Earnings. Lets go to bonnie. Bonnie onetime benefit earnings came in at 116. Sales are good. David saying customers move to Outdoor Furniture earlier in the year. Home depot took advantage of that. Samestore sales are up 6. 1 . The stock is up in free market trading. We are waiting for topline amounts. Home depot raising guidance for 2015. Tom 6. 1 comp samestore sales better than nominal gdp. Vonnie we have the top line, 20. 9 billion. A nice break. Tom walmart at 7 00 a. M. Brendan we should look at big ticket sales. Improving household appliance demand. That will change revenue at home depot. Conseils at 6. 1 . There had been whisper that sales were going to be out. Tom what is a whisper number like . Brendan terminal has the whisper number in scare quotes. Vonnie the government is optimistic the bailout funds are within reach. Creditors not sure. The grease finance minister said the sides are almost there greece finance minister said the sides are almost there. Could it be a matter of 24 hours . I would say it is about a week. Vonnie creditors want to see more action. Until that happens, they will not release any more bailout funds. The controversy over Hillary Clintons emails will spill over to the Election Year. The state department proposes releasing emails in january. That came in response to a request. For the First Time Since 1960 britains inflation rate has fallen below zero. Energy prices depress the cost of living. Consumer prices have fallen. With it so far below the 2 target, the bank of england is under pressure to raise Interest Rates. European central bank to increase bond buying this month and next. It launched the Quantitative Easing Program to boost inflation in the eurozone. Apple plans to make a television set. They are working on an apple tv settop box and related services. Apple has been in talks to provide webbased television service. Shares rose more than 1 . Carl icahn says the shares are worth 90 more than where they closed. Nhl playoffs Tyler Johnson scored a hat trick. That ties the Eastern Conference Finals at one game each. The rangers committed seven penalties. That led to six tampa bay power plays. Tom tampa bay with a shorthanded goal. Thank you. The rangers go down in flames. Brendan 6 brendan 2 62, those are Vladimir Putin numbers. We are going to spend some time on building permits. 9 30, tjx reveals results. Tom 8 30 on housing starts. Looking forward to that. Futures are up six. Moving on to the Second Screen the greek bond down one point in the last hour. 22. 7 . I want to get to brian belsky. Nominal gdp in the united states. This is where we were. This is when you felt good. 6 nominal gdp. Down 34 on our animal spirit right now. That does not mean anything for equities, which go higher. We saw what home depot retail america acts better. You have to be in the market to enjoy the move. Brian belsky with us when he is not looking at the minnesota vikings. I have home depot with a fiveyear dividend growth. Up to seven point 3 billion. That is the little story that makes up for a big market. Brian is a story you and i have been talking about on the radio and television with respect to Corporate America overpromising and under delivering. In terms of putting cash to work , that is a key thing people are missing. For years we talked about this rotation. People got bored with it. It has not happened. These companies, the brand Name Companies they are providing income for investors longerterm. Tom i want to fold this into tom news. Job owns the euro lower. Talk about rates. Do Central Banks get in the way of optimism . Does janet yellen get in the way of your equity optimism . Brian not from a longer perspective. You have to provide more perspective for investors. There are two buckets of growth. It is not emerging and developed. It is volatile and stable growth. With these notions of what is happening in europe and japan, that is volatile growth. Canada is providing consistent growth as well. As an asset, that is where you want to think in terms of managing your portfolio. Brendan you talk about the Great American companies. That is the story of the Great American consumer. We are still feeling burned. We are scared. We cannot stop feeling scared. Brian we run a mutual fund that focuses on brand Name Companies and we have done well so far this year. Both names we want. Corporate america continues. If you walk down main street in lincoln, nebraska people are still scared. They are not believing yet. We have seen Monetary Policy but no fiscal policy. Tom i want to go back to home depot. Do you want to make 13. 4 per year . That is brian belskis world. That is big money. Brendan it makes sense when you look back and see it has continued to rise. I cannot stop being scared. Fiscal policy is not happening. We see Monetary Policy, but there is no since we have gotten it together and we can make policy in this country. Brian the combination will be what the next bull market is. We have been clear on that. 2015 will be a year of volatility. 2016 will be a year of transition. 17 18 19, a new regime in washington, a new way of thinking. Brendan you think something will happen with the new administration . Brian yes. Brendan we keep waiting for something to break. Brian they all run in cycles. We have reverted to one side and now we will refer to the other. We will revert to more moderation. Tom lets talk about rate structure. Brendan the twitter question of the day retail walmart numbers. Can walmart compete with amazon . Tom i have an opinion, i am not going to give it. Brendan tom often has opinions. Tweet us. Tom good morning. Brendan greeley with me. Our top headlines now. Vonnie about 170 members of rival motorcycle grain water cycle gangs have been charged. They are accused of engaging in organized crime. Bail is set at 1 million each. Waco police are on alert in case other rival gangs come to retaliate. A coffee chain is teaming up with spotify. Customers will have access to playlist created by starbucks baristas. A driver needed surgery after his car crashed during practice for this sundays indianapolis 500. He will be ok. It is the fourth frightening crash in a week at the race. They tweaked power rolls to make time trials safer. Tom you wonder when cds go away. Lets look at some of the things we are looking forward to. Right now, the ecb out with news. Real news rates move. Brendan greeley will touch on that with francine. A great chart for you on your trade deficit. We prepare for walmart earnings later. Home depot out earlier. Walmart as a proxy for americas retail animal spirit. Brendan yields on the 10 year are up. College macro textbook this is bad for equities. The s p 500 does not seem to have taken college macro. Brian harvard on the hill. You say context on Interest Rates matters more than the level. Brian rates are low for a reason. Tom touched on the first block, we have been seeing unprecedented slow economic growth. That is why rates are low. We have forgotten the equation of investing. Economy improves, Interest Rates go up. That is good. We have reared an entire generation that inks higher rates are bad and lower rates mean good. It is the opposite. That is why 2015 will be a year of volatility. The fed has to act because things are getting better. Look at the numbers. We think it will happen. There will be volatility in the market. Tom the critical strategy, two year 10 year, 30 year bonds. What paper does your world care about . They go farther out than two year. Brian we focus with respect to the correlation of gdp to 10 year treasury. In the old days we looked at the 30 year. How quaint. 