still in the early stages. what this could mean for verizon. let's go straight to the markets desk where julie hyman has the latest. possibly a bad earnings season, but you could not tell from how the markets are trading. julie: the sentiment is terrible going into the season with a pullback of about 10% in the s&p on average. all three major averages trading higher. some talk that investors are now looking past this earnings season, seeing it as a bottom for earnings. all three major averages are higher, the dow doing the best of the three. if you look inside the moves today, sector wide, financials are leading some of the gains, even though there is a lot of pessimism around the bank earnings. energy and technology rounding out the top movers. health care is the laggard, but at the moment it is not much changed. the other big story has been a japanese yen, which is not doing much today, after that 17-month high for the currency. we could see a shift there, even as we are seeing a very bullish sentiment in the end. take a look at the bloomberg terminal. this is looking at the dollar yen versus the cfpc long, yen longs, which have been surging. we have seen a lot of bearish sentiment squeezed out of the markets. now bullish sentiment could be reaching a top. oil trading near a four-month high in london trading. in the u.s., of by better than 2%. raised its it output, which you would think would be negative for prices, u.s. prices down for the 10th time in 11 weeks. betty: tell us about earnings season, what are people saying? julie: a lot of negative sentiment. oa usually kicks things off. there is a lot riding on the line for them. they are playing to split themselves up into raw alumina production and finished products production. lots of questions about what this will mean and how the business is doing. shares are up 3% going into the report. the other group is banks. they report relatively early. these stocks are rising as well. there has been some analysts commenting it will not be quite as bad as investors are fearing. check out the stoxx 600, the industry groups. we have fallen for four consecutive weeks. weeks, it at five would be the largest stretch 2007. it is all about china today, which is why basic resources are rising. data takingation investors by surprise. month on month, producer prices posted the first increase since 2013. interestingly, investors are pulling money from tracking european equities. stoxx 600 is now trading near its lowest evaluation relative to its usp or, the s&p 500, since -- in more than a year. is thelow line evaluation of the s&p 500. 17.4 times estimated earnings. the stoxx 600, 3.5. the disparity is the most in over a year. the lender is paring its balance sheet after reporting record income it. 50 bank index.se 3 standard chartered is a by 1.2%. interesting comments from the ecb executive board member. he said extraordinary measures to spur growth may show diminishing returns. this chart shows the measures are having an impact because since march 10, when the ecb said it would buy nonfinancial corporate bonds, euro investment have outperformed financials by 18 basis points. the spread differential between the two is now the highest since 2014. the blue line is utility, white, financials. frontors are probably running the ecb purchases, what they think the ecb will buy when they start to buy corporate bonds at the end of the second quarter. let's check in with david gura with the latest from our newsroom. ministers from the group of seven industrialized nations are meeting to call or nuclear disarmament. also on the agenda is terrorism. all the g-7 nations remain absolutely steadfast and united in their commitment. i would call it a resolute commitment, strong commitment, to degrade and destroy daesh through our global coalition and are each committed to using the tools available to us in order to confront this scourge. david: meanwhile, secretary kerry visited the memorial of the hiroshima bombings. him the mostes senior american official to travel to hiroshima. the international furor over the panama papers is entering its second week as david cameron faces criticism about offshore tax havens. malta's government is facing a no-confidence vote. the u.s. naval officer charged with spying for china has been identified in multiple media reports as lieutenant commander edward lin. appointed to the navy reconnaissance group. he has been charged with five counts of espionage. 