>> how is this for a ringing endorsement of the economy? the economy continued to expand across most regions from mid february through the end of march. demand for manufactured products , we can act -- weakening activity and the harsh winter weather. not anything we did not know. speaking oil prices, investment in oil and gas drilling declined. laos related to the decline in oil and gas prices recorded this reported in multiple districts. despite the decline in permits into new investment, overall production in the oil and gas sector remains strong to increasing. a majority of districts report higher retail sales. they cite consumer savings from

lower energy prices as helping to boost transactions. this is still a mixed picture. a number of districts including boston, minneapolis, san francisco recording higher retail sales. business service firms, some good news. rising activity. they expect positive near-term growth in that. as for the labor market the fed's question should they raise rates. labor market conditions remain stable or continued to show improvement. there were layoffs in the manufacturing and oil services energy sectors. firms in many districts reported having difficulty finding skilled workers, especially in professional and business services. modest or moderate wage press ure reported.

mark: michael mccain. michael, thank you so much. let's check the equity market reaction. scarlet fu is at the breaking news desk. scarlet: good afternoon. if you come inside the terminal you can see how the s&p, dow and nasdaq have been moving before the release of the beige book. one of the more highly anticipated data points of the day. this was the trading action right before the 2:00 p.m. -- 2:00 p.m. release of beige book headlines. we are pretty much continuing on this slow downward trend of the last hour or so. not much change on that front. we're still looking at gains of about half of 1% to three quarters of 1% for the dow, net s&p -- dow s&p and nasdaq. the two year yield, 49 basis points.

i know mike mckee was telling us about on the one hand come on the other hand this does form a basis for discussion on the policy meeting on april 29. so many people in the market were talking it up as an important data point is a were trying to figure out whether the federal service will be raising rates in september. mark: kathleen gaffey is a portfolio manager at eaton vance and she joins me. thank you for your time. what is your reaction? >> a lot of noise with not much information. something to talk about but it is backward looking. i think it is more important to think about where the employment numbers -- where are the employment numbers and where are we headed. mark: the beige book said, among other things that modest upward

pressure was reported in wages and overall prices. how will that factor into the thanks inking -- the fed's thinking? >> that is the inflation we want. that is a positive sign. if i were the fed, i would want a move now rather than wait until september. we are strong dollar and the stronger that stays, the more it boxes the fed in. employment is where they want it to be. if wages are starting to pick up, now's the time to act. mark: how important is this beige book given that we are a couple months away from the fed making a decision to raise interest rates? >> it is a moment in time and it is more backward looking. i do not think it gives the fed a lot of information in terms of how they want to act. i think they want to get analyst fears going. i think you want to and sent --

they want to incense corporate america. mark: is a message of confidence or concern for the domestic economy? >> i think it has been mixed and measured. i think they are confident but they continue to stay data dependent. if you become too dependent on the data, you're not really thinking about what is happening forward-looking in the future. that is a concern. if they hesitate, they are missing a good opportunity as we get to june. mark: that they are to backward looking as you suggested, what should they be looking for down the road? >> they should be looking at hours worked and what the momentum is in the economy. i think that positive wage inflation, when you think about that with the tailwind of lower

energy prices, that should get the consumer going. mark: i'm speaking with kathleen gaffey. when the fed does decide to raise interest rates, how the markets react? is there going to be some volatility? >> i'm expecting more volatility . in a perfect world, everyone is looking for the fed to gradually raise interest rates in for everything to go very smoothly. i think the challenge is, we are at the zero bound so even a small rise in rates could lead to negative returns for investors who were at the short end. they are there for capital preservation. it is less about what the fed does and how gradual they are and how investors react to a new environment, transitioning to life back to normal. mark: let's talk about how your managing things at eaton vance.

