Argentinas debt levels are unsustainable. This is after the review we had been expecting. We will dig a little deeper into any and try to let you know impact from that decision. Lets dive a little deeper into the action with our markets reporters from equities want. Watching . Hat are you abigail i have volatility on the mind. The vix maybe receiving the panic index. The skew index is an interesting to. It could be hedging against a big move higher for stocks or could be an early look at volatility. In 2018 in the summer when the vix was smooth was snoozing, that is shown in yellow. Part over the last year, both the vix and the skew index down. We see the skew index going back to levels seen in 2018. That is ahead of the pullback we had last month around the coronavirus tragedy. Take a look at this. We have a big divergence between the skew index and the vix. Something worth keeping in mind. Taylor i wanted to take a look at the stocks index. It has been outperforming the general market. Some of this is based on of the stimulus measures we are hearing from china to support the economy. You come and take a look at this chart i am showing. Backs forward p e ratios to trading 20 times relative to the s p 500. We know within the stocks index, there is so much cyclicality. China coming out and saying they could provide some additional measures can has the potential to give some of these companies a big boost in the market. I am looking at oil higher on the day. It is the supply side that is driving the rally that is crucial. Lets start from venezuela were sanctions could meet the supply lower. In libya is where the story is key. One millionby barrels. Those barrels were supposed to come back onto the market on the p stocks. Shock significant supply for the opec producers. Thank you. Still with us, katie gry feld and brent judy. Brent, i want to talk about where you like to put money or where you are interested in right now. You mentioned e. M. And small caps. Classes thatasset have not worked in a long time even though on paper they may be cheap. Why this time will they be different and offer some meaningful outperformance is . Brent people have been consistently worried since the trade war was launched and we had the trade we had the fears that went away. If you pick your favorite and of the cycle indicator, take the treasury and the 10 minus two spread and you overly growth versus value, u. S. Large purses u. S. Small, the s p versus em, they trade off the end of the cycle. People have been worried a recession was coming. We believe those lais will turn back up. We believe the cycle will continue with Economic Growth strengthening. You will to be on the others of the trade that was the trade of the past. A shift to more offensive as the cycle does move back higher and people stop fearing there is a recession lying in the next two days. Romaine the sense we are heading for a recession, that seems to be off the table. You couldis a sense even see a strengthening of the economy. Can that happen or is the market going to react to that in the same sense if the fed takes that as a signal to move rates higher . Katie to your point that it seems most people have accepted we are not headed for a recession, that is broadly what i hear as well. There was some chatter around when the yield curve started to flatten again that perhaps there would be a new wave of recession chatter, but i think there is widespread acceptance that curve is being driven by global forces. That is not a good indicator for where the u. S. Economy is. If you look at measures of the u. S. Economy, im thinking about the city economic surprise index. At least when i talk to people about the u. S. Economy, there is still a good sense of bullishness. Fed cut pricing has not moved all that much. Joe you point out that a lot of this is being driven by a global condition. Brent, you are optimistic on global markets. What is your story or what is your explanation for why there is this persistent bid in the long end of the curve and once again, inversion chatter is heating up . Brent i agree there is the commentary there is not a recession coming. I think investors have been chicken little. They want to see it happen. The market trades off of what is happening today. I do think there is a little bit of belief of, lets wait to see if it happens. The thing katie also mentioned was about the fed. The fed is not going to raise rates in 2020. The bar is high in the future to do so. When you add those things together, i think Global Growth does we accelerate. That pushes people towards something that is more conducive to rising Economic Growth. Stays, therehe fed is still this talk we could see inflation and that this could be the one thing the market is not priced for at the moment. Are you confident that if we do start to see a really a reacceleration or see inflation creep up that the fed is comfortable enough wedding that run for a bit longer before it moves . Brent absolutely. I think the shift of the fed is complete. From a cyclical basis, they are not interested in cutting off the economic cycle. The fed used to worry about cutting off inflation. They would do that every time even if it meant sacrificing future Economic Growth. The fed believes they can sacrifice or risk future inflation to try to get more Economic Growth. Inhink inflation is a risk 2020. The market is not priced for that kid for that. Metric has a different now. It was at two and a half percent. I think the fed is not going to tighten in 2020. 2021, the bar is still pretty high. If they do tighten, that will end the cycle. The cycle continues as does the market. Joe we got the fed minutes today. It did not have a huge impact, but confirming no indication of any inclination to hike. There was some talk about the Balance Sheet and how they are addressing the repo market. Does it look like they are making progress on was anythino write home about, it was the Balance Sheet comments. That is where a lot of focus is going to be with the fed supposedly on the sidelines in 2020. We know they have committed to keep buying bills through the summer. I have been talking with a lot of people. What is it look like on the tail end . Q. Week, not q. Week, that has been discussed to death. Romaine the market has not really thrown a tantrum. Katie in has not thrown it attention yet it has been debated whether or not that actually that has an impact on asset prices. The psychological impact is huge. Even though it has been well telegraphed, until we see it, it will be impossible to know what effect it will have. Joe what is more important, the reexpansion of the Balance Sheet or powells comments in october about the willingness or the eagerness to see realized inflation before they ever think basicallyng again, recalibrating the reaction function . Brent i think the comments youve just mentioned are the important thing. They may have learned a little bit of a lesson when they tightened, now the fed listens to the market. That is when they cut they were expecting to hike. I think that as a backdrop the fed is going to operate under until inflation does get far enough above the 2 . Think the bar is still pretty high. That is why you are seeing the actions you are seeing in the markets. You. Ne our thanks to chief investment strategist at northwest mutual wealth. Our thanks to bloomberg sound katie cry film. Does it for the closing bell. We are going to take a look at the democratic debate set for later this evening. This is bloomberg. Romaine live from bloombergs World Headquarters in new york, im romaine bostick. Joe im joe weisenthal. Romaine here is a snapshot of how u. S. Stocks closed today. Thanks and chipmakers leave the market with a fresh record high. And lowth, wage growth Mortgage Rates continue to fuel Home Construction and if the u. S. As applications to build jump to the highest since 2007. Beijing plans to seize control of age in a group. Rocket stocks. The frenzy around virgin. Alactic echoing teslas around the reasons for the space really could bring it down to earth. Joe lets dive deeper into some of the Economic Data after a warm january housing start. It was not all bad news for the Housing Market. It was very good as permits jumped to their highest level since 2007. Housing data is always idiosyncratic. The overall trend, it looks really solid. I think if you look at the trend in permits, we months d nine consecutive months of increases on housing permits. The data is not very much impacted by weather and pardons weather patterns. Joe that is pretty clean measure of at least some sort of optimism industry space. The accommodative policies, slow Interest Rates. The severe lack of existing inventories is really boosting housing prospects. The question is always whether it will last or not. This is a very rate sensitive sector of the economy. Ratesl continue to see hovering around the same levels and then it will be positive for that sector. Romaine we are talking about the fed. We did get the minutes today. They kind of told us what they thought they would tell us. Of whatevernse effect the fed is having on the economy that that is enough to sustain the Housing Market . That is what the fed things. They think the insurance cuts they provided last year will probably be enough for the theomy to withstand all of shocks, the virus and other things like that. Joe housing is a crucial component of the economy. When people buy a house, they buy furniture and laundry. Positivel kinds of defects. Positive effects. This undermined but a lot of people say rate cuts do not do anything . That was a mantra we heard a lot over the last couple years. Looks like we can point to an area in its the fed rate cuts contribute to a major aspect of the economy. I think it does make a lot of sense. This is the cornerstone of the whole theory. Housing and other consumer autos areoducts like very rate sensitive. People do buy stuff when Interest Rates are low. That is helping the economy. The question is whether this tugofwar between exile janessa shocks and strong fundamentals and who will win in the end. Romaine what about this idea of inflation . We keep coming back to it. We got the price data earlier today. Did you Pay Attention to that . We do Pay Attention to everything. Really boosted by one special sector, trade margins. Component,y volatile which goes up and down. It was up 10 today. Do not look at month over month numbers. Look at the trend. The trend is not going to accelerate that much. Virus accelerated the strong dollar dynamic. I do not think we will see a flareup in inflation or anything. Joe is there anything to write home about in your view regarding the minutes today . I think it was an interesting set of minutes even though they were slightly outdated because of the virus. It tells us the fed are monitoring the risk. They mentioned the risk eight times in the minutes even though they only had one week of trying to assess the impact. Romaine i went to bring you some breaking news. This is on a ceo change at ubs. Being hamer is apparently named ceo of ubs. He currently is the ceo of ing. Apparently going to be making the move from amsterdam to zurich. Coming up on this program, a new arrival. Democrats taking the stage in las vegas. But with the new target. We are going to discuss the latest. Youre watching bloomberg. Joe the ninth democratic president ial debate takes place in nevada tonight. For the first time, our owner, Michael Bloomberg will be on the stage with his fellow candidates. Although he is not competing in the state, he has been rising in the national polls. Here is Kevin Cirilli. We all know him pretty well here at bloomberg, but for Many Americans watching the debate, this may be their first chance to see the candidate by many measures a second or third in a lot of the polls. The first time former new york city mayor Michael Bloomberg will make his debut. I am told by sources connected to the Bernie Sanders campaign that this is a welcome opportunity you for the democratic frontrunner. Bernie sanders can draw a contrast against bloomberg. It is also an opportunity i am told i sources close to joe buddens campaign for him to cast himself as an alternative in what could be a contentious dynamic between bloomberg and sanders. Senators look up for Amy Klobuchar and elizabeth warren. The Klobuchar Campaign feeling emboldened following her strong showing in new hampshire. Former south bend mayor Pete Buttigieg is also feeling momentum following his showing in iowa and new hampshire. Romaine is this is going to be folks sniping at each other about their personalities or are we going to hear something substantive about their policy proposals . Kevin if you look at the track record of the past week or so, we will notice the political attacks against bloomberg have sharpened, not just from President Trump but also from his democratic rivals. I am told that is going to continue. Are not competing here in nevada or south carolina. Beenloomberg campaign has banking that super tuesday is going to be where they were able where they will be able to get most of their delegates. You talk to sources connected to buttigieg and biden and sanders, they feel every race counts. Joe go back to the calculus for sanders. We heard from the Bloomberg Campaign that this is a two person race. Trying to make it seem like it is just bloomberg and sanders even though there are clearly other competitors. Is that also the race the Sanders Campaign once . The sanders want the final onetoone set up of the socialist democraticsocialist versus the wall street capitalist . Upon my reporting, im hardpressed to find anyone outside of the Bloomberg Campaign who views this as a twoperson race. Poll came outole this afternoon that showed in terms of likely democratic voters, the Sanders Campaign is viewed as the most electable candidate amongst all of the democratic candidates. From the Sanders Campaign perspective, they feel they have the momentum as similar to the buttigieg campaign. They feel they have that momentum coming up. I do not see this field winnowing until at least after super tuesday given at least given the sense of unpredictability in the race. Romaine the last time you were covering a debate, i believe President Trump set up shop across the street. Where is he at . Kevin President Trump has not showed himself inside this room here at the nbc debate, but he has been tweeting throughout the day. Romaine our thanks to Kevin Cirilli and Michael Bloomberg is president ial nomination and he is the founder and owner of the company who owns this network. The new owners of forever 21 planning to keep most of the fashion chains u. S. Stores open. Will and property property they filed for a cup september. The chain opened their emerge in the coming weeks. Thannetwork posting better expected sales. The company boosting competence among investors that it can offset subscriber tv losses. This is part of the tmobile sprint deal where dish is requiring is acquiring some of the assets. The new york area has the highest rate of Bank Branch Closings in the u. S. The number of branches fell 6. 8 . That is three times the percentage from the previous year. More consumers are turning to mobile apps. Plus, the dense urban area can lead to a duplication of bank branches. That is your business flash. Coming up, we are going to talk about the takeover in china. Beijing trying to seize control of hna group. This is the biggest depth so far in containing the coronavirus. This is bloomberg. Mark standing outside his family home in chicago today, former illinois governor rod global image thanked rob global eviction thanks President Trump. He was released yesterday after serving eight years of a 14 year sentence for corruption. We want to express our most profound and everlasting gratitude to President Trump. How do you properly think someone who gave you the freedom stolen from you . He didnt have to do this. The republican president. I was a democratic governor. This does not help his politics. President trump has a kind heart. This is an act of kindness. I believe it is the beginning of the process to turn an injustice into a justice. Mark blue going event was convicted in 2011 of trying to auction off the u. S. Senate seat left vacant when barack Julian Assanges lawyers told a london courtce that President Trump was prepared to offer the wikileaks founder a pardon if he agreed to say russia was not involved in leaking Democratic National committee emails during the 2016 election campaign. Assange is fighting extradition charges to United States on spying charges. Hacked before being published by wikileaks in 2016. The white house calls assanges claim a total lie. A representative from california ripped into pacific gas, saying they put great before greed before safety. Pg es powerlines have been blamed for igniting a series of catastrophic wildfires in recent years that killed nearly 130 people and destroyed thousands of homes. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Lets turn to china and the economy there under strain. Beijing planning to take over hna group and sell off its airline assets. The latest example reside