The nasdaq finish lower, but we still remain stuck in this range. Joe nasdaq declining because of those tech stock earnings. Google and microsoft getting hit. Scarlet it has been an adjusting week to sift through, especially as they get ready for the central bank meetings. Joe next week should be more interesting from a macro perspective. Scarlet lets go into our computers for a deep dive. You are taking a look at caterpillar. Joe why do we care about caterpillar earnings . I have shows exactly why you care about caterpillar. Caterpillar going back to 2006, the yellow line, versus the green line, msci emerging markets index. Look how well that lines up. Things werewarning not going to be that great. Of miningr does a lot and construction stuff. Caterpillar is beautiful. It is all encompass there. Scarlet it holds pretty well. As much as a bellwether caterpillar is, technology is the most influential sector in the u. S. Stock market, and there has been annexed it is out of technology. Especially out of the etf. Is the moneynel flowing into and out of the etf. That is signaling significant outflows since the middle of last year. The share price is white, and techpider is an purple, stocks have outperformed since 2013, but investors have been pulling money out of it a lot of the Software Companies are pulling money out. A lot of the Software Companies have yet to report. Joe that shows how there is this growing trend. People are losing interest in the space, at least based on that etf. Scarlet you can see all these charts and more on twitter. We want to take you to a live , a sheriff deputy speaking on the death of prince. Prince passed away earlier this week. If you want to see this, you can watch this on the Bloomberg Live go. I want to bring in our first guest, the cofounder and cio of cambria investments. Joe thank you for joining us on the show. Signs,re a lot of beleaguered markets coming back, a rebound in emerging markets, commodities, and people talking about the golden cross in the dow, the 50 day average moving above the 200 day average. Would you think, are we headed higher . Pretty broad. You have a wide range, right here and we talked about this my favorite setup is when value and momentum combine, and that has not been the case for the last five years, where cheap stuff goes down and gets pummeled, particularly foreign equities. U. S. Stocks have had great moments, the trend was great, a dip in january, but march had this updraft. Markets,these foreign a lot of commodities, a lot of beatendown stuff that has been down 70 90 , its starting to get huge bounces at the beginning of this year. Scarlet the last two weeks, it feels like people have turned bullish on the emerging markets. Far into that rotation into emerging markets do you think we are right now . Music to my ears. Ive been waiting to hear this forever. We came on the show in december and talked about a funded study. Fund study. We said when a market is down four years in a row, what happens the following year . We just updated that this past week and said what happens to these Asset Classes, sectors, industries, after you invest in these multiple down years in a row. To emerginging markets and commodities, both down three years in a row, and smaller Asset Classes like gold miners, coal. What happens when they are down five years in a row . It turns out the returns are huge, like a rubber band stretching, the further down, the more potential these markets have. Even though brazil is up 30 , gold miners up 70 , coal up 40 , we think that is just the beginning. Joe gold miners, bloomberg had our etftoday from analyst pointing out what an extraordinary year the goldmining etfs have had. You say there is more to go with golden the minors . Ers . You can have down three years, which only happens 3 of the time, down four years in a row, only 1 of the time. Down five years in a row, which is happen to coal miners, about. 5 . When they do, the average returns for the next two years or 100 , so that is a solid double. Even though we have good returns, this is just the beginning of the move as the trend comes and people start piling in. Trends aree impressive, but i wonder to what extent can we expect a reversion to the mean when you have policies that are so unprecedented. Can you apply the same strategy on the same timeline as in the past when we are in uncharted territory . We have measured this insect is an countries back to the in sectors and countries back to the 1990s. You have low valuations, and so as we wrote in an article, here are the global valuations, huge , brazil thes cheapest market, russia close second, and you see a lot of the same things happen. 70 , 90 , multiple years in a row, nobody wants them, and that is really when they are truly hated that you can get these massive returns. Scarlet i think a lot of people have pointed out, especially when it comes to financials in the u. S. , value can become a trap. Especially when the economic fundamentals or industry fundamentals dont look to be changing any time soon. You distinguish between something that is value and the value trap, something that looks cheap and then just gets cheaper and cheaper year after year and your money is gone . The challenge of value, that things can always get cheaper, so this hit a lot of people hard in 2008 and 2009, they started catching the proverbial falling knife. Value and momentum, where you have a cheap market, but you wait until it starts to go up. You talk about a golden cross, a perfectly reasonable way to invest, any other trend indicator, 200 Day Moving Average, so you wait until something is cheap and wait on the sidelines until it moves up, and we are seeing that this year. Hopefully it continues, we dont know that. Joe it seems the conversations about markets has been oil, and oil getting destroyed for the last year and a half. Since february, we have seen an extraordinary rally. Brent crudeng at breaking above its 200 Day Moving Average for the First