we saw in the fourth quarter of 2014. >> it gave us a lot of room to maneuver. we have 20% in cash going into the fourth quarter. with the increased volatility what we saw with the treasury action in october and particularly lower oil prices presented an opportunity to look for opportunities in the corporate sector and also with that strong dollar, opportunities away from the u.s.. mark: your global positioning includes places like brazil. >> interesting in the fourth quarter. brazil is sensitive to energy prices and they have had an election. not only did you have that double whammy of what is going on with the sovereign itself and how fiscally prudent will they be but you also had concerns about corruption and low energy prices. a difficult, uncertain environment but one where there was real opportunity. mark: when i was doing my

research i was looking at some notes. you believe it is time to go against the flow that clients should take a look at nontraditional fixed income. why now? >> because we are transitioning off that zero bound. when you think about it, this is a time when you do not want interest rate risk in fixed income so you want to get as far away from traditional fixed income as possible. that means not treasuries and even traditional credit as it offers a little yield. that yield has been taken away by voracious demand. i think you do want to think about being more opportunistic in less traditional markets. mark: kathleen gaffney portfolio manager at eaton vance joining me this afternoon. always a pressure. -- always a pleasure. police arrested a man who landed

a small helicopter on the west lawn of the u.s. capitalist afternoon propping a temporary lockdown of the capital's visitors center. you're looking at a live picture . the man's identity and motive were not immediately known. police identified the aircraft as a gyro copter with a single occupant. homeland security panel chairman michael mccaul said the pilot landed on his own at that he had made it much closer to the capital them authorities were prepared to shoot him down. street in the area were shut down for a time. small craft presented a strange sight. it's lowers -- its rotors slowly spinning. a robot bomb detector was sent over to the craft. a small one person helicopter landed on the west lawn of the white house. that headline prompting a temporary lockdown of the white house's visitor center.

as the ceo of goldman sachs hank paulson had a unique view on the u.s./china relationship. in his new book he offers his take on doing business with the people's republic and on china's future. peter cook sat down with secretary paulson. here's his take on p -- his take on president obama's handling of. >> the right thing to do would have been to say right on, we want to be an observer. we want to argue for better standards. that is the right policy i believe. to keep working to bring china into the existing institutions with a bigger role. many observers and much of the

press said this is landmark. this is a watershed event. china passing the torch. that is bull. that is not a huge thing. we do not get everything right. mark: former treasury secretary hank paulson. coming up, who will stand druckenmiller -- who will stan druckenmiller back in the 2016 elections? ♪

mark: welcome back. a tense moment at today's ecb press conference in frankfurt, germany. a protester jumped up onto a table where president mario draghi was speaking. demanded an end to what she called the ecb dictatorship. the woman was taken into custody.

after a short break, mr. draghi resumed speaking. interest rates, unchanged. aaron hernandez has been sentenced to life in prison with the parole following his conviction today of first-degree murder. a jury in massachusetts found hernandez guilty in the shooting death of odin lloyd who was dating the sister of hernandez's fiance. the conviction will be automatically appealed to the state's highest court. hernandez was selected by the patriots in the fourth round of the 2010 nfl draft. coming up stephanie ruhle's exclusive interview with stand druckenmiller and his take -- with stan druckenmiller. the president with the boston --

the president of the boston celtics. at 2:45 the spring housing outlook. stay with us. ♪

mark: stan druckenmiller has one of the best track records in the history of investing. he spent years working with george soros before striking out on his own. his fund was returning 30% annually for a quarter century. mr. druckenmiller does not just invest in markets. he is a major supporter of various politicians including governor chris christie. esther druckenmiller spoke with -- mr. druckenmiller spoke with stephanie ruhle about 2016 presidential election. stephanie: we just heard from a

politician who you supported in the past, chris christie, about entitlement reform. does chris christie have a chance at anything anymore? stan: he is a tremendous talent. tremendous communicator. that speech he gave today, what guts? we will see how it plays out. if there is anybody who can deliver that message, it is chris. stephanie: you believe in entitlement reform will be an important theme in the to the 16 election? -- in the 2016 election? stan: no. stephanie: does that disappoint you? stan: a year or two ago i thought we had an incredible window when the sequester fight was there. that is why i was so vocal at the time. you shrug when you think you can have an impact. -- you strike when you think you can have an impact.