30 year paper is way too long. Tom the 10 year yield is not Janet Yellens province. Brian yield curves have been doing strange things for years. You have to default the fundamentals and focus on companies right now. Textbooks and Economic Data looks at what was, not what is. That is where people are going to be trapped the next few years. Brendan you cannot say simple s p 500 index. You have broken this down. Brian at the end of the day there is going to be some rotation into take areas and areas that are extended over the volatility that is in the fundamental perspective when the fed acts. Industrials from these levels historically, they do quite well. The business of industrial is our business. If business is improving Interest Rates will go up. The s p 500 has underperformed. Industrials are an exact market performer. You have to pick the best positions from a fundamental position. You can have rates in bond yields go up. Equities can and should work. Tom brian belski with us. We have gone through the first 18 minutes of the show without mentioning the minnesota vikings. Hall of fame game. Pittsburghsteelers. We are joined by mr. Heitzman about twitter and the other joys of Silicon Valley. Rick heitzmann always interesting. This is bloomberg surveillance. Tom good morning. Bloomberg surveillance. Lets do a morning must read. Doing better than walmart. Matt levine with a piercing assay linking mr. Icahn with apple. He likes this, that, and the other thing. Wall street estimates it will have 68 new gazillion dollars. Carl icahn wants the cash. There is a lot of other apples out there. Apple gets depressed. Brian this is about the redistribution of cash. Corporate america has done an awesome job rebuilding the coffers of cash. A lot of companies are doing a great job. We think as this turns into buy back stock, Free Cash Flow yields continue to come up. Tom what is a Free Cash Flow yield . Brian it is the amount of cash you are actually yielding tom divided by the income statement. Brian you want to look at how they are operating the cash. As a cash flow continues to go up, that is the key thing. At the end of the day, business wants to generate cash. Brendan good project would be to build a calculator to tell how much carl icahn thinks apples work. Look at the current price of the stock, double it, print that. Why do we care what carl icahn thinks . Brian he is a great investor. Apple is a microcosm for the stock market. It is a name everyone continues to doubt. Stock continues to churn higher. It is like the stock market. Brendan is it a good proxy for the market or just the best story we have now . Brian it is the combination. Everybody wants to doubt it. There is going to be other apples because of how much cash there is out there. Brendan brian belski says there will be other apples. We are looking for them. We call them unicorns. They pop up rarely. We moved to europe. We will tell you how comments are moving markets today. This is bloomberg surveillance. We are streaming on your tablet phone, and the bloomberg. Com. Good morning. Tom good morning. Bloomberg surveillance p co. Lets get to our top headlines. Bloomberg surveillance. Lets get to our top headlines. Vonnie lenders have got to sell from their position on greeces debt. There is no one in our government. No one. Our government will sign an agreement that will not the debt. Vonnie greece has made called progress, but they are not there yet. They are hoping to reach an agreement later this week. The state department wants to release thousands of pages of Hillary Clintons emails. It will not happen until after they are reviewed. That is a response to a request by medium. Controversy arrested when it was disclosed. Private emails were used for state department. A bullet did not hit the windshield of the amtrak train before it derailed. Fbi agents performed forensic work. They have not ruled out that Something Else hit the train. Four passengers have filed suit against amtrak. Regulators want to know if cars are being fixed fast enough. A hearing will happen in july. We have concerns. There will be a chance to have a hearing where we will collect information diversely from the public including chrysler. It will not be a press release. We will be looking at evidence to see whether or not they are meeting their obligations. Vonnie the recall rate for the company is better than the industry average. In pro football, they are trying to resolve differences. The patriots are engaged in talks over the deflategate football controversy. Tom brady has already appealed his fourgame suspension. Brendan we are going to london for deflategate analysis. Race could get to a deal within a week. The ecb is going to increase the pace of its quantitative easing. The german 10 year is down eight bits today. Francine it is not that they do not speak, they speak too much. They are buying more bonds because of a summer low. The question is, why would you be frontloading things. I spoke to a former policy member in the u k. Is there less liquidity in the summer . Maybe. This is an elegant way of the other countries. Brendan when you say negative event, we are talking about greece. Francine if we were to call it a more negative event and qe is more than it has been in the past, it would make sense. Tom is the leading authority trying to get out in front of bill gross . Just to let the markets know who is in charge . Is that all that happens is morning . Francine maybe. Two years ago, mario draghi was not mincing words when he said make no mistake, there is not liquidity. The official line is because of the summer wall. Summer lull. Brendan i notice amazing news out of the u. K. This morning. I am speaking of mark carney saying he is going to put a visual artist on the pound. That is what caused the pound to swoon today. Francine i have Princess Diana on a fake 10 pound note. It is all about deflation. We had Joseph Stiglitz and he was saying if we have deflation, the u. K. Is not as strong. This is not a bad thing. This has to do with oil prices. I asked whether he was worried about the productivity puzzle and whether this would alleviate households. This is what he said. Prices are going to be going up. Median incomes, income in the middle has been going down in many countries. You see it in the labor market. Wages are not where they were a few years ago. We have not recovered from the 2008 crisis. Brendan we have not recovered from what happened. Tom for him to make a statement is a big deal. The crisis is over. In europe, it is not. Brendan coming up, we talked about trade and how it comes to imports and exports. We are looking over the history of the trade gap. Tom good morning. We go to the best single chart. Brendan was walmart to buy was walmart borrowing to buy abroad . We look at the u. S. Trade balance. Several different ways of looking at this. We started in the late 90s. It plunges. You can describe it as the walmart economy. Running up a trade deficit you see the spike in 2008. This is possibly the great deleveraging. Some improvement in the trade deficit. We have a dip down. When you look at this, what do you see . Brian walmart is talking about building more in america. Remember during that period of the 1990s, aside from the spike in the 2000s, Interest Rates were going down. It is only going to improve. As north america remains a viable economy that will continue to improve. Tom it goes back to the twin deficit range from a couple of years ago. The s p 500 is up 9. 