Time Since 2014. Had you gauge Something Like oil . Do the sam do the same momentum rules apply . You are looking appear trends, and a lot of people get this wrong, using a trend following approach on one market doesnt really increase returns in general, and we have done this across dozens of markets. What it does is reduce the volatility and drawdown. When you have the opportunity to combine a number of markets, what a lot of managed future ability, but also the to sit in cash and bonds, you end up with an entire return. Oil, trendike following works great on, a lot of the commodity markets. All of a sudden you was see a lot of these markets slowly in aming out and find life number of different commodity complexes. Do you apply these valuation models to the global bond market . Is universally hated. We are getting into uncharted territory, a situation where there is low, if not negative yields. When you say bonds, people get disgusted. Lawns is in five countries with an average yield of 40 basis points. A number of these countries are negative. However, it often surprises bonds is theoreign largest asset class in the world. Allocate tont to the market cap weighted indexes, because that puts you in that super low yielding bucket. What you want is a value approach. There is research that says if higher yield the countries, so if you get the top third of foreign highyield countries, you end up with a yield of 7 . You had about two Percentage Points a year. We are at a steep spread right now. We think that is a great opportunity. Launched the only sovereign highyield bond etf. We think it is a great spot now. You talked about brazil, and now brazil has had this rally. Are there any other countries that are starting to come into view and look interesting . , we have been saying for a while that the cheap countries, the bottom 25 of the world, is super cheap. The cheapest since 2008, all the way back to the early 1980s. A lot of those countries are in europe, emerging europe, eastern europe. Many of those have not responded yet. Another fund that owns the cheapest countries in the world, and this year is having great returns because a lot of these countries are starting to rebound, but they are massively tree. The average p e ratio for these countries for the longterm is nine versus 15 for the world, 24 in the u. S. I think it is a great spot. Thank you for joining us today. Up, rees and its creditors making progress on resolving disagreements that have hobbled a countrys bailout program. Mark i am mark crumpton. First word news. The local sheriff of ca rver county is holding a press availability, saying there were no obvious signs of trauma on princes body, and it was not a suicide. An autopsy was completed earlier today. It could be days or weeks before official results are known. In other news, president obama says it is up to british voters to decide of the country remains part of the european union. In a joint press conference, the president made clear that he is more than comfortable entering the debate advancing the case for britain staying in the eu. Im not fixing any votes are casting a vote myself. I am offering an opinion. , everybody should want more information, not less. President discussed syria, saying he has long been skeptical of president Vladimir Putins actions in the country. The Ohio AttorneyGenerals Office says and eight the body has been found at a fourth crime scene in the state. Earlier, they had said seven people were found dead. All of the victims are believed to be members of the same family. Believe the victims are five adults and two children. There is no active shooter and no arrests have been made. A big political endorsement in the business world, the ceo of Continental Resources is endorsing donald trump for president. The wall street journal citing an email quoting him saying that donald trump is unstoppable , and he called on the gop to help him. Is the that donald trump presumptive choice for republicans after having won a majority of primaries. A lawyer representing the staffer who set up Hillary Clintons email server says he will not testify before congress. Two Senate Committees every new the request to request him about after news broke that the Justice Department had offered him immunity. Global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. I am mark crumpton. Joe whatd you miss . A possible light at the end of the tunnel for greece. Area and greece signaled a deal may be within reach, but it is also setting a hurdle that the greek government might not be able to clear. What how far apart are greece and its creditors from getting a deal . Todayswe got from meeting of the eurozone finance ministers is a clear idea about the path towards the completion of this first review of greeces third bailout, and basically what greece was told today is that if it is close to an agreement with its creditors on the first set of measures it has the past, the fiscal measures amounting to around 3 of gdp or , but thatlion euros it needs to have on standby a set of contingent measures worth 2 of gdp in case the measures that have been agreed dont pay and it needs a target of 3. 5 surplus by 2018. Scarlet last july debt relief was promised. Is there any movement on that at all . These extra measures, the 2 eurosp, 3. 6 billion yea has to go through parliament now, a big ask for the government which only has a three seat majority and his party struggling to pass the original 3 of gdp measure. The second point is that he doesnt have anything clear on debt relief to balance it out. Any deal on debt relief would apply when needed, and this was and what the greek government wanted to hear. They wanted to hear the fund pushing for the europeans to do something much more proactive. A razor thinioned majority and parliament. Showed know the polling there is support for new democracy and the latest polls. How much Political Capital if any those Alexis Tsipras have right now . What he has is a government that has gone through two elections last year, referendum, and is still hanging together. His party broke up last year, and the people who remained on board did so knowing that it would have to implement this third bailout. Is that he has lost to mps already from the governing coalition, so they are down to 153 out of the 300, and the package on the table is not oft the 5. 