We had a dip in the major averages, but they have since come back. The s p has in leading gains. The dow and nasdaq and that, each up by about. 5 . We have a lot of anticipation for tomorrow when we will hear from the ecb. At the bull market and go back in time. March 9 2009 as the date it was born in weve seen almost 200 appreciation in the s p 500 with some hiccups to be sure as of late. What is notable about the bull call it theople most hated bull market, it is also a long bull market compared with past once. This shows the s p 500 and here is the bull market. Here are the fund flows. 2012, we beginning of have seen outflows at a time when talks have been climbing, so theres a disbelief all the way along that the bull market would continue and yet somehow it has. Scarlet the most hated bull market. Thats the most appropriate title. Lets talk about commodities because we got a fairly bullish inventory report. Julie on the face it didnt look alleged a week over week, it dropped because it was such a large drop last week. We did see oil make it ties in the day and now up more than 4 . The chart of Energy Stocks is interesting if you look at over two days. Yesterday, its biggest oneday drop in about two weeks. Still down more than 1. 5 . News on Chesapeake Energy that the company is said to be considering the sale of some of its oklahoma assets. That caused it to extend its gains. Devon and chevron among the big gains we are seeing today. Many stocks were participating in the big drop we saw yesterday and today, a bit of a recovery with those oil prices. Scarlet julie hyman, thank you for setting the scene for us. Lets check in on the bloomberg first word news with Mark Crumpton and the headlines. In u. S. Was a big night president ial politics. Bernie sanders upset Democratic Front runner Hillary Clinton the michigan primaries. Polls indicated mrs. Clinton had a doubledigit lead before election day but mrs. Clinton won in mississippi and now has more than half the delegates she needs for the democratic nomination. On the republican side, donald ,rump one in mississippi michigan and hawaii. 1237 now has 458 of the delegates he needs to become the republican nominee. Ted cruz has 359. Carly fiorina today endorsed ted cruz for president , telling a rally in miami that he is a leader and reformer willing to take on the status quo in washington. A majority of americans disapprove of Senate Republican plans to lock president obama Pass Supreme Court nominee. 55 oppose the gop strategy according to a new nbc news wall street journal poll. The white house is already vetting candidates to replace the late Justice Antonin Scalia a. Republicans say that should be left to the next president. Attorney general Loretta Lynch says shes not interested in the job and has asked the white house to remove her name from consideration. Vice President Biden says if iran breaks the terms of the Nuclear Agreement with the west, we will act. The Vice President spoke today in israel after iran carried out a Ballistic Missile test for the second day in a row. The iranians launched to missiles. The official Iranian News Agency says both missiles hit targets 870 miles away. Hours before the missiles were launched, the u. S. It would investigate whether the test violated Un Security Council resolutions. Oflure to contain the spread an gay fever could mean officials have to find new ways of writing zika which is also spread by mosquitoes. The World Health Organization says traditional methods like insecticide have had little to no effect in reducing the number of cases. There are fears the same might apply to zika. Said zika is a global emergency. Global news 24 hours a day powered by our tree 400 journalists and more than 150 news bureaus around the world. Scarlet thank you so much. The equity bull market is celebrated seven denver street today and while the indexes have gotten off to a rough start this year, they are currently at session highs. So problem solved. The s p is coming off its longest rally in five months, so the question is, is the worst over or are investors to skittish to keep double alive question mark my guest joins me from stanford, connecticut with more. Seven years in, does the equity rally still have legs . Guest i dont want to put a damper on the birthday celebration, but lets keep in mind the alltime highs of the market was last may. The bull market is only ongoing if we dont move down from here and have the correction turn into a cyclical bear market. If that is the case, we will look back and find last may is the high and the end of the bull market. If we move up and take out the prior may highs, we will look at it as the seventh anniversary of the bull market. We are in this middle part of the equation now which means we dont officially know if it is the seventh anniversary. Longerterm, the bias is still higher but right now, we are a bit overbought. Sentiment has gone back toward optimism. See a little profit taking given how much good news is priced in. Scarlet we have seen Retail Investors are missing out. Julie had a chart showing fund flows. Whats it going to take to get the individual investor back and and what does that mean for whether we will continue to move higher or whether this will turn into a cyclical bear market . Im not sure we get the Retail Investor back to the same allee as we have in past markets. It is a very unloved bull market and im guessing the fund you showed with traditional markets, even if you showed Exchange Traded fund, there is on a cumulative basis no net new money added to u. S. Equities in mutual funds and Exchange Traded funds since before the financial crisis. We have never seen that and i think its a function of the muscle memory of not only the severity of the crisis and bear market but within 10 years of the prior crisis, specifically in tech stocks and a brutal attended bear market. To some degree, much like happened coming out of the Great Depression was you lost a generation of investors who never had the market capture their hearts and minds. That may be what we are experiencing. Scarlet one thing we are looking at are the red flags that are out there. As you look at gold prices and global stocks, they tend to move in opposition. But what you have seen recently is stocks have been moving higher along with gold prices. That doesnt quite make sense. What does this reflect . Guest we can make assumption about what has been correlated to gold either positively or inversely. The past it has been an inflation hedge or currency instability hedge. What is unique in this time is that gold has by default a negative carry. A yield butenerate theres a cost of storing it, so you are automatically in a negative situation. In contrast to most currencies historically which have a positive carry, you get a yield on a currency. Now that we are in negative Interest Rates on the comparison is more favorable, so gold takes on an attractive characteristics. As a hedge against currency instability, that may be a fundamental place. Another thing people are looking at is what happens of Companies Stop lying shares . The buybacks grind to a halt. A chart going back to 2008 show that buybacks totaled 2. 