5 per year. There were eight reasons not to invest. Brendan it was well before the collapse of 2008. I did not know this dynamic until we ran this chart. This is when the dollar depreciates. Brian we have seen the dollar has become more meaningful. People are believing again especially from a currency standpoint. It is more to do with weakness then believability in the dollar. Stronger dollar, stronger u. S. Economy. Brendan when you say look better, we are going to continue the deleveraging. Brian and looks like noise. I grew up in the business at a place called William Oneil and company. It is a pretty bullish chart. You have a secondary low. Tom the major idea, this is the wheelhouse of what you do and female capital. In capital. Brian considering that america has the best Multinational Companies in the world. We think it is going to improve. Tom what does it mean that there are no canadian teams in the final four . It is a scandal. It is sad. I thought the auto was the ottowas or coming along fine. It is an outrage. Brendan the control room told me i got owned by brian belski. I tried to shut down the hockey talk and i wish shut down. Quote of the day from brian belski. Pretty bullish chart. We are going to look at photos. Number three london, air bnb. A massive stroke of pr. Selling a house down the river thames. I do not know why you would want to spend a night floating down the thames. Londoners can rent their homes for up to 90 days. Tom airbnb is getting traction. They are getting better. Brendan they cannot just flout regulations. They have to work with them. Number two, and china, a restaurant uses two robot waiters. They slide along magnetic tracks to reach customers. Ted suggests maybe we could rereplace me and tom on the desk with little pain can with little pink and little blue. I think this feels like a stun and we will look back and think of this as the beginning of the end. President obama receives his own twitter account. That account has 1. 6 million followers, but only has three tweets, including one to build including one to bill clinton. What does he say . We do not have it. The handle comes with the house. Do you know in the one do you know anyone interested in flo tus. Tom how many twitters does he have . Brendan 1. 6 million followers and three tweets. Walmart reports results in 10 minutes. They won back shoppers. We will discuss that next for the twitter question of the day. Amazon is rolling out a delivery service. Tweet us. This is bloomberg surveillance. Tom good morning. Lets get to top headlines. Vonnie at least 58 people dead after a mud sliding colombia. Officials do not know how many more are missing. The avalanche struck a small Mountain Town yesterday. Betterthanexpected earnings last quarter. Grand theft auto added to profits. Bacon is a big bargain. Wholesale prices down from a year ago. The u. S. Will produce more pork than beef. That is leaving they are sold by a Burger Company in california. Tom i hope you started from the beginning. Tom that is what i have done. Ewaldevolve. I think it is a firstperson shooter game. I love that part of the game. Walmart out at 7 00 a. M. This is important. A profile of Marc Andreessen. We will look at the social media shell game, challenging, to say the least, for twitter. One of the joys of bloomberg surveillance. One dollar shopping and the International Lower of luxury. Howard devitt of its howard, are our closets full . Howard you see almost everyone miss numbers. Tom which you predicted. Full disclosure. Howard Retail Business is tough. We have no gdp growth. Tom are our closets full . Howard we are over retail. We are overdone. Tom are they like the airlines . They go out of business . Howard we are going to close a Record Number of malls. Vacancies will go up. More chains are going bankrupt. More stores are closing. It happens that we have a chart that explains the dynamic. Brendan we buy stuff, we fill up our closets. The Financial Condition of most of americans are left out of this whole thing. Howard half of america does not have money. Tom i want to look at home depot and walmart. Walmart does not get it up. They breakout. That is fine. Now what for walmart . What are we going to see . Howard they will make less this quarter than last year. Walmart has challenges and i do not think they will be will to complete will be able to compete. Tom what Square Footage works . Howard to bigbox are less relevant than they used to be. You cannot fix real estate. They have it everywhere. It is a huge problem. They are the biggest spenders in information technology. Where are they . They did about as much as business as staples online. It is not good. Brendan can walmart compete with amazon . Howard there is no way. You need a culture of technology. Walmart is plodding along. Tom how the ui data to the pixie dust of bentonville . How do you adjust to the pixie dust of bentonville . Howard they were great innovators. They changed the business. Walmart is stuck in the mud. If you look at every area of a tradein, half of the business is food. Can they compete with kroger . No. Can they compete with sprouts . No. They cannot compete with trader joes, aldi. That is half of their business. Can they compete with walgreens and cvs . No. Can they compete with any of the good guys in their key categories . No. Brendan you talk about competing with amazon. Culture matters. Howard amazon has spent billions, tens of billions on i. T. Walmarts return on investment has gone down every year for years. Tom headlines on walmart for you and revenue changes. People want to know, what are the sales going to be like . There is the third week of may, what is happening . Will there be record sales . Howard no walmart tom i do not mean walmart. I need everyone else. Howard you have to watch the number. We are not the only thing we have going up is the debt. We are good on that. We are in a tricky position. Tom lets come back with Howard Davidowitz. Ecb front and center. A nice move. Stay with us on