low. kidding, it ist down and today was not a boom day. alix: the fact that retail and apple just got hit was actually kind of impressive. we have to look at coal to look at the damage and that retailers were dealt today. call was called the worst-performing stock in the s&p today and you can really see how bad it was. it is down to its lowest level since 2009. people aren't buying apparel, they are not buying clothes, and that has changed the whole retail sector. macy's and gap has their own problems and apple has a similar story. this illustrates really how ugly it was for them today. low.y a two year we heard that apple's asian suppliers will week and that they really rolled -- were weaj abeak and that they really rolled over today. it is really anxiety-producing. joe: a little bit of increase in yields across the curve, but not too much going on there. it is sort of quiet like everything else. scarlet: the notable mover in fx was the pound. actuallymerica had forecast one or two members of the committee would cut because of uncertainty ahead of the brexit vote in june. we know that mark carney warned that a vote to leave the eu would tip the economy. alix: in an economy market -- in market, it was truly a bloodbath. you name it, copper, lead, all of them were down. i didn't really see a catalyst for this, guys, i just saw this as a continued slam-down. more of those spectators getting run out across the board. joe: the same with iron ore as a. it was pretty ugly. alix: the same with rebar -- iron ore as well. it was pretty ugly. alix: the same with rebar. earlier in the year, right before the february selloff, we had apple's market cap go below google. alix: that was pretty much for the first time in that it resolved itself. what we are seeing something very similar right now. apple's market cap is something below google. you can really see what has happened there. there you go. apple's market cap is that white line and google is the blue line. it has been another week illustrating how much pain apple continues to be in an sort of can't get out of its funk. joe: it keeps leading lower. i want to talk a little bit about the economic data we got with the initial jobless claims that came in a much worse than expected. it was low. 290 4000, and that was the highest since 2014. you can see that red line that goes back. there was still reason to think that there was a lot of new aims came from new york state, and there was thought that maybe something hinky was happening there. i just want to grab one other chart really quickly. i want to look at claims, and one of my favorite things, the nonseasonal adjustments showing the broad trend. we are still so much better than we have been in past years. so again, a lot of those initial claims are high, but don't get freaked out for this week. scarlet: yes, they are on it directed -- there uninterrupted. when unemployment starts rising, tok for bad home loans pick up as well. before the crisis, there was a lot of movement between these two lines, but you can see that they are pretty much moving in lockstep since 2007. you can see that it was the lowest it has been almost one decade. joe coming can see that it is at a big low. joe: yes, you can see that it is in lockstep. alix: we do have breaking news for you looking at nordstrom. the company is cutting its four-year forecast. it is really ugly when it comes to retail in the last week. macy's, tap, and now nordstrom is cutting its four-year gap as it goes in to $.46 per share. scarlet: and i'm not sure what that had to do with this, but when it comes to these result, it is missing the average analyst estimates by $.20 and lower than the lowest estimate out there, which was for $.40. the revenue also missing the mark here. $3.29 billion. so it does represent a little bit of an increase from one year ago, but not a whole lot. a were down 1.7%. analysts were looking for a drop of 7/10 of 1%. the retailer came in with disappointing results. alix, you mentioned how people just aren't buying apparel. yes, the copresident of kohl's saying they were impacted by lower than expected sales and they are going to make further adjustments of inventory but how much more cost-cutting can you do if people literally aren't going to be buying jeans? joe: yes, and we saw that they were getting clobbered in after-hours, what you can look at the terminal and see that there are down 1% already getting caught up in this retail downdraft. there was a lot of negativity and still those numbers are still going down. scarlet: and of course, just like everyone else, they need to markdown prices. their profit decreased 164 based points since this same time last year because of markdowns. racku look at nordstrom stores and nordstromrack.com, you can see that people are buying more there. alix: that's right, people want cheaper stuff. that will be interesting to see how they can benefit as a nordstrom's and macy's can't sell their inventory. scarlet: they have already been punished and it is pulled down about 13%. joe: down about 20% in the last month. alix: a bear market for the last month for nordstrom's. joe: yeah. said thatjack fusco there will be cuts with his company effective immediately. many are calling this crazy expensive and moments ago, he talked with erik schatzker in las vegas. using these numbers, i think that the stock is dramatically overvalued. above the projections put out last year. think those projections are quite up to mystic. alix: i want to bring over paul who is an analyst. what do you make of the claims that the stock is undervalued even by their own metrics? paul: cheniere is always an over analyze stock. right now, it is a pretty cruel -- pretty critical theory for cheniere. early stages of ramping up production. people are going to want to see sustained products and increasing exports and that will affect revenue and even for the time being, the company has a lot of interest expenses of course. it is going to be a long time. it will probably