15 former bar association presidents are urging to push president obama's nominee to the supreme court merrick garland. isy argue the gop blockade injecting a brand of politics into the court which materially hampers the operation of the judiciary. republicans say they have no plans to move forward on the nomination. betty: thank you. as we have been mentoring, let the earnings parade begin. reports after the bell today. corporate profits are expected to call 9.8% year-over-year. that would be the sharpest 2009, and a fourth consecutive quarter of contraction. joining us from irvine, california is john brynjolfsson, chief investment officer of armored wall family holdings. wolf family holdings. mohamed el-erian has a look at talking about the central bank. our corporations the only game in town when you look at market price action in equities? >> the earnings have been week and are getting weaker. it looks like it will be a terrible first quarter in terms of earnings. money managers for the past seven years have been focusing on central-bank action, solouts, industry subsidies, you have to be a washington or global policy analyst as much as an economist these days in order to gauge the market action. we are looking at the fed, looking at the ecb, bank of japan, global conditions on the political and policy front as much as earnings. you said in a note to us, the price action per -- what do you mean? >> equities have been doing well the past seven years, a pullback in january and february. that is bouncing back mostly on the idea that the fed would not tight. given economic conditions, it may be hard for the fed to talk -- titan this year. my colleague and i who run a mayfolio, think that that -- the fed may tighten once this year. we do not really think that generates economic growth. it kind of grades and illusion of liquidity, of being able to sustain things. , that is not that encouraging. for example, gold has been doing well for the past quarter or two. gold is an alternative to buying into that liquidity. mark: how worried should we be by the fact that as equities from the february lows, we have seen money move into these havens, like gold, the yen, the g-7 sovereign bond index. us? does that tell they haven markets will continue to rise, and risk assets will not do well? and g-7 sovereign bonds, half of them are yielding zero or less. for a greatt auger long-term investment. it might be ok to park money there temporarily. bill gross talked about how the long run outlook for interest meanss rising, and that negative capital gains on bonds. so in the case of the u.s., the highest yielding sovereign in years, that.75%, 10 is not really anything to crow about. the outlook for bonds longer-term is certainly negative. certainly, given how weak the global economy is, how weak ,arnings and profits are probably i would disagree with bill in the short-term. bond yields are likely to stay low, maybe even get lower been here --from here, before they start a secular ride. mark: i want to get your take on a price of oil. about $14 today. you think we are getting to about 30, why is that? john: i have been wrong for the last eight weeks or so. what i got wrong is there is floating storage available, meaning right now the global oil producers are producing more oil than we consume. we have already filled all of the on-land storage. i made the mistake of thinking that that would result in an immediate glut, down trend in prices. there has been a rebound, but i think it is a head fake. having oil sitting around in the high seas floating in tankers waiting to be used is not a long-term plan for success. ultimately, all those inventories, all of them floating storage has to be worked off. the only way it can be worked off is it production dramatically -- if production dramatically decreases, or if consumption rapidly increases. i don't see that happening, certainly not in china, europe, brazil, certainly not in africa or the u.s. we are looking at a 1% gdp growth, which does not speak to strong oil consumption. betty: i heard what you said about bonds and the outlook for rates, but i don't know if you can see this -- our viewers can. full of the chart on bond market expectations. the five-year outlook for inflation continues to rise. it is getting near the 2% inflation target set by the fed. when you look at something like s wellit actually auger for the fed to raise rates and that the bond market could turn. for most of my career, the inflation market based in either 2% inflation or a risk on the outside. the past three or four years, it has been looking more like deflation, in europe and the u.s. we did have a pop recently, part of that is the shelter component. hasowners equivalent rent been rising, and the rent has been rising, bring up the court and nation. -- inflation. the other part is the headline affect. with oil going up to $40, you will have a pop in the headline rate of inflation. even on a five-year basis, according to the tips market, we are looking at it later around 1%, 1.5%. and there could be some risk on the downside, especially if my oil view comes through. betty: good to see you. the chief investment officer of armored wolf family holdings. we will check on how stocks and others are moving in today's session. ♪ mark: from london and new york, i'm mark barton. betty: i'm betty liu. it's time to take a look at the biggest business stories. the pay gap is only getting wider. the federal government says adjusted for inflation, wages for investment bankers and security industry employees was 