the kids did not seem to stay excited three or four months down the road. the one chance entitlement reform has becoming a big chance into the 16 is the communications get -- in 2016 is the communication skills of chris christie. it is a courageous road. stan: would you back him -- stephanie: would you back him if he decided to run? stan: i think you would be a great president. stephanie: what to think about hillary clinton's announcement? stan: i think old people like hillary clinton and i should not try to be called with social networks. maybe shoot should leave that stuff up to chelsea. -- maybe she should leave that stuff up to chelsea. stephanie: the amount of money that is going to report into this election is beyond grotesque. you could be a big contributor

to pouring that money in. money that could really help save the environment, the country -- stan: i would rather give to harlem's children's home. it is a free country. apparently that is people's priorities. i do not have any judgments or issue about people who give to politicians. i give to some politicians. i will say that my waiting is skewed -- wweieighting is skewed towards nonprofits. the most important issue for me is we have a leader who does not look myopically and is more interested in the long-term. if you're talking -- stephanie: how are you going to get elected with that? people do not vote that way. stan: we have not had proper communication. you're talking about a single

issue, i think tax reform. stephanie: it seems that a lot of people in new york are excited about jeb bush. stan: i think you would be a great president. stephanie: are you going to support him? stan: i think he would be a great president. mark: tomorrow, publix -- party city goes public on the new york stock exchange. the value of the company is estimated at nearly $2 billion. what are the key things investors want to know? >> i was going through the prospectus and a lot of tidbits came out. a quarter of all annual revenue from party city actually comes from one holiday. mark: halloween? >> you're exactly right. $2.2 billion was reported in revenue. that means that half $1 billion

comes from one holiday alone. that is a scary thought if you are an investor because if one thing -- because of something happens, and economic downturn or a rainy halloween, that will affect bottom line. mark: after costumes, where does party city make its money? >> birthday parties, tableware things like that. balloons and piñata's. apparently the piñata's come from mexico. mark: when i saw this helium how does display the party city's revenue? -- how does this play into party city's revenue? >> between 2011 and 2012, there was a $2.6 million fall year on year because of decreased helium surprised -- helium supply.

between 2013 in 2014 it's off 5.5 million dollar increase. proceeds are going to either a management termination fee -- mark: it is 1.9 billion dollars. how's that going to play into expansion? >> right now they have about 900 facilities in the u.s. as well as canada and they're going to grow by about 30 a year. maybe more over the next 10 years. we are all going to keep our eye on the ipl tomorrow. mark: we will be following that . the president of the boston celtics. i will speak with rich gotham about the end of the regular nba season and the upcoming playoffs for his very young teen and --

his very young team and coach. ♪

mark: welcome back to "bottom line." i'm mark crumpton. they can for staying with us. -- thank you for staying with us. as you see on your screen, in new york, crude finishing up the day 5.5%. factory output in the united states early climbed in march. automakers rebounded but other industries w retreated. cheap oil has led energy companies to cut back operations

. lower fuel costs have delta airlines flying high. delta posted first-quarter earnings that beat estimates. the airline is forecasting it will save more than $2 billion this year because of the collapse in oil prices. delta plans to reduce international capacity next winter because the strong dollar has heard overseas sales. the boston celtics will play the milwaukee bucks tonight as both teams close out the regular nba season and had to the playoffs. rich gotham is president of the boston celtics and joins be now from boston. it is good to see you again. rich: nice to be with you again. mark: does making this year's playoff appearance make it even more rewarding? rich: i think it does. we have known since we traded pierce and garnett that we were in a bit of a building phase. you hope you get through that in

the minimum amount of time and you're not out of the mix for too long. we took a one-year reprieve from the playoffs. this season has us further ahead of plan than we expected. very excited about this team. mark: from a purely business standpoint how do you market a team with few if any household names and whose coach is probably better known than a majority of his players? rich: you market it as a team. you market the team culture which is one of hard work and celtic pride. our fans in boston identify with that. they like the idea of a blue-collar team that exceeds expectations and overachievers and a coach who is equally egoless. i think it's a prize a few people -- i think it surprise a few people but we are going in on a roll. mark: the celtic mistake has

been a part of the -- the celtic mystique is part of the franchise's history. rich: we go is say it is the name on the front of the jersey, not the name on the back. yet fans with been season-ticket holders for 50 years. a lot of them fall into that category. when you have a year like we have had the last couple, what is important is that you are communicating to fans what your plan is. i think fans will stick with you as long as they understand how you are progressing and going about your progression in putting the team that in a position to contend. we of been strong on clear communication with fans on how we are building this team into a sustainable contender. we have the luxury of loyal fans who have seen a lot of basketball over the years and know it is cyclical. their inpatient. they want to win now. mark: what does building a team