the 18 months but in the meantime, they won't be off spending cash flow in a big way to continue the capacity expansion. pavel, why does this company attract so much attention? it gets good and bad attention. we heard that this is a timely investment but when the has a company attracted this level of scrutiny? pavel: this is the only public company of its kind. if you, if investors want to play the theme of exporting lng from north america, this is the only publicly-traded place in the united date. there is nothing else like it. and it is also the first company to actually deliver on its plan of holding a north american lng plant and beginning exports. seven cargoes have already shipped, but it takes huge capital. going to move higher so when you look at the balance sheet, it doesn't lend itself to the traditional death of the interest coverage kind of diet metrics because it is an early-stage business. as you pointed out, it has never reported an annual profit, so that kind of makes matters a little worse. some see that $29 billion in debt is one of the reasons why some are so negative. where do you stand on the debt profile? is it a good thing because it helps them grow like a shell producer? pavel: well, i think it is ultimately a matter of judgment, but of course, leverage is the in of double side effect of this makeess model, which is to from the first two or three or four or five years of the energy plant construction, you will have zero revenue, and all you are doing is taking on debt to uild construction. it was is up and running, it becomes a cash cow. like i said, 18 months from now, it will begin to generate, you sufficient energy enough to pay for expenses of the corporate level, but at this time, it is not a cash cow, and it is sucking up cash. once it starts oil producing will be able to be profitable? because ifs a trick prices will continue to move up, that is going to make, number one, sentiments on all lng-con nected stocks, including better, so psychologically, that is going to make it a dangerous sure, but over the next six to 12 months, this company will be ramping up production. so unless they want serious difficulties every quarter, they should have better sales metrics, you know, better financial numbers, so from a standpoint, this is probably not the best time to do that. alix: all right, thank you so much, pavel. fromis pavel mochanov raymond james. not the best time for cheniere. joe: we will see. goneet: n shake shack was in the first quarter, in proving by 10%. shake shack year, increasing its forecast as much as 5% and at least 4% whereas previously, it was just up 3%. you can see shake shack shares climbing. joe: it is worth noting how much of those shares were tumbling in the last year, they were not having a good year. alix: good perspective. scarlet: and another quick look at nordstrom, tumbling in after-hours trading. again, the longest in a long line of numbers that shows they are just not making a. ♪ -- making it. ♪ "lix: "what'd you miss? well, investors fleeing high-yield. this shows the biggest jump on etf in just the past five days. it is now over $3 billion. that could mean two things, investors are trying to sell other things, that is a bullish sign, or, they are running for the hills. so which is it? howard joins us now. how do you interpret these loads ? mark: it is a choppy market, as you know, and obviously metals has had its up and downs -- ups and downs. calendar inlding the month of may and we see that basically ce reating cash opportunities. joe: we have seen a tightening of spreads in the ugly, early days. edt the picture is the f is on some sort of tightening mode. how much longer can it last? pic up have had this now, but how much longer will now,last is a -- pick up how much longer will this last is a slowdown? global investors are looking for yields and they are looking for some stability and they can get that in the u.s. credit market right now. as will continue for a while. there is some time for the uncertainties, but we think that the u.s. market is a relative safe haven compared to others. scarlet: what does this mean in terms of volatility? does this affect follow till of the, not just in terms of credit, but in other classes -- affect volatility, not just in terms of credit, but in other classes? mark: i have an example of a company mentioned to be in the market that would finance its acquisition and transactions like that would affect positively the market. transactions in europe could be big transactions and they need the markets to function well. alix: the issue is good, but these outlooks can be really painful. we talked about the environment for high-yield and what it meant for the etf. a place whereoshua: we are in the market is in a very different structure compared to what it was during the financial crisis. this consists of the daily funds andof mutual today that is a quarter of the market and the market is bigger. alix: that is why we heard that the mutual funds were not going to give you back your money for a while and he thinks that we can see more of that. mark: the etf market is a two way market and so while there may be retention, there may also be people who want to step up and by. you are likely to see -- up and buy. thatre likely to see when energy is heading south. but where the energy market is stabilized and where oil is we thinkrly stabilize, we will see a step back, and i will point out that that one etf is not representative of other balance flows. joe: we have seen this pickup in the price of oil in the last few weeks, but the defaults continue, so do you see that trend continued to worsen as they rise in prices and they try to stave off the defaults that people see coming? ink: there will be others the pipeline, but they are priced at the market and many of these are going along the path of a prepackaged arrangement with creditors and many have bought into these levels where they are fully comfortable with bankruptcy, so we don't see