>> it is unusual. the tradition is the chairman will deliver the exact same testimony the day after. we expect the same thing today. no indication we'll get a dramatically different message. she said basically the economic forecast looks like it is holding. take a look at what you said. >> we are likely to continue reducing the pace of our purchases in measured steps. we also indicated this program is not on a preset course. it means if the committee judges there to be a change in the outlook, it would reconsider what is appropriate with respect to the program. >> we have gone weak economic numbers. sales and production. some of those things may also had to do with the weather. we have had interim time, fed policymakers, the cleveland fed president last night suggesting the taper would continue and that the dramatic change in the outlook, and, we had those fed minutes, which indicated a fed had agreed to alter their forward guidance with regard to interest rates going forward. that may be the biggest. i expect she may get questioned about that. there was a debate about how that should change. do they change their threshold to a different number? do they make a more qualitative? i think she may ask about that today. >> we also saw a lot of volatility in emerging markets. what kind of pushback might we see in those topics? >> she will be asked about those things. theher thing unusual about congressional testimony, a lot of things on the regulatory front as well. i would expect that to dominate a lot of discussion as well. >> thank you. in ukraine, gunmen seized a building. >> we will do everything we can, everything possible. we will do all tools and legal means. >> it is such a hot spot is the reaction to what is happening? >> they are concerned about it. if you think about it, the lead up to the housing of the former president, which happened friday, concerning the country was some of the regions in the west in the ukraine would secede. oppositeoncern is the that some of the pro-regions could seek more autonomy within ukraine. it is on their mind. they surrounded the building with police. worth noting, we do not know who the gunmen are or what they want it we just know they raised the flag. there is no evidence they are in any way connected to the russian state. week spoke about their concerns about ethnic russians. onsideey have militaries -- their side of the border. saying, we do not see them moving into the ukraine, but we are asked to avoid any kind of intervention or confusing -- confusion. >> no word about what putin might think about these moves. up here is what might speed from the west. anywhere from brussels? collected as all in the works. the connection is the prime minister i spoke with about to be voted in, really has a full plate and the issue of territorial integrity is not one he needs to deal with right now. ukraine needs 35 billion over the years. a deal oneeds to cut to avoid default but he did not leave the door open for a haircut for bonds holders. one thing he understands, as he told me, he is the most unpopular prime minister in history because anything they get will come of those conditions like in greece. >> i'm interested in what you're hearing as to how putin might respond. here, hek the feeling would kind of welcome that. russians would offer $15 billion, whether they would want to extend the offer again after this change of government, that is not clear. what they have been saying is, we are happy for the west to help in ukraine. the ukraine is a big trading partner for russia. they do not want it to fail economics. want whateverot happens to be to their detriment. that is their big issue. >> all right. we will check with you throughout the morning. thank you for your update. ♪ moving and shaking this hour, ceo of the world's's largest advertising company shares of the company are following most in europe in four years. cause wpp to miss its earnings margin target. there was still promising news for. revenue growth at eight percent in the fourth quarter. if there are any regrets in the last two years, it was that it did not go faster in the emerging market, where the company has the biggest margins. google filled a behemoth business by showing ads in its search engine. newestthe company's businesses is google fiber. home internet access the company claims leaves competitors in the dust. all of that comes at quite a cost. cory johnson took a he dived into the business of google fiber. jumpstartmpt to services to unprecedented speeds. it is 100 times faster. it is faster than verizon files, faster than at&t. other competitors google is timeng in the dust -- warner cable. google started in 2012 and now it is in utah and coming very soon to tech this. google just announced it wants to bring this service to 34 more cities. cutting-edgeork? routers and modems. cabled right into each customer's home. it will cost google as much as $900 per household and up to $3 billion per year. if googles told it, will customers come? billion will come, giving google fiber as big a customer base as comcast, 24 million. nextogle gears up for its round of fiber installations. cory johnson gives a for closer .ook a fiber pioneer joins us now. wellare you hearing? how did this perform? >> is an interesting experiment from google. we are seeing innovation on a level -- the phone caret -- carriers. this.re not doing they're not bringing it to the home. the fastest speed they could maybe in somee cases 300 megabits per second. the fastest thing verizon or something else can offer, it is three or four times that. specifically technology businesses here. >> people do not like it? class i think they do. we talked to a lot of people here. we spoke to the mayor yesterday talking about what consumers are getting out of it. it would help not just businesses but the school and the local hospital. of course, the college town here. a lot of businesses, people are coming out of school and starting businesses here. there is a lot of technology in the area. we met and spoke with a technology company about what this means for the average user. take a listen. >> gigabit network speeds are not new. many businesses are it he have them connected to their data centers. they pay for that because of the amount of data