6 billion more than quantitative easing. , the stocko hsbc market had its own qe while the treasury market only had a between 2008 and 2014. Should we be more concerned about companies not buying as at the end of qe or monetary easing . Guest it has been the biggest support from the demand perspective. We have not seen it from the Retail Investor. Hedge funds that exposure hasnt been anything but in the low 50s. Has been a big support, so the question is, and i think it is a risk that if we lose that support, are we going to get it in other areas. As the Institutional Investor going to step in and will Pension Funds realized the need for return from a higher risk asset class versus the yields on the fixed income side . The ecb as we await meeting tomorrow and people are pricing in some kind of easing and the fed is expected to maintain its current strategy in march, what would be the first order affect on u. S. Equities if the ecb does go ahead with cutting its deposit rate 10 basis points . I think the expectations are already embedded in the market. Therefore you could move the needle in one direction or another if you get a surprise but something in line from the fed, which would be no move, something fairly small but in the director of easing by the ecb, i would argue its already priced in the market. Thank you so much for joining us. In the next 20 minutes of Bloomberg Markets, mario draghi set to fire another salvo in the Central Bank Battle against deflation. Will the story be different this time around . Are looking at u. S. Stock that session highs with Energy Leading the gains after the worst drop in six weeks. We will look at which specific companies are driving the rally. Wilbur ross giving the bloomberg go his mind on the gop frontrunner, donald trump. Scarlet this is Bloomberg Markets. Im scarlet fu. Its time for the bloomberg flash. Chesapeake energy considering a ine of some of its holding an oil soaked patch of shale in oklahoma known as the stack. Thats according to people familiar with the matter. The natural gas giant is unloading assets to pay off debt. U. S. Prosecutors are trying a new tactic in their investigation of volkswagen and omission test cheating. The government is using a far reaching law against bank fraud and are looking at whether volkswagen broke tax laws. They admitted to cheating on cars on whether diesel cheated in missions tests. Amazon has agreed to lease 20 boeing cargo planes airport transit Care Transport services group. They want to reduce their reliance on carriers like fedex and ups. That is your business flash update. Ecb decision,e most economists are expecting the ecb to announce new decisions and cut Interest Rates tomorrow at 7 45. The question that continues to limit his will the stimulus plan have enough firepower to reignite Economic Growth . Joining us is our Bloomberg View columnist, mark gilbert. As we can see through the different derivatives, markets are pricing in some kind of easing. The specifics keep changing as the days go by. What do they signal so far . Mark there were lots of expectations and Nothing Happened in the markets. Its almost the definition of not achieving monetary stability. Got to do something, so the expectation is you get a an in Interest Rates and get expansion of the Bond Buying Program both in volume and maybe assets. One surprise he might pull off his europe has a problem with bad debts at the banks. You can pack them up and the ecb is willing to buy them, you go a long way of freeing up the channels. The reason hes doing this is not because it is fun. It wants to generate and stimulate lending in the eurozone. If it can find a way of taking the bad loans off the banks, oft might be a good new way surprising the market and exceeding expectations. Scarlet there has been a lot of chatter around the loans. How far has the ecb been ahead of these nonperforming loans . Have negative Interest Rates, it makes it hard to generate any profit for yourself. Doing that, you hardly going to be seeking to lend to small and mediumsize enterprises, the stories that have been missing so far. You see the ecb saying weve seen the problems. We dont want to make the situation any worse. Theres also a twotier Interest Rate where investing in the impact on the bank where you have those negative rates forcing inflation back toward the 2 target. Scarlet do targeting the banks anyway get inflation going . Far off fromill its target rate if you look at the latest numbers. Only are they far off, if you look at the expectations, notfuture inflation, it is good news. Genuine feeling that it needs to do more. Use the firepower and it has less of an impact. That is why it might be the surprise he is the guy who said he would do anything to save the euro. The euro is not threatened by the clinical stock, if the economy cannot get going, the electric gets less and less keen on the euro as a project and you see that were parties are winning votes. Draghi does not want to see that political side either. Scarlet he needs all the help he can get. One analyst has posited Central Banks are targeting specific currency levels. Evidence the ecb is doing that . To stoke demand or stoke inflation . I think that is the one policy success he can point to. That has definitely helped european exports and if you do a counterfactual experiment, how the european economy be doing if the euro hadnt weekend in the dollar hadnt strengthen, you would be in a much worse place. Around theolicy world that the ecb has been one of the winners on that and it will be interesting to see draghi mentions the currency in passing that says we dont have a target rate. I think he will make an effort to talk to currency down farther. Scarlet what is the cost of doing so . If you look at euro era cyclicals that have been to keepating, it looks the euro weaker than where it has been. The biggest impact has been for savers in the eurozone. What are the consequences of moving away from zero Interest Rates is that savers are getting absolutely crushed. If i am a pension fund trying to put money away on behalf of my customer so they can retire comfortably, those negative yields are not helping me at all , so we are setting up something that is it it dangerous for the future if it cannot be on well soon. Draghi has to pull out a bazooka tomorrow morning. Scarlet thank you very much. A homebuilder falling after posting a wider loss than expected and announced it would the exiting the markets. Scarlet this is Bloomberg Markets, im scarlet fu. With go to the markets desk were julie hyman has some word about a homemaker making news. Julie the stock is going on lower in a big way, down by 12 . Even after the owner of the company said he was pleased by the start of the fiscal year. There is investor concern about liquidity for the company and that seems to have affected shares. In addition, the total revenues by 2020 will be similar to 2016 is not an that optimistic comment in the eyes of investors. The company is going to exit in minneapolis and raleigh and sans to wind down its francisco operations and as well. Were also looking at a handbag maker forecasting and earningspershare forecast matching analysts estimates. This is after Fourth Quarter comparable sales fell by less than analysts were anticipating. Gardener of all of coming out with preliminary thirdquarter earnings high above what analysts had been anticipating. Schoolpany says the thirdquarter comparable sales rising 6 on a comparable calendar basis of 4 . There have been some activist lead changes over the past couple of years and it looks like that is bearing some fruit in terms of the bottom line. And finally, a company that makes deluxe that food is doing well after coming up with earnings that beat analyst earnings. I dont have a pet. Products. R uses these people like to spend a lot of money on their pets. Scarlet lucky dogs and cats. Thank you so much. Still ahead, we will hear from veteran investor, wilbur ross, on the single most important issue on europe. Scarlet lets start with the headlines on the first word news. U. S. Special forces have captured the head of the economic state unit trying to develop chemical units, according