His tightest range of the whole year. We actually thought low volume. A lot people are waiting for the jobless report tomorrow. Sawy the whole month, we it really come down, for the most since october. Over the whole month, the risk of the volatility really decreasing overall. It seems like quite a trend. Us to wrapping up the First Quarter of the year in what a quarter it was. I want to start your with the nasdaq in particular, because it started off the year falling below its moving average. But in february with the rest of the market, the green for the quarter, but none the less, it was quite a comeback. The dow and the s p also seeing a second straight quarterly gain. Lets be honest, overall, we really havent gone anywhere. Were still flat. Tracy we have in there and back again. It felt like a lot happened here. Alix it did. , andhappened with the s p then that rally . He stocks that led in decline were apple, amazon, baker of america and microsoft. Of the upside, the same stocks. Apple, amazon, microsoft. We didnt really go anywhere, unless you are energy stocks. It is the best quarter for energy since june of 2004. Tracy im going to one of you. Best quarter for emergingmarket currencies on record. Alix you win. That is nuts. Tracy lets take a look at this chart. Astounding. All of that is off the back of the rally of commodities prices and also the much weaker dollar, the dollar having its worst quarter since 2010. Thanks largely to the statement we saw earlier this month, it and the dovish janet yellen this week. In terms of the out performers, and of that was brazil russia. If we take a look at the developed markets, take a look at what has been happening with the pound in with the japanese yen. That is addressing. The japanese yen was one of the bestperforming currencies this quarter. The Great British pound was one of the worst. Is clear looking at the chart, not a happy camper. Tracy it is unreal. In terms of commodities, the story belonged to gold. This is the best quarterly rally for gold in 30 years. Finally having a positive quarterly gain since 2014. It was really interesting to me that money slowed in. Since at the fastest pace 2009. That was how much fear was in the market this quarter. The other part of the story has to do with oil bottoming in february. Then managing to climb higher very quickly to that 40 a barrel. Best quarterly rally since june. Alix lets move on to bonds. Returned 2. 9 this quarter. If you take a look at the chart, that is the u. S. Yield. Basically the difference. Mostly because of the safe haven bid and how terrified everyone was. Now it has been steepening again off the back of the fed stock. I think and mention this, but 2. 9 for the quarter in terms of treasury. A gain since june 2012. Tracy the bears keep coming out and keeping wrong. I want to take a deep dive into the bloomberg. Im looking at emerging markets, because the other part of the quarter with the rally we saw in emerging markets. This is the index. Organ stanley out with a note today saying he where earnings season. 10 downside. They point out that rallies tend to slow and matchup with poor performance. Earning season, you saw a decline. Right around here, you saw a steep decline. Right at that level here. You have a lot of weakness, deflation, week growth overall. A lot of excess capacity. I feel like the question over whether the rally can continue is a debate one is going to be a big one. I havedeep dive, something more u. S. Oriented here we thought u. S. Consumer comfort figures come out this morning. Measure of how optimistic consumers feel about themselves and the economy. There is an interesting divergence happening here, along political lines. I have the list and read. These are republicans responding to the consumer comfort survey. In blue we havent democrats. We have democrats. Republicans not so happy with the economy, democrats feeling a little better. In white is the difference between the two. The worst you feel, the more you might want to vote for trump. I think it will be interesting to watch this difference between the two parties as the president ial election heats up. Alix you can see all these charts and more on twitter. I want to bring in our guest, global strategist for jpmorgan. There is plenty of blame to go around for the stormy part of the quarter. He really points the finger at one of the usual suspects. The bottom line is central this one, isng confused. They do not know what to do. They do not know what the next move could be. That is why the markets are so volatile because you see these changes and people are unsettled. Alix just mentioned portioning blame, are Central Banks the ones to blame . Putting all the blame on anyone factor for the roller is slightly in q1 misplaced. Thinking ahead, i think investors are within their rights, it is healthy to be skeptical. Central banks are part of that. Dovish tax,at the that has been part of the rally. Ultimately i think that will be selflimiting. Oil prices rebounded. Of the medium all seem to put downwards. I think 100 oil is a thing of the past. It is a thing of the past, yes. There is a lot of downward pressure on oil prices. China, you still have these latent risks bubbling up from currency management issues. What you think the trigger for that is going to be . Ben that is before the notable characteristics, this rebound. I think that comes under pressure at some point, imminently. Alix what is the trigger . Do with macro pressure. If you think about the growth rate of emerging markets against othervelopment of markets. Emerging markets are growing very little above developed market counterparts. Back any to thousands it was more like five percentage points. Last year, it was 2. 