they need to conduct business. it is new to have the speed going to the home. it will be up to the consumer demand to create to create the push of new services to occupy that level of bandwidth. >> what is interesting about new uses ofind of chny see the real speed at which da f the internet. >> i cannot believe my data phone can work that fast. y wi up helping google seah engines? what is the real motivation? class a great question. google spent so much money on this. about 40% increase on their cap back for many years to come. they're getting into the internet service provider business in selective places where it makes sense financially. they are taking it right to verizon and at&t and comcast. we have seen the local cable provider change their service and offer faster speeds and lower their price to compete with google, but they cannot come anywhere near the speed available. it is a clever way for google use the things it is good at. and bring it to the home. >> we actually have competition in the cable network. what about regulated business? i would think google would shun all the regulation that would come with being a cable provider. >> it is interesting. they're partnering with the cities here. i spent a lot of time the mayor yesterday. they have a fiber network in the city that was losing money and facing tens of millions of dollars in networking upgrades. they were happy to hand this thing over to google and google would only do the deal with them if a lot of regulatory issues would get out of the way. the same thing happened in kansas city. this googlelled welfare. google has been very selective to try to getis the regulations out of their way. >> thank you. we will check in with you later in the show for more on the fascinating game changing technology. coming up, and he has big -- big plans for you and new jersey. detail on the billionaire's giant that on real estate is coming up next. building high cost of up the manhattan skyline. we catch up with the man behind it. and, a flag, play. a $15 billion business is yielding some very unsportsmanlike conduct. ♪ offshoot, 200s thems for sale, many of running day-to-day operations. julie hyman has been looking into this. before we get to this, i want to talk about the recent quarter. pretty brutal. it in context for us. -- a lot of consumer traffic has .eft behind is not coming back i think the changes permanent. kmart and sears have been troubled for a long time. there are issues specific to the retailers from years ago. like have seen things selling retail stores to get more cash back. again today.d this we're looking at the auto centers, selling him. that is where it comes in. -- it hasreal estate to 200 different pieces of real estate on the website. kmart, sears, the places, real estate. what is curious is why it is separate for the rest of the world. it operates another realty corporation that has a separate website. >> lie is that? they're trying to get away from the image? >> it is difficult to see it is affiliated -- some of the there is nothing that clearly identifies it. -- mpany spokesman says the other unusual thing about sears among all the retailers, every single one of its stores is listed on the other website, potential sale or opportunity. >> what kind of money are we talking about? class it is pretty wild. $40 billion to $7 million. the problem has been consistent that people still buying the shares are betting on eddie bettingand potentially on that portfolio. -- of the possibilities there is a little bit of debate as to whether there would be demand for those assets. crescent underscore sincere's major issue. thank you. we appreciate your looking into sears. world-renowned design, bloomberg this week was called a design conference week. ♪ >> a new lively neighborhood that provides for people to play our role is to basically be the castro. we have multiple buildings. artists. my job is to make sure to the best of my ability we are actually producing music. design is an important part of how we envision. because we're building over the railroad tracks, we are building our own land. we are building our own sidewalks and gardens. the nature of the building, they are twice as big as you might think is normal for the development. what we did not fully appreciate -- one challenge is to ensure magnitude. that is what we need. we need a series of them. we challenge is making sure really create a great sense of place. i have always wanted to do commercial development in new york city. i do not think you could get any bigger than this one. it is the phrase, all my life, preparation. getting here was the long haul. >> unbelievable. really looking forward to that in new york. coming up, it may have been a record year for his fiveffett and decades of acquisitions. we will tie you about the upcoming annual report. plus, no one has ever come up with a scale your -- scarier story than this one. that is next. ♪ "> you're watching "in the loop live on bloomberg television streaming on your phone and bloomberg.com. past the hour,s which means boomer television is on the markets. you're looking at futures continue to trend lower. s&p futures have pared their declines throughout the morning, now down about three points. is relatively flat after european stocks drop the most in a week on escalating tension we are seeing in the ukraine. we are on the markets again in 30 minutes. here is a look at our top headlines for the hour. best buy's fourth quarter began a list estimates. per share..83 that is compared to a loss of one dollar and 20 one cents per year earlier. the company ceo working to turn around the struggling retailer by cutting costs and improving its supply chain. blackstone is getting into high-end fashion business. in antaking a 20% stake italian fashion house in a $287 million. by thebeen fully owned founders family since he was murdered in 1997. growth.its funds for the u.k.iled out by government in 2008. it was brutal. the banks lost $15 billion last year as a blog billions of dollars in legal costs and impairments. five years after receiving the biggest bank bailout in history, the government still has an 80% stake in the company. be very afraid to open your utility bill this month. i was and i got penalized for it. the brutal