walmart. Bloomberg surveillance. Impending summer doldrums. Stocks surge across the board. A retail signals a better 2015. Twitter and linkedin, lets talk about that, it is a social media show game. Is it over . Good morning, everyone, this is bloomberg surveillance. I am tom keene in new york. Joining me Brendan Greeley. Greece is not in the news. Brendan we had this one little beat from Yanis Varoufakis that said it would happen sound like he has a gamble that he is losing but wants to have a hot hand. Francine lacqua says statements from the ecb are getting out in front of the possibility. Tom review this again for americans who are like, oh, i do not really care. It is a series of payments to the imf. Brendan essentially it is hard to explain, but greece borrowed money from the imf to pay back the imf, which is bad news. The bank a running out ofs liquidity. Tom we are waiting for walmart. Lets go to vonnie quinn. Vonnie greek leaders believe a bailout agreement is near, but european creditors are not so sure. Late last night, the greek finance minister said the two sides are close to a deal. Mr. Varoufakis i think we are very close. Of course until the deal is done, no one ever knows when the deal could be done. Reporter could it be a matter of 24 hours . Mr. For there are caucus mr. Varoufakis lets say about a week. Vonnie the controversy over Hillary Clintons emails could drag into the election. And walmart, First Quarter earnings of a share, 1. 03. The estimates for adjusted earnings is 5. We are waiting for more headlines. Tom as warmer comes out across the bloomberg terminal, very different from the clarity of home depot as well. We will get the headlines out here slowly. What i am interested, vonnie are the comp sales, home depot numbers of 6. 1 , very un walmartlike. Vonnie a little gain, 114 8 billion. 114. 8 billion. Tom we will break and what that cant fail number as well. Brendan joining us now is Olivia Sterns. Do you remember Olivia Sterns . Welcome back to surveillance. What do you see in these earnings . Olivia we were expecting a modest increase in sales and a decrease in profits. What were seeing is a mix. Walmart has beaten earnings estimates 11 out of the last 12 quarters, you can make that 13. A lot of macro tailwinds for walmart that we were expecting to show up. We are all wondering when everybody is doing with the gas money. We think they are saving. The labor market is doing well 5. 5 unemployment, jobless claims that a low. We thought the customer was going to spend the money they are saving on gas. That is clearly not picking up. Richard check over at steeple said the macro picture is in walmarts favor. Brendan we have Howard Davidowitz with us. The walmart consumer was the one that was supposed to be buyin, but that is not what happened. Howard i agree with olivia. I expected the drop in gas prices to really help the walmart customer. Obviously is not happening. Here is my summation we doubled the debt and doubled the number of people in poverty. Doubled. That is another 30 million. The walmart customer is a lot poorer. That is a big problem because they are a Family Dollar and Dollar General and aldi food. Tom the key headline is the caucus sales, one point whatever percent. Olivia one point what . Tom i will have to look again, but when it is under 2 , the company must react. What does a giant company like i do when they are not performing at gdp . Howard if i were walmart and half my business was food, i would be living in the kroger store. Olivia [laughs] howard i would be living in trader joes stores, i would be living in all the guys that are eating my lunch. If i were in the drugstore business, they are not doing that. They will not be best in class anywhere. Tom vonnie there is the key headline, looking forward to that 1. 1 , an estimate of 1. 5 . Olivia they are just not getting it done. If you look at retail sales, they were a big disappointment following four falling four of the last five months. Ralph that is no surprise. Perhaps that is no surprise. 50 of sales for walmart are from grocery. That is a problem. The head of u. S. For walmart at tresses the media call at 8 30 a. M. Howard when you look at the freshness of the produce, it is not rocket science. Olivia that said, the head of u. S. For walmart has said that what he is trying to do right now, 2015 will be the year of investing in walmart. We thought earnings were going to decelerate this year. If you think about the flashing cash, first of all, they will be paying employees more money. They said that is the reason they cut their earnings forecast, are investing in stores, trying to improve the experience, the supply chain the groceries, and they are trying to improve online. Brendan real quick, Howard Davidowitz better wages, better experience. Howard now way. The no way. The only reason pressure from washington, and number two, they cannot compete in the labor market for all of those parttime people working crazy hours. Brendan vonnie, do you want to jump in here . Vonnie shares of walmart are falling, they have fallen seven out of 12 previous quarters after announcing earnings, but the top line and bottom line the number that tom quoted was First Quarter walmart u. S. Stores, 1. 1 , below the 1. 5 estimate. You mention a lot of the issues the three of you, i. T. Continuing to pressure earnings. Tom Howard Davidowitz, what does this mean for walmart and its direct competitors . I am thinking Kohls Department stores and other names list beat america that are not getting better. They are not waltzing down fifth avenue or madison avenue like you do. What to do the Business People due to respond to this subpart gdp . Howard if i was running walmart tom would you shut down stores . Howard definitely you close a stores, and the most every retailer is, including macys. That is the mark of a good retailer. The mark of a great retailer is one who gets rid of the losers every year. Tom does walmart have a Terry Lundgren . Howard no and it would be better if they did. The last guy they had was good was glass who was after sam walton. Brendan is there a cultural problem as well . I go back to the chart of the day. They own this part of the economy, as the trade deficit expand, do they know how to handle this part of the economy as a strength . Howard the answer is absolutely not. Look at what they have on i. T. And look at the result. That is why the return on investment consistently is down. That is the key metric for walmart. Why did their 1 trillion remodeling effort fail . Olivia it was spent on crating a bigger supersize store. Now they are retooling. Say no people want to go to a smaller store. The threat from the Dollar Stores is fiercer than ever. Howard they got those big stores. Theyve been working 10 years olivia what if they can turn those big stores into Distribution Centers to fuel the ecommerce business, and that is the way they rival amazon. Com . Howard not going to happen. Olivia [laughs] brendan earningspershare took a ding on currency. Does walmart to be a