this as fully disruptive except in a couple of pockets where there may be a little bit of a ripple effect, but nothing that is worrisome to us. alix: banks don't really want to wind up ending owning all of these assets. scarlet: i wonder, mark, whether it matters at all to investors if the funds are being used for something like operations or pain debt? mark: certainly, scarlet, the investors want clarity and where their proceeds are going -- clarity in where their proceeds are going. the use ofarge, proceeds is pretty clear today and investors just price accordingly. retail investors is a different story. there'd looking for yield and not so much stability. bestu know, is one of the asset classes today despite the performances in january and february. alix: all right, mark, thank you. that is mark forman of bnp pari bas. ♪ . . scarlet: i'm scarlet fu. "what'd you miss?" getting investors are nervous. yields just keep going down. the yields now have a duration of about 15 years, which means of that investors have few options. this is the difference between the yield on a 30-year bond and a japanese 30-year bond. what did they call this, the widow maker trade? it is higher in the u.s. yield. alix: this no longer means anything when it comes to fx. let's take a look at chinese currency right now and what it might mean for volatility in the stock market. let's look at the terminal right now. ands look at offshore yuan onshore yuan. ast blue line shows the yuan it falls of the white line shows onshore yuan as it rises. that means the offshore yuan is becoming cheaper compared to the onshore one. onshorethat means that people o get in and devalue their currencies in order to have the matchup. in the past, there has been a risk of a stock market sellout. take a look at what happens when those diverge quite a it. you can see the composites really selloff. joe: we really need to start watching that nightly yuan fix for that devaluation. alix: you never know. joe: i want to take a look at some economic data that we got this morning from the bloomberg comfort index as it has tumbled quite a bit. it is at the lowest level it has been this year. there is a decent correlation of comfort andel average gasoline prices. if you flip the axis, it shows that when gasoline prices are rising, that blue line is going down. you know, it is not a perfect correlation or anything, but they could show a good correlation between consumer comfort. obviously, consumers are not crazy about that alix: you tend -- about that. alix: you tend to notice gas prices when they are on the way up. scarlet: that's right, and coming up, we go live to brazil next for an update. ♪ iaae-m" mark: i'm mark crumpton. let's get to first word news. in washington, the republican presumptive nominee, donald trump, and paul ryan met after a callsin watch paul ryan "a bruising primary season." they have a shared goal of defeating presumptive live democratic nominee hillary clinton in november. of goodn: i heard a lot things from our presumptive nominee and we had a good exchange on things that everyone knows that we have. there are policy differences that we will have. there are no two ways about it. there are policy disputes and core principles. those are the kinds of things we discussed. mark: mr. trump held back to back party meetings on capitol hill first with paul ryan and then with republican chairman leader reince previous -- reince preibus. 2000he first time since eight, wall street is betting on a democratic presidential candidate. bloomberg crunched the numbers and in the first quarter, hillary clinton received more than $.70 of every dollar earned from u.s. banks. it is a big turn around in the early part of the campaign. jeb bush and his allies got the biggest share of wall street moneys. state of michigan will pay all of flint michigan -- flint, michigan's bills. the estimate is $1.7 million. flint has about 100,000 residents. it has been using water from the flint river for about 18 months. the city switched back to another source in october. and nepal is increasing its estimates of how much money it will need to rebuild after last year's earthquake. billion more than $1 from last year's estimate. the earthquake killed nearly 9000 people and left another 22,000 injured. day,l news, 24 hours a powered by our 2400 journalists in more than 150 new bureaus around the world. i'm mark crumpton. scarlet, back to you. going to we are now brazil where we have heard that beendent dilma has impeached. we go now live to brazil and what to expect president temer to say right now? >> you are right. he has gathered just about a half a mile away from me right now and he is swearing in his new cap it i think what he expects is to give a speech that will try to unite a nation which this has united and been very traumatic for the fiercean people with a battle between dilma rousseff and michel temer. he will also try to down scale expectations somewhat. there is no easy way to face the economic challenges that brazil faces. deficit in the worst a decade and unemployment is on the rise. it will be a very tough half -- tough path for him to follow. scarlet: these are forecast for 2016 and the weight line is the gdp forecast. gdphe white line is the forecast. this shows that rock-and-a-hard-place situation that brazil is in right now. michel temer moved pretty fast to get a new cabinet. what is the significance of the information that he will announce today? raymond: i think in terms of names, there are new surprises that the man to run the economic team was leaked before today's announcement. he is a known figure and he comes to the job with a lot of cloud. he was the head of the central bank for many years. of theas some professional qualifications, they are there. the question is, how fast can they move forward? ofknow there is not a lot appetite for the kind of austerity measures. budget gap enormous and they have to adopt unpopular situations like cap and payment so there is a very fine line between austerity measures and satisfying investors and upsetting the people on the streets. alix: and you can see acting areident temer there shaking hands and signing documents. what we haven't really seen today is a stock reaction. we have seen foreign reactions of people coming into the market, but, scarlet, today the reaction is more muted. scarlet: yes, everything has been priced in already to the currency and to the equity. ray, give us a little bit of a backdrop here. why do the markets have so much faith in him when he is just as much caught up in the corruption scandal as dilma rousseff? raymond: i think there was a relief rally in the last couple of weeks and the hopes that the leftist presidential dilma rousseff would leave office. we know that michel temer has investment-friendly platform. dilma rousseff had never held platform before she had ascended to the presidency. now people are waiting to see what the next steps are. can you push it through congress? that is the big question right now. ff have anyoes rousseef more cards to play or is this a done deal at this point? be and: look, it will extremely difficult task for her to recover any kind of support. she will not have the kind of spending power, she will not be able to sign bills, porkbarrel spending for legislators that are key in brazil to sway be in theemer will limelight for the next couple of weeks and months. having said that, today's vote over the vote overnight was one vote above what is needed to permanently oust dilma rousseff. false move by michel couple ofhe next weeks could undo that small advantage that he gained overnight. scarlet: and finally, i have talked to a couple of people who said that people are celebrating dilma rousseff basically being impeached or with the impeachment trial basically beginning. give us the mood going on there in brazil. are there people celebrating? are there celebrations? the masscompared to protests that we saw in the early years that brought millions of people to the streets, there were isolated clashes last night, but nothing behind me leading up to the presidential palace, leading up to congress. it was well until he calm and at the end of the day, that was good news. alix: all right, ray, thank you so much. ,hat is raymond colitt bloomberg's acting brazilian chief. and you can see president michel temer shaking hands and looking signingial and documents. we will be right back. ♪ scarlet: i'm scarlet fu. it is time for the bloomberg business flash. this is a look at the biggest stories in the markets right now. nordstrom is having more cuts in trading. the company now expects earnings share.dollars $.75 a alix: and first quarter profits topped estimates held by new locations and a chicken sandwich for chick-fil-a. -- shake shack. and guggenheim is working with westar for a deal of almost $5 billion. and that is the bloomberg business flash. "what'd you miss?" of the out-of-the-box thinking when it comes to monetary policy. usually there are two tools to use for monetary policy, quantitative easing and qualitative easing. new study shows that qualitative easing can actually shift wealth and should become permanent. joining us from l.a. is the author of the report, roger farmer. joe: roger, thank you so much for joining us. so explain to us what the difference is between quantitative easing and what qualitative easing is and why you think the latter can be a better solution? roger: this can affect the size of the central bank balance sheet. the fed went around 8 billion to around 2 billion in the middle of the recession. quantitative easing has to do with the competition of the fed's balance sheet, so a lot of the things that happened at the beginning of 2009 is that the fed began to buy much riskier assets like securities and typically, the feds only bought short-term bonds. joe: so explain to us why qualitative easing works. i read your study on this and one of the things that you noted is that your work was premised on the fact that people are born and die, which we always think it is very obvious, but to you that is an important application. -- it is asonable reasonable assumption. why does this work? reasons why of the macroeconomists have thought about the economy like this for a long time is the premise is that we can think about all of the choices being made. if they are made by a single person, we call those robinson crew so -- robinson caruso economies. do ainson caruso economy very poor job of understanding asset pricing and i believe related to that is that we don't live in a world like that, we live in a world with lots of people and most importantly, we die and new people are born. of the consequence, one consequences of that fact is that the fluctuations of that occur in asset markets can affect all of us, potentially quite seriously, and are not something that people are able to insure against, so that one of the studies of that was a ucla economist jobd that if your first begins in the middle of a recession, you have earned 50% less over your lifetime that if your new job starts in a boom. isx: and the reason why that so important is because when you look at the whole market and you look at all of the volatility we've got out there, that cannot necessarily be explained. that is not your fault if you don't get any stock returns in 1929.xt 40 years from if you take a look at the next set of volatility puzzles and you look at over 150 or 130 years or so, what does that tell you? why is that so important? becauset is important if, again, if you think about the very simple theories we are thinking about, you look at the graph here where we see the cyclically adjusted price-to-earnings ratio, that is the ratio of the average price of stocks to the average earnings on those stocks and the earnings are averages of 20 years through fluctuations. they are all very simple theories based upon robinson caruso, which says that should be a flat line. now the faqs about these ratios -- the facts about these ratios it is notu may think surprising that stocks go up and example, down, for following the internet, you would expect that the invention of the internet would lead to potential he huge profits for new companies -- potentially huge profits for new companies, but the thing is, the stock was supposed to be the price at what you are going to be getting early on that stock in the future. although you would expect volatility to get in the asset price, you would did not -- you would not expect volatility -- are basically what you saying is that it is all volatility that is not justified by the economy and that if we can smooth this out essentially or if the central bank can improve this for everyone with smoothing this out, then it is good for everyone. scarlet: i would think that we are a guinea pig and the angst are already doing that. roger farmer, are these banks doing the right thing? roger: they are doing the right thing to be earning stocks, but i am not sure they are going far enough. we have had a number of examples in the past, hong kong was a good example after the financial crisis. they bought stock and they made a lot of money off of the activity, but the issue is not whether you hold stock or whether you hold a risky at set, it is -- risky asset, is what you do with that. for central banks or treasuries, they should be making the trades that our children and our koran children are unable to make, that is, they should be making trades smooth out that volatility. you: gray, professor, thank so much for joining us. that is ucla professor roger farmer. we will be right back. ♪ scarlet: i'm scarlet fu. "what'd you miss?" presumptive, the republican presidential candidate recently said that the government can just money. well, that is true. kind of. joe: i talked about a senior scholar about this from bergamo, italy. many people have said the same thing and one person say, "well, look, we issue our own currency and this is correct, whether it is on the debt or social security beneficiary, we can always make all of those payments. joe: a lot of people accept that. next thing they usually say is, sure, but we could become germany or zimbabwe or venezuela if we fund our debt by printing it, won't we have hyperinflation? print the money but it is just as bad. what is your response to that? look, it is actually pretty difficult to get hyperinflation going. it is not a matter of not paying your bills on time. that is not a factor of hyperinflation. all three of those were typical -- typical of certain circumstances. the likelihood of getting even relatively moderate inflation in the near future is really remote. joe: but why not? our government debt and the gdp and why doesn't that cause the inflation that people expect and why happened our creditors don't print dollars? why doesn't this is an seem to be moving the needle just a little bit -- why doesn't this seem to be moving the needle just a little bit? there are people willing to produce more to meet command -- meet demand. people andjust say, perhaps even donald trump have slightly misinterpreted what we are saying. what we are saying is that government always spends through keystrokes and he used the term printing money and a lot of people do this. is federal government running its spending through our is not bank, the fed, really using real money, and we are not using wheelbarrows of money. that is how the government always spends. whether it is making an interest payment, whether it is redeeming bonds, whether it is making social security payments or funding military hardware, it always spends through a credit bank account. joe: so what you're saying is it is not about spending money through paying debts or collecting taxes, which is how the dichotomy is seen, all payments are made in essentially through a spreadsheet and you credit money in one place and you take money in from somewhere else and there is only one way to pay and it is not printing, it is all just sort of a digital credit here or there? right, that is exactly and of course, taxes are just the reverse of that operation and that is just debiting various bank accounts when people pay their taxes. so i know that people think that the government, you know, sort of literally, physically takes the tax revenue and then spends that is obviously incorrect. tax payments just lead to a debit to your bank account when you make your payment. joe: it sounds like you are saying, if anything, rather than deficits being the lever that causes inflation and rather than being a sort of a source of inflation, that essentially taxes and spending are the lever and deficits do matter, perhaps, with inflation, it is not so simple that higher deficits lead to runaway inflation? right. that is exactly now if key stroking leads to hyperinflation, the fed should the already generated warning against hyperinflation that we were worried about. the keystroke is literally hundreds of millions of reserve dollars into the banking system and they haven't been able to create a blip of inflation and they would love to be able to do that because it just doesn't work that way. was randy ray, a senior scholar. scarlet: you're looking at a live shot right now of the brazilian acting president michel temer. he is urging to unify brazil and he said that this is the first step towards economic growth. ♪ scarlet: jcpenney reports earnings tomorrow. nordstrom came out with disappointing earnings. macy's the day before. alix: if you back out autos and gas, we are looking for 3/10 of 1% increase. joe i will look: at the producer price index. an sentiment at 10:00d a.m. inflation expectations. that is all for "what did you miss?" joe: have a great >> paul ryan. reince priebus. and donald trump. behind closed doors. the donald visits d.c. >> mr. trump goes to washington. trump goes to washington. >> why didn't we think of that? >> mr. trump goes to washington. an event so big it requires not one box, not two, not three, not four, not five. holy [bleep]