to the associated press. As the first major success of the pentagons new policy of going after Islamic State commanders on the ground. Former republican president ial candidate Carly Fiorina says she is endorsing ted cruz. Miami,lly today in fiorina called the texas senator both a leader and reform are willing to take on the status quo in washington. Days ofornia, three global morning for betsy reagan begins today. Family and friends are gathering for a small ceremony in santa monica. Afterwards her body will be escorted to the Ronald Reagan president ial library in seamy valley. Simi valley. Fewident obama may have a more gray hairs, but physically hes in better shape than he was two years ago. The president is even five pounds lighter, 175 pounds, with a resting heartbeat of 56 beats per minute. And his cholesterol levels have falen. Fallen. However, occasionally the president still chews nicotine gum. A day news 24 hours powered by our 2400 journalists in more than 150 news bureaus around the world. Im Mark Crumpton. Scarlet, back to you. Scarlet the bull market may be celebrating its seventh anniversary, but investors are anxious about whether this can continue. On bloomberg earlier today, he addressed concerns about this date of the global state of the global market. You go around the world, theres no big engine driving the economy at 800 miles an hour. I was just in china two weeks ago, and things really are slow there. Theres no question about that. They then next order a lot of their problems because so many of the other emerging companies export to china. It really spreads around the world in a rapid way. The u. S. Is not going to grow at a rapid rate. Not. E certainly is where is the big machine to drive rapid growth . I dont see it. I think we are going to be ambling along great one monthly statistic will be good, one will be bad. What ise you get into fundamentally driving these markets, let me ask you about the technicals. We see the absentee rising in the face of out close here. Outflows here. In, and wants to get then you start to climb this wall of worry. Eventually the market get capitulates to the outflows. Markets in general have three phrases. The innovators, imitators, and the swarming incompetence. On the status that my backs have been bigger than inflows since the stocks. Buybacks have driven this bull market. The retail money is just not there. Underpinningare this market, how long can this thing lost . This can go on for a long time. What is causing the buybacks . Tremendous liquidity in corporate america. Shareholder activists are playing a role in every boardroom, whether they are really knocking on the board room door are not. People are much more conscious of not sitting on excess cash. They divide their opinion between increased dividends and increased buybacks. I wonder whether the lack of enthusiasm in the market may help the market. Exuberanceirrational , things like buybacks this is a rational decision. Theres truth to that. In china, before the big collapse in shanghai, . 80 of new brokerage accounts were opened by people with less than a high school degree. It is not sophisticated dying buying. Theres a lot of distressed assets around, particularly in the commodities sector. Do you see signs of forming a bottom in your market . Oil did hit the bottom when it jiggled around 30 a barrel. Amountod day, given the of speculation, it can go anywhere. In terms of where is the real level, i dont see it going much below 30. 30 is a painful level for a lot of folks and especially for sovereign debt. We think that as the iranian oil gets absorbed later on this year, as u. S. Shale production finally goes down some, then we will next have to deal with the excess inventories. Is probably going to be well into 2017 before you see any kind of sustained uplift in oil. I dont think it goes to 10 or 15 on a sustained basis. What are we talking about . Maybe 50, 60. After inventories have been drawn down. You get much over 60, theres a lot more that can come onstream. Of the questions, if it gets back to 50 and 60, do the shale owners come back into the marketplace and drive down prices . Everyone in the market is an eternal optimist. Wilbur ross also stuck around when the president of the Peterson Institute appeared on bloomberg this morning. The institute released a report that takes a reality check on the global economy. David began by asking adam why there is a divergence. Theres understandably huge distressed after the double financial crisis. Theresls the idea that bad news that either the official sector is missing or is hiding. People are frustrated. They are sick of seeing low results and they dont like adjusting to the new reality. Both of these are understandable, but they are misleading. Things are better than people seem to think. You, monetarym policies have distorted asset prices. The 210e of that, spread. It used to tell us about underlying economic forces. Tells you something, but its definitely less coherent and less clear than it was, whether its the two 10 years spread, or the quality spread between treasuries and Corporate Bonds, all of them have been distorted by the fact that there is such risk aversion to pile into the government on market to pile into the short end. Thats probably a good thing from a policy perspective. From a forecasting perspective, the benchmarks we used to use from spreads are much less informative. Generally theres been one big country that has driven growth throughout the world. I dont see where is that one big driving force right now. What do you see is the big engine that will keep growth going . Weve shifted from one big v8 in the old days of first china and the u. S. To now three v4s or v6s. In a sense, thats more stable. Youve got a china that my colleague is growing stronger in the service sector. Youve got a u. S. Thats got a solid consumer and residential and auto sector. Youve got a western europe thats actually not doing too bad either, although obviously migration matters. You have a bunch of smaller engines running a decent capacity. Adam, you mentioned western europe and i pulled a chart out piecevier blanchards which shows nonperforming loans. In the u. S. , we see a dramatic recovery from 2009. Opean nonperforming loans continue to rise and almost go off the chart. His not a problem is that not a problem . Interpretation question. There is clearly some bad news in europe. The way my colleague or i or a live year or olivier would put it, if the business of getting down to recognizing the nonperforming loans. Behind the curve in italy, but most of the other euro Banking Systems are doing what the u. S. Did in 2009, 2010. I would expect that curve to go up more and then move down. Withnt that interfering the evolution of quantitative and monetary easing in general . You need banks to transmit Monetary Policy to the real economy. I dont see the european banks doing that, they are trying to shrink their asset base because of regulatory issues and because of the npls they are beginning to recognize. I think thats why monetary easing is much less likely to be effective than people at home. What do you think . Its fair to raise the question of transmission. Weve got issues ongoing in europe with them being so bank dependent, unlike the u. S. Thats a structural issue for europe. In a sense you are still overstating its. We saw what the u. S. And savingsandloan crisis in the 1980s. Stateis this transitional you have to go through of getting losses recognized in the banking system, shrinking the balance sheets, but then transmission of Monetary Policy becomes stronger because its on a real basis. They may not get a huge impact over whatever mario