multinational cap abroad . Howard they have done an unbelievably great job in mexico. If you ask yourself what country can you make another walmart in there is only 1 china. Tom olivia, what does the sell side say about walmart . What does the street say this giants has to do . Olivia i would go to my know from edward jones, weakening, they are investing and spending more on employees, they are investing in ecommerce and vesting in smaller format stores, they are cutting prices because remember that is supposed to be the reason people come to walmart, but that will cost them. Brendan all these things you say theyre doing, Howard Davidowitz says they do not know how to do it. Howard and when it comes to prices, lowest prices every day, b. S. Tom howard ending with b. S. That means bloomberg surveillance. Tom good morning, everyone. Bloomberg surveillance. Brendan greeley and tom keene with you. Lets switch gears. Brendan i definitely recommend you read this already if you have not already. A profile in the new yorker about marc and and recent Marc Andreessen i love. We have Rick Heitzmann onset with us. You understand this culture so well. What struck me in the piece in the new yorker is there is income inequality among vcs, but the long tail of vcs are not making these returns. Rick it is hard. You are able to say if you are a toptier vc, you have been successful before, you have the brand out there, the customers want to be associated with howard wants to be associated with so there is definitely a gravity to being a toptier vc so to break into that is a lot of work. Tom the critical question is given new terminal rates, is the irr now at a lower rate is a different than what was five years or 10 years ago . Rick not ours, but the threshold for our limited partners is. Tom making 15 is not going to happen anymore. Rick it is not going to happen for everybody, but there are more people trying to take a chance to get there. Tom by definition, then it diminishes returns. I think it is fascinating. Brendan the returns we see are coming from out west. Can they culturally do what they need to do to make these returns . Rick there is a shift back north. New york is the fastest grower after Silicon Valley, so you are seeing the rise of new york to a certain next and, boston is tapering off, and Silicon Valley will always be Silicon Valley. You see banks move out there. Tom tom Rick Heitzmann with us for the hour. How about the twitter question of the day . This is brilliant. Love this question can walmart hope to compete with amazon . In our last hour, Howard Davidowitz said absolutely no way walmart can compete with amazon. We need your opinion. Discuss out on twitter bsurveillance. Futures up 4. Benoit coeure of the ecb making news this morning. Stay with us. Bloomberg surveillance. Tom good morning, everyone. Bloomberg surveillance. Lets get to top headlines. Here is veronica. Vonnie cities and towns in texas a new state law overrides local authorities with oil and gas issues will stop Governor Greg Abbott signed a bill saying he was protecting private Property Rights in the heavy hands of local regulations. This will be the best year yet. Figures compiled by bloomberg indicate production could grow this year by nearly 1 3. The price of solar sails have been cells have been plunging. A driver needed surgery after a car crash at indianapolis 500. He will be ok. It is the fourth serious crash in a week at the brickyard. Race officials did change the time trials to make them safer. Those are the headlines, guys. Tom vonnie quinn, thank you. Lets look forward on bloomberg surveillance this morning, it is crash in on trade. Senator warren will speak with our peter cook later today. Higher rates and vc investing we touched on that. We will revisit it. So important the returns that limited partners equal sub if you have been sleeping, euro plummets, this is front and center. Euro weaker german yield abruptly reverses. Lets turn back to the sea, linkedin down 26 from its peak, twitter a big sale at 25 lower and do not even mentioned zynga, Silicon Valleys definition of a dead cat. Is it too late to introduce partners and potential shareholders . Should they require shares with interest with pinterest . Rick heitzmann believes in pinterest. We need to make some news here. Rick a couple of years away definitely in the mediumterm i think as we announced last year, we are generating revenue, we are showing the Unit Economics that a lot of people did not do until tom what did you learn from the other Silicon Valley types that seem to be a bit lost . Rick i think we have to prove that economics work on a user basis. You can acquire users, grow domestically and internationally, and the users create a tight community that is engaged. Revenue per user increases. Brendan we thought we would talk retail, we ended up talking pinterest. Ultimately the amount of brands and desire to actually create consumables, meaning out for the deck ring trade but through Consumer Retail has increased accidentally therefore the ability to decorate ones house through ones own taste and using pinterest to express oneself has never been there before. Brendan rick, all right, new designers, pinterest in the middle of the consumer. Rick pinterest is capturing that intent. The difference in the display advertising, which is the top of the final, h the funnel, hey i want to be aware that i can buy the couch, to google where i can actually buy it, pinterest captures the attention that hey, i want my living up to look like this couch looks great, i want to buy that couch. Brendan does pinterest have the backend if someone is looking at certain fixtures, that means they are redecorating a bathroom . Rick they do because i will create a board called newhouse, and the sub board will be master bathroom, a bunch of pictures of sinks. I know as you are going through that buying process, that logic of the same thing as the economic value creation. Brendan the goal is be a facebook for the physical space around you. Rick i would say inspire for its ration around you, so it could be taking a trip, planning a wedding, building a house. Tom the rap is it is a grill site, a midwest site. How do you make pinterest hit . Rick the Fastest Growing part of pinterest is international. You are seeing a lot of indonesia, second world tom it is great at collating home stuff. Rick right. And you are seeing more males do slightly different things. The best dunks in the nba this year, people are creating boards around that, creating different types of interest that may be around. Brendan what are the demographics . You say there are more men. What are the demographics right now . What percent . Rick call it about 2 3, 1 3. Tom is facebook so dominant that you have in the founding business and that we have to deal with zuckerberg . Rick no not at all. Originally, the on boarding process a lot of people use facebook to connect. They can find out tom cares about bowties, therefore you do not have a cold start. As soon as you have critical mass, you