4 billion euros austerity measures, but the extra set of contingent measures they have to pass. That is a problem for him. The difference with last year is that the government seem more determined to remain in power what ever the costs. The feeling is that they are going to try to get this through parliament. The question is whether a few mps decide that it is too much or there will be too much of a reaction and local constituencies, or if it does pass, if they can survive after that. Greekt we have seen the bond spread come in a little bit here. What is the next event on the calendar that matters for investors . Resume and athens in the days to calm, and there is the possibility that we will have a new group next week if there is an agreement to flush out the discussion on debt relief, so there will be developments next week. There are questions though about whether greece and its lenders can get the deal done quickly enough. Scarlet thank you so much for joining us from athens. We will be back with more on whatd you miss . Scarlet whatd you miss . The bank of japan is considering negative Interest Rates in order to spur lending. You can see that loan growth has been a challenge for both places. The eurozone seems to be doing better. The eurozone and purple, japan in blue. That theyat downtrend are trying to reverse. Bloombergews out of is that the bank of japan is considering a program similar to what the ecb is doing in terms of rewarding banks with negative rates, those who loan enough, so maybe they are taking a cue from the ecb. Scarlet a little bit of a copycat move, isnt it . Joe im looking at another japanese chart. We have the flash pmi reading today. It was not very good. This sub index has new export orders, falling off a cliff. When you think about what is going on with the japan and that surging yen, it makes sense that manufactures when they asked them about their new exports are not saying very positive stuff right now. That is a really dramatic klein when you consider dramatic decline when you consider all ,he talk about currency wars that is going in the exact opposite direction they would like to see. Scarlet the yen strength also means that tourists wont be attracted to coming to japan. Another side effect of japan introducing measures sometime in the future. Scarlet for this years race to the white house, it could just come down to how confident americans feel about the economy. Next, we dig into the latest sentiment numbers. Mark i am mark crumpton. Of of carver counties speaking to reporters on the death of the pop legend prince. The sheriff telling reporters that there were no signs of trauma on the body or signs of suicide. 57yearold was found dead yesterday in his home studio. Today,psy was completed results in days, if not weeks. President obama says british voters will have the final say on whether the country remains in the european union. At a joint News Conference with he said then results will be felt across the atlantic. The matter is of deep interest to the united states, because it effects are prospects as well. The president ial contenders have spent a billion dollars in the race for the white house, according to an analysis by the center for public integrity. The toptier candidates account for much of the spending. Hillary clinton and bernie spent 326 million. Ted cruz at 70 million, the top spending republican. The Republican NationalCommittee Chairman is calling on his party to close ranks and support the eventual residential nominee, saying it is essential to victory in november. He is refuting Donald Trumps claim that he should be the nominee even if he falls short of the delegates needed. Hes poked to the rnc members today in florida. The subway station in brussels where the suicide bomber killed 16 people will reopen on monday. The attack aboard a metro train during morning rush hour also damage the station. Been closed since march. Belgian media say a wall of memory has been installed at the station so subway riders can express her emotions by leaving messages or drawings. Global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. I am mark crumpton. Thank you so much, mark. Lets get a recap of todays market action, little change in up marginally. The dow industrials up 21 points. The nasdaq up like a tense of 1 . The worstperforming sector today was technology as tech earnings disappointed. Microsoft falling as much as 9 after profit miss, google down , showing Profit Margins are seeing pressure from higher mobile phone use an automated ads. One thing worth mentioning is the triple q, it got taken down. Bonds. M looking at despite the faltering momentum yieldsities, bond rose, one of the biggest moves in weeks for the market. , noww a bit of reversal week stocks and rising yields. The big story is the japanese yen after Bloomberg News reported that the bank of japan is considering further actions on the negative rate front, the yen weakening by 2 . You see the yen weakening by 2 , the biggest weakening since january. And the dollar, not long before speculators have turned bearish on the dollar for so first time in two years, you talk about all this optimism about the dollar going into this year, now we have seen a selloff and real reversal in sentiment. Scarlet take a look at oil prices, what a change from the start of the week. Signs the Global Market is maybe rebalancing, lifting for a fourth straight day. Agreement with no disappointing investors who thought of production freeze was in the works. Joe nobody would have guessed this going into this week. Scarlet certainly a lot to keep an i on here. How does it all add up when you talk about consumers and voters . Whatd you miss . Gas prices have fallen, unemployment low, and the number of americans filing for job is at a level we have not seen since 1973. Joe thank you for joining us. The stock market is close to its alltime highs, unemployment people at 5 , what consider to be full employment, gas prices are down, what you say people are not happy and the National Mood is negative. I see this in terms of behavior, but you can look at it objectively. Only 20 of americans think the economy is good or excellent. 