challenged by investors. A recap of the Earnings Call up next. Matt this is bloomberg. On thursday the canadian Prime Minister will sit down for an exclusive interview with bloombergs john dingell wait. Watch that had 9 00 a. M. Julie this is the Bloomberg Business flash. Jefferies group posted a loss for the First Time Since 2008, trading revenue fell 82 during the time. They are frequently a sign of how the largest investment banks will do with her the numbers a month later. According to the wall street journal amazon is launching a new service allowing big businesses to move out of databases online. And so you will pay the estate of the late Michael Jackson for his stake in their joint music business. 1985ught their catalog in for almost 42 million. Stephanie we have to bring our attention back to valeant. Shares plunging today after the drugmaker cut its 2016 forecast to lower than what it predicted back in december. The ceo, lik Mike Peterson speaking earlier on the call, saying he is sending off nonstrategic assets. Take a listen. During the past few weeks we have already taken steps to restructure our underperforming businesses and we are taking steps to launch a broad place Cost Reduction for broadbased costreduction program. These will bring forth public reporting, public relations, and our managed organization. We are also exploring the vestiges of noncore assets which will enhance our liquidity. Stephanie the hits keep coming. Drew armstrong has been watching this story for months. We have been on the call since in 00 a. M. What have we learned . This is one of the craziest things. Something that just happened on the call, they put out guidance earlier, a release about 6 00 a. M. Be 6. 2 billion. Then they said it was actually 6 billion. How can you have hours after issuing guidance. It is almost up 30 right now. This is going very badly. Stephanie when like person came back to the company two weeks ago yesterday, they did not, numbers because he said we are not money. We want to make sure our teas are crossed and our eyes are dotted. Who is checking the spelling over there . It has been really fascinating to watch. Some of the biggest olds behind this company or calling his credibility into question, they are calling the company into question, there is why they are fit to lead us. That is four times when it is trading at right now. Being thehy are you ceo of this company, after the guy has come back. David something that does not happen every day. Matt this is called a breakaway gap and it is a bad sign for an analyst. This is when the highs and lows to not overlap those of any state. You can see this typically asked her mouth disasters. The wells broke open, or volkswagen after diesel games, that is when you saw the stock. We are below 30 on the rsi. Technically the stock is oversold. I do not know if that is every time there is a breakaway gap, but they are coinciding. Stephanie what is your take . Amazed by the performance over the last year. The clearly have some issues in terms of suspense ability. Usceptibility but you also free cash flow, three years before they have maturity, so they actually, if they can get it right in fixed the business model, they have time in their capital structure to work on it. They have time before full maturity. They have taken one step that makes me feel they can get their arms around this. Is 1. 2e but there billion in cash, he said on the call. They said they would be paying unless the this year that they did last year. The goal was to pay over 2 billion in debt, and now they are saying it will be one billion. It is being hurt by everything were seeing right now going on the business. Point is that you need to get the right management in there, because there is a business. So what is next . I am at a loss for words. This was supposed to be a call where my person come where mike pearson came back and talk to everybody. And in the time he has been on the phone with analysts, it is down 10 percentage points. It is getting weird. Stephanie the first activist was jeff osman. Then bill ackman comes in. They do not have a relationship. They had a weak board and needed it to be beefed up. Their argument is that they are not good communicators. In the last five days huge you could have corrected your pr problem. It is interesting when you see the board and those that are on it. There are those that are the biggest owners of the stock. Between those two guys to 20 of the company. In the same boat as mike pearson right now. People are starting to ask exactly pass. Jon thank you for joining us this morning. We have breaking news . I thought he is only just come to us, as he is gone already. Takeover approach from apollo. [laughter] i am talking about ferro corp. , it is a u. S. Chemicals maker. People say they received a takeover offer from apollo. Up 7. 25 ,e the stock and it is only getting back to its 2015 level. Stephanie up next, a tournament of champions. Many togetherg for a vast will competition. You were watching bloomberg. It is time now for a special contest we are having here at bloomberg tv. Founder,ed by our michael bloomberg. We have brought together 41 ceos bringing in their teams. Last year the president and ceo of Goldman Sachs was the game. Going 420,000 going to charity. Jeanie buss from the lakers, phil jackson, there are some people that have a little bit of advantage. But with all of these teams, it is anybodys game. Matt i wonder who will lose the most in productivity during march madness. Stephanie Steve Ballmer heckling is going to be amazing. People who areof not a enthusiast, but theres also a lot of hecklers. You can follow all this if you have a terminal. This is all starting thursday. Matt but starting now you can put in your own bracket. You can do the mens or the womens contest in either case. I think ohio state will win. Jon that does it for bloomberg. We will have more tomorrow. The former viacom ceo and the former minneapolis fed president. Best of luck for the rest of your day. From bloomberg world news headquarters, i am vonnie quinn. Mark i am mark barton. This is bloomberg markets. Yorke we will go from new to london to japan. 33 asare plunging down ceo Michael Pearson talks about guidance and the possibility of a fold. The latest on what he is saying. We will tell you about the trading day. Stocks are low after disappointing retail sales. Shares in europe are snapping a twoday gain. Energy shares drop. We will talk to the jcpenney ceo martin ellison. Well talk about their