are independent. Brendan to be clear toms pinterest page would simply be pictures of the bar the carlyle hotel. Tom no. Rick it would probably be a beautiful page. Tom when you look at this, a lot of our viewers and listeners with suggest that the bloom is off and also much the Rick Heitzmann world, but social media. I am interested in that. Rick facebook still is growing still driving real possibility, and it captures about 20 of all mobile internet users. Tom are you optimistic twitter can write itself can right itself . Rick it is running to the problem of having a core group of users, but how do you make a product assessable for people who are not on it all the time . Brendan we will be coming back to Silicon Valley this hour. Coming up next, president obama and senator Elizabeth Warrens fight is heating up for stop peter cook will speak with Elizabeth Warren today. Bloomberg surveillance. Tom good morning, everyone. Bloomberg surveillance. Lets go right to the bloomberg terminal. Here is the president ial fouryear moving average of our animal spirits, nominal gdp. I just arbitrarily circled two peaks here. 15 years ago, 10 years ago crisis. We are down. We are lower like this. Brendan talked to Rick Heitzmann, the idea of a new lower terminal rates, a new lower terminal rate of return on everything. Brendan this is important because we do not in a political sense follow gdp. Inflation plus gdp is not part of the way the Political Class is taught, so when we do this it makes sense, but when you talk to washington, they just think of the topline number gdp alone. Tom are you managing first mark capital Firstmark Capital in a more subdued animals during or do you have an optimism when you get back to this excitement we saw and another time and place . Rick i think it is so hard to think about macro trends, so we just think about hey and 10 companies that are so destructive, they can grow regardless of economic environment. Brendan this is fascinating, really. We get so many people, we are listening to mark carney talking with the bank of england, and then you just say people have got to make good stuff, we want to invest in stuff that is good. Rick google grew every month month over month for the first 100 months through the recession of 2000, 2001 2002, in that environment. If you are that disruptive, you are going to tom how thick is the pageant of someone pitching to you, you say yes, send me your pitch, they write a fourpage powerpoint . Rick it is usually 10 flights to 15 flights, and there are a lot of pictures, too. Brendan how do you interrupt their patter . Rick i do not care much about interrupting their patter come i want to hear what they have to say, and if i am interested enough, then you say hey is this a team i interested in, is this a market that is big, ok. What happens when google does this . What happens when zuckerberg says, i will destroy this . Tom again, all of this within the new lower rate regime that so many are presuming. Lets get to our top headlines with vonnie quinn. Vonnie thanks so much, tom. Greece says the bailout may only be a week away. Lenders must use their position on greece debt. Mr. Varoufakis there is nowhere in our government where we haver solve the issue of our debt where we have solved the issue of our debt, nowhere. Vonnie greece is hoping for agreement later this week at an eu summit. Hillary clintons email controversy is going to be an Election Year issue. The state department is supposing to release some of her 50,000page email record next january. Miss clinton used her personal account for official business while to a secretary of state. Investigators say the amtrak train that derail in philadelphia was not hit by bullets, but the possibility that Something Else at the train before it crossed has not been ruled out. The fbi tested a crack in the engines windshield. Four passengers hurt in the incident are suing amtrak. Regulators want to know whether Fiat Chrysler is fixing safety defects quickly enough. They say recall Completion Rates are low. A hearing will happen in july. We clearly have concerns, and there could be a chance happily now to have a hearing probably now where we could have a hearing from the Public Safety advocates, including chrysler, and it will not be a press release, we will be looking at evidence to factually determine whether or not they are meeting their obligations. Vonnie Fiat Chrysler says its Completion Rate for recalls is above the industry average. Those are the top headlines, tom and brendan. Tom vonnie, thank you so much. It little more on walmart, down about 3 right now. This is a stunning headline, and it shows the state of the nation. Sams club comps gasoline fuel, up a minimal amount, versus the estimate, which was a fairly good, not great. That is a telling of the First Quarter, brendan, stretching out into april and may. Brendan is that bad news for america, or is that bad news for bigbox stores . It used to be that those two were one and the same. Tom if this were jpmorgan or home depot, the headlines would come up with walmart, it is a grip process this morning. There we are with walmart, down about 3 right now. Lets do a data check right here, this of course of the bloomberg terminal. Futures, better than good, up 5. Records of seen far and wide yesterday. Twoyear europe, a weaker euro, as the ecb jawbones. Nymex crude, 59 a barrel. Onto the Second Screen if we could this morning. I look at euroyen 1. 3441. And greece is messy this morning. Brendan this is bloomberg surveillance. I am Brendan Greeley with tom keene. Senator Elizabeth Warren and other antitrade democrats have not given up the fight to block the fast track of their own president s trade bill. Yesterday a critic warned in congress about what trade can do. What is not debatable is some industries are going to get hurt, Sun Communities will be hollowed out, some worker jobs will be lost. We know that. Brendan our chief washington correspondent. Guest planning to speak with senator Elizabeth Warren today in an interview. He joins us now from our washington bureau. Peter, senator warren released a bill about trade bills passed. What did we learn . Peter what she said in this report, and it was compiled by her staff, is listen to the track record for these free trade of the precooked trade agreements when it comes to labor enforcement just doing good, she calls it a decade of failure, and it is one more attempt by senator warren to undermine not only the fasttrack trade bill on the floor, but the trade agreements looming out in the future. You have the pacific rim deal, the european deal. It means she has not given up the fight. She is willing to take on the president and do whatever it takes. Brendan is there a sense that she and the president has a way out of this . Peter the president has a way out, by getting more than 60 votes on this bill in the senate and passing in the house, but there is no clear roadmap for the two of them to reconcile their differences over trade. They are just too great. It has gotten