5 this year is 2. We see a structural difference of growth around 3 . Macro year. A tough that is what ends up manifesting itself. Negative keepsl on bubbling up every time you get earnings announcements related to that. Earnings, ifg of you like when it comes to u. S. Stocks we have been through a lot. Like what we were talking about, we havent actually moved that much. Was going on there what is going on there . Ben you have a series of big shots. One in august, one in january. You want to take that into consideration, especially your time horizon as an investor. Turning a critical eye on the rebound for the reasons i mentioned. I think if you are investing over a long horizon, i think you are more willing to look through these fluctuations if you think these big financial shocks will be a regular feature of the environment, which i think they are. Tactical, i think you should be somewhat skeptical. This shows what is that happening honest and credible quarter. Your single best rate for the Second Quarter . Substitutingbeen out of the margin, we are still optimistic about u. S. Large capital. Substituting equities into credits. Credits, you are getting equitylike returns with a fraction of the beta. If you are worried about these big shots bumping up your portfolio, i think you should have a portfolio of beta portfolio. He will give you some of that along with the quality of u. S. Equities. U. S. E other hand if the stays out of recession, you have high carry assets with limited downside. To call youl have back at the end of the Second Quarter and see how that . How that went. Coming up, we are discussing a record high correlation between nonenergy junk bonds and oil. Next. Virginia,ichmond, state troopers responded to a shooting at a Greyhound Bus station and have been taken to a hospital. The shooting suspect is in custody. It was not immediately clear if the three people hospitalized had been shot or sustained other injuries. There is no immediate word on their conditions. President obama says the United States and china are on the same page when it comes to north Koreas Nuclear program. The president spoke today at the Nuclear Security summit in washington where he was joined by the chinese president and dozens of other world leaders. Of great importance to both of us is north koreas pursuit of Nuclear Weapons which threatens the security and stability of the region. The president and i are both committed to the denuclearization. Fourthoday marks the summit the president has helped. Forces were killed in a bombing today and the in the countrys kurdish region. 23 people were killed. That is according to activists who say it is one of the deadliest incidents involving civilians since a partial ceasefire went into effect more than one month ago. Day,l news 24 hours a powered by our 2400 journalists in more than 150 euros around the world. Im mark crumpton. Host defaults will pick up and name. \nenergyrelated lets bring in credit strategy list you say this hike relation will trigger defaults because were not paying attention. The big problem in the market today is this everybody is so focused on oil they have not paid attention to what is going on in the noncommodities basis for us one of those are concerned. If you look at it, it is as bad as we have seen in many many we years. Worse evennever been a growth ebida growth. Host are you looking at things like leverage levels . You do not default because of leverage alone. You do not not default because of low leverage. Were looking at acid impairments, debt to acid a balance haveany writedowns noncommodities companies in writing down. When you look at that data, debt to tangible assets is that alltime highs. The data does not look good. Host where is the risk, if it is not energy and commodities . Michael there is risk in any company that has acquired cheap financing. Host quite a few. Michael absolutely. You look and this is been a strategy that is not specific to health care, not specific to tech. Is notperspective, it about which companies or sectors you want to all, it is which type of companies you want to own. You want to own it largely companies that are exposed to the ninth its economy. You want to own companies that have grown organically. These are the companies you want. Host do you worry about companies that have issued debt, because this seems to be the other trend. Michael absolutely. You have absolutely cnet. Tremendous amount of ig issues. We have seen that market grow by 110 . Theook nearly 20 years for credit markets to double in size leading up to 2008. The seven years since it has doubled in size again. Phenomenal growth. Much of that growth has been fueled by cheap debt. Host what will be the trigger for investors to say, oh my god, this will be terrible . Michael we are looking for is catalyst a capitulation. Host serious jargon. Michael a little bit of alliteration for you. It could be a major default. From a big company, not necessarily high yield. Typecom, and jan enron event. Paying morestart attention to the fundamentals of corporates, i think they are going to find things they do not like. We have seen a little bit of that with volkswagen. A chinese miss that could be an issue. Misstep could be an issue. I think any of these could yield the market backup. Host it seems like one of the wildcards is what happens in terms of Interest Rates and centralbank. Does that end up extending the credit cycle . Michael no. I think it extends the most recent rally. Eventually it will fade. We have had very low rates for quite a while. This is not the first time the 10 year has been less than 2 . Where you are going to find the yield is no different today than it was 12 months ago. Every time you see that argument used, and ultimately underlines unwinds and ends in tears. For a longer. Of time, i do not believe so. Host the problem seems to be timing. Waiting to see that big shakeout in credit. Michael we have gone in highyield in particular. 10 . Up to nearly about 8. 5 , at which is still higher than we had been in a very long time. We are starting to see a pickup. 2 default rate. I think next year is when you start to see the big pickup and defaults. Digits. Gh single highyield strategist for bank of america, merrill lynch. We have breaking news on the war. Oping bidding angbang is walking away from its bid of starwood. Starwoods stock is dropping. Marriott had a rival bid at about 13. 