1992 2014.m over the same period, wages for all other industries up only 21%. canadian pacific ending its effort to purchase norfolk southern after several rejected proposals. hoped to create stock a coast-to-coast network. let's go straight to the markets where julie hyman has more on the reaction. norfolk southern socks falling on the news. julie: and canadian pacific getting a bit of a lift now that this is ending. canadian pacific up 4%, norfolk southern down about 1%. the nail in the coffin appeared to be the justice department. canadian pacific try to create a trust so that the ceo of canadian pacific would run northern pacific -- suffolk. these things were piling up, resistance to the deal happening. an analyst at callanan company said in a note, canadian pacific is walking away from a negotiating table which never really existed. , but the twoorts were never really insubstantial talks, so the question is what happens now. pacificast, canadian has held talks with csx, but those were also rebuffed. csx today is little changed. our analyst suggests the kansasng target could be city southern. we spoke to officials about whether they had a preference in either of those mergers. there is noaid favorite, both organizations in the east would work with our franchise. there is not a favorite. one has this advantage, what has that advantage. we think we could sit well with either one, but neither thinks they fit well with us. to do, if wed job are going to make this successful. julie: so it is unclear what happens now. inhave seen a decrease railroad shares over the past year, along with commodities. part of their playbook has been cutting cost, so if there is nobody to consolidate with an cut cost through synergies, it is unclear what happens next. mark: thank you. still ahead, yahoo! getting another suitor, this time the owner of the u.k. "daily mail" newspaper. ♪ mark: another suitor is drawing their hat into the yahoo! ring. mail" newspaper is in talks with private firms for a bit of yahoo!. our chief correspondent is not here with more. how would they afford it? this will have to be done with private equity or through some kind of complex structure. i don't expect anyone thinks the parent company to purchase yahoo!'s media assets outright. private talking to equity firm to see if they can get a deal together but there are some big gorillas here. verizon, google. it will potentially get quite expensive if these companies really want these assets. betty: where does this leave verizon, who appeared to be the leading bidder as a last week? matt: i'm not sure, and i think it will come down to what the various parties are willing to pay. certainly, verizon is a much larger company than dmjt. if they want to, they can do so and win the auction. "daily mail is more of a media company, not a telecom company. that lets them go the extra few inches when it comes sums of how they would pay. mark: how might this expand their reach? matt: the name of the game right now is advertising. the daily mail is a pretty big platform, the number one english newspaper on the internet. ? is huge as well. together, it is a one-stop shop for advertisers. that means they can charge a premium for getting those as in front of readers eyeballs. sok: why is daily mail popular? matt: celebrities, i suppose. they sell in tabloids as well. mark: what is coming up next, betty? betty: british prime minister david cameron under pressure when it is rumored that he made some offshore investments. he will be making statements shortly. live remarks shortly before his remarks. ♪ betty: live from bloomberg world headquarters, and betty liu. mark: i am mark barton, this is "bloomberg markets." has more from the doors are in. david: greek officials have another go at talks on austerity measures. they have been hoping to wrap up talks over the weekend. greece assigned a $98 million bailout deal last summer. the u.s. agency used parachutes to airdrop aid to a syrian city under siege. was dropped, the eight is enough to feed 2500 people for one month. more airdrops are planned. president obama meets jenny ellen today, -- janet yellen today. we will focus on wall street reform. vice president joe biden is also excited to attend. a stark warning for donald trump, americans trust hillary clinton more than the republican front-runner on an array of images -- on array of issues. that's according to a new associated press poll. it reveals trouble spots for clinton, trump is really even with her on who americans trust handle the economy. oneen state warriors are game away from breaking the nba record for most wins in a season on sunday. the warriors beat the spurs for the 72nd win of the season which ties him with the chicago bulls, the defending champions and they play wednesday against the memphis grizzlies. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. i'm david gura. betty: time to get you caught up on the action around the world. we started in asia, where most of the stock market follows the nikkei down. the yen continues to hold onto its gain that we've seen over the last seven sessions. china, story came out of china's consumer prices were up last month while factory deflation used, tom mackenzie has more. tom: inflation in china rose again in march with the consumer price index up 2.3% year on year. that was marginally below forecast for a 2.4% increase. the rising cost of food, particularly pork and vegetables had an outside impact with prices up 7.6% in march, the highest since the start of 2012. they may have more to do with supply shops then demand it, according to bloomberg intelligence. nonfood inflation edged up just 4.3% fromion used to 4.9% in february. that was thanks to stronger commodity prices and improvement in the real estate sector. trade it out on wednesday, first-quarter gdp on friday. from bloomberg news, i'm tom mackenzie in beijing. ofk: after four weeks decline, european stocks arising on this monday session. it's a china led rally in place. the big news was producer prices. on a month on month basis rose for the first time since 2013. have a look at the best-performing industry groups today. if the china led basic resources that are leading the advance as an industry group, they are up by 3%. on hopes that we are close to an italian bailout fund being completed in italy. the talon banks are the best performers within the banks index. energy stocks and autos are also rising. we finish off with the bond and currency market. rising ton thursday 80 pence against the pound. since junethursday, 2014, it rose for the fifth week past week, the yield on the u.k. tenure is up by four basis -- 10 year by four basis points, the german up as well. the propensity is to invest in riskier assets. let's find out how some assets are doing in the u.s., abigail doolittle has the latest live from the nasdaq. abigail, what have you got for me today? abigail: a nice rally is happening, the index is up about .9%. the biggest boost as apple, shares or have little as rbc capital says they believe apple is selling the iphone as the se reallyl -- iphone well. it says it could actually boost earnings for 2016 by $.23 per share. moving, the stock is back towards the 200 day moving average, something that is typically bullish. but in less convincingly above that level, last year's trading action suggests we could actually see some downside ahead of apple, perhaps into the company's earnings report on april 25 or after that. mark: any other stocks moving higher today? abigail: the best performer in the nasdaq 100 is seagate technology. they believe seagate could move up by 20% over the next 12 months, after the stock of got pummeled over the last year, investors are concerned about declines. behrens is encouraged by the company is ample earnings, their cost-cutting efforts, and also, a hefty 7.6% dividend yield, which they say looks quite safe. mark: abigail, thank you very much indeed. betty: the head of the largest listed headphones -- hedge fund business occurs -- prefers a low-key approach. luke ellis talks about how he runs a portfolio, and about the hedge fund industry. fundsthe really big hedge have very high profile characters of ahead of them. they make great tv, everyone likes them. as we've seen, they get a couple of fairly dramatic mistakes in the last few quarters, and have been punished by the market. the real returns are not that bad. it wasn't a great quarter, the reversal in the stock market, the reversal of momentum harkin from the short fight a lot. that was bad in the first quarter. but short terms are not that bad, and they're doing quite well. >> is the business model broken? you are down 15%, and the stock is limping along, 75% of your revenue comes from management, 25 percent from fees. is this a statement on the business model of hedge funds? luke: i don't think so. honestly, i spend little time worrying about the stock price on a day to day basis. we are trying to run a business, you try and run it five years forward. there areswer is that lots of opportunities to grow the company on a five-year basis. management, like any other part of the financial industry, is under pressure, there's no question about that. we have to keep moving faster, we have to keep delivering performance for our clients and deliver an interesting things that they want to put their money to work two. if you do that, you can grow the business on a long-term basis. in aound hedge funds moment, you say primarily also because of these big hedge fund rock stars that have made some bad calls in the last 12 months. does that really inflect inflows in general? luke: there's an interesting thing. just one bit, we review the largest listed hedge fund, but it's not one single big hedge fund. one of the things we believe in is shutting hedge funds early. there's no question that anything that's supposed to be about returner output has the capacity constraint. you cannot have something that is enormous and it's just a simple game of math. is 50 different individual