and the ecb do this league. They will probably be ok Going Forward. Scarlet coming up, false alarm for burberry. We will explain how the speculation got started. Nasdaq the story at the is this weeks story, even this years story, volatility. Weve had the nasdaq with saw. Whipsaw. Today is bignasdaq tech, especially microsoft. Another big tech named trading higher is intel after the Company Announced it is buying an immersive sports company. They are paying 175 million dollars, saying it is the next natural step for a collaboration that began in 2013. I did speak to bloomberg chips saids it does show the companys commitment to intense computing computing. Today ore nasdaq down dragging a bit is filed tech. We have the Nasdaq Biotechnology index down for a second day in a row, down 5 over that time period. Today dropping below its 20 day moving average. On the news late yesterday, a new Medicare Pilot Program will be launched, that will change the way that Medicare Part b is reimbursed. Im Abigail Doolittle at the Nasdaq Market site. Now more Bloomberg Markets. Scarlet youre watching bloomberg. Im scarlet fu. This is your Global Business report here it everyone expects mario draghi and the ecb to pump more stimulus into the euro zone economy. There is a debate about how effective it will be. False alarm for burberry. We will explain how the speculation got started. Jack ma wants to make alibaba even bigger. Hes looking for a huge loan and need several banks to put it together. We begin with the much anticipated European Central bank meeting tomorrow. Mario draghi and Company Almost certain to inject more stimulus into the eurozone writes the only question is how big will it he. Will it be. Expectations are high that they can be even more aggressive this time, perhaps dipping into negative Interest Rates. Neville hill says he does not believe the ecb will have to go that far. Ecbs a consequence, the will probably shy from being too aggressive. We are only looking for a 10 basis point cut from him. Scarlet despite the slowing global economy, the worlds biggest clothing retailer posted its fastest Profit Growth in three years. 15 last year, boosted by online sales. The retailer said it plans on adding as many as 460 stores this year. The talk of a takeover bid for burberry turns out to have been a false alarm. Hsbc triggered speculation after buying 5 of stock last month. Hsbc cleared of the mystery by telling burberry that the purchase was for a number of clients, rather than a single investor. Did notlear why hsbc tell burberry sooner. Alibaba wants to come even bigger and is asking google banks for loans. U. S. Banks involved include citigroup, goldman sachs, j. P. Morgan chase, and morgan stanley. Time for our bloomberg quick takes, where we provide context and background on issues of interest. Today the focus is on banker bonuses. The Banking Industry we see today was built on a promise of substantial compensation for its employees. The debate over whether regulators should interfere with this practice rages on. Wall street firms adjusted to the post crisis financial morality reality by pulling back on pay. That marks the biggest decline in 4 years. Regulators play a starring role in determining how banks play pay their top traders and managers. This applies to worldwide operations at eu banks as well as local operations of global firms. Started to inflate in the 1980s after deregulate allowed commercial banks to trade to capital markets. The eat what you tell tradition meant that bankers got paid profits in line with what they generated for their firm. More risk meant potentially bigger profits and payouts. Hit. The financial crisis in the u. S. , banks that took taxpayer money to stay in business were forced to cut their bonus pools. To only substantial reform come out of the crisis was the eu bonus cap. As a result, european banks are at a disadvantage compared to their peers and new york or tokyo. The u. K. Has a vested interest in a more flexible approach so the city of london can remain a top draw for finance. That is your Global Business report. For more stories, visit bloomberg. Com or bloomberg. Com quicktake. Coming up, square. Scarlet square will be reporting its first earnings as a publicly traded company and a big focus will be on ceo jack your see. Hes also ceo of the other twitter. E cofounded, lets see what the numbers on square show. Square stock traded almost 12, not far from postipo pickup. Fairlynt towards square negative. In part, just because the mobile Payments Company isnt making money. Yet, square trades at 10 times revenue. Square gets more than 80 of its adjusted revenue from payment transactions. Overall Revenue Growth slowed almost 60 last quarter. One reason why the transaction revenue rate, it stuck to 2. 9 per 2. 95 . Revenues,ag on slowing volume growth. Most of squares growth comes from increasing the number of sellers using it service, which now stands at 2 million. Squares gadget allowed anyone with a mobile phone to accept payments. Will investors think it is hip to be square when the books are finally opened . Gil, no one is expecting stellar results from square today. But what metric will you and other analysts be looking at to determine if the company is going through growing pains, or their substantial issues . People will look for adjusted Revenue Growth to be over 50 . Then they will look at profitability to see any inclination of profitability, any inclination they will be profitable Going Forward. Other companies at this scale are already 20 positive grade there will be a view of they can sell anything beyond payments and loans. They talk about software and how that is the future of the Company Selling their merchant software. People will be looking for a sign that they are making progress in selling these kinds of products, whether payroll or inventory or any type of monitoring software. Those are the kinds of things investors will look for today. Scarlet how fast is that business growing . They have theline lending business. Its going very fast, well beyond the growth of the transaction. But the actual software peas we can all agree lending is not a Software Products. The actual Software Product is so nolan negligible they have not broken it up. Scarlet lets talk about jack dorsey. Hes been preoccupied with running twitter as well. Is his dual role as ceo of square and twitter hurting or helping square . I dont think its had an impact yet. Concern investors quite yet. If square starts to struggle, expect for that to become an issue. For now, they are still growing fast. There is still a lot of excitement about what they can do. Down,wth starts to slow expected then investors to become concerned and make this an issue. Scarlet ballistic how long does jack dorsey have to turn square around realistically how long does jack dorsey have to turn squrae around . Expect them to still have this year. If they exit 2016 still growing faster than the industry with a good trajectory for margins, i would expect the lease to be extended. Scarlet is there any opportunity for synergy between twitter and square, or is that something where there are two separate entities and never the twain shall meet . Bluebottle coffee, which is where jack stops on his way from twitter to square, is the best. Thin Tech Companies that have recently entered the Public Market have had a tough time of late. What will squares results say about the health of thin tech . Its early, but bringing on deck a lending club is important in the square context. Engines and big High Expectations are from this Small Business lending business. Look at what happened to on deck and lending club. Those started to deteriorate and when they did, there wasnt any looking back. It is a subpar lending business. Scarlet thank you very much. We have to leave it there. Scarlet welcome to Bloomberg Markets. From bloomberg World Headquarters in new york, good afternoon, im scarlet fu. Oil prices heating up with west texas intermediate heading for 40 a barrel. We will hear from the president and ceo of ge oil and gas. Gold has been a hot commodity this year, but is the fed about to kill the rally with a rate increase . A mile high board fight. A former airline heavy white is heavyweight is leading the fight for united. First, we want to head over to the markets desk, where julie hyman will set the scene for us as we enter or get closer to the ecb decision. That is in focus for investors, the fed next week. Well we make it more commentary on what is going to happen next. Stocks coming off their highs of the session. Map onlook at the bloomberg here. Youve got energy in the top spot here. Of 1. 