80 are saying it is fair or pooler. Ven more distressed or poor. Pessimism has not been impacted by all of the levers that policy makers expected to help boost confidence. About howou also talk there is a decoupling and how corporate ceo see what they are doing and not seeing the economy. For instance, they feel like they have done a lot of hiring, but yet people are pessimistic about the labor market. They are saying that we have hired a lot of people. We are excited about our businesses, and the consumer is saying, that may be, but we are not seeing it in wages and we are not feeling as good as you are. That is becoming a big problem, because the confidence that the corporatepoliticaleconomic elite is high, and main street is extremely low now. Politicians, especially those running for president , they have seized on that the satisfaction. Is thatound interesting a survey showed an unexpected drop in Consumer Sentiment and april, and one reason why is because of election anxiety. 20 of respondents said news about the November Vote was making them anxious about the future. You have this phenomenon with and it is the nature of virtuous cycles. The election cycle is fostering this deteriorating sentiment, and interestingly, that falling sentiment is what is favoring folks like donald trump and bernie sanders. Joe you have this weird situation where people are anxious and they are supporting more radical candidates, people who would have previously been seen to be on the ranch french, and its causing other people to get nervous. Inge, and it is causing other people to get nervous. Side, it ispublican becoming clear that Donald Trumps momentum will carry through into the convention. People are worried about a brokered convention on the republican side, there will not be one. It may be angry or violent, but ves and point the halve the Republican Party seem to be backing away from it. The Democratic Party seems to have the greatest potential to be brokered. Bernie sanders continues to hold on, and is likely to gain more traction here. Risknk there is a real that you indepth neither with bernie nor hillary as the ultimate candidate because they cant create a bridge between them. The Bloomberg Weekly Consumer Comfort index looks at consumer comfort for democrats, the blue line there. The redline tracks the republicans, which pretty much trends the same way, but is notably lower than the democrats. Little bit about the level of sentiment and which party benefits more from a drop in sentiment, confidence, and an increase in confidence. On the current lineup, if sentiment were to rise, it favors hillary clinton. If sentiment falls, it favors donald trump. I call it the lady or the tiger election. With thisclear that real big split that you have any kind of bipartisan candidate. The closest bipartisan candidate is donald trump. Scarlet really . Its not because of his political stance as much as his authoritarian positioning. His anger. That is something that will Cross Party Lines if confidence continues to fall. , can the quickly market remain near these alltime highs if we continue to see this deterioration in sentiment . No, i think what voters and investors want are completely different at this point. The battle between owners of capital and employees of capital is about to come to a head. Scarlet conflict in the days and months ahead. Thank you so much for joining us. Long with a rally in bitcoin last . We will discuss, next. Scarlet i am scarlet fu. It is time for the Bloomberg Business flash. Fiat chrysler recalling more than one point one million cars and suvs worldwide, including more than 800,000 in the u. S. , dodge chargers, chrysler 300s, and the jeep grand cherokee. Schlumberger trimmed its workforce by 2000 in the first quarter. The reductions,s profit declined 49 because of the slump in oil and gas drilling. The company said the work force entered the quarter with 93,000 employees ended the quarter with 93,000 employees. Puerto rico will default in may on some of the money it owes. The island is expected to fall short on 422 million from the Government Development bank. Mayys says puerto rico also default on debt from three other agencies. That is the Bloomberg Business flash. Joe whatd you miss . The boom in bitcoin. The Virtual Currency has been on a rally, doubling since last year, but why . Does it have more room to run . Joining us now is a technology analyst. What is going on . People dont talk that much about bitcoin these days. Run. S been on a nice what is driving it and how much further does it have to go . The core constituents of bitcoin have continued to work on developing the network, making it better, more robust, Building Tools around it, and that has been happening in the background even though bitcoin has not been in the news. Of theeing used for some applications that it has been touted for, crossborder remittance, paying online, banking and places that dont have other possibilities, so it is starting to live up to its serve shorter term like helping capital come out of china, driving some of the volume, but overall there are is more optimism within the core constituents of bitcoin. Outside the core constituents of bitcoin, the word you hear more and more is block chain. Is block chain superseding bitcoin now . Only in terms of investments by the big banks. Those are two separate things. Bitcoin will be very useful for payments