Warning emerging markets need to prepare for capital flight if investors are surprised by the timing or pace of changes. Even if this process is wellmanaged, the likely volatility could give rise to potential stability risk. And echoing her warning, a Hedge Fund Billionaire says the Federal Reserve could calluse a 1937 style shock and slide. Hes steering clear of big bets on the Financial Markets because they could be unseen consequence of changes to the fed policy. The new manager of the funds at pimco seeing a bigger return than his boss. Right to the breaking news desk where scarlet fu is looking at the action. Scarlet another triple digit move. Breaking news from the cme. It is in talks to pursue gfi Technology Assets after losing a takeover battle. If you look at the screen behind me this is gfi groups shares right now. There is a pop on the headline. It is still up 1. 5 percent from the session. As for the broader market, u. S. Stocks are lower but they basically have a raised a big chunk of their losses erased a big chunk of their losses. Trading in all three indices below their 10 day average. Housing starts, the latest report, shows some weakness because of the bad weather in february. Alix thank you. Turning to israel now, we have about an hour until polling stations close in what is turning out to be a tight race for Prime Minister. Elliott is on the ground in tel aviv, what can you tell us about the polls . Elliott we do not have polls throughout the day, they are not legal here throughout the day. You get the first exit polls about a minute after voting e nds, and that is in one hours time. That will give us an indication of whether the right wing or the left wing is likely to be able to form a governing coalition. It is very noisy and here, they are preparing for what they hope will be a victory party. Earlier today, Benjamin Netanyahu calling on rightwing voters to really get out and placed their votes, warning of high error voter turnout arab voter turnout, those comments have been decried as playing politics and being racist. Some commentators have likened it to saying imagine there are too many black people voting, we must get more white people out, it is controversial. More comments in that again, saying that there will be no palestinian state on his watch. Alix another war of words over greece. This time on capital controls. Dutch finance minister raising the idea as a way of avoiding a greek exit. The government officials are calling it a fantasy scenario. Here to discuss is peter and lisa. What would capital controls me for the country . Peter greece having to leave the euro and i think it can be done calmly and organized that is the most organized. That is the most likely scenario. Alix but they said they wanted to keep greece in the euro zone in the next wrath of that sentence. Lidasa the question that i been trying to answer is how much to the banks of europe to the specific a government of europe have a stake to lose should greece start to fall or show signs of deteriorating rapidly . Alix trish if were talking capital controls, does that bring up the liquidity . How much does that mean for how much money they are going to need from the . M . Peter it becomes very unsustainable very quickly. Greece has about one billion 1. 6 billion euros coming due this friday. We are seeing the problem where it is a different story this time that it was in 2010 and 2013. Almost all of the jet is owned to germany, italy, spain, and france through these lending facilities they have set up. Alix we have some news on that, greece is going to take a summit break, trying to get some sort of summit put together. One step forward, two steps back. Lisa it is hard to parse through the words to see what the motivations are. It is exhausting, people pounding it again and again. The finance minister of germany said that he can wear a necktie or not he can talk a shirt in or not, we do not care, but verbal attacks on the financial minister are on acceptable unacceptable. Peter the other thing that is so hard with europe, most financial ministers are politicians. It is not like when we had the Treasury Department which really was finance people. Whether you liked what they did or not they were true finance people, they understood it got the details right. What it goes on in europe is a complete lack of understanding and an unwillingness to dig into the details. A very two inconsistent statements coming out of the same time. Alix we do have a bank of england official coming out and saying failure to find a solution to the debt problem could cause market correction. Peter it will have a small impact on europe, but not much. One thing that will surprise people as you will actually see a stronger europe. If you see greece leave, you will see a stronger europe, and that would catch the market very off guard. Everyone is worrying what could happen, and if you Start Talking about greece exiting and a controlled way, that actually could spark a euro rally. Alix i wonder how that factors into the feds decision. If the fed says that they are going to hike rates, it indicates a rate hike in june. Does that make it easier for europe to allow greece alix stronger dollar capital flows. Lisa exactly. Peter the fat is obviously watching fed is obviously watching. No one wants to be in a position with greece with no central bank support. I think theyre trying to actively encourage the ecb to not let this got of control, where all of the sun the chinese become the savior to the greek banking system. 