8 . It looks like a mixed picture when you look at the balance between red and green. Doing well. Materials also participating in that commodity led rally. Oil prices are higher today in the wake of the weekly inventory support. Drop was a week over week in the size of the inventory build. There was a drawdown in some of the refined products. Thanrices now at better 3. 5 . Ive also been watching the commodity currencies. We take a look at wcrs. You can get a currency monitor. This is the one day change. Terms of performance, you have the South African rand, the brazilian real, of these commoditybased currencies doing well today as we have commodities prices on the rise. Scarlet i went to go back to the ecb for a moment there and stick with the euro. What kind of trends are we seeing there . Julie we are not seeing a trend ahead of the euro. There has been some gyration. Its only a move to the upside, not even 2 10 of 1 . There has been volatility in the euro heading into this decision, even though this time there is broad expectation that there will be more easing of some kind. Mario draghi has prized the markets before. You never know. I want to take a look at bloomberg as well. I was looking at volatility in the euro versus the pound. Both of these as compared with the u. S. Dollar. Here is the pound in yellow. We have seen a bit of an uptick recently and volatility for the euro. Its nothing like the brexit risk now being priced into the market. Scarlet even though the vote will not happen until next june. Thank you for setting the scene for us. Mark crumpton has those headlines from our news desk. Mark Hillary Clinton and Bernie Sanders will debate tonight in miami, florida, a day after senator sanders surprise win in the michigan primary. Next, primaries on tuesday including florida, illinois, and ohio. The Republican National committee has filed two lawsuits, seeking emails from as secretary time of state. The first lawsuit seeks electronic records. The second lawsuit is for communications between state department officials. Test. S. Government will alternative payment plans to try to lower costs for an expensive medicare program. It has to do with doctors administering highpriced drugs for cancer and other conditions. Medicare says the Current System financially penalizes stocks ares doctors. The United Nations says substantive syrian peace talks will begin within days. A ceasefire that began february 27 has reduced violence, although there has been some fighting. Global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world trade im Mark Crumpton. Scarlet, back to you. Scarlet oil prices have driven tectonic shifts in the global economy. What does it mean for the companies that produce oil drilling and exploration equipment . Here is the president and ceo of ge oil and gas, with the european close team this morning. We had to be prepared for this slow down its hard to be prepared for this slowdown. One of the things we say is we dont control the price of oil. On theute and we control aspects of outcomes for our customers and make sure that we return to our shareholders as well. If we have taken the necessary actions, we focus on reinvestment back into our products, standardize asian, making sure we can help during this time. Did you see an immediate slump or stagnation in order to you doing and a son a ration of equipment . Journalingseen that has come down significantly. We have the benefit of a backlog we have been working through. , seeing how we can make sure some projects go forward. The name of the game right now is to drive productivity for our customers by standardizination. We announced a deal a couple of weeks ago with Diamond Offshore to help them as well and ourselves. Those are some of the novel approaches where we are entering into a Contractual Service agreement as well as financing to make sure we can remain competitive in the industry. Has oil bottomed . What is your outlook for prices this year or next . I wish i had a crystal ball, just like you do. Let the pundits focus on the price of oil and where it is going. Where we tend to focus on is what our customers are telling us and staying responsive to them. Clearly the price is volatile and we have to stay focused on the productivity and cost factors. We do believe in the macro trend, and the macro trend says that energy will be required by the increasing population. Weve got to make sure we are ready. Production is starting to come down. We are making sure we are ready when he comes back. Is iran a customer . I gather you took a trip to iran, the first u. S. Oil executive to do so after sanctions ended. Is their business to be had in iran for ge oil and gas . I went there on an exploratory visit as Nuclear Sanctions came off. We wanted to understand what is the situation in iran. We are going through an analysis of seeing how we abide by the u. S. Rules and play in iran. Clearly its a big market from an oil and gas perspective. We want to understand as a business how we can be ready for that opportunity. Do you need to be ready for m a . There must be some good opportunities out there. Yes. Have a diversified portfolio, so we have a lot of capital we can allocate into a number of different areas. At this moment in time oil and gas is one area were looking at, and we are going to be opportunistic. That fitss something in well into our portfolio, we will take a look. We have amassed over the last 20 years very competitive. Coming up in the next 20 minutes of Bloomberg Markets, as gold futures fall for a Third Straight day, we will look at how the Metals Sector is faring. As is Economic Growth stronger than valuations imply . Activist investors are waging a campaign against united continental. Scarlet time for the Bloomberg Business flash. Chipotle Mexican Grill temporary closing a massachusetts restaurant after four employees got sick. The company says there are no reports of customers falling ill. Chipotle has been reeling since outbreaks of e. Coli and norovirus. Holdings could bring 300 million to 700 million. It is the moment of truth after todays closing bell. Be looking for data on small and mediumsize businesses and whether square can boost market share amidst competition from others in the mobile payment space. Square is up 25 since its ipo in november. And that is the Bloomberg News flash. Lets head to our markets desk. Lets start with gold, which is having its Third Straight session of losses. That is the longest losing streak in almost 2 months. Stocks dropped yesterday. Look here. We are looking at a bullion falling for the first time in 19 sessions. That was the longest run of those inflows going back to 2010. In terms of what copper is doing today, we are