hedge funds, none of which we allow to get that big. it's true that you can deliver some decent returns. market to give you a bit of opportunity. , it's 5%u look at ctas first-quarter. in an environment of zero returns, zero yields on bonds, whatever you guys have the numbers. an enormous percentage of bonds globally are not a negative yields. if you did a three-year bond issue the other day, that's zero. people are looking for something other than bonds. i can't tell you how the clients we talked to around the world i just can't buy bonds. i can't own bonds. >> you manage a lot of different funds, and you will shut them early if they are not performing. luke: the thing i was talking about was stopping inflows when they are performing. performance remains. >> you take that trendline, are you making changes in your funds faster than you did before in order to adjust to the marketplace? luke: i think if you look at individual position levels, what you see is this type of market where liquidity is fairly flaky. what it means is you either need to run your portfolio with very little macro risk, very little directional risk, little factor risk as possible and try and make it out of security, or you need to be very patient. the people who are getting in trouble are the ones who are trying to call the market one way one week and then suddenly flip and change the other with the next week. hard at the best of times. in this market environment, you basically are just paving the way to the streets. betty: that was luke ellis on bloomberg . in the meantime, u.k. prime minister david cameron is speaking. statement making the in front of lawmakers in parliament right now, is comes amidst his week of scrutiny of his financial affairs in which it was really profited from offshore investments. he has a knowledge he badly handled his response to the revelation and has published his tax data over the last weekend. tax data covering the last six years, he's speaking of parliament. interestingly, he's saying he isn't suggesting all mps should publish their tax returns from members of parliament such as the opposition leader says we are probably heading in that direction. london reporter, he says it's up to the individual isps and the constituencies themselves. smith himself has published his own tax return as part of the campaign. we also just had george osborne publishes tax return. there was pressure on the chancellor to do so because he liked cameron, -- he, like cameron, has come into family money. you can watch this live at bloomberg.com/live. we continue to dip in and out of the prime minister statement to parliament. still ahead, bloomberg businessweek. a trip to a restaurant where it can take months to create the perfect eye pleasing dish. ♪ mark: this is "bloomberg markets," i'm mark barton in london with betty liu. a look at the biggest business stories in the news right now. britain's equivalent of the secretary of the treasury has published his return for 2014 to 2015. george osborne earned $198,738 during that time, he made $72,000 in taxes. as we mentioned, david cameron is speaking to parliament on the tax issues. he isn't suggesting all mps, and members of parliament should cover -- should public -- published tax returns. malia pharmaceutical asks its cooperate everto he failed to appear. the senate says it plans to start legal proceedings against him. the executive is under subpoena to appear before the committee for april 27. the company says the rental car market is suffering from excess capacity. hertz global holdings expect revenue to range from flat to dropping by 1.4%. the company producing projected growth between 1.5% and 2.5%. that is your latest business flash. betty, we did talk about food. -- we need to talk about food. betty: i was just going to say that. my favorite topic. bloomberg businessweek is hosting its annual design conference in san francisco. when he five of the world's most creative speakers will speak at this event. profiledem is a chef by howard, who joins us now. after reading this article, i really want to try her dishes. she's very unusual, she presents a palm, not a menu. poem. -- a howard: each entrée is a line of the poem. betty: tell us about her. howard: he was trained as a businessperson and her father was a politician. she went to business school. -- betty: she went to business will. restaurant started a which has two michelin stars. that's very rare. what gave the change of heart to go from business to being a chef? howard: two things, she loves food and food evoked all of these memories from france. not of what you present in the dish is a lot of what she has experienced. the dish we profiled was a --ert which reminded her was of walking in the forest with ng to hunt forlki mushrooms and berries. mark: he reminds me of that pixar film ratatouille. howard: one of the best movies ever made. mark: peter o'toole voices this wonderful serious french food critic, who is bowled over by this dish at the end which evokes