applications, banking applications. Block chain is a whole other universe helping banks trade and exchange at best assets in an efficient way, help with real estate transactions, so block chain is a broad tool useful for a lot of Asset Classes, but bitcoin is still useful for the original purpose of payments and low levels of banking. You dont buy this idea that the Underlying Technology of bitcoin is interesting, but that ultimately it is all about the technology and the currency will fall by the wayside. That bitcoin will continue to thrive and be a bigger and bigger deal . Absolutely both. Be useful for some applications, and that Underlying Technology a block chain will be useful for other applications. Years from now, i would expect most Financial Services to be delivered on one type of block chain or another, upper mission, a private block chain that helps banks settle securities, or bitcoin helping people move money from the u. S. To philippines for nothing. Both will be useful. Bitcoin also has other features that people find interesting, thate haven asset class only used to be the purview of gold. Now bitcoin is becoming a safe haven just like goldies to be, so that is another feature of bitcoin that is helping just be, so that isto another feature bitcoin that is helping the price. Scarlet institutions find value in bitcoin. Ceotal Asset Holdings weighed in on block chain adoption and where she sees that technology going. There will be businesses that are completely new, other there willfail, and be businesses that do what most people did with the internet, which is adapt, adopt, use it to provide Better Services for customers and see it as a tool. Thatwill take some time has started already now, and it will continue for the next 510 years at least before you can this technology has become genuinely mainstream or more common. Scarlet will Widespread Adoption of Block Chain Technology promote bitcoin on an institutional level . I believe so. What these institutions are going to find is that after they whereent block chain, they only so certain information was certain banks, they will realize that being able to move i you in a seamless, inexpensive , way across borders is something they will want to do. Once they get comfortable with the technology, longerterm, they will adopt bitcoin as a technology for moving money betweenorders, countries, and across the value chain. Up, the coming brazilian president says the country is in an series mama as her inpatient looms. What the global uncertainty means for markets. Scarlet i am scarlet fu. Whatd you miss . Brazils political turmoil has left the investors on the sidelines. What we need is a change in direction. Lasts falling almost 4 year, the same this year. Inflation has gone back to double digits for the first time in 10 years. We need a political reset. For that to happen, we need congress to work with the executive. She is involved in all the shenanigans that went on, so it it is time for a new start. I think the Vice President will be able to put a cabinet and plays, central bank in place, to get us back to where we were. You are a native of brazil. Will this take years to play out, or can we see a quick reversal . It will be a quick reversal in sentiment. Putting a good finance minister in place who starts to move back to fiscal responsibility, andtion under control then get the economy going again and growth in 2017. You have been on a roller coaster ride with brazil. It has gone up and down, now its coming back up. What makes you confident that the market has not priced in the advantages you have described. I dont think we will get back to those levels where we were anytime soon. On a 2017ok at brazil basis, the earnings forecast have a chance to go up, and with that support for equities. For the last five years, weve had four months of net inflows, so there is a lot of money sitting on the side that was waiting for a sign that things are improving, and i think what we are seeing is one of those signs. Would you think about the valuation relative to other latin american stocks. Here we have the p e ratio of brazil stocks to a latin american index. We have risen to the highest valuation in a decade. Still in aings are range that was consensus before. Time in a while, we will have to see those earnings revise, if for nothing else than that the currency is stronger. Its not the cheapest market in the world, but that valuation is not the main driver, and what we need is better sentiment. Take us into the macro picture on brazil and the economy, what is the state at this point . We second a lot of the thoughts that have been expressed. Most importantly, while the political situation can be the catalyst of sentiment change, what we see is you are being paid to take risk, between the currency being one of the cheapest with the other latin american currencies, very high Interest Rates, attractive equity violations across the , and all commodity producing countries in latin america, so most important a you are seeing the cyclical changes, orders to inventory surveys in the pm eyes are picking up, classic signs that the markets are cheap and the economy is responding. Brazil oil exports are 11 of gdp. Economy driven by services, the domestic side of the equation, so with inflation down and the middleclass growing, i think that will be the most important thing. Are in mexico, despite the valuations, because with oil restabilizing, the situation will get better. Peru, elections in june, and that will also be good. To calm andgreat talk about stocks and not politics. Come and talk about stocks and not politics. Scarlet coming up, which you need to know to gear up for next week. On monday before the bell, halliburton reporting quarterly earnings. I will be looking at new home sales with all due respect to the rnc, summer is coming. Happy earth day, earthlings. Republican partys Spring Meeting in hollywood, florida which wraps up today. Leaderschairman urged to unite. It was a private