watching that as well. We are seeing that up today by half of 1 . Lets start by those more focused on gold. These two have been on winning streaks as well. We have had a huge snapback this year after falling last year. The stock of a by 5 . Up by 5 . Iarlet for more on gold, went to bring in bloombergs metals or porter. Julie showed us that chart about the gold etf and how it has fallen for the first time in 19 days. What was driving that reawakening in the etf to begin with . The gold price is the driver. It is there have been huge questions about growth concern in china. Our own stock markets have had a lot of trouble. The question is, where do we go . The idea for gold as a haven has come back strongly this year. There is no real sign inflation is about to run away. Were still trying to get to that 2 target. It is used as a hedge against turmoil in the markets. If you are not seeing the stock markets rising, you have to ask yourself where will i get some yield. You can go to gold. Its not going to necessarily go to zero at some point. It seems like people might be allocating out of stocks in certain ways. Those people are in the gold market right now. Theres been quite a bit of chatter. Telling rs are telling us, we are taking a look at gold. If you look at stocks i know there has been turmoil in equities. The goal line is the country world index. In inverse. Ey move what you have seen is as of late, they have both been moving higher. Gold is used as a hedge against volatility. What does it tell you when you have stocks, a risky asset, and gold, a safe haven, at the same time . In this case what you might be seeing is equities moving higher, gold moving higher, in anticipation of more stimulus coming from Central Banks. Theres a question as to whether the fed will move again it in raising Interest Rates. Obviously it uses an inflation hedge. Its become a hedge against weakening. Obviously gold typically does move inverse to the dollar itself. Its all of these things factored in, and ultimately you look at what do you really think is the driver. Right now we are seeing the weakness in stocks in the u. S. You are looking at this comparison between equities and g maybe its more shorttermold. Gold. Maybe its more shortterm. Talk about the link between Something Like iron ore and gold. Is there one . You could say they are both commodities and so the link might be there. 19 is a huge move but its also important to remember its a thinly traded market. The bigger look was, what about copper and iron ore . We saw copper fell on the day that iron ore moved higher. Gold a little bit less of a connection. People looking at iron or maybe not linking those two. Scarlet thank you for joining us. Stocks rising today. We get perspective from one strategist. Scarlet this is Bloomberg Markets. Im scarlet fu. Allopean central bank that stimulus is making european stocks look a little more attractive. Up 2 10 of 1 . Does the attractiveness of european stocks come at the expense of the u. S. . Lets go to carol massar. This is a bloomberg advantage. We went to bring in the chief strategist at pinkett Asset Management and they have 180 5 billion in assets under management. Ecb, European Central bank, this is in focus. What are you anticipating it will get from mario draghi tomorrow and what it might mean for investors . Given what they did last time in december, it was like disappointment. They will try to do more than probably expected. They will cut Interest Rates to negative, which i do not think is needed. They will expand the Asset Purchase Program and there will be some surprise may be in terms of purchasing Corporate Bonds or Something Like that. Cory the asset values for european equities certainly suggests theres a lot of trouble in the water, and that the Economic Performance is maybe even going to be worse than what we have seen. When we look at retail sales, we are improving the scene in asset production in germany. Carol germany is a highlight. Europeou look in overall, there is general improvement. We should not forget how bad the situation was a year ago. Industrial production is picking up. Its not that bad. For 2 target. Carol part of the reason you like specifically, you do like europe and you do like japan. That is where you would be allocating assets at this point. We like europe because we see more potential for earnings. Carol its a value play. Also we expect growth in europe to get better. Its a combination of factors. The most important thing, europe is lagging in the u. S. Lagging behind the u. S. Cory as it relates to japan, where do you see that . We still believe that abenomics will succeed. When you look on the corporate sector, earnings are still decent. Theres a combination of factors. Well. K japan will do talkingory and i were earlier about a story this week that talked about the negative rates in japan. You were not seeing bank loans being generated, which is what they were hoping to get out of it. You see a lot of individuals and folks saving more money. The intent of a negative rates was not playing out. The idea of negative rates pushes down the value of the currency more than anything else. We know that negative rates are negative for the banking sector. Is it the best thing for the Central Banks to do . It still gives a pretty strong signal to everybody that the central bank is willing to push the value of the currency down. , japan, evenia mexico all of these have tremendous ties to china and the pace of Economic Growth and china will dictate what is going to happen to those countries and those economies. What do you expect out of china versus what the predictions are . When you look at china, chinas growth is roughly 6. 75 , down from 14 in 2007. Its a down trend for china. Cory do you believe those numbers . We dont actually expect deterioration in economic momentum. Thats true for a lot of emerging markets. We see that the valuation is good and we see improvement in terms of Economic Growth. Carol he talked about what bank of japan is doing. Talk about the potential for currency war that we keep seeing everyone kind of doing things to their currency. Efforteed a coordinated to get the Central Banks to stop doing this . That would be fantastic, but its difficult. Even in europe we disagree on what to do. It would be difficult to do Something Like this. You need to see a much, much worse kind of outlook for Economic Growth. Think we can expect this to happen in the next few months. Carol your thoughts on the u. S. Market at this point . The u. S. Market probably new highs in the next few months. After that it will be more difficult. Carol thank you so much. Chief strategist, asset manager joining us on bloomberg radio. Scarlet, back to you. Still ahead on Bloomberg Markets, activist their fight ong continental. This is Bloomberg Markets. Lets start with the headlines. Mark crumpton has those at our news desk. Senator Bernie Sanders heads into tonights democratic debate in miami, florida with a burst of momentum following his upset win over Hillary Clinton in tuesdays michigan primary. Strengthenedhas his hold on an improbable march to the republican president ial nomination. Bureaurg washington achieve megan murphy joins me with the latest. The polls leading up to yesterdays michigan primary have mrs. Clinton with a doubledigit lead over senator sanders. What happens . Worst polling the disaster we have seen in more than two decades. She had a 25 point lead in many polls we saw. His turnout was strong among youth. He got a great push back among white workingclass voters. There was some feeling that maybe there was a sense of not going out for her that they thought she would win it, that apathy