2 billion. They were also in this bidding war. Both pulling in afterhours. Coming up, when strategist says specular is our swimming against the tide when it comes to the yen. Are speculators swimming against the tide when it comes to the japanese yen . Check out this chart. Basically, in white we have net long speculative positions on the japanese yen. Lots of people betting began will strengthen. Meanwhile, over here in red, we have a Foreign Investment and japanese stocks and bonds, which is trending down. Purple, we have Japanese Investment in foreign bonds and stocks. Outflow going out of japan and inflow is deteriorating. Meanwhile, all of those currency speculators are betting the yen will rise. The fundamentals might not prove that to be true. Alix i love that chart. We have the capital outflows and inflows at the same time. Tracy i actually do not know. All i know is there are weird things happening in the yen. There are market distortions in the yen. Im looking at something amazing. His is proprietary information evenslooking at the break , which are typically thought to be higher. He found out that was not true. These are a sampling of different counties in the ba kkan. The lowest price for breakeven, 30 a barrel. Nhere are areas in the bakke that are making money. It goes as high as 63. Counties that are making money under 30 a barrel. 35 a barrel. If you have assets that are you can pick up some of the assets on the cheap. This can help rival texas and eagle for. None the less, that really shocked me. This must be a negative for oil prices, because a lot of of these guys can say pumping for longer. Alix the lord the cost, the more you can keep pumping. Good stuff. It is that time of year when banks review their credit lines for you. We discussed the options. Mark i am mark crumpton. Lets get to first word news. In richmond, virginia, Authorities Say two troopers responding to a shooting at a Greyhound Bus station have been taken to the hospital. Not immediately clear if the three people hospitalized have been shot or sustained other injuries. There is no immediate word on their conditions. Donald trump met with Republican Party chairman in washington today, just days after trump, john kasich, and ted cruz, made it clear they decided to back away from a loyalty pledge they signed in september, a guarantee the partys president ial nominee would receive the support of all the candidates. The u. S. And china will sign a climate accord earlier than expected. In a joint statement, president ibama and chinese president x say they hope the early commitment will knowledge other countries to join in. Global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. I am mark crumpton. Alix u. S. Markets closed mixed today, fixing finishing a wild first corner. Lets look at asian markets. Paul allen is in sydney. Good morning, paula. Paul good morning. Futures indicating we are australia,er here in and probably on the nikkei as well. In hong kong, we will be watching China Agriculture bank. This is the last of the five Big Five Banks to report this week. The headline number looks pretty good, but once again, that is just. 6 Profit Growth for Chinese Agriculture bank, the weekend the weakest in a decade. If that sounds familiar, it is the same we heard from all the other chinese banks to report this week. Also out of china manufacturing and nonmanufacturing pmi for the month of march we expect to see a number of 49. 3. Improvements on the previous rate of 49. Number, a number below 50 indicates construction contraction. Well things are continuing to deteriorate, at least things are slowing down slower, if that makes sense. Alix yeah, it does. Paul, there is important data out of japan today. Paul yeah, similar story here. We are excited to see manufacturing we can a read of 12 in the fourth quarter, expected to shrink to 5 in the First Quarter, and similar for nonmanufacturing, weakness from 25 to 19 there. Appreciation is weighing on corporate profits and it is likely to weigh on Business Conditions as well. That is just some of what we are watching in the asia pacific today. I am paul allen in sydney, australia, bloomberg tv. Thehatd you miss . Season is just Getting Started and we are seeing deep cuts to the Borrowing Base for shell companies. H did win crude reserves dwindling crude reserves and world prices, thanks hogties enough their exposure to energy. The next guest says demand for capital will return. It is a matter of when and what type. Buddy clark is a partner and head of energy practice. You are on the ground, in the oil patch, talking to all of these companies we mentioned. What are you seeing in terms of how the Borrowing Base is shaking out this year . Mr. Clark it is going to be a little bit more of a challenge for producers this time around. We do Borrowing Base we determinations for oil and Gas Producers every six months, and westfall fall, the reductions were not too bad. Theink last fall, reductions were not too bad. I think the markets at producers were hopeful prices would comebacks in her than they have. It has been lower for longer, and now we are in eight months of a downturn. The banks are giving of the optimism that prices will turn around soon enough to recover on some of these producer loans. The expectation is the Borrowing Bases will be reduced. Alix i have been hearing that for a year and the banks keep kicking it down the road. Why is this going to be different . Mr. Clark that is a good question. I think well, number one, banks want to work with producers. They do not want to lower the boom on them. To the extent you can push the barrel down the road in hopes prices return, that makes a lot of sense from the banks perspective. Now that we are 18 months plus into the downturn, it becomes more difficult to convince the Credit Committee that we need to get the produces another six months and everything will turn around. Plus, we have had this lower price for longer