winter is bringing people nasty surprises. the economics editor michael mckee says a big reason the chill has settled on the economy. how bad will it be next month? >> you do not want to know. natural gas in particular, we have been freezing. trying to heat our homes and it is costing us a fortune. in the the increase amount of natural gas we are using at the same time we see a rise in price. we see it reflect where the storms have been all across the country except the west. the only place where natural gas consumption is going down because they did not have as much snow there. everyone else, it is been a three percent, almost four percent in terms of usage and costs. that has an effect. take a look at what electricity is costing. you add consumption to price and you get the costs and that cost is up almost four percent over the same time last year. is just a one-month change. and imagine what it would be like for the entire winter. in new york, you are one of the worst off. take a look at what the typical new yorker has been paying, an additional $388 in their january bill. it is not just new york. we went to the midwest. another $146. just as much. everybody is suffering. our electricity went out, three space heaters, josh shot right up. >> is doing ok, but the make it notsically on price. it has not improved as much as some of the others. but the public service enterprise group those practices sword. you want to know where the real money is being made. it is natural gas. here are a couple of natural gas companies really doing well. we have a pipeline and delivery and all of them are seeing their stock basis spike. right now. headlines >> we just got durable good orders. orders for long-lasting equipment. is better than what economists anticipated. drop for the month of january. economists were looking for a drop of 1.7%. orders rose 1.7% to decline 3/10 of one percent. when he back out defense transportation, 1.7% for the month of january defying expectations of a decline. we should mention the previous month's numbers for december were going to show bigger than reported declines. jobless claims coming out at a: 30 a.m. here's a number worse than expected. 348,000 jobless claims fire -- filed for last week. the average estimate was for 335,000. terms oflike a miss in economic data. durable goods are better than anticipated for the month of january and jobless claims worse. the taking a look at market reaction. we are seeing markets on the move. the dow jones also paring its loss by about 10 points, now down just 1/10. looking deeper into the data, give me your take on the goods. class it is good. you want to look past the headlines and see what businesses are defend debt spending. you take out defense and aircrafts nec a pretty solid gain for a month. the three month rolling average, we are up 6.6%. couple ofter a months. when you look at capital goods, it looks like this is is starting to spend again and ended december. the december number was revised from a negative to a positive. this matters because 30% of the s&p companies revenue comes from spending. of whereeal indicator the stock market might be going in the future. one problem is transportation. happened to has orders there. orders have really dropped off for that. shipments, that is what goes in to gdp. it is not good news for the first quarter. >> he would think if there's anymore and it has been picking up and we were so worried they haven't, that would trickle down to gdp, but usa not so. klesko orders rising would give us good news in the second quarter. what shipments are telling us is , you're collecting the money for what you ordered a while ago. at this point, they have dropped off significantly in the fourth quarter. maybe it was some sort of hit cup in what businesses wanted to put out there. >> the fed is watching this closely, no doubt. >> you could mention jobless claims. they moved no doubt. there it -- they are within a range. it doesn't look like the economy is falling apart. >> we like the positive news be the economy is not falling apart. that is the news for the day. of foodp, issues labels. michelle obama unveils new rules and changes to get us healthy. someone who is not quite synonymous with the healthy for apaula deen, looking comeback after spoiling her image with racial remarks. stay in the loop for more details. ♪ >> chances are nutrition labels are not really telling you the whole story. the new food label rules released today by the fbi are aimed at may debt help bill will make healthier choices. julianna goldman joins me. what are the changes proposed to my then in jerry's ice cream. should mention ben & jerry's ice cream. i happen to have brought a prop. sometimes we bring props for live television to give you a sense of what these changes will mean. if you're anything like me, when you see a serving size is half a cup, do you really eat half a cup at one sitting of ben & jerry's? let's look at what the label tells us and what it is actually going to change according to this proposal. the calorie count will be much bigger. everything you see here, bigger font, calories in particular going to be a lot bolder, serving sizes are getting bigger. instead of this being a half cup serving size, it will be one cup , two servings per container. total fat is 50% of the daily value, saturated for -- fat, 45% of daily value. the most controversial item is the proposal on a separate line to list added sugars. this is one of the biggest contributor's to the obesity epidemic in the country, one third of every adult in the u.s. suffers from obesity. >> consumer agencies did not really get everything they wanted. they wanted to highlight things like healthy greens on the back of food packages. fromhas been the response the food industry? >> so far, muted. michelle obama played a key role in getting the proposals through. she will make the announcement later in the morning at the white house. i would expect it to be measured for now. there will be a comet -- public comment time for 90 days and then a few months before the changes are finalized. a concession to the food industry, they will not go into effect for another two years. the total cost is expected to be $2 billion, but the fda says in the long run, it will be $30 billion