among voters, and i think that hurt her as well. I dont see she will make the same mistake again. If they were a little complacent about michigan, they will not be like that Going Forward. Ofk i know this was a burst momentum for senator sanders. Is it something he can capitalize on Going Forward . Ohio, we are looking at illinois. In florida she has a big advantage. She will look to really maximize her advantage among africanamerican voters that she does well with. What she needs to do is take this step back and look at it as a chance to refocus her message, refocus her organization on her ground game of getting her turnout. Shedoes really well when has a defeat and when her back is against the wall, she will be one to come back from this. Mark is there anything that can stop donald trump at this moment . It seems like no matter what he does or says, voters dont care. Megan i dont know if it is voters dont care, if they actually like what he is saying. And we look at the polls the exit polling from a state like michigan, they view donald trump as the person best positioned to Carry Forward the economy. They see lack of political correctness, he says what he feels and he can get things done. The reason why no establishment candidate has been able to consolidate support behind them is because he has proven very popular with voters. That is a simple fact. The establishment may not want to realize it, but this is the reality going into florida and ohio. Mark our Washington Bureau chief, fresh off of being through the middle of the night to wait for the hawaii returns. Your time. Ks for global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world trade two activist investors have waged a campaign against the airliner. Named, former Continental Airlines ceo who has been credited with turning around continental after bankruptcy. Uniteds current ceo returns from medical leave after undergoing a heart transplant. Our reporter joins us from atlanta. This was a surprise, wasnt it . It was. I dont know that anyone expected gordon the soon to come back. United has had a lot of turmoil and chaos recently. They ousted their last ceo six months ago, then they bring in a. Ew ceo in october then he has a heart attack and a heart transplant, and now this. Apparently investors were upset and did not think the company was doing the things they needed to do to turn around. They saw that thought that gordon with his history could shake things up a bit. Scarlet what goals do these activists hope to accomplish . They have not said exactly what they want gordon to accomplish. They have really been more talking about the problems that united has had rather than exactly what they want to see Going Forward. What they have set about united in the past is that the company has had kind of a languishing stock price. It is not performed as well as american. Theyve had turmoil where the board of directors seems to have sat tight where they had this scandal involving their last ceo. As board being seen complacent, entrenched and not prone to acting as aggressively. These new investors want to shake things up. They want some new blood on the board and they think that will help it turn around quicker. Scarlet to what extent will this be a distraction . Thats the big question, what everyone is asking. I dont sense that the new investors really want to upset me knows munoz. The sense is they may be behind munoz, they dont like what the board has been doing. Keep up the momentum he has with this distraction . He certainly has rallied the troops and he seems to be a personable person. Some different labor groups have come out recently and supported the moves he has been making. Thats the big question, can he keep the momentum going that he started . Scarlet Michael Sasso will be chronicling thats when we get more data on it. While the united board situation highlights a clamor for activism to turn that company around, there is new evidence that activist campaigns overall have slowed down genetically. Activist agitation has reached its slowest pace in 6 years. Lets bring in some experts. A professor at columbia. Niversitys school of busines , well. Lders is here as why are we seeing such a slowdown in activist investing this year . Theres probably three major reasons. They are getting stronger headwinds. All, these hedge funds are much larger and theres a lot more of them. 213ast count, there was activists out there. Now they have become activists. You coulds never go after a general electric, which they have, and win. The conversations there are much more genteel. Its not exactly a threat to oust the board. Has required more elephant hunting. The second issue is the politics of it. The first phase of the activist cycle is easy. Pay a bigger dividend. Give me a board seat. The you start getting into next phase where it is shut that division down, move this reduction to mexico, and your investors in many cases are institutional. In the united case, you look at california the teachers pension fund. Scarlet perhaps the low hanging fruit has been picked. When you look at the numbers, you are with Bloomberg Intelligence and you have been doing the number crunching on this. What sectors are more susceptible to activist campaigns and others . Fabio told us about how there teelare some gen campaigns. One of the things with technology, as disruption brings new players to the market, at the same time it gives activists and opening when investors fall behind. More of the companies that activists have been targeting have had poor governorates, and in particular for voting right structures, and specifically around their entrenched boards which make battles more difficult for activist investors Going Forward. Torlet are we going to get a point where activist investors would need to change their pace . The two and 20 really is something. You can cover it around and say the large part of this quote unquote is because you are facing these headwinds. The other reality, a lot of them dont hedge the positions at all. What youve got is a correlation. Hugeyou are all along, a slab of your returns is the market. When everyone says what a genius, he or she was up 20 if the market was up 18 , you should be paying 20 of the upside. The activist index has a higher correlation in the market then fidelity magellan fund. Issue. A real they have underperformed in down and up markets. At some point it makes it hard to make the case from a portfolio perspective. Withet we mentioned this Michael Sasso earlier when we were talking about united. Are activist campaigns distractions for companies . What kind of operational improvements are being made . Theres no doubt it is distraction. Management has two response. Activists are bringing good points to the table. That is something that the ceo that theock a point ceo of blackrock made. He still is knowledge that 39 of the time, blackrock voted with activist proposals. Activists are bringing new ideas to the table, recommending good ideas many other times. Nextet as we enter this stage of activist campaigns, what will it look like . You wille seeing be seeing more people moving to europe. Blackrock has done a full on webpage about a company in hong kong that was doing some really silly things. Even larry fink has gone activist. You will see more of these occasional activists. Larry fink is a highly reluctant activist. Moreharder and its entrenched over there. That is the next frontier. China and asia is where they are headed next. These Family Companies dont realize, you are actually publicly traded. Theres a new sheriff in town. Scarlet thank you for joining us. We have more Bloomberg Markets coming up after this. Scarlet it is time for