personal. That is one thing i want to get to senator warren, to what extent she is disappointed in her president that they have the gap on this particular issue. They agree on a whole lot, but they disagree on this, and it is not clear they will be able to reconcile that. Tom mr. Cook, the litmus paper for any senators and their ability to raise money, can senator warren raise money for other senators . Peter absolutely, and she has already proven that she can. She did it in the last election. Shes arguably the most potent fundraiser right now within the Democratic Party party other than perhaps the president himself and hillary clinton. That is why so many people are talking about her as a National Force now and that is why her words on trade matter, her words on Financial Regulation still matter. Tom i cannot convey, Brendan Greeley, that abrupt change it is for senator warren from 5, 6 years ago. Brendan now being a leading force in american politics. Peter, what are her red lines, meaning, it is not just, lets shoot this bill down, but what provisions issue demanding is she demanding that would allow her to sign . Peter i do not think anything would allow her to sign, but she has that two amendments with colleagues in the senate that she was to make changes to this bill, and one of them would be you cannot have a fasttrack bill that would in any way change u. S. Financial regulatory rules. She does not want this as an opportunity to roll back doddfrank. She says that is a threat although the president disagrees. The other thing is the investor state dispute settlement , but to senator warren, it may be the most poisonous hill within this fasttrack bill, and basically she says would give Carte Blanche to companies and bypass the court system. She is certainly not a fan of that. Brendan you get a sense there is a difference between what Sherrod Brown is saying and what senator warren is saying where she is worried about the finance industry, and he is worried about workers. Peter i think they are both on the same page. You talk to them personally, and they are adamantly opposed. They think at the end of the day, this hurts american workers. Theyre not convinced this is the most progressive trade deal in history, and even if it is, it is not good enough by their standards. They think this is a setback for u. S. Workers. The president remains just as convinced that this will advance u. S. Workers, that the ship has sailed in terms of u. S. Trade policy, and the u. S. Needs to be on board. Tom peter cook, thank you so much in washington. Of course, he will speak with senator warren later today on bloomberg television. Look for that. Our route on twitter tears me to shreds. Rick heitzmann with me. She said yeah, youre right, but so what . She is right. [laughter] i did not mean any offense. Rick it is a lot of growth for males. Tom barbara, i will see you on the seventh floor in hr here. [laughter] it really for me. Brendan all right, our twitter quest of the day, we asked can walmart hope to compete with amazon . Let us know bsurveillance. Howard davidowitz is no way, not good enough. Tom good morning, everyone. Tom keene and Brendan Greeley with you. Brendan it is another morning of icahnapple activism, he is valuing the company at 240 billion dollars. Market makers anchor Erik Schatzker will be speaking with dan ives gives the company a month at over 1 trillion. I want to call your attention to noted Silicon Valley investor Rick Heitzmann of Firstmark Capital. I want to show you his watch. That is not an apple watch. Rick no it isnt. I cannot get one. Im still waiting for my delivery. Brendan why do we have to listen to carl icahn . Eirik i am not sure we do have to listen to carl icahn. He is a smart guy, but he appears to be wrong on one thing, which is the two markets that he protected yesterday apple would come to dominate our the television on the one hand and the car on the other hand. He is not protecting that apple will dominate the Automotive Market until 2020, but he says that television will be a big deal for apple in 2015, and what happened since then . We learned overnight from the wall street journal that apple quietly scrapped plans for a television, not the apple tv we know now, the hockey puckhighest device, but a Television Last year. Brendan let me call it a distinct and without a difference. Atv is just a screen. It is a device that fits into the tv that will allow them to dominate. I am willing to buy that even if they abandoned the screen, just doing the device makes a difference. Am i right . Rick there is no margin any screen. Erik right. Rick own all the software the media feeds come of the pieces, and then you on tv. Erik well, we understand from the same reporting that apple was looking into sensors, for example, that would have allowed the television to recognize who you are and to interact with the television in a way that you cannot, at least with the box that we know now. That box is not a smart box, it is a relatively dumb box. It would have been a much smarter device. Apple made the decision presumably a wise decision that either the technology was not ready or could not create the kind of revolutionary experience that the user requires for apple to have a hit product. Rick they have sensors that can be in your phone, your apple watch and then the display is just a display. Your tv just becomes a display, no different than your watch is. Erik the additional point to make your is that dan eyes, who is going to be on Market Makers at 8 35, is not even talking about television. He is talking about china. The unrecognized opportunities on the watch, the television the automobile, it is china with the total Addressable Market of 150 billion for apple. Brendan all of these drugs you do not know about are just gravy. Twitter question today, we asked can walmart hope to compete with amazon . Tweet us bsurveillance. This is bloomberg surveillance. Good morning. Tom good morning, everyone. Bloomberg surveillance. Home depot, not bad earnings, walmart, ouch. Lets get to top headlines. Here is vonnie quinn. Vonnie Dzhokhar Tsarnaev will be allowed to speak when he is formally sentenced to death. A judge in boston is due to schedule that hearing today. The jury voted in favor of executing the marathon bomber. The bird flu could cost of the u. S. 1 billion. Federal Officials Say it is affecting 15 states. Chicken and turkey farms in iowa and minnesota are hardest hit. Those states have lost nearly 30 million birds. And bacon is a big bargain. Wholesale prices are down from about 2 3 from a year ago. These names the miami losing track, tom and brendan the se names, i am losing track, tom and brendan. Tom thank you, bonnie. The euro front and center, bond yields on the move as well in germany, particularly walmart. Followup off the earnings call, they have got some challenges. They need to go out and find some customers units to sell to. Fixed income etfs, we see demand surge. Some of the dynamics of a challenged fix income market. It is a new ipo or