in health payments. qwest that is huge. i cannot imagine someone will not eat and in jerry's they want to read because it will be packaged differently. qwest you might think twice about how big that serving will be. >> may be. thank you, on the food industry. staying on the topic, paula deen is back in business after being embroiled in scandals for rasul -- racial remarks. the star announcing plans to open a $20,000 restaurant the summer in tennessee next to the dollywood theme park. it will be the first rod jet by a firm created earlier this month as part of her comeback effort. joining me now with more is the reputation dr., mike paul, founded -- founder of reputation dr. where he has worked with celebrities, athletes, government officials and corporations like goldman sachs him united airlines, and dunki'' donuts. the biggest question, what does she need to do differently this time around? question is to understand the issue will not go away unless she includes humility at her core. qwest even like you have seen that? >> no. we just saw it as -- evidence of it this week. i do not need to apologize anymore, look at all the things that have happened to me since nine months ago, i am still alive. the focus needs to be taken away from her with that issue in saying i realize i heard people, not that you did not intend to her people movers please -- place. you did hurt people. one of the thing she also needs to understand is when you have a wall street investment like that and you're trying to branch out your brand, not only nationally, but globally, you have got to go to new york city and l.a. and chicago. >> what you think of the fact that it is in tennessee? class i think she is very afraid. that is a problem. she needs to embrace and go to the root of the crisis, which is, there of -- are people of color in the country who do not believe your words. with it would at -- actions. >> does she care? there was a recent cruise they brought you the dreamliner is getting into the mobile device business. what boeing is coming out with is nothing like your iphone. why did it take general motors ears? we will talk about it next. ♪ >> bloomberg television is on the markets. we continue to see futures improved after the positive number we saw without transportation -- it rose 1.1%, futures almost flat along with the dow. flipping into positive territory, up five points. durable goods really deflecting the issues over in the ukraine as well as european markets. we are on the markets again in 30 minutes. much more is coming up on "in the loop." ♪ ... >> 30 minutes to the opening bell, this is "in the loop with betty liu." the countdown begins right now. >> welcome back. here is what we are working on. futures are little changed this morning. the s&p has gone over its record for three days before falling back. jobless claims hitting a one-month high. economists are forecasting that the labor market will improve in the coming months. -- salesposting a loss fell for the 28th straight quarter. digital investments may pay off this year says the ceo. scarlet fu has breaking news. icahn publishing yet another letter to ebay. this is his third letter in four days and the continuing battle between ebay and carl icahn. he disputes ebay's version of its history with skype. andreessen and scott cook are thenames -- they two board members that carl icahn insists have conflicts of interest and should be removed from the board of directors. andreessent mark informs companies that are rivals. he said he would lay out his full business case to separate ebay and paypal in the coming days. he has called the government of ebay dysfunctional and riddled with problems. >> thank you so much. washington, janet yellen will deliver her first senate testimony since becoming chair of the federal reserve. these hearings were scheduled for a few weeks ago. they were delayed because of bad weather. peter cook is on the hill. are we looking at a six hour marathon? if it will goow six hours. i expect it to be genteel. get largely an instant replay, with her testimony at the top, which will be identical to what she delivered two weeks ago, and in the questions that we will get. the republicans will question what the fed is doing to reduce its balance sheet. republicans will be pushing. on the flip side, democrats will express reticence about tapering and concerns about the u.s. economy. expect that from democrats. >> who were the lawmakers? that we have to pay attention for? >> on the republican side, i would be watching bob corker. he voted for janet yellen. he does not like everything that is going on in the federal reserve. howh he treats her, given he did support her in that confirmation. the democrat side, the person to be watching his elizabeth warren, if she is there. she is pressing on the regulatory front, the supervision of big banks. senate a speech off the property this morning, not clear whether she will be there for the entire time. i would watch her carefully on the regulatory front. >> thank you so much. things have not changed that much in the economy. thank you very much. techis a look at the top stories on the "bloomberg west" radar. shares of the biggest advertising company have been falling. it missed its earnings profit margin target. reporting estimates were be. -- beat. google goes to court today over claims. it should not have to face a single class-action lawsuit that lumps together hundreds of millions of users. the judge in san jose who is hearing the case is hearing similar suits involving yahoo! and linkedin. you can catch all the latest in tech and media every weekday on "bloomberg west." moving and shaking this hour -- boeing's ceo is pumping out dreamliner's, now they're getting into the smartphone game. the boeing phone is a high-security android phone that is likely to be bought by the military and companies with lots of secrets. if anyone tries to take the phone apart, all of the data and software will delete automatically. cruise think tom "mission impossible" for that. over aeral motors took year to recall 1.5 million cars. with theer joins us significant implications of this recall. take us through the details. >> this is the old gm that we are talking about. it wentduced before into bankruptcy. a lot of