the Bloomberg Business flash. Struggling Drugmaker Valeant Pharmaceuticals increasing the size of its board and adding three independent directors. Has defended valeant shares. The New York Stock Exchange is adding up financing so it can bid on a london stock exchange. If Intercontinental Exchange makes an offer, that could set off a bidding war. A Record Number of americans will take advantage of Lower Airline fares to travel this spring. Airlines forp america says 140 Million People will fly in march and april. That is 3 higher from a year ago. That is the Bloomberg Business flash. Lets head to the markets, where julie hyman has been checking out the latest. Julie the company will be holding a meeting with investors on march 15. Ng, it should rise on comments around the investors. Commentary perhaps on ad rates should help the stock. For companies from ubs to sell, yelp and groupon. Larger competitors start to focus more on the local ad market. In the case of yelp, ubs saying they are skeptical on a turnaround for the company. In the case of groupon, they are looking at google, facebook, and amazon. Groupon seeing a tumble in todays session. This is getting an upgrade over Piper Jaffray to overweight from neutral. The analysts theyre saying the company will be successful in transitioning to the out of service model. Analysts saying that will have been because the security environment is growing more complex and his company has best in class intelligence gathering capability. Shares of less than 2 . I want to end on chevron. It is the underlying reason for the upgrade that really is driving stock upward. Promised tong it defend its quarterly dividend, and so that is one of the reasons why we are seeing a big increase in the stock. Scarlet thank you so much. Julie hyman with the latest on and stock move straight coming up, a bold call on the eurozone ahead of the ecb meeting tomorrow. Neville hill explains. Scarlet this is Bloomberg Markets, im scarlet fu. A recession in europe could destroy the eurozone. That raises the stakes for the European Central bank when it meets tomorrow with its policy decision. Neville talked about what factored into his recession call. Politics is one fault line that another recession would build up. The other is the Financial Sector. Scarlet we will get there in a moment. I want to ask about the broader backdrop here. You look at a euro area cyclical indicator. This is a case of europes perhaps catching down with weaknesses outside of the eurozone. What does that mean for europe . Does the sun keep going down . Cyclical momentum will continue to weekend. Europe had outperformed over the last year or so, if you look at the pmis and other indicators relative to those. Prettyowdown looks to be as a consequence, it is likely to continue for at least a few more months. It does for the euro zone recovery at a bit of a risk in the sense of having seen a long economic which momentum was strengthening, it is now starting to deteriorate. Who is to blame for the week growth in the eurozone . Is it the ecb not doing enough . Something about physical matters, heads of state and not doing enough to boost things on the fiscal side . If you want a Silver Bullet to transform the economic i putk in the eurozone, satisfactory economic recovery into something that looks more selfsustaining. Im one who diminishes those tail risks i referred to earlier. In some sense, the weakness in demand is still persistently pervasive across the eurozone. It is manifesting and continued high levels of unemployment, nonperforming loans. Talked about banks being another major risk to the economic backdrop great how mindful are banks . There has been commentary about the negative Interest Rates hurting them. Its better to ask what they might do to help the banks. For me, thats probably the area i am most worried about. It is actually vital that that continues. The stress we have seen in the Financial Sector in the last couple of months puts that genuinely at risk. Consequence of markets being worried about negative Interest Rates. The ecb will probably shy from being too aggressive. We are looking for a 10 basis point cut from them. One of the things they can help, besides delivering credit easing potentially through purchases of Investment Grade corporate credit, or a further bold provision of liquidity to the banking sector. Scarlet that was the chief eurozone economist. For more, i want to bring in joe weisenthal. As we look ahead to the ecb meeting, i feel that the expectations have changed. People were expecting a lot and now they are saying and 10 basis point cut. Joe especially given how negative the sentiment is towards negative rates, it felt like this might be a more powerful tool. People do not seem to be sure whether that is good or whether it has the desired effect. Given the weakness we have seen and banks, bank credit and bank more targeteding towards them might be the avenue that the ecb needs. Scarlet perhaps it might be more effective in getting the economy to grow and inflation to get to that 2 target. Going the opposite direction, if you were to look isa chart of core cpi, that the divergence. Divergence could not be more clear when you do that. Scarlet there are some headlines about how the ecb is going to scrutinize brexit risks. Looking atb starts it in terms of material risk for 2016, i wonder to what extent that will way into its policy decision. Joe i dont think anyone is that confident that they know what is going to happen. Bee people think it would kind of bad. Some people think it would be good. Is studyinge ecb it. Something like this, a major economy leaving this free trade area, is there any good president to know how i dont think anyone has a clear idea. Rlet mark does the boa know what it will be . Presumably it would put things on hold longer. Who really knows . Scarlet we will be speaking with michael pettit. He teaches at peking university right now. In china. A professor he has a very interesting angle on the situation economically in china, talking about how its all balance sheets, and any sort of move around the edges to try to reform the economy is going to be completely useless if there isnt a fundamental change. That should be a fascinating conversation. Scarlet sounds like he is advocating shortterm pain and a lot of it. Mark theres not going to be any easy fix. Its going to be harder than that. Scarlet joe weisenthal, thank you. As we head to the next hour, a quick check of Financial Markets out before the ecb comes with its policy decision tomorrow morning. You have the s p, tao, and nasdaq rising. The dow industrial adding 32 points. Stocks leadinggy the way, up 1. 7 . Argue some of the defensive industries are declining. The it comes to currencies, euro strengthening as well, gaining versus the dollar and versus the yen. On the next hour of said thatmarkets, he brazil is not just in a recession, its in a depression. Depression. David it is 2 00 p. M. In new york, 7 00 p. M. In london, 3 00 a. M. In hong kong. Tracy welcome to Bloomberg Markets. David from bloombergs World Headquarters in new york, good afternoon. I am david gura. Tracy and i am tracy alloway. Are calls for u. S. Recession overdone . One of the bestperforming bond managers of this decade tells us the bond managers he talked to says there is nothing to suggest it is added david warning signs of potential weaknesses for Hillary Clinton. Tracy a few weeks ago he said brazil was a mess, and now investors are piling in good we will hear from goldmans head of latin american economics on whether the country is looking at an outright depression. David first lets go to the markets desk, or julie hyman has the latest