40 to 50 chance, and a small probability of a german exit. They are getting very frustrated with this whole situation. We get this point of view of i will take my ball and go home. They do not need to deal with these babysitters. Alix thank you for joining us. Coming up next, if youre on the fence about cutting the cord, apple may push you in a new direction. How they want to deliver podcasts tv into your living room broadcast tv into your living room. Why iron man is getting engineering assistance from an inspirational sixyearold boy. Alix this is street smart kerley headlines were watching ahead of the closing bell. Falling by the most in four years plunging 17 . There was a rise in the number of ruling permits which indicates that the slump in home starts may be a temporary blip. Facebook allows you to send money to friends over its messaging service. And nintendo has dropped its opposition to using its characters on mobile devices. The company is partnering with another Japanese Firm to develop new games for mobile. It had only allowed games to be sold on its own devices. Apples target, your cable subscription. They are in talks with tv programmers about creating a service that would charge less than 50 for 25 channels that would live on your little apple tv box. Is this a good thing . We are all looking for someone who is going to improve our living room experience and lower our bills in the living room experience has been very frustrating as far as development that occurred on settop boxes. Youre strolling through scrolling through so many channels. Alix how is this different from sling tv or hulu . Walter it is not. We do not know what they are going to announce and include. There is this expectation that you need to include every broadcast channel, and they do not know that that is the case. There are customers out there, if youre going to save them a lot of money, theyre going to take one bundle that may not have something. Alix how much is it going to cost apple . Presumably these retransmission fees are huge they are a huge moneymaker for these broadcasting networks. Walter they have been able to get their price point down to as low as 20. It is a Person Driver fee per subscriber fee. Alix apple left their juicy margins look at their iphone. Will they have to eat it . Walter it is more about the ecosystem. If they could sell you additional phones or ipads, if this drives more usage, and people can get a very by ipads and give them a fat margin. Alix steve jobs never seems to care that much about apple tv, and all of a sudden he was like tim cook is making a payment. All of the sudden tim cook is making a pivot. We thought it was going to be a big huge flatscreen tv, not a tiny box. Walter again, we have been expecting it as an industry there has been some new developments with slaying, perhaps sony, even verizon doing an overthetop service. There is a change in that in the past apple has thought about partnering with the Cable Companies, while now they are more credible with an overthetop solution worthy do not have to rely on a managed service to deliver Something Like this. Back to be a change that makes 2015 the year for apple. Alix what are the Cable Companies going to do . They have my wifi. Walter they have broadband pipes in your home that they can charge a lot of money for. This is not going to appeal to everyone. This is not an all or nothing. Cable has that monopoly in the broadband, that is a key. None of this works without the broadband pipe. Alix in your best estimate, or terms of what this might mean what will this mean for other apple products . Walter it we will have to see what it we will have to see what they charge. But they can create revenue in other products. It is about a Massive Company continuing to grow and 10 or 20 . If they can show that they can grow at 10 or 20 even at the current stock price, the stock is cheap. Alix kind of cool. Walter, great to see you. Coming up next, im going to introduce you to albert the changing the world of prosthetics. I designed one of these, it broke on me. I keep working on it. You work until you get it right. Alix the big names reporting earnings after the closing bell. Scarlet fu at the breaking news desk with a preview. Scarlet oracle and adobe reporting earnings. I want to focus on oracle because it is not participating in the rise of overall shares today. Growth from licenses has been slowing at oracle, as customers switch to cloud inscriptions. Subscriptions. Only 5 of revenue is showing great look for a strong dollar to be a part of the narrative as well. A lot of analyst forecasts indicate that oracle has been giving guidance that underestimates the direct from the stronger dollar. Look at the bloomberg terminal this allows us to show you how often oracle surprises when it comes to the revenue line. Overall analysts are looking for a 2 growth last quarter, and in general this is the trend. In the last four quarters, they tend to disappoint when it comes to revenue. In terms of what it is projecting overall an increase but only 2 and the average surprise they have reported in their sales have been 1 over this time that we trekked. Terracked. That gives you a sense of what they are dealing with. Alix one of the big issues in talking to managers is going to be the currency issue for hewlettpackard. We have seen it all across the textch sector. How much will it impact earnings, and forward guidance. Scarlet analysts all saying that they are looking for the company to give their revenue in terms of Constant Currency terms. Strip out the effects of a stronger dollar, the weaker emergency emerging markets, all of that. It will be something were analyst and investors will be asking a lot of questions because nobody will have difficulty projecting a much of him had wednesday stronger dollar will be because they will have a difficulty projecting how much of a headwind the stronger dollar will be. Alix they did guide to about a 4 hit on revenue. What about the great thing about oracle is it is a huge window into the entire world of how sales are going. 