his childhood memories and breaks through his very sincere defenses and makes some cry. it sounds similar to that. howard: it's very similar. she does that with every dish. as beautiful as the dishes are, they are also very delicious. mark: how long did it take to prepare these dishes? howard: it depends. the one we profiled took a few months to prepare because they had the perfect the dish they were presenting. it looks like it is carved out of a tree. it has a texture of a piece of wood that they found in the forest. just fellike it there, but it is ceramic. a beautiful dish. here is doingchef similar things and has been doing similar things in his famous restaurant the fat duck. but it is not cheap going to the fat duck, it's probably 250 pounds before alcohol is thrown in. betty, you're going to have to start saving up. betty: sound like a double date. a dutch date. [laughter] mark: what is the cost? it costs close to $300 per person. dominique is a new policy, the tip is included. mark: that's a bargain. betty: moving along those lines to, i know a lot of restaurant owners are. howard, thank you so much. read more in bloomberg's annual design issue. still ahead on "bloomberg markets," good timing for swiss luxury watchmakers. iwc unveils a new timepiece for the tribeca film festival. but who can afford it? we will tell you about that in a moment. ♪ --k: swiss luxury walked watchmaker i debussy is according -- is courting the u.s. market, with a $25,000 timepiece in honor of the tribeca film festival in new york. president.is iwc's why do you have this collaboration with the tribeca film festival? is it beneficial to you? >> we don't think anyone is buying our watches to till the time. with the it's all about the story of the product and our watches. it's like in the film industry. strong link a very between iwc and the tribeca film festival. it's a long-term platform for us. you launch the special edition timepiece in honor of the tribeca film festival. who is your client? what type of person would buy that timepiece? edouardo: people who are in the film making industry, they really appreciate the movie and they like that it is limited edition. it's going to be produced only 50 pieces available internet american boutique. latest product, we launch/year. but some think very special for us. betty: how big is the north american market for you? edouardo: it's a very important market. still the number one market worldwide for luxury goods, especially for market -- for watches. has a lot ofmarket worry sos and we don't much about tourism business. it's all about the american customer, which is great. betty: that's different in many ways from the other luxury goods sold here. what is most popular? we have watches, what are the most popular timepieces? edouardo: almost everyone is our piece that iconic. betty: which one? edouardo: second from the left. and first one from the right. it's doing extreme llywelyn the u.s. and also worldwide. doing -- it is doing extremely well in the u.s.. it resonates very well with this kind of product. it's elegant, it's not only dressy, but it has a very classical look. by the way, which is launching this year our new collection, we expect the coming months to be even bigger in the u.s. the: there was a gap at end, there's no smart watch. are you planning on getting in the smart watch orson of the market -- portion of the market? edouardo: the last thing you want is to wear a piece of technology that will become obsolete in two years. be still ber iwc to updated when you pass it onto to your kids and grandkids 50 years from today or 100 years from today. but we are doing some special, we're about to launch iwc connect which is basically a wearable device that you will be able to put on your strap that will track your activity. betty: it's on a watch. it will be connected to the internet of things. that's two years once the technology is outdated, you can get a new strap and will not touch the watch. thanks for joining us, great to chat with you, the i .ebussy -- i wc ahead on the european close, we have the latest on u.k. prime minister david cameron's remarks in front of lawmakers in parliament. speak after he unveiled his past tax returns. releasedellor has just his tax details as well. that's what's happening to european stock markets, a small decline in london but european stocks are rising after four straight weeks of decline. the european closes next. ♪ york -- it.m. in new is 11:00 a.m. in new york. mark: you're watching the european close on "bloomberg markets." ♪ we are going to take you from new york to london to milan. here is what we are watching today. pm david cameron addresses parliament. how he explains this controversial i investment to parliament. betty: italian banks have been the black sheep of europe as bad debt piles of help may be on the way. more from the private meeting. has wipedcommodities out much of the energy industry but there is still some that are benefiting because of low oil prices. betty: