Switch up the board, dollar on the back foot yesterday, front foot today. Another piece of top data. Time warner has come out with adjusted earnings per share of 1. 49. At 7. 3 billion. Billion hbo5 at 1. 15 billion. They are reaffirming their fullyear outlook and the stock is currently down 1. 5 in the premarket. Pre 74. 32 unchanged. Ondo have beating estimates the eps side and earning side. David two in a row for me. Now, back to politics. Donald trump won big last night in indiana. Delegates tonough secure the nomination. He commended ted cruzs decision to suspend his campaign. I did not expect this. Braveed did is a very thing to do and a great thing to do because we want to bring unity to the Republican Party. We have to bring unity. It is so much easier if we have it [applause]. [applause] david this is not what the political pundits would have predicted. i think ted cruz dropping out last night has been unexpected. Donald trump is going to get the nomination. That is a fact. Media has been predicting the would be some support for a thirdparty savior , a white knight candidate to come in rise out of the ashes. That is not going to happen. Theres two challenges the party faces now. One is consolidating support behind donald trump. The second is, can they actually get there . Can they raise enough money to challenge Hillary Clinton in a general election . David i want to bring in Ralph Schlosstein. Pick up on those two points. Those are both questions about donald trump that remain o unanswered. Ralph youre probably asking the wrong person because im not a longstanding republican. The Republican Party was always headed for a difficult year. Once trump became a strong candidate. The nontrump faction, had they won, would have alienated a significant part of the party. A lot of new people who voted in the republican primaries. Trump has done this without spending much of his own money and without raising any money. The republican financial people will have a tough choice. Do they throw in their lot aggressively behind donald trump and raise a lot of money for him, or do they sit on the sidelines somewhat . The money decision is a different one from the voting decision. Lets turn to your home turf of the democratic party. Sanders i understand secretary clinton thinks this campaign is over. Ive got some bad news for her. [applause] Bernie Sanders tonight, we won a great victory in indiana. I want your thoughts on what is going on now with hillarys campaign. Where this situation now we have this message fight on the democratic side is fascinating. What is he going to get out of her . Is he going to push her further to the left . Its unlikely he will secure the nomination. For him, its all about the battle of the message at this point. Her byhe can hurt ultimately not coming together on substance. Roleu place a spoiler rather than a role of uniting the party, he could be of some harm to her. The election is a really fascinating election. On the one hand, if you look at it from a conventional perspective, demographics, how they have voted historically, it is awful hard to see looking backwards how donald trump wins. If you look past elections, bush barely won with 40 of the lost by 5ote, romney million votes with 27 of hispanic vote. Its hard to see that trump will thistter than romney in sector. You could see an election which is basically outside versus inside. David Ralph Schlosstein will be with us for the rest of the hour. Jon shaping up to be a bit of a soft open. Earnings juste broke. Eps 10. 54 beating the nine dollars 66 estimate by a 9. 66 estimate by a longshot. A big beat from priceline. Yet, shares down 8. 7 in the premarket. 117 drop because of the outlook. I will dig into those numbers. Out with its first corley profits and becoming a public company. Soaring. Profits sinceerly becoming a public company. Out medivation they have another suitor after the pfizer talks broke down. Cbs reported firstquarter earnings above estimates last night. We will hit on that later on in the hour. Vale named in a lawsuit in brazil. Bhp down in london. Vale down in london. A couple of u. S. Stocks unchanged on earnings. We still have 2. 5 hours to go until the u. S. Stock market opens. Lets look at the other stocks that are trading overseas right now. Shell is out, also down right now after a 58 drop for the First Quarter. Offsets from refining earned 1. 6s, but billion dollars, the smallest profit since 2008. We want to go to Ryan Chilcote in london. Take us behind these topline numbers in the earnings of shell. Ryan it is the same stuff that exxonompanies like bp, surprise when it comes to the earnings. It was the downstream side of the business, the refining side of the business. Street the up upstream. The Chemicals Business at sheldon really well. Loves to talk about how its been performing so well. The Chemicals Business at shell did really well. 1. 6 billion is not that bad if you think about it. Did better with 1. 8 billion. Pretty solid results. The i was looking at combination my Capital Spending down one third over the same time. Is there more fat to go . Ryan there is more fat to go. 33 to 30 billion. We saw the gearing go from 14 before this deal was completed 26. To they are relieved that the companys free cash flow, they dont need money borrowed to pay dividends. Jon thank you very much. After last years record m a boom, the First Quarter of 2016 is off to a slower start. Dropping 11 compared to last year. China national chemicals, 43 billion offer. Hires acquisition of ask all to baxalta. I look at the breakdown of bigger he washalliburton baker hugheshalliburton. Confidence is lacking to get these deals than. Ralph there are two things that have happened. We have seen a somewhat more aggressive antitrust regulation in the u. S. And europe as well. That affected baker hughes, halliburton, comcast, time warner. There is speculation that will affect the two big transactions in the Healthcare Services field. Approach, the changes in regulations regarding inversions derailed the deal. Allergan theres less uncertainty about the economic environment, but more careful scrutiny of some of these large agglomeration type deals. Megan we see not only the ,ntitrust officials ramping up when you look back now at pfizerallergan, did pfizer make a mistake in acting so aggressively and being upfront about its reason for pursuing the transaction . Ralph i dont think there was any way they could have pursued what they sought to pursue that would have been more respectable thats respectful of u. S. Regulators. Regulators and tax authorities have these transactions in their sights. Once the transaction was out there with the dynamics, the treasuries response treasurys response was generic but crafted. This which deals fit into theyve been called unpatriotic by jack lew and others. Ralph we have a strong and appropriate populist revolt against the off shoring of jobs. Basic other hand, the economics of employment going to where it is most cheaply provided and productive is very, very difficult to do. This is less about where jobs are located than it is about headquarters and taxes. Jon hold that thought. Stick with us. David next, we look at what is driving deals and health care. In health care. I will be talking with less moonves about their earnings at cbs. Vonnie you are watching bloomberg. The largest auto recall ever is about to get bigger. Questions about the survival of takata. Takata is in talks with u. S. Regulators, leading to the recall of millions more vehicles. S plans to sell a. Truggling hardware business aeropostale has filed for bankruptcy protection. Shut manyxpected to of their stores while looking for a buyer. David lets turn to deals and health care. The 40 billion in new health care a deals new health care deals announced recently. Evercore ceo Ralph Schlosstein is still with us. Also joining us, asthika goonewardene. What is going on here . My head is spinning with so many farmer deals. Drives a lot of these transactions is much of the innovation, the research and the Drug Development occurring in midcap and smallcap companies. When those companies are ,uccessful in developing a drug they faced the issue of how we maximize the value of that. They have great intellectual property, but they dont have large capable distribution organizations. Arebig Drug Companies sitting there with large distribution organizations, drugs going off patent and they have to constantly replenish the pipeline of new products. These are classic cases of new products with long lives being combined with the most effective distribution organization. The pattern clip is no longer that big of an issue. Pointsed that big 2012 when we saw drugs go off a cliff right there. These companies have gone through the patent process. Theyre looking to add more things in the pipeline with more als come attractive assets a drug that has been on the market for two years now. It is doing really well. Megan is the next wave of dealmaking going to come from these spinoffs . Weve seen the spinoff this morning in terms of biogen. Ralph you can look at these Super Large Companies and say their multiple for their whole business is being harmed somewhat by the fact that they have very large, high cash flow but low growth businesses. The market still does pay for future growth. Financial sensible engineering that comes from separating these high cash flow, high dividend businesses from the higher growth activities. Merger andn see acquisition arbitrage, you can look at their spreads. This is the anthem deal for cigna. It has comeint, back in line a little bit now at 38. With a similar story humana. Theyarket is telling us are not sure these deals will get done. Ralph starting with comcast, time warner, then