30 are in the european areas. A good window into how those countries are holding up in terms of demand. We have gotten a lot of indications from those companies as of late. Scarlet whether it is oracle or intel, who told us that Quarter Sales would this point because of the stronger dollar as well as the slowdown of the pc refresh cycle. All of that coming to an end. That cyclical part of the industry as something that we cannot look for as a boost or our earnings anymore. Alix thank you for that preview. We look forward to the actual earnings at 4 00 p. M. Coming up next, the new managers of the Pimco Total Return Fund has been trumping former boss bill gross. I will speak about their new strategy and a look ahead to tomorrow. Alix here are the top stories were watching ahead of the closing bell great calling for European Union cap. The talks would be held in brussels on thursday ahead of the eu leaders meeting. All of this according to the ap. Just raking, jp morgan is fighting the right to handle 45 billion in home loan from off when financial familiar with transaction. That are like that to performing debts by any made. Expect to to complete the transaction by midmay. Pursuing a Technology Assets areas the asset may be valued at more than hundred million dollars. Bill gross versus pimco. This time pimco win. The total return fund cut the exposure to shortterm debt laden betting on a shortterm that in june. It is paying off for pimco. 2. 6 return 2. 6 from september through march. Joining me to discuss the strategy is a comanager. Also the cio of global credit of pimco. Thank you for joining me. When bill gross with that pimco did you and the other managers disagree a lot cap . I do not think we disagree that much. We have been incorporating the insights of the Incredible Team at pimco. We noticed basically around the time phil left that there were growing divergence economically as well as future Monetary Policy that caused us to think the economy with picking up. We wanted to get the Interest Rate it measured down and increase the currency positions. Over the past 5. 5 years, the team, which encompasses myself and scott have done a good job getting the insight into the portfolio. The portfolio has been quite well. Alix was that a big change from when you work with bill gross . It seems like you pivoted the strategy. Reducing the exposure by about five years. Not a big change. Remember, the pimco strategy is topdown and bottomup. I think one of the benefits with three managers is all of us have worked together for 17 and 19 years. We all have managed very large teams. Scott with global and myself with Global Credit Team and analyst. We get tremendous amount of insight every day from this Incredible Team. We are incorporating 15 much more proactively. Alix part of the issue as everyone expected the rates to go higher and prices to continue to fall, and that did not have been. We saw a lot of redemptions, about 100 billion at the end of september. He can you tell us about where those are right now . Basically some of that money has left. Some of it is going to income at pimco or credit. Some of it could be going into europe. We have managed to liquidity very well. I think the performance speaks to that. Alix what are you going to buy now gekko what is the strategy y . We think the fed will remove patients tomorrow and will raise rates in june or august. The reason is the Unemployment Rate is coming down dramatically. The labor market has added one million jobs. We have added 3. 3 private sector jobs. Unemployment rate of 5. 5 is coming down 1 annually over the past two years. Wages will eventually start to rise. The fed has to be forwardlooking. What were doing is were overweight the dollar versus the euro and the yen. We also have been reducing Interest Rate x version are particularly the front end of the curve that looks very vulnerable. Right now the market is pricing in no Interest Rate hikes. Looking at her market that only 1. 25 literally two years from now. At the end of 2018 2 . Basically no risk premium on the front end of the curve. We have reduced exposure. Alix what do you say to the billionaire ray. Leo who is concerned about the collapse of the fed . Christine lagarde thing it will be hit hard . The reality is the consumers nearly 70 of the u. S. Economy. It is the strongest it has been in years. The income proxy, job growth, income and hours worked. Income proxy is upset 5 . The reality is we are very close to the point where you will see wage inflation. The bottomup suggest it is happening more broadly across a lot of industries. The reality is you want to stay overweight dollars. You want to favor housing and housing way sectors. Finally you want to own inflationprotected securities. Inflation we think we gradually will gradually had higher. Tips are for winners. Alix that is like your slogan. Do you miss bill gross . Of course we missed bill. He is a legend. Pimco is strong 2400 employees around the world and 13 offices in 12 countries. We are routine united, and we are working very well. The performance as you said, is good. Alix we miss them, but good without him. Thank you. The u. S. Chamber of commerce is hosting the annual aviation summit and easy, and matt miller has been talking to bury the layers in the future based and aviation. He joins us from d. C. Matt i am here with tim clark. There was an attack launched a u. S. Clay or carriers that three middle eastern carriers are giving subsidies and asking the u. S. Government to almost hold you back as far as your participation in the market. How do you feel about that . First, we need to respond about the allegations made against us. These have been brewing. We need to sit through that and deal with allegations. All i know is it has been this way over 30 years. Very profitably and successfully. We will keep it that way. We want to continue growing the market. Matt have you already talked with lawmakers . We have had discussions with certain stakeholders in the government. We found very constructive talks and very fair and reasonable talks. I hope we can take this further and respond as we will do. Matt james hogan was saying the u. S. Carriers get also a lots of advantages because of the near monopolistic terms that are set up here, the infrastructure, tax breaks on fuel, pensions that can be wiped out with bankruptcy courts. Have you tried to quantify the amount of subsidies that u. S. Carriers are living off of . The main part of it will be mainly to deal with allegations made against us. Very important the united dates government understands we are here as fair playe