initial public offering, a private world of Venture Capital and the new world of finance. An ipto is hinged on cheap money with the vc firms up to their eyeballs and investable cash. Rick heitzmann of Firstmark Capital, how did you get into this . You were at georgetown quaffing beers in the tombs, how did you did you wake up one day in your dormroom, and go the see, it is my future . Rick it was before that. I graduated georgetown, became a baker for a couple of years, then i started playing with the internet, went back to business school, in the mid1990s, the internet started to work. I thought that was neat. I thought it could be onto something. Tom now is not 1999, in part of it is the Interest Rates. I do not know what the riskfree rate is, do you . Rick no. Tom the economists covered this week, is the great distortion. It is still out there. Brendan we talked in the break about Pension Funds as you point out, they have got two problems, one as they do not put enough money in, now they are not taking enough out. Rick that is true. The highest quality names in ventures will continue to get funding, continue to preach returns, and then there is the effect as people are putting more money in the venture trying to throw the hail mary to create an alpha tom our retirement plans are doing a duck flutie . E a doug flutie . Vonnie is looking at us like doug who . Vonnie [laughs] i am, you are right. Tom it was a hail mary pass. Brendan boston college, early 1990s. Mvonnie one of the largest conferences, and continue now is gathering. Brendan where is that new market . Stockholm, london, berlin rg iii are here. Which of those would you go to if you are young person looking to start . Rick berlin. London is a little established the culture in berlin of getting kicked off is really fascinating. It is one of the big hugs out there that is underappreciated. Tom lets go back to the Pension Funds. Everybody wants to get into the Rick Heitzmann world. We will not make 5 , 6 , 7 yes they want to do better. Is a myth, a fiction . Rick it is. If you look at the returns come as you pointed out, the bottom level distribution, the guys have been doing this a long time, have established companies that capture over 100 of the returns. Tom doing better than good . Rick so coyle, benchmark, ourselves have captured 100 of the return. If you are trying to chase, you are not going to make it up. Brendan you cannot build up a vc culture from scratch. Ironically, there is no such thing as a start of vc . Rick there are. Brendan how did they catch up with you . Rick we are relatively new, we started about seven years ago. He worked hard you get a little lucky, you take on some risk. Brendan so this movement, this bimodal distribution rick there is movement, largely by startups. If you settle in and proving that you are not as leader, you will not get there. But there are always startups that emerge that is done great things. Tom google do they have their own internal venturecapital competing with the same players or talking to everyday . Rick they dupe. They deploy more money than anybody. They deploy over 1 billion a year so we have been doing this for seven years, and data point that in a year. Tom and again it goes back to too much money driving down internal rates. Rick anytime corporate get into any form of investment, it usually drives the returns down. Tom what do the pensions do . Make it a single digit business . Rick i think they say hey if i cannot get into one of the top guys i will not over allocate. I think they do it for a little bit, realize it is not working. Tom fascinating. Rick iceman with us on all things venturecapital. Vonnie, outward up question of the day. Rick heitzmann with us on all things venturecapital. Vonnie, our twitter question of the day. Vonnie everyone in the Retail Business is looking at smaller real estate to compete with amazon. Tom so sure get down. Vonnie second answer walmart cannot compete with amazon without admitting defeat. Tom yeah, but that goes back, brendan, to your question about walmart and coulter. And culture. Brendan culture matters. If you have a lot of physical presence in the physical world and you can distribute faster than amazon can, but youve got a culture that can take advantage of that. Rick walmart was a destination store. You go there, you get every thing from gas to cucumbers, and everyone went there. Now no one wants to go anywhere. Everybody wants everything on demand. Vonnie i remember sears and roebucks. Both will survive. A number of exclamation points in that one. Tom what i find fascinating is where is amazon in five years . They are doing so many things right. Vonnie except for the margin. Tom that is right, the margin may not be there, but in defense, they are managing that title. What does the vc world think of a jeff bezos . Rick they think he is a genius. Tom he is in his own world. Rick what he has done with his Amazon Web Services, he created out of his head. Brendan they accidentally discover they had a billiondollar business based on their ability to serve. Vonnie would it be possible for them to have a future . Rick Amazon Web Services they completely changed the sea forever. Could. Tom what have we got . Brendan moving on to agenda. Im looking at greece, below the fault of the ft, here we go, syriza hard left faction, we are now at the level of the endgame where internal politics within greece has to matter. We will have to start learning who these other people are, not just the leaders of syriza but the people who want to bring it out the noncompromising fringe. Vonnie i have been looking at the euro all day, im seeing a headline behind you, tom, jpmorgan buying 17 billion in bonds. Tom that is a new number. Vonnie that is the reason Benoit Coeure tom vonnie quinn always glued to the headlines. What am i looking at . Iraq. Yes it is international relations. We have covered this ever so slightly. We will be covering this more. This is not pretty. David lynchs article out it bloomberg business, i cannot say enough about it. There are piercing quotes from smart, experienced people who say this should become, as brendan said, above the fold. That is coming i would watch moving forward. David lynch, fabulous story out on bloomberg on the islamic state. That is it appeared we will continue, Market Makers on bloomberg, bloomberg surveillance on radio with key Economic Data. Stay with us through the morning. This is bloomberg. Live, from bloomberg headquarters in new york, this is Market Makers, with Erik Schatzker and stephanie ruhle. Stephanie good morning. You are watching Market Makers. Erik front load euro area bond purchases. That news has jolted markets. Stephanie walmart has a lousy quarter. Erik apple tv what are apples plans . What does carl icahn have to stay about it . Stephanie he likes them. He said from the beginning he likes tim cook. He is saying with all of the money, why dont you buy stock that. While we get you up to speed with the headlines. Clicks greece greeces finance minister telling us the nation