baker hughes halliburton. Llerganpfizer. Transactions that involve real agglomeration and market share gain, which both of these Healthcare Services deals represent come are getting more careful concern. You have a lot of capital licking their wounds. David ralph, you will be with us. An coming up, the return megan time for bloomberg trends. Still with us, evercore ceo Ralph Schlosstein. Jon barclays put out a press release and there it is, the 100 mortgage has returned u. K. Can you believe weve got back to the old ways . Ralph that is not a good sign come in my view. Megan how many of those mortgages actually defaulted . You have more than the actual cost of your mortgage, you picks up the house, then sell and trade up the property ladder. David what is driving this . Wethis european banks saying will make money off retail mortgages . Jon the bank of england has put limitations in place. Out spreading these 100 mortgages everywhere. The bank of england has done a lot here, but it is not a good sign. David it is more a personal loan. Propertyssumes the values will go down from here. We know what happens there, dont wait . Dont we . The dollar on the front foot. That is next. Jon good day to the city of london. A beautiful sunny morning and when percent mortgage thats 100 mortgage at barclays. Lets get to the market boards for you. Teachers and the west down the u. S. Futures in the u. S. Down. 145, the euro down to 114. The dollar that was on the back foot yesterday very much on the front foot today. Explain what is happening in treasuries as well. Yields came in by a lot. Me from radioing in a moment. Nomineethe republican will be donald trump. The head of the Republican National committee is calling trump the nominee. The victory clears the way for trump to get the delegates he needs to win the nomination outright. Bernie sanders and surprised Hillary Clinton, winning 53 of the vote in indiana. Clinton has an almost insurmountable lead in delegates and superdelegates. President obama gets a firsthand look today at flint, michigan and its tainted water supply. He will speak to 1000 residents at a high school. Two state officials in one city official have been charged in the case. He the most unpopular leader in french history and it sounds like he is running for reelection. Francois hollande said in a speech that things are Getting Better. Claiming his reforms are working. He has an 85 disapproval rating. Global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. Matt we have breaking news on a merger or lack thereof. Ice says it will not make an offer for the lse, citing insufficient engagement. Not enough talk going on there. s First Quarter adjusted revenue was 1. 45 billion, in line with the analyst estimates. Pre hereng at the gip for the intercontinentalexchange. Ice shares have come down. Lets talk about greek banks as well. They have been beaten down hard. Greeces bailout review for those banks looks set to conclude. All for banks rated overweight. There is 90 upside there. Under armour making some waves, locking up bryce harper for another 10 years. The stock is moving lower after the shares were downgraded from a buy to a hold. Check out shares in fedex, edging higher after barclays raised the stock to overweight. Brandon polanski says the package growth will drive meaningful upside. Say tomy pleased to keene joins us from surveillance radio now. We want to discuss the interview with the San Francisco fed president. We are never supposed to talk about whats going to happen at fomc meetings. In my view, yes, it would be appropriate, given all the things we talked about. A lot can happen between now and the middle of june. In 24 lot can happen hours. Tom you look back and things have changed. I call it flighty. Weakening ets isnt about them weakening or the dollar . The gaining of what the fed will do, almost a rolling moment to the next fed rate increase, whether it is june or september. The fed is stepping back, weaker dollar. Fedfed is steps the steps back in and china destabilizes. The market vigilantes taken as a whole versus policymakers, dont know what it is when everything is said and done, policymakers will stand on their personal domestic agendas. That almost unimaginable they will raise rates so close to brexit. Here is the issue, the timing. The next meeting is in the middle of june. If the polls are still tight and they think that is a concern, will they make a move after the referendum . Tom he is heated at the idea link Economic Policy to jon you cannot find the transmission mechanism for the spill off politically to the financial market. You are better at this than i am. What is not happening in the markets is german rates driving lower. That is almost an elephant in the room. Twoyear, 10 year negative yields have been studied the last number of days. In yesterday the treasury market casting a net and yields came in. Debate,t is the major will they take notice . They will take notice of the economic data. Including this important productivity data friday. Mr. Gross will join us for jobs day. Jon thank you very much. David no shame at all. We started earnings season ,esterday with cbs last night time warner this morning, both beating estimates this quarter. Oining us is brian wieser look at this, i feel like it is 1988 all over again. Advertising is coming back into network television. Wasn advertising supposedly dead it was never dead. It was just resting. The biggest problem with advertising, they are cutting costs. They are reducing their spending wherever they can. If new categories dont show up, you dont get advertising growth. We are seeing a resumption of increasing spending and wireless and other categories. How much are we seeing the trump affect in political advertising boosting these earnings . Brian it helps at the local station level. That helps local stations first and foremost, it does not have an effect on the National Spending level. Time warner has cnn. Brian the budgets dont change that much. They have more ratings, more audience, but it does not create new spending. A global level, it is incremental. 12 d cbs, they were up taking out the super bowl. Where are those dollars coming from . Cable, in part. You have google, apple, amazon, pharma spending on advertising right now. Outside of tech, pharma, what are those sectors you see coming through . Brian the largest advertisers of packaged goods are not increasing their spending by much. It is too soon to tell. Inflectionpossible point for National Television . Ralph i doubt it. Are seeing what happens every four years, elections, come in, they happen to the same year and tend to boost advertising spending somewhat. Absent therm trend emergence of new products and new growth is gradually downward. David in fairness to cbs, it was not just advertisers. Theyre shooting for over 1 billion in retransmission. Fran. Ralph that is the continued emerging strength of content versus distribution. The delinkingout of people pulling the cut brian court shaving is what is happening. We are taking smaller bundles. Hulus ofix and wh the world, this is incremental. People are taking additional subscriptions. David les moonves likes skinny dles because ryan their share of audience rises. Because advertising budgets get ofocated on the basis audience share in general. David content versus distribution. Cbs and hbo did very strong. Ralph there has been a proliferation of means of distributing content. Mobile, over the top, satellite. That has fragmented distribution. You have a great show, great content, you will make money. David brian wieser thank you for being with us. Ralph schlosstein of evercore will be staying with us. Megan ted cruz drops out and Hillary Clinton takes a bruising and indiana. David this is bloomberg. Coming up, i will sit down with les moonves. That is 11 00 eastern time. You are watching bloomberg. Big changes on the way or apple. The usere music interface will be changed to make it more intuitive. A warning from the Air France Klm group. Costs,rop in fuel but they say it will be harder to maintain ticket prices. Inbev claimsh weakness in brazil they are ofthe middle of a takeover miller. Megan a surprise decision by ted cruz to bow out of the president ial race. John heilemann is with us. Ralph schlosstein still with us for this hour. What are your Key Takeaways from last night . John i thought back to 2008 when tim russert when on nbc and we know barack obama will be the democratic nominee. No one said that last night about donald trump but it was obviously clear. 1237on a path to get to delegates and cruz made it official by dropping out. Ironically, we have a still ongoing democratic race, even though Hillary Clinton is equally on track to be the nominee. We will see more spending, more battling, more bruising on that contestedotentially a democratic convention. Megan how does donald trump now about healing these writs rifts . John with great difficulty. The people around him recognize that there is a lot of mending to do. There is some faction in the Republican Party that will stay never trump. The intellectual class and foreignpolicy establishment votesay im not going to in this election. Im not going to be for trump or Hillary Clinton. They are for Hillary Clinton. There will be a lot of coalescing and trump will rollout a few big endorsements. A key element of this will be the selection of a Vice President ial nominee. And then there is the money thing. He just said to me this morning that he will make a decision on finance in the next week or so. If he decides to accept super , that will also go a long way towards healing the rifts within the republican ranks. Is he seems to have putting that together . John not just to be a convention manager, but to start the overall professionalization of the trump operation. It is notvolved just you have to hire a bunch of people. They dont have a media team, they dont have data analytics, they dont have any of those things. All of those things will have to be built from the ground up getting today and hopefully done over the course of the next six months. With 1have to come up billion to run against Hillary Clinton. There is a very aggressive say we understand what this task is about. It will be really hard to scale up. But we know we have to do it. Mark John Heilemann and halperin at 5 00 p. M. In new york. Alonghen bill gross comes the Bloomberg News dream, i pay attention. Matt he says that that is going to have to come back for more qe. The fed. He said drop the money from helicopters. Central bankers will choose to fly instead of die. Jon he is a good writer and has skin in the game as well. Ralph we are at a very challenging point in Economic Policy and Monetary Policy right now. The endretty close to of the line of additional stimulus that comes from Monetary Policy. We have very supportive Monetary Policy, it will continue to support a tepid Economic Growth environment. There are not a lot of bullets left to boost growth and have breakout growth. For seven years now, weve been leaning very heavily on the monetary side and to lightly on the fiscal side. Investors dont have to worry about the fundamentals do you see it fueling asset prices . You have asset prices globally that are supported by monetaryently loose policy and the expectation that if the economy goes off course , an additional boost from the monetary authorities will come. There getting not far from end of their capacity to do that. That means we have a relatively slow growth economy that is vulnerable. Jon up next, matt miller and i you more of that bill gross note. Matt bill gross has come out with his monthly investment letter and said the fed will go back to qe. He has said essentially that helicopter money is coming, meaning the fed or treasury will somehow pass out money to the people. It will come to an abrupt end and is problematic. It is better than a prolonged recession. That tells the story of centralbank policy around the world. Can see how violently weve come down to me even as the fed has said it is on a path to normalizing. Heres the yen and the euro. Caused the japanese and european markets to tank. The nikkei is down 15 yeartodate. We are doing quite well. This as agreement in markets that people think the fed is getting quite dovish . Jon they are about to go on a new round of qe, stepping back from their position of four hikes. This whole helicopter money do you think that can happen anytime soon . Ralph i sincerely doubt it. I dont think the fed wants to go back to expanding its Balance Sheet. They would like to stick to the traditional monetary tools. Jon Ralph Schlosstein, thank you very much for joining us. David coming in the next hour, douglas holtzeakin joins us to discuss donald trump. That is next on bloomberg. Jon donald trump becomes the Presumptive Republican president ial nominee as ted cruz drops out of the race. David stocks are falling around the world after fed Officials Say an increased Interest Rate increase could be in the cards next month. Jon a warm welcome to the second hour of bloomberg. Megan murphy, great to have you with us. Megan we are talking politics today. Trump the presumptive nominee, bernie beats hillary in indiana. Jon dow futures off by 87 points, s p 500 12 on the session. 1. 3 . Se off by copper what a difference a day makes for the fx market. The dollar making a comeback in the last 24 hours. Big move for treasuries, the biggest move lower in yields in two months. Miller, some big news in the last one in four hours. Matt a lot of big moves in equities. ,riceline topping estimates Second Quarter outlook fell short of analyst estimates. This was the 31st straight quarter that priceline beat consensus, nearly eight years in a row. Rp in the bloomberg, you can see this company beat every time it reports. By guiding analysts down. You might as well start early with your First Quarter earnings report. Time warner in the green after topping estimates. Cnn reported higher ratings. Pfizer may be next in line to bid for medivation. This is according to reuters. Medivation added to provisions to its buy laws, a poison pill. Two provisions. Has decided not to make a bid for the London Stock Exchange after the exchange chose not to engage in meaningful dialogue. Ice bid reserve the right to make another approach if another buyer appears. Megan donald trump becoming the Presumptive Republican nominee as ted cruz unexpected lee dropped out of the race. Bernie sanders surprises Hillary Clinton by taking indiana. Know if ted cruz likes me or doesnt like me, but he is one hell of a competitor. He is a tough, smart guy. [applause] from he has got an amazing future. Bernie sanders i understand that secretary clinton thinks this campaign is over. Ther. Some bad news for tonight, we won a great victory in indiana. While trump likely has enough to lock in the 1237 the republican nomination outright. We are joined by douglas and jennifer jacobs. Jennifer, you first. We now have a presumptive nominee. Is next for him in terms of getting the money he needs . Jennifer this was not a surprise. I was at trump tower yesterday for his news conference. He takes questions from the press, he has his family with him. The trump advisors heard about this just before ted cruz went live on tv to announce and give his exit speech. They were very quiet and respectful. They really were. Trump came out and reflected that same tone. That was meant to send a signal to cruzs backers. Ted cruz did not mention donald trump at all. He has expressed some very strong opinions megan he has called him a threat to the stability of our nation. How are we going to get to a the ted cruz backers how are we going to heal the rift . Jennifer when donald trump says i dont know if you likes me or not, i would say at this point, the answer is no. Trump was going after every other one of those candidates on the field except for ted cruz. They originally had some similar sentiment and they seemed to be two peas in a pod. What we have heard from ted cruz best way to the heal this rift is to pick ted cruz as the Vice President ial nominee. Say he will be in charge of the Supreme Court nomination. One thing we have not heard that much on the campaign trail is policy. Care, like health spending, how nervous are you we still fact that have so little flesh on the bone in terms of what a trump policy is going to look like . Douglas that is one of the two Major Concerns about donald trump as a nominee. The first is his character. Hes displayed volatility through the course of this campaign. Map onen all over the the little he hasnt said about policy. Not touch Social Security or medicare and get rid of the public debt. Those can coexist. Cant coexist. Mores to lay out in a coherent fashion how he is going to deal with the regulatory overgrowth, what he is going to do after repealing the Affordable Care act. David theres been almost nothing that has been normal about the trump candidacy. Typically at this stage, you look at the advisors around the person. On economicing him policy . Douglas we know he talks to carl icahn. The Trump Campaign does not have the usual structure of a policy director and council devoted to trade issues and Health Care Issues and angie issues. Energy issues. The Trump Campaign has not had it. How does he structure his Campaign Going forward, both in is hefundraising going to continue that as the nominee . How is he going to staff a National Campaign . The one thing any candidate faces, scaling up. Is the biggest stop Trump Movement actually trump himself . Does he go from no advisors to a National Framework with a National Message . Douglas his washington, d c jennifer his , theygton, d. C. Office are starting to build that. Theyre really working on the associations like taxes, realtors, the different lobby groups. Traditionalhe conservative think tanks reaching out . Jennifer they are. He has listened to their advice. He is listening to them. Jon the questions we are asking is about how to trump reaches out to the establishment. Dont they have to reach out to him . Douglas there is a really important first order question. How does trump look on the elect world map elect world map electoral map . Out into the reach establishment and get the base on board and rally all the troops and take that route . Or, is he going to reach out to democrats and changed elect oral map . We know there are a lot of democrats who are not super enthusiastic about a clinton candidacy. Moore surprises to come in the election. Thank you, douglas holtzeakin and jennifer jacobs. All 80,000 residents have been ordered to evacuate from a raging wildfire. The fire has already destroyed whole neighborhoods. There are no reports of serious injury. The European Union agreement on refugees is having a huge impact. In the number of refugees from march. Global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. Jon next up, a beat for stock ckgen. L sto vonnie you are watching bloomberg. The largest auto recall is about to get bigger, raising questions about takata. They are in talks with u. S. Regulators and that could lead to the recall of millions more vehicles. The Worlds Largest exporter of liquid natural gas is planning a 5 billion bond sale. The slump in Energy Prices has hurt qatars finances. Adidas looking for a buyer for brand. Lormade we are waiting for the adp private payroll numbers. 195,000,pectation of the prior month was 200,000. I plotted a max. The sixmonth average is bumping along at 200,000 right now. Miss, 156,000. Added in the month of april. The 10 year yield takes a big drop as investors pile in. The index a look at futures. They have been down all morning. Thou futures down almost 100 points right now. Down. 6 . S jon what i think is really interesting at this point, theres two narratives here. One, it is a soft piece of data. When you get to full employment, the pace of job gains should slow. It is only one data point. It is fascinating Going Forward, get more in the one 50s 100 50s, how you explain that is a good thing and not a bad thing. , how you explain it is a good thing and not a bad thing. Matt we are expecting softer jobs on friday when we get the change in nonfarm payrolls. That data is expected to slow down as well. I dont know how investors will take it. If it goes down to 150, it will rattle markets. David and the wage number. We should start to see the wage number take up. Jon the data coming friday, payrolls friday. Bill gross coming up as well. Climbing aftere the banks apprised analyst with an unexpected boost in Third Quarter profits. Bank surprised analysts. With the kind of environment we expect, with a russian losses a ratio above 11 . This year, we cannot guarantee that kind of return. We keep this kind of objective in mind Going Forward. Can achieve that by further transforming our business model. Michael, a jpmorganesque story for socgen. What do you make of the numbers . Michael they talked about more cuts. Is surprising that they posted an increase in fixed income trading the moment we have not seen at any of the other banks. Story you aree supposed to see. The bigger banks talked about regional players dropping out of that business. Making aocgen comeback, almost catching up to Morgan Stanley in terms of revenue. Jon barclays trading was not down in a terrific way. Is the european u. S. Story there . Michael we have seen a mix from the europeans. Better than expected at socgen down,rclays, but ubs Credit Suisse morning they will be down quite a bit. Warning they will be down quite a bit. It is hard to get a consistent theme from the europeans. Megan i look at the beat on bnp theses, going back to boring sectors. Socgen with the International Retail banking. How much more can they squeeze out of these businesses with the ip remaining weeak . Michael you will see them try for that. The loan office is Getting Better in the places not hard as it. Italy improved for bnp. Some of these areas we talked about being the worst performing have maybe stabilized a bit. That has helped the retail side. Jon i cannot think of a single bank that is not planning deeper cuts. Megan coming up, futures and focus. This time, it is gold. Futures in focus. This time, it is gold. Matt this is bloomberg. Gold in the red, falling for a second day, hitting a oneyear high on monday. The top traits this year, surging 21 in 2016. It trades this year. Todd, let me ask you about gold hitting 1300 and then coming back down. Is that a resistance level that has you concerned . Prefomc. Move came the dollar likewise made a big move. Makeyou see commodities these kneejerk reactions, it becomes a recovery rally. 1300 is not necessarily the top. The market is going to correct itself. Old is a macro look at fed expectations. Gold is a macro look. Gold is the path you want to follow here. Matt we have adp numbers disappointing a moment ago. , we had afore that , sayingom bill gross helicopter money should be the next move from the fed. That has to be bullish. Todd it is very bearish dollar and bullish gold. Byr currency is only backed the faith and confidence in central banking policies. Traders on the street are saying the only way to revise the economy is to give money away, that does not do a lot for your dollar. I do expect gold to go higher. Now, things have to we should see gold over the next 12 to 18 months at 15001600. Matt John Williams came out yesterday and said they are ready to go live in june. If the fed does raise Interest Rates, is that a big problem for gold . Todd a quarter basis point is not a problem. One year ago, he was saying the same thing about 2015. They are saying one thing when policy action is another. Gold will show you that overtime. Thats over time. , july 15he adp reports lets talk about the other story. On read. Hese david a 571 billion debt wall from local bonds that have to be refinanced at a time when yields are going up and issuance going down. There could be real defaults. Jon do they actually let them default . Or issue more credit . Take up in credit. 100 mortgages . We will talk about that later. David coming up, we dive into shell earnings on bloomberg. ai david this is bloomberg go. Im david westin with Jonathan Ferro and megan murphy. By 100n dow futures off four points. S p futures negative. Some data in the last 15 minutes. Adp payrolls report. It means a weaker dollar. Big day for treasuries yesterday. By twoies yields down basis points. 1. 78 . Higher to 44. The u. S. Trade deficit to 40. 4. 9 in march billion. We were looking for 41. 2 billion. Nonfarmlso getting productivity out. Costs getting unit labor with a gain of 4. 1 compared to 3. 3 was the anticipation. Lets check in with vonnie quinn. Vonnie the republican nominee for president is almost certain to be donald trump. Even the head of the rnc is calling him the presumptive nominee. Ted cruz dropped out of the race after losses in indiana. Bernie sanders surprised Hillary Clinton by winning 53 of the vote in indiana. She has an almost insurmountable lead in delegates. Sanders is hoping to persuade the superdelegates to switch their votes to him. The European Commission is making good on its promise to turkey. In return for stemming the flow of refugees. It is paving the way for turks to have visa free travel to the eurozone. President obama gets a firsthand look today at flint, michigans contaminated water supply. Michigan declared a state of emergency four months ago because of widespread lead contamination in the water supply. Im vonnie quinn. Shell areshares at plunging. A lot of that coming from downstream. Joining us to explain is javier blas. That lookt of results very similar to the other stories we have seen. Downstream outperforms, upstream looks ugly. What do we need to know . This was the First Quarterly lls bigafter she increase in gas production. The downstream sector does very well. Chemicals also performing strongly and the upstream continues to underperform. This was a very good quarter for shell. It is still the worst quarter since the end of 2008. Morning remember the the deal got done. The pushback against this deal was just immense. Why now . Why so much money . Is it starting to pay off a little bit . Clearly there are still struggling to digest the deal. The Capital Expenditures forecasting for this year grievously guiding toward 33 billion. The cfo told us it could go even lower. It is a bit early to say that this is going to work. It will all be depending on a factor of oil and gas prices in particular. Of gas about the future production. David they were deciding to keep their dividend but give up their capital investment. An interesting judgment for the longterm. Yes. We have seen the consequences of that. We saw it in 86 and 1999. Companies protect the dividend at any cost. They used the analogy of mario draghi whatever it costs we will protect their dividends. Lower spending will mean lower supply for the future. That means lower growth for the companies and the global economy. We may have oil supplies that we were not expecting. Jonathan theres a company out this morning people asking whether this is a bp moment. Im talking about php and a big lawsuit. It is 44 billion dollars. Authorities in brazil are asking bhp andhp and for moneyning company for a disaster when a dam broke. To the disaster for bp. Authorities in brazil are raising that parallel. We have seen going after chevron for example. The sentiments are much lower than the initial claims. There is some posturing at the beginning of the fight. Megan i want to talk about iran. Irans production is coming up very quickly. We are putting that at 3. 5 Million Barrels a day. Thats the highest in four years. It means iran has moved very quickly to recover market share the moment the sanctions were lifted about 90 days ago. Its a remarkable turnaround for tehran to be able to increase production so much. That is more oil that is coming into the market. Probably another reason to expect that oil prices are going to pick up. Blas, thank you for joining us. We are just under an hour away from the opening. We are hearing what he banks are looking at today. Stephen anzac is head of the strategy team. He joins me now with his take on the health of the bond markets. Thanks for joining us. You are not bearish credit right now. Neutral . Eping you is that a Fair Assessment . Is a Fair Assessment. Whats interesting about credit right now is you have diametrically opposed forces. Right now its the technicals that are driving the day. The technicals are really bolstered in part by limited supply in credit as well as a lot of inflows in this low yield environment we are experiencing particularly in the overseas markets. Money lookingof for a home and not a lot of bonds to buy. I think the primary force driving valuations that pushing spreads tighter. Havee other hand we fundamentals that are not supportive of valuation. Were talking about how earnings are not that great. If you only look at earnings they just arent good. We took a sample of bond issuers and looked at their revenues. They are basically going to be flat in q1. Look at another metric like leverage. If you go back over the next decade you are at alltime highs. These forces that are working against each other. The technicals are working right now. But you are getting rich to the fundamental fair value. Let me ask you about supply. We have heard a lot of doves on the fed say the u. S. Should be issuing more debt in order to. Eet the demand we just heard bill gross talk about the possibility of helicopter money and going back to another round of qe. No matter what your take on how likely that is, the fed certainly is more dovish and seems to be positioned that way. Dont you think . I do. There are reasons you could see companies wanting to issue more debt. Low yields are one good reason. I also think you have some counter forces to that. M a was a huge source of supply. Shareholder friendly deals in general. Companies would issue debt to do in m a transaction. They really have not been doing that. Why . I think the equity market is less interested in renewing Rewarding Companies that pursue financially engineered growth. I think thats a shift in market forces. With credit fairly valued, where would you look for value . I think thats a great question. There are a lot of divert and says within the credit market withince divergences the credit market. I believe it is a credit pickers market. You have to go company by company to uncover the value. Matt thank you, stephen anzac. David. David tesla is in the spotlight. A new Home Energy Solution is about to hit u. S. Markets. Demand is rising for the model three and earnings are coming out after the bell. Thats next on bloomberg go. Megan this is bloomberg go. Coming up on Bloomberg Markets, jeremy cook will join to talk rights it. Thats at 11 00 eastern. To talk breaks it rights brexit. Thats at 11 00 eastern. Yorke the parent of new Stock Exchange says the deal. Combined with the london exchange. The u. S. Added fewer workers than expected last month according to adp. Government comes out with a monthly jobs report friday. Big changes on the way for applesyearold streaming music services. Apple music has been met with lukewarm reviews. The user interface will be changed to make it more intuitive. Apple also plans to better integrate its streaming and download businesses. David tesla earnings are coming out after the bell. They are expected to post a loss. They are expecting to turn around and be in the black for the Second Quarter. There has talk about them going into the black in the Second Quarter. Thats a long way to go. They lost 14,000 a car. An automaker. Its the youngest automaker in the u. S. The key is making autos. They have not had to do that a lot. They had 50,000 vehicles which f150st what ford sells in a bad month. The better they produce the more they can sell. What they have made they had pretty good success. They have had great reviews on the vehicles they have made. Its just making enough of them. Thewhat that says about future and how quickly they can bring the model 3 to market. The number,s about what do they need to get to in order to break even . Thats a good question. It has to be more. Its not even about breaking even. In 2018,t the model 3 2019 and can they really maximize that factory and to do they have enough capacity and skill to expand to a second and third factory. Megan when i look at a company like fiat chrysler, 10 billion market cap. Marketas a 30 billion cap for a company only expected to generate 9 billion in revenue and a good case. This number is so out of whack. It is still a call option on the future potential of the company. It is a 10yearold company. Somebody in the industry was asking me, how long do they get to be a startup . Its a very big and slow developing industry. The second youngest company in the industry is 50 or 60 years old at honda. They are like an adolescent. They have to build one factory . Its a tiny thing. But the potential of this company is really what investors are excited about. Theres a chance the world is going to get away from petroleum and prefer electric cars. They are trying to show people that electric cars can be better, more fun, and more useful than traditional cars. David how much runway do they have . Burned through 440 million just in the First Quarter alone. That was one of the better quarters. That is something they are really looking at. It was the model 3. They got a huge influx of cash. Thats great and maybe thats enough to get them through to where they become cash flow positive. These troublesll with manufacturing on the vehicles and batteries. Theres a lot of thinking that they might actually need more cash. People want to buy that stock. It is so inflated relative to the prophets and size of the company. People want to give you their money, take it. David that is jamie butters. Thank you for being with us. Megan booze or cigarettes . Which vice has outperformed the financial crisis in battle of the charts, next. David this is bloomberg go. Im david westin. Hedge fund fees are under fire from them of the worlds biggest investors including warren buffett. Critics say managers face a wave of closures. Some of the challenges facing the hedge fund industry. First quarter for the Hedge Fund Business has been a very unfavorable period in large part because when you head check the positions and markets turn as they go up sometimes everything goes up and you are short and it goes up. Compoundedounded that were too few opportunities. When they tried to cover their positions stocks went up 100 , 200 , 300 just for technical reasons. The rates of return in the Hedge Fund Business and the Fee Structure has discouraged some investors. Its highly probable that the asset class will shrink a bit. For firms like ours its very interesting. One would think it would be very negative. Because we are the largest in the world allocating money to hedge funds. We arerprised me is getting really goodsized flows. Whats washing out a number of our competitors. Is there is ang move to quality. There is a move to performance. And the people who will be left in that business will do very well. The people who are marginal performers will not. , 20 ofmal environment hedge funds go out of business every year. Thats a normal environment. What are we looking at now . A slightly abnormal environment. As a allocator of capital to hedge funds, you are focusing on quality. How aggressively are you redeeming from those who cannot deliver the results you want . We have been doing this since about 1990. We are prudent in terms of taking money away. Do you find yourself giving more of it now . Lets look at it this way. We started with no assets. We now have 67 billion. About who wel choose. Thats the most important thing. If something is wrong of course we act. David that was blackstone chairman Steve Schwarzman talking with erik schatzker. Jonathan you can find it online at bloomberg. Com. Time for battle of the charts. Its mark barton versus matt miller. Chart wars. Mark barton, you are first. Mark the miller quandary after my good buddy matthew miller. Cigarettes or booze . Today we had results from Imperial Brand and ab inbev. Which sector has fared the best since march 2009 . Spirits andncludes beer and soft drinks. It has risen by 194 . We need a benchmark. I have chosen the s p 500. It has outperformed the beverages index. The best performer is the msci World Tobacco index. 217 . But wait. On an individual basis out of cigarettes and booze, which company has spared the best since march 2009 . Constellation brands, 1141 . The miller quandary has been answered. Matt he knows darn well that i do not smoke cigarettes. I have taken two of the Biggest Hedge Fund etfs that are trading. This is almost 100 billion in market cap. This is about 85 billion in market cap. This is Steve Schwarzmans blackstone. They have far underperformed these two hedge funds. None of the three is doing well. David it is spelled without a t. Megan it is an easy call who is winning today. Matt i will change that for you. Jonathan im going with the chart, matt miller. Megan coming up, bank of america iaaem david donald trump takes indiana as ted cruz bows out of the ways race. June rate rises are still possible. Jonathan the adp payrolls disappoint. David we are just under 30 minutes away from the opening bell. This is the number of. This is bloomberg go. Im david westin alongside Jonathan Ferro and megan murphy. Futures down on the dow. The ftse 100 down by one full percentage point. The dollar a week or moves off the back of some soft data. Table disappointing data out of the u. K. As well. 145 and treasuries rally. Biggest move yesterday in about two months. The yield of 1. 78 . Matt a lot of equities moving in the premarket. Almost 8 is plunging despite beating analyst estimates with firstquarter earnings. The Second Quarter fell sure. Short. This was the 31st straight quarter that priceline beat consensus. Nearly eight years of positive surprises. Lets talk about the Big Media Companies that have reported. And time warner both reported profit above analyst estimates for the First Quarter. Credited higher ad sales. Time warner saw higher ad sales as ratings rose on it cable news stations during the primary season. Etsy soaringa since growing public. Than 13 million from income tax provisions. Have you ever purchased anything on etsy . Megan much custom made furniture. Time for the three stories that really matter to markets right now. Joining us is chris hyzy. We are talking about trumps in indiana, the dollar, and another big day for earnings. Jonathan where is etsy . Megan wheres my furniture . Victory means he is a virtual certainty to become the republican candidate. We are joined by kevin cirilli. How surprising was it to you about ted cruz . It was shocking. Top aides from the donald Trump Campaign were stunned to see senator ted cruz remove himself from the president ial race and candidly a are left scrambling this week to reassert their schedule for where he will be campaigning. They were anticipating a much longer call. Haul. Megan we have heard endorsements. We think of few are coming. Whats interesting is how he is going to get the money. He needs to unify the party and a great way to do that is to fund raise. There was not really a concrete plan at this time. Whats interesting about Donald Trumps campaign is that he is going to be able to tap into a new network of wealth. This is a new type of money. It is not necessarily the oldschool money from wall street. These are the type of people that have put businesses in the trump hotels. This is a new era. That could be a big benefit to the Republican Party and a leverage point as he looks to unify the party. Also aroundris hyzy the table. As an investor trying to grapple with what this means. Last time it came down to it as simple as who would be in charge of the fed. I do not see what it is at this point. For the markets it is always positive and negative surprises. That is mostly what everyone has talk about heading into this year. It looks like things are getting more clear in terms of a two candidate race for the white house. Is Political Uncertainty in a lot of places. You have the u. K. Referendum. Election season is coming. The contentions in july. Megan the increased certainty we have that he will be the nominee as the market view him the same as any other nominee . Its a little bit sanguine. Theres not a lot of movement. The markets are most concerned right now about the dollar and very soon about the fed. It is less so about the political environment. Megan we will see how that holds. Jonathan two fed Officials Saying the markets are wrong about the potential for a june hike. They say a rent hike next month could be on the table. Bill gross said prepare for renewed qe. He sees helicopter money as the next depth in stimulus efforts. A lot of people are going to look at this and say, this is crazy. Its not crazy at all. A lot of people are talking about this. Theres not much left in terms of stimulus if they need to pull the trigger. Timing ofnds what the the next step is. Isnt this year or a few years down the road . A few years down the road is the duration that Something Like a helicopter money would come. We have a ways to go before we worry about whether or not there is extra stimulus. Its probably not another qe. Qe is about bond buying. Theres others talking about it in the marketplace. Some of the other large bond managers are out there. If wage growth starts to trickle in and continue the momentum we have seen in the last six months than you are going to Start Talking about when the fed actually hikes versus when the fed is going to move the other way which is on an easy stimulus measure. Megan we have been talking about jobs. Howe come in much lower much do you think thats going to change things . It will change the futures market first. We are about 12 right now i think discounting a june hike. Week is going to be the u. K. Referendum. So theres a lot of conditions you have to take into account. We dont have enough data yet to suggest that june is any higher than the 12 of the market expects. If you get one bad employment report number, the dollar is going to come down. It will likely support markets versus the other way around. We have a chart showing treasury yields tumbling by the most since february down to 180. Back when they were closer to 2 you had a june} odds of 50 . Rate rise odds of 20 . Hike in june a this would turn around pretty quickly. Jonathan im not sure it would. If you get a hike in june and you set up the potential for growth and any kind of take up inflation, treasuries should rally, shouldnt they . Thats what they have done recently when that has happened. The question would become, how flat will the curve become and will the german bond yield market come down with us . Thats the key. One big reason markets and asset prices have come back since mid february nothing much has changed except the fact that the dollar has weakened about 5 or 6 . It supported commodity prices. To get thist feeling that if the dollar declines another 5 you get another additive matt is the fed only focuses on jobs and inflation that you would see them on an actual path to normalization. Thats why i think that could turn around. Jonathan thats interesting. David we will move on to the number three story. Another big day for earnings. Time warner profit. Earningspershare also beat. Later today we have tesla reporting results as well as 21st century fox. Give us a report card. How are we doing . Slightly better than what we thought going in. And slightly ahead of expectations. When you think about all of that the next question is what do earnings revisions look like . They have been a little bit better. If you continue to see stability in the dollar and oil price hang , you could see another two to three dollars added to earnings. Of that is tied to what you think is going on with the dollar . Slow weaknesssee in the dollar, not sharp weakness. Dollars5 is one to two in s p earnings. But that all together. We are at about 122 for the year right now. We are at equilibrium. Megan lets talk brexit. How much uncertainty do you think is lagging over with that or do you think it is priced in now. Most of the uncertainty around that is priced in as we speak. Anded into the pound Interest Rates and the overall global marketplace. Any negative surprises now patched priced in. The only positive surprise you can see between now and the end of the year is the fact that earnings surprises to the upside. Its tough to say that thats going to happen but the element is there and it all has to do with the dollar. David thank you, kevin cirilli. Chris hyzy is staying with us. Lets go to vonnie quinn. Union the european agreement on refugees is having a huge impact. Greece took in 3500 refugees last month. The European Union reached an agreement with turkey aimed at cutting off the flow of refugees. In return turks are expected to be allowed to travel to europe without visas. All 80,000 residents of an oil town in western canada have been ordered to evacuate. The fire has already destroyed whole neighborhoods. High winds are making the path of the fire and predictable. Public School Students in detroit return to the classroom after a twoday sickout. Schools have been under state oversight since 2009. Im vonnie quinn. David much more ahead on bloomberg go. Dont miss my interview with cbs ceo les moonves. Thats coming up at 11 00 a. M. Eastern time. Megan coming up on bloomberg west this is bloomberg go. Im megan murphy. Chris hyzy is here. This,e been talking about but i want to explore this possible upside you see in equity markets. Is it just going to be earnings . Thing he coulder be as multiple expansions. Its very difficult unless you get new investors from all over the world that are going to come in and get excited about things. The political equation is about to hit us again in june and july. Election season in the united states, we have the potential for another devaluation in china. All these things that are a general wet blanket on multiples. The only thing in the denominator that could get you excited between now and the end of the year is the potential for an earnings surprise. Ont would be 68 70 points the s p. Which gets a closer to 2200. That its very difficult to see much more than that. Its a grind. I think its a buffalo market. The possibility for a negative surprise around the corner as well. Absolutely. You know what buffaloes do. A run the other way. Jonathan and they fall off the cliff. Unit labor costs are up. Corporate profits down in the First Quarter. Im a client. I call you up. I say, ive got tons of money. I want to stay in cash. What do you say . You are heading into a downslope. Political uncertainty. As it relates to cash earnings, theres fantastic opportunities below the market particularly around the Consumer Spending area. Massive Consumer Spending shift going on. You want sectors that are not necessarily going to be hurt by whoever becomes president. What type of bills might get passed through congress. You are looking for yield in cash flow. You want to get paid to wait. While we continue to have these low numbers the productivity numbers are probably not accurately calculated. The iphone has made us all much more productive. For all phones. David or at least busier. I would argue the cloud all of those things make companies more productive which keeps operating leverage at a level that they suggest. For me to productivity numbers being as low as they are, im not so sure if is measured as accurately as we want it to be. We talk about accommodative policies of the Central Banks around the world. And supporting asset prices. Im wondering if there is the anticipation of further devaluation in case of a downturn. Is that a risk for the markets . Have you ever concluded the Central Banks would not come in on a downturn . Then thet is not there larger Institutional Investor would be the first that would get very uneasy on that. On the retail side it is still an element of where is revenue growth, where is Economic Growth. We will be stuck in that number for a while. Its very difficult to get out of that world when you have demographics like we do in the world. You dont have fiscal policy filling the gaps is used to fill. Infiscal policy comes back than Monetary Policy can wean itself away. You get a much better balance. That happens Monetary Policy has to remain accommodating. Megan chris hyzy, you are sticking with us for the rest of the hour. Next, under armour versus buyer capital. More on that and some of the others ahead of the open. Futures just firming up a touch. S p 500 futures 12. Some disappointing data. The adp number comes in cooler than expected as we look ahead to payroll friday. Jonathan youre watching bloomberg go. Youre watching bloomberg go. American worker productivity fell for the second straight quarter. Laborer costs for climbing by the most in more than a year. Recall ever is about to continue. Takata airbags are the reason for the recall. Takata is in talks with u. S. Regulators. That could lead to the recall of millions more vehicles. Aeropostale has filed for bankruptcy. The chain has struggled to adapt to online competition and the changing tastes of teenagers. Latest Bloomberg Business flash. Markets a look at the and stocks that are moving ahead of the open. Down for a armour is fifth straight day. You can see the stock in the premarket off. Green capital cut this from a following last nights announcement that the chief digital officer would be leaving the company in july. I have a function on here to show you. Green capitalm has given up the ghost at under armour. Buy. Bruary, still a but aeek, still a buy price target of 50. Today is just a hold. Walk away from under armour. Health care is falling this morning after jumping yesterday. Shares downgraded from neutral to a buy. It looks unchanged in the premarket. Tenet is down over the past year. Look at the sad panda thing. Jonathan you look a little bit down about the under armour. Matt analysts in general. Jonathan great function to break down what the analysts are thinking on an individual chart. Thank you very much. Ahead of the open, lets get a market check. Equities in europe softer once again. Another day of losses. The ftse down 1 . U. S. For futures are rolling over again futures are rolling over again. The adp payrolls report a little bit disappointing. After that treasuries rallied. The biggest move in about two months on a 10 year. 1. 79 on the u. S. 10 year. What a 24 hours it has been for the fx market. The fed president s start chuck working up talking up a june rate hike. Down today. All of this building up to payrolls friday. Adp a mess. Does it tell you anything about the upcoming report . Most people would tell you no. The open is next on bloomberg go, just under four minutes away. Jonathan this is bloomberg. I am Jonathan Ferro. Two point 5 trillion of assets around the table. Have chris from bank of america joining us. Titan seconds away from the open. 10 seconds of it from the open. Teachers go little bit lower. 12 on the s p 500 and europe heading toward the close for a fourth straight day of losses. Quicklyut the boards and treasuries advancing. On the one basis point 10 year and crude up 1. 8 . Lets call it or the four dollars . 42 a barrel. 44. 42 a barrel. Oil and miners have been big movers today. They were gainers in europe. Points. S off by 60 s p 500 index off by. 5 of 1 and the nasdaq down a little more than. 5 of 1 . All read as far as the Industry Groups are concerned. Pretty shocking. I dont think i have ever seen if this red. Energy is only off as a group by 11 hundredths of 1 . And utilities are right behind it. Hundredths of 1 . And utilities are right behind it. Financials down big and materials down big as well. Materials over in europe with the hp with that lawsuit. Lets check out some of the earnings with php and the lost. Lets check out some of the onions. Profits above estimates for the First Quarter. The media giant credited higher ad sales from events like the super bowl and the grammy awards. Cbs is called the best Investment Option of big media following earnings. That is the reigning endorsement. The stock is up two. 5 . Take a look at time warner, the of othercnn and a lot cable channels. Firstquarter earnings that beat analyst estimates. Because of higher ratings from their Networks Like cnn that god and a lot of advertising dollars due to donald trump and the rest of the people who are running for president. Also, check out shares of etsy. This is where megan gets her furniture. Sewing after the Company Reported their first profit in going public. That was driven by Foreign Exchange gain in more than 13 million from income tax provision. It is a great place to get tie dyes, david. Megan i would like to point that out. David that is a good idea. We will talk now more about cbs and time warner. Joining us is paul sweeney and chris from bank of america. Hall, the thing that struck me about these two earnings, cbs and time warner, the division between advertising and subscription fees. We have heard the place to be immediate is subscription fees and advertising is dying. These seem to point in the other direction. Is advertising back . Paul particularly it is back on television. Cbs is exposed to television and Advertising Television and it is up 12 . Have not seen that in five years and we have not seen that from any Media Company in a long time. Is comingenvironment back and theres talk about advertisers switching money out of their digital internet budgets back into television. That the ceo of cbs said last night that people and not trusting Digital Advertising because they are not sure whether the dollars are paying off. Is that true . Toebook advertising is going the roof. Called over the last 18 months, advertisers have been trying to dabble in Digital Advertising and i think some of those marginal numbers may be coming back to broadcast and Cable Television. We have seen that in the scattered market over the last six months with a strengthening in tv ad spending. The industry is now going into their upfront selling season. David explain that because this is a great piece of time for les moonves. Paul exactly. That is when the broadcasting table Cable Television cells for next Television Season in the month of may. 18 billion of ad spending will be allocated over the next couple of weeks, so a nice time to come in with a strong market environment,onomic and all of the networks are talking about the strong upfront and even les moonves expects doubledigit pricing increase going into the upfront. Megan when i look at time warner, i look at cnn and i think about how much they benefited from the trump effect. Much has that benefited them in terms of political ad spending . Paul cbs and cnn in particular have tremendous radians in rating boosts and that is translating into advertisement. Obviously, that will continue through the election. Local Television Affiliates benefit from clinical advertising and that is what candidates spend their money, so Companies Like time warner with no tv stations but cbs does, so the local affiliates are the ones that really make the money on these political advertisements. David 21st century fox comes out next and they own some television stations but what are expecting . Hall Strong Quarter of the fox because theyre benefiting from two trends. That is advertising at the Cable Network and broadcast network and strong affiliates, or paid tv providers are still increasing the amount of money they paid for the Cable Networks yearoveryear, so affiliate fees for Cable Network owners are still strong, despite the concerns of core coming and what that might due to business longterm. David another question is exposure to foreign revenue because that is different among media companies. Time warner has 30 that comes from overseas. I think 21st century foxs 36 . What about fx . Issue ashas been a big it has been for other industries and it is starting to moderate right now. Companies that are exposed to the National Advertising markets, which are faster growing and most cases, from advertising and affiliate fee thepectives, most of Companies Like discovery, communications, 21st century fox, those are the most exposed to International Business and those have been a longterm positive for them. Megan we are talking about cord cutting and where you seen that now . Skinny bundles are really favorable now, so what is the trend Going Forward . Is it decelerating or accelerating in terms of cord cutting . Paul that is the big deal for investors. Cord cutting is happening across the board. It is a question of this deepness of the decline. I think we are at the opinion that it will be a much more moderate decline then some in the markets feared, even as recently as last summer when the concern was business was under pressure. We are starting to see some Cable Companies actually growing their video subscribers. Comcast had the best quarter in terms of video sales and nine years, so i think it is a longterm trend and it is probably a little bit slower than some bears forecasted. David how do you view the media sector . Chris very good points. It sets up the whole point hall talked about with megans question. Paul talked about with megans question. The dollar is helping. People dont think the media sector is impacted by the dollar, but that is a shot for the rest of the year for people more impacted by the dollar. In the longterm, we are witnessing the greatest spending shift next that we have seen in any demographic, and that is the purchases of goods shifting dramatically from experiences, service, entertainment, travel, leisure, etc. , which impacts positive mediabased areas. David i want to thank paul sweeney. Americazy of bank of will be staying with us. Stay tuned for my interview with les moonves at 11 00 eastern time. Next, speaking of the dollar. What a 24 hours in has been for the dollar. Looking ahead to payrolls friday. What is the story in the fx market . That is next. Matt i am matt miller in our hpe greenroom. Coming up, the ceo. Vonnie i am vonnie quinn with their latest business flash. Trade deficits have fallen to the lowest level in 16 months and the largest amount since the recession since years ago. For the fifthrts time in six months. Irish billionaire holding off on an ipo for at least one year to 18 months. Obrien planned to take the Company Public one year ago but shelved the plans. A say they will keep investing heavily. On apples streaming service. Apple music has been met with lukewarm reviews. The user interface will be changed to make it more intuitive. Apple has a plan to better integrate streaming and downloads. That is your latest is a splash. Into the minutes session and lets look at some of the stocks. Matt a lot of equities to look butbut internet until intercontinentalexchange has the best they have gains since of 2011 and decided not to make an offer for the Stock Exchange in london. They said they were not talking and engagement was the problem there. It could that created the largest operator in new york, but if you dont get along, you moved inshould not together. Zillow seen the best day of gains after sales topped estimates and they raised their forecast. It is a real estate website. It has a net loss of almost 50 million for the quarter, but the analysts saw something that they really liked in the report, so they almost doubled the price target. 12 and nowworth worth 23 and it is way over that target so they might want to revisit that. Take a look at hain celestial beating Sales Estimates on the best day of gains since august 2014. The thirdquarter adjusted eps and it missed estimates. Beating sales but missing estimates and heading a ninemonth high. David thanks. Lets go to bloombergs abigail too little at the nasdaq Abigail Doolittle at the nasdaq. Abigail priceline shares down sharply. The worst dry on the nasdaq is that they offered to well below analyst. View of this they say a few factors are responsible for the forecast, including a weak macro environment and cancellations. What stands out is the fact that priceline sees a softer demand for travel in the Second Quarter than expedia. Priceline said the Second Quarter view is not indicative of longterm growth that lots of uncertainty. Shares of priceline are stuck in the longterm trading range. Climbing on the open our shares fell computing company, also will below consensus paper the Second Quarter. While saying that the for your targets could be at risk on the timing of new orders. They have downgraded shares of cray. They say that the company is well positioned in the computing space. Up 20 yearray was to date and now the shares are down more than 5 on the year. Thank you. To the fx market. What a move we have had. Following Dollar Strength and to explain it, we are joined in new york with chris hyzy still with us. Yesterday, euro dollar through 116 and that was your call. What is the narrative because the fx market is grappling for a story and struggling to find it . I think you are right. This story is not a trending the range hasile been extended on the euro from the outside, i think it got a little scared being above 1. 16 ahead of payroll. Ofhink the market has kind enabled to ride the story for little bit, but i think traders are willing to reconsider, especially ahead of this data. Jonathan talk to me about volatility. For thenly gotten this first time in about two years. Are we over 1. 16 . Dont think we are massively short the dollar. Q1 was all about and winding that long dollar position and the bullish dollar debts. We got to a point where the market was a little bit short the dollar, but it is not a trending market. I think theres not a lot of conviction behind holding up for a long period of time, so that largely explains the dollar reversal. Just caution and maybe we push things a little too far in one direction. Jonathan are you looking at the front end of the treasury yield curve . Basis gone from 110 points to below 75. That smells weaker dollar. Does that story continued for you looking at the front end of treasury . Vassili i think we should be near the lows. Vassili real yields have been falling. Im wondering where is the end story . Almost nothing is priced for the fed until the end of the year. A 50 chance of just one hike and the fed keeps telling us that the window is still open. If those expectations were to change, i think that were more likely to change in the harkers direction and that is part of the reason why traders and analysts, including ourselves, are turning more positive on the dollar just from the risk perspective. Jonathan matt miller . Matt i have a chart that i showed earlier and it shows the dollar year to date and the yen and the euro strength. You and jon talking about whether people are low on the dollar or have gotten short on the dollar, what sources do you go to to see where Global Investors are r. E. The dollar . It is subjective judgment to some extent woman look at positioning in the futures markets, planned positioning, the Options Market area judgment to some extent when we look at positioning in the futures markets, planned positioning, the Options Market. All have been turning against the dollar for little while, but to emphasize again that i dont think it is massively short the dollar. I think the market is moderately short but even that is not High Conviction do. That is why you are starting to see the reversal. Megan chris, what are you thinking about in june . What will we have to see to have that happen . Chris a couple of employment reports, number one, and you have to see the cost index start to rise in that. You would have to see that go up. You would also have to sit Global Financial conditions very tame through all of that. And 10 of that so Percent Discount that the fed had the futures market would rise precipitously and you doubt that back for real on the table. The fed is using communication to keep things as tomlinson as as balanced as they possibly can. We saw what happened when theyre a negative surprises in the fragile market and they do not want to see that. When you look at everything that the foreignexchange markets and everything they said and you put a map of Financial Assets out there, we have been range balance on everything for well over 12 months. That is emblematic of a midcycle adjustment that is going on. It is a fragile market place overall. Megan i always think about looking at if they are doing an effective job in the communication strategy. Chris i think they are doing the best they can for the cards they have been dealt. They have a massive Balance Sheet and they do not want to unwind it too quickly or tap the brakes on it too quickly because most of the demands of not been met and they have Global Financial conditions to watch and no transparency and what fiscal possible be in the next. Fiscal possibility in the next few months, so they are doing the best they can. Jonathan thank you. Short they will be are to the dollar. , great torebriakov have you on the program and talk fx markets with you. David and chris hyzy, thank you for being with us today. Coming up, Bloomberg Markets with betty will and mark barton. What do we have to look forward to . Were looking forward to something you will be giving us, les moonves. You will be interviewing him in the next hour. Also, the cio of janus capital. He will be joining us later in the next hour, and we are still talking about an incredible win. We will be talking about what is and in the championship john nickel weight john nickelwait will be talking about how he is looking his wounds for not betting this year. Of all years. Back to you guys. Megan i dont think i want to see those images any time soon. Jonathan would john trade the premier leagues . Ask him. I am not so sure. That he said he thought that was silly. Only later did he realize it was 100,000 points. Up next, a look ahead to what is on the agenda for today and the rest of the week. Ferro. N i am jonathan we are 24 minutes into the session. Major indices in the red in america. Down by about 1. 5 in the s p 500 and dow jones. Europe having their fourth day straight fourth straight day of losses. Checking the board quickly. The head of payrolls friday, a soft adp report with treasuries rallying off the back of the board. Crude keeps climbing higher, up by 2. 6 . Short the euro ahead of payroll. 110 of 1 at 1. 15. Blame whatever you want, it was soft. Construction and manufacturing soft. Cable 1. 45. Eastern, we 00 a. M. Will have durable goods data. Speaks in minnesota later this evening. David moore fed speak tomorrow. Lockhart will be speaking, along with John Williams. Friday, we get the latest nonforeign payrolls report. Maybe the most important day this week. Jonathan it has got to be. I have one question for our coanchor, as you pointed out, where is john kasich . That tohen they said me, i had to think his strategy all along has been, lets make its agreement and see what comes out there. Convention chances are almost zero and i do not think it will be john kasich coming out. Aly nott is a matter of gracefully. Megan his endorsement is important because he appeals to a court of the audience that donald trump does not appeal to and that is the welleducated moderate. Vp. Ould beat trumps prudential Michael Collins right here on bloomberg. Bloomberg markets continues, next. Betty 10 00 a. M. In new york, 10 00 p. M. In hong kong. I am betty liu. I am live from london, mark barton. This is Bloomberg Markets on bloomberg television. Betty lets kick it out stick to the markets. Julie hyman has the latest on more economic numbers. Julie it has been a busy morning. The i. S. Service report coming out at 55. 7. That is higher than what was estimated. Services is the largest part of the u. S. The economy. Factories up 1. 1 . A little a revision bit lower in the prior month in february of 1. 9 percent decline. I am looking at durable goods orders with a gain of. 801 , in line with estimates and transportation falling. 2 of 1 , which is worse than had been estimated, but it looks