these cars to not even exist. general motors made six models in the u.s. that had an issue with an ignition switch, that if your keychain was too heavy or bounced the wrong way after you hit a speed bump, it would switch off. that is incredibly dangerous. lose a lot of your power controls and your airbags can shut off. a lot of people were involved in crashes and airbags did not deploy and at least 13 people died, 17 injuries. it is an ongoing investigation. general motors first identified this problem in 2004. it is 10 years later they have started to recall some of these cars. >> while. -- wow. >> they issued a service bulletin in the middle of the last decade, which is one step below recall. they fixed like 700 cars. that is not enough. least 1.6 million cars affected here. a couple of pontiacs, saturns, chevy cobalt. pontiac andands, saturn did -- saturn, do not even exist anymore. >> what kind of fine are we talking about? most theylion is the are allowed to be fined by law. >> could it really hit that? >> toyota was fined $70 million for its recall -- $17 million for its recall. $35 million won't make a huge difference. they could pay their ceo that much. the company is very different. managemented top completely out in 2009. they started making a whole of cars. when you think of general motors , you think of quality products and safe cars. it was different than the saturns and chevy cobalt of 2005. back withller will be us after the bell for more on the auto world. elon musk has made a name for himself and now he wants to build a factory that could transform the power and lithium industry. goodbye, barbie. hello, my little pony. hasbro has found their way into the parents pocket book. we will tackle them next. ♪ >> you are watching "in the loop " live on bloomberg television. companies from google to procter & gamble and even political campaigns all rely on big data. who buys what when and what influences consumers. these electronic trails might fall short, especially of companies launch new products and enter new markets. take a look at hasbro. how they explores leveraged what they learned and tripled sales of girls items. is the founder of red associates, a consulting firm that measures and studies human behavior. it is a pleasure to have you here. is you i think about it look at more crowd sourcing, but you call it sends making. >> it is trying to get deeper into the understanding of who people are and how we make our decisions. the promise of big data and statistics is that you can cast a very broad net. we go deep and try to understand, what are the reasons why we do the things we do? what are the ways that we do them? most of that happens below the threshold of awareness. it happens in dealing with the world. >> if a company wanted to use sense making to help their business, what does that step look like? do i have people living in my home? >> yes, you do. how wewant to understand engage with tvs, then you immerse yourself in that world to understand how they live. if you're an executive in a big company, would probably do not live like consumers. you do not live like consumers in other countries. if you want your -- to enter china or another market, you need to understand what is meaningful them and how they live their life. >> i mentioned hasbro. what is a company that you've noticed that has made this transition? >> the story behind samsung -- there are many to that success. they are the ones that go deepest in understanding. they need to understand americans in order to sell us phones, tvs, and equipment in general. they are very advanced in terms of understanding what is important to us. >> you mentioned tvs. some look at tvs like electronics. what is the samsung difference? >> they used to look at tvs like electronics. they were sold like electronics. now, they look at families and how they deal with tvs. even though the father would say, i make the choices, it was really the mother that made the decisions. >> it became more like fashion or furniture. >> furniture. what was important to her was not the pixel length, but whether it fits into the home. and that is called the tiebreaker of the tv industry. >> what is the cost associated with it. >> it is vastly more costly not to do it. >> longer-term. >> of course. if you do not understand the customers and you cannot read the data that you have, particularly in other geographies, that is going to be very costly. of course, it is time-consuming and costly to spend time with your customers. >> fascinating. it really highlights how much people might not know about what we do. thank you for joining us. the partner at red associates. we will be back in a few minutes. ♪ >> warren buffett annual earning report will announce record-breaking profit. what kind of profit are we looking at? >> some of the estimates are saying at least $18 billion. >> unbelievable. >> it is a big number, a big number. it is fascinating about this to me is not just the absolute itber, it is really what signifies about the evolution of this company. a lot of people think about berkshire as a mutual fund. they have this enormous stock portfolio. have all of these operating businesses now that are really just incredible cash flow and earnings-based. profit ish of this directly related to warren buffett's investments and how much is related to his henchmen, if you will? >> you could say that all of the acquisitions were his investments originally. a lot of this profit is coming from units like burlington northern santa fe, and acquisition he did back in 2010. unit. from an energy it is coming from all of these acquisitions. the issue ofraise succession even more? >> succession is a huge issue for berkshire. if you listen to what buffett said about that in the past, he would say that these operating berkshire hashow a future that is going to go on much longer than him. he is not involved in the day-to-day operations. >> right. i wonder what the correlation is between their profits and gdp. is there one? analysts,speak with as the u.s. goes, so does berkshire. think about something like burlington northern santa fe, a big, big railroad. if people are buying more stuff, companies are moving more stuff, burlington northern tends to do better. --what are you expecting what do people want to know? is always on the table. last year, he did not give us that much on that front. apart from that, it is going to be everything from the economy to his thoughts about the investing environment right now. are these sectors the ones that are responsible for the profits? >> a big chunk of it. another piece of the equation is -- there was not , lot of bad weather last year so the claims they faced should be lower. thank you so much. we appreciate that look into berkshire hathaway. we are a few minutes from the opening bell. we have your top 10 traits. keep it right here on "in the loop." ♪ >> will come back. you are "in the loop." i am alix steel. bloomberg television is on the markets. scarlet fu has the latest. >> durable goods came in a little bit better than anticipated. the nasdaq futures are still up slightly. the s&p rose above its closing high but it was unable to hold onto that game yesterday -- gain yesterday. is still stronger, but cutting off its earlier level. imf put out a statement -- the ukraine notified the imf and the imf is ready to respond. we will continue to monitor that story as well. we are on the markets again in 30 minutes. >> let's count down to the open with your top 10 stocks. scarlet stays with us and olivia sterns joins in as well. i will kick it off with forrest oil. it will slow drilling and reevaluate property. dropews prompted shares to . >> blackstone group. bought 20% of her thought she -- versace. amc networks. it 19% jump in quarterly revenue, beating estimates. results were helped by the increasing popularity of its hit series the walking dead and the continued success of "breaking bad." >> i am on season three. number seven, tesla motors. outlining plans for a giga factory. it would produce enough batteries to supply 5000 vehicles by 2020. kohl's.er six is o they are renewing emphasis on national brands in an effort to increase sales. >> number five, hilton worldwide. 13% increase in fourth-quarter revenue, but earnings shrank due to ipo related costs. billion ipo was the biggest ever for a hotel industry. >> it is a bad day for sears holdings. $358 million loss in the fourth quarter. the rewards program failed to boost holiday sales. the ceo says sears largest shareholder had a terrible holiday season. >> the royal bank of scotland reported its biggest loss since the bailout in 2008. they want to shrink the investment bank, combining units , and cutting jobs. >> number two is best buy. fourth-quarter profit topped analyst estimates. operations are more efficient. the ceo has been working to cut from an earlier target. his big problem -- >> your number one stock of the day, jcpenney. shares surging more than 20% as the department store chain, as a post increase in annual revenue and margin expense, prompting the ceo to predict the turnaround will be completed this year. also posting the first profit in more than two years, at the start of the opening bell. here is todd horwitz, the founder and author of averagejoeoptions.com. we have the ukraine and janet no -- janet yellen, the better-than-expected numbers. think that right now, we are at the level of the s&p, 1850 that i don't think will be penetrated. we have tried to close above the high and i don't think we will make it above. i think we're going to start to make our way lower. weable goods were ok, and have a lot of big numbers next week. i think the market looks tired and what you're starting to see is professional traders are starting to sell the market. you see a big boost in the bond markets. bonds going up and yields going down. you are starting to see that people are moving out. you can see the regional buyers trying to step in now. >> you mentioned gold, what is equitiesng part of the -- are you looking at the yen? >> i think that the yen has a big play in it. when you look at the overall picture there is a lot of money made in the market. janet yellen has made a clear statement. she made her statement clear that they will continue -- but if they have to they will bailout the market. people are going to start to take some money to allow this -- because this lack of growth is eventually going to come in to play. >> todd horwitz is skeptical on the markets? i am shocked. the founder and manager of -- to the call on the markets, we bring in kevin karen, the --rtfolio manager of nichols 00 it seems like you are bullish on the united states. what is happening? >> all the changes that happen in the last few months in regards to fed policy, all the money that has flowed out of the united states into the rest of the world, this is beginning to reverse and create a turn overseas on the dollar will be a safer place to be. that has not been the case in the last few years. >> you didn't have an authorized dollar? 1990, thethat in attractive thing that the investors wanted to come here because we have a strong dollar. >> the flow out of the emerging markets, in regard to china, you have taken a look at this country. >> it will be a major part of these markets and i am looking at the chinese yen. the dollar is strengthening after it had suddenly lost ground since last february. the chinese central bank is trending lower as part of its efforts to prepare -- repair the currency for greater trading. this is the clearest sign yet that they are pressing ahead report, withial the messick spending. >> is there a transition into that consumer driven economy? >> it is tough. they have a lot of challenges and an inflation problem, they need to essentially print more to get that to happen. they are caught between a rock and a hard place. it will be difficult to maintain price stability. >> and they have more volatility. one stock that you like his intel. olivia, you have been digging into that barricade. is the largest maker of chips and they did $50 billion in sales last year with the problem is the bulk of their .usiness is in pcs 80% of pcs around the world use products --butel customers are drifting away from this and they have lagged their competitors in getting into mobile, those markets have been falling for the last three years and the latest earnings report forecast that for the first quarter, margins would fall from 62, to 59. it raises questions over whether this is the time to buy intel. >> for that specific region -- you have margins and for that specific reason -- >> i don't think that the pc is dead, there are things you cannot do on a traditional mobile device like an ipad or an iphone. >> but not dead is not the same thing as growth. >> it is growing. i just bought a fantastic laptop that is wonderful, technology i have not seen in 10 or 15 years. is trading at 10 times earnings and there is a leadership advantage with ships at a two-year lead, at 10 times earnings. and the valuation -- >> when you think of margins, we have old about margins all across the s&p companies. what do you make of that? is going to generate profitability and they may have to, in the short term give up that profitability but they will come back. andtaying bullish on intel u.s. stocks, not so much. peter nicholas. it started as a central search engine but now google is trying more, we have a look i'm the scenes at the latest venture, google fiber. and tesla ceo elon musk wants to build the largest factory -- and this is less about electric cars and more about lithium. we are 15 minutes into the session. stay "in the loop." ♪ >> high-speed internet is important, but how much bandwidth does one person really need it yeah, bloomberg -- "bloomberg west" spokeswoman the first users in provo, utah. i am mr. hanson and i have google fiber. this is like the jump between dial-up and dsl, this is so fast you don't notice loading time. this was $120 per month and i do not have to pay any inflation fees. when it comes to gaming, connecting to friends is pretty much instantaneous. one thing i wish it had is more apps for the tv. ihave netflix but i wish that had youtube and other ways to browse the media online. i can see my entire guide and if i want to ring up something from my dvr, an old episode of supernatural, i hit play and it brings it up instantly. i am on netflix. let's see how fast something loads. the only thing i don't like about google fiber is how much time i spend on the couch watching tv. >> like an advertisement for google fiber. provo, areople in they as excited as that man for google fiber? >> i think that they are. the city is just papered with advertising and the newspaper has great things and the other cable providers are here, trying to up their game. comcast has lowered their prices and increased their delivery service. there is a big change happening in provo driven by google fiber. >> how many homes do you think that this could really reach? what is the target, one small town at a time? are talkingnalysts about this thing. 50% of the homes the fiber service will get. we were at the diner this morning talking to people and they say that they have been waiting months to get the service installed in their homes. there is clearly some demand but there is not just a man in provo. there are more cities lining up. google says they have 32 cities and they are quietly negotiating. one of them is salt lake city. we spoke to the mayor of salt lake city and listen to what he had to say. in thisve the ability information age both to attract businesses for notch pernod or working out of their home to have the same speed as someone downtown with access to fiber, it really elevates us to a place in terms of international competitiveness, but also in the terms of service for every household in our community, it allows us all to raise our game as a community, and to put us in the position both for prosperity, and for a connected society. that we are excited about. actually ae city is vibrant technology seen. but even at the office in salt lake, owing to the mining craze of the 1950's and 1960's, some of those companies are still around. but this kind of internet service can really be in game changer. lots of startups that moved to kansas city are already here hoping to get the same treatment as provo. >> what is with the rabbit? we saw this rabbit about 47 times. >> this is speed. they are pushing the speed of how fast that the service is. >> cory johnson in provo, utah. tesla's biggest battery plant is one step closer to reality. ton musk unveiled his plan get it off the ground, to help tesla achieve their mass-market ambition. car company, tech company, energy company. >> this move would really bring them the possibility of being much more than a car factory, a car company. he wants to create a gig a-factory, it would not only be the biggest lithium battery in the world but it would produce more than all of the rest of the lithium ion battery factories in the world. >> i say lithium and i am a big nerd. less than one percent of lithium is used for cars. it has the potential to reach 27% in 2017. this goes a long way to do this. >> is this use for bipolar disorder? >> and also for our phones and ipads. >> this is pretty amazing for the car industry, at a time when beijing is being drowned in toxic smog, maybe we will see the biggest car market in the world take a push to electric cars. but it will be interesting for everything because elon musk would have the ability to power all of our stuff, and if this is combined with his supercharger station, which will be strategically placed around the most important urban areas in just give elon musk the ability to run america just begun building cars. >> if we stay with cars he is looking to produce half of a million. >> he said this would produce enough batteries to make half a million. he is not saying he will produce half a million cars. he's just giving an idea of the scale. >> it would be mass-market within millions -- 10 million cars per year? >> it would be mass-market with 10 million cars. >> and you could have a reduction price. >> for luxury cars this would be mass-market. with what is going to help them bring down the cost -- elon musk says he wants to build a car that is affordable for you or me. concerned,esla is the price, 50% of that is the battery. reducing that is an amazing push. >> the best conversation all day. matt miller, i appreciate it. we will be back in just a few minutes. ♪ >> and arizona bill that opponents say would target gays has been vetoed by governor jan brewer. it would allow them to refuse service based on their beliefs but widespread protests of companies from apple to american airlines opposed this bill. white house correspondent julianna goldman joins me. paint a picture, what kind of pressure was the governor under here? brewer came to this decision after intense pressure from businesses and national political leaders, and to republican senators. mccainay and john cautioned her and urged her to veto the bill. she came out last night, she said liberty and nondiscrimination are core .alues are -- of her state >> i have not heard of how a onerous religious liberty was piloted. and bill is broadly worded could result in negative consequences. after weighing all of the arguments i have the code the bill. -- vetoed the bill. >> only was a discriminatory but it also threatened a number of businesses in the state. senate and political leaders said that it would be catastrophic for the state's economy. you saw a number of companies from apple to american airlines, intel and verizon threatened to pull business from arizona. steve case, the founder of aol who owns the largest spot in the u.s. tweeted and urged governor brewer to veto the bill. and last night after brewer came out with her announcement, he retweeted her picture of her vetoing the bill. >> thank you for joining us with the latest on the arizona bill. time for the global outlook. the ukraine says it needs a $35 billion bailout. the u.s. has raised 1 billion and now christine lagarde says that the imf is ready to respond. this is after the local parliamentary building in crimea was overtaken. alex is in crimea and joins me on the phone. what is it like on the ground? >> this is the capital of the peninsula and right now hundreds of people have gathered for a rally that is ardently pro-russia. everyone here feels closer to russia. this autonomous enclave in the southeastern part of the ukraine , is ethnically and culturally closer to russia and the people here have completely rejected what has happened in kiev and the rest of the country. >> what do they want, any demand? >> it really runs the gamut. some people would like to be part of it, if they were not ukrainian they would want to be part of russia. beers want crimea to independent, complete independence from the ukraine. others say they just want to be treated equally and feel that they are more part of the ukraine. it really runs the gamut but the point is that this is a decidedly different part of the ukraine than we have seen over the last few days, where the protesters on independence square that the ouster of president viktor yanukovych. >> we have 15 seconds, is there any violence? >> there was, with 2 people killed in the clashes on both sides. but so far no violence today. >> thank you for joining us. alexander marquardt with us. that does it for today with -- that doesn't today for "market ."ker "in the loop who isw, gina adams, bearish on the market and we will find out why. ♪ >> it is 56 minutes past the hour and that means that bloomberg television is "market makers." i am scarlet fu. we are 30 minutes into trading and here is where stock stand. the s&p 500 -- yesterday it reached a record high, but it did not close above and we are coming off of that level and eight at of 10 industry groups are falling, led by energy stocks. telecom shares sparking the decline, they are higher. the yen is higher than the dollar but still holding at the 100 to level. the yen or the u.s. treasury, pushing the u.s. yields lower. a two year yield is at week low, and there are certainly concerns about the u.s. economy after jobless claims came in higher than anticipated. clinical turmoil in the ukraine boosting demand for safety. with u.s. stock markets learning with a record high, 84 companies announced their intention to go public with ipos. this is a 55% increase over last year. for more, i'm joined by leslie baker, who covers public offerings. everyone talks about j.crew, which is considering making its trading debut get again. why do they do this now? >> they have been private for three years, with leonard crane and they had a very controversial buyout back in march of 2011. they were not sure of the price, purchased for $2.6 billion. now they look at a $5 billion valuation. almost double. -- companies are rushing $3.5 billion valuation. almost double. as you mentioned, stocks are near a record high and they will be able to get theoretically hire. but look atnot help michael court, who has done phenomenally well. >> a lot of these retailers perform extra ordinarily well. that one performed extraordinarily well. they then came out towards the end of last year, with cashmere similar to the j.crew style of clothing and this on the first day of trading and it debuted well. ofthere are a number e-commerce companies and j.crew has a website, there are companies that are only e-commerce. they don't have brick-and-mortar. >> coming up this year we have the women's fashion site, that has been speculated to go public for the last couple of years, they interviewed banks and have chosen them, and they are actually pulling the trigger on that one. we have a chinese cosmetics company that is looking to expand into the u.s., that would be a play on the women's chinese consumer side of things. and so, we see a lot of these consumer-oriented companies looking to break into the market this year. >> another e-commerce man that went public, how are they doing? >> they have done very well and they were great when they debuted in fall of last year. this has been a nice trigger for any e-commerce -- other e-commerce companies to go public. with future competition from been patiently has and looking to see how another e-commerce company would do, actually performing well and encouraging others to go forward. >> we will wait and see which actually pulls the trigger. leslie baker, from bloomberg news, covering initial public offerings. on,re on the market later "market makers" with erik schatzker is up next. >> live from bloomberg headquarters, this is "market makers" with erik schatzker and stephanie wu. >> janet yellen goes back to washington. the senators will be grilling her. what will she say? >> and the doors may take fewer customers as sears -- looks for a turnaround. if either retailer will provide -- >> google is profiting its high-speed internet service. our roving reporter out west

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