through draft picks mean for fans? rich: the way we look at improving our team overtime is we are not married to anyone way to do it. you want to develop young players, build up a cache of draft picks. you want to create multiple options for improving the team. if you're basing it on one blockbuster trade or winning the lottery, those are not high probability things. we've put ourselves in a position to improve and we talked to our fans about how we do that really bring fans closer to the team, provide access to the team executives. it talks with the coach. we get them closer to the team so they are part of what we are doing and really buy in. mark: in december, the

sacramento kings and celtics will play and be a possible third regular-season game in mexico. while the benefits of bring the nba south of the border? rich: there's not a direct financial benefit to the celtics. the nba is a global game. the aspect population is the fastest-growing part of our fan base here in america driving ratings. i think it is the 22nd game we've played in mexico. get it is to spread the -- the idea is to spread the brand. the celtics are one of the top two or three most recognizable basketball brands in the world. we're always amazed when we travel overseas or out of the country to see how many celtics fans there are. you played in istanbul and the arena -- we played in istanbul and it was a sea of green jersey. ys. the great thing about sports is it transcends culture and breaks

down barriers. it is the use of vernal -- it is the universal language. mark: we have about 30 seconds left. how would you rate adam silver's first year as nba commissioner? rich: i cannot be more proud of the job adam has done on behalf of the league. he is with tough situations early. showed what his values were. he is very open to new ideas and ways of thinking. we have a meeting coming up this weekend were a lot of new thinking is on the table stuff we've never considered as a league. i think adam as a leader is open to listening to new ways of thinking about the league. i give adam strong grades for the early going. i've not see how he could done -- how he could have done anything better. mark: rich gotham president of

the boston celtics. thank you for your time. coming up, we will take you like to mexico city for the midweek edition of the latin america report. ♪

mark: welcome back. it is time for today's let in report. -- let and report. the u.s. will remove cuba from a list of state sponsors of terrorism. this is the administration's most significant act since president obama began restoring diplomatic relations with cuba in december. cuba up a designation as a sponsor of terrorism was a major economic hurdle. it barred the country from access to banks in the u.s. and made banks in other countries wary of doing business with the cubans.

no word on when this may happen. cuba was put on the terror list back in 1982. the investigation of corruption at petrobras continues. please arrested the treasurer from dome of yusuf -- he's accused -- the arrest brings the country's largest corruption scandal a step closer to the president's government. she was chairwoman of petrobras when the corruption happened. she told bloomberg that she knew nothing about this at the time. in mexico, the l finance yarrow newspaper has a story about cooper drivers. -- uber drivers. when we return the hottest housing markets the spring. which cities are commanding the

strongest home prices. "bottom line" continues in a moment. ♪

mark: police arrested a man who steered his one-person helicopter onto the west lawn of the u.s. capitol this afternoon. prompting a temporary lockdown of the capital visitor's center. capitol police did not immediately identify the pilot but the associated press is reporting a florida postal carrier named doug hughes took responsibility for the start on a website where he said he was delivering letters to all 535 members of congress in order to draw attention to campaign finance corruption. european regulators are accusing google of violating antitrust laws. the european union said today that google is abusing its dominance of the internet search market and unfavored -- and

unfairly favors its own service in search results. the eu says it will also investigate google's android phone system. regulators say the complaint of not just coming from europe. >> one out of four individual companies -- company from the united states also play a major role when it comes to these business associations who have complaints. mark: google has 10 weeks to answer the accusations. first-quarter profit rebounded at bank of america. earnings beat estimates bank's a big drop in expenses. more than $50 billion in expenses linked to dozens of bad -- linked to thousands of bad home loans. brian moynahan is now trying to boost revenue.

a look at top stories we are following this hour. coming up, scarlet fu will have another market check and analysis in the aftermath in the release of the fed's beige book. peter cook's interview with treasury secretary jack lew. it is open house season. auction.com put out a list of this bring's hottest spring -- hottest housing markets. what fundamentals do the top selling single-family housing markets have in common? >> for we looking at now is population growth job growth wage growth. those of been historically, three things that led to housing growth. mark: can we and further strength or weakness of that market's overall economic performance? rick: historically we have been

able to do that. it is possible to look at the top five markets we are looking at and assume they are doing well economically. mark: we have those markets on our screen. they all seemed to be improving on the economic front. rick: denver has job growth three times the national average . a lot of growth in professional services and technology. mark: where is that growth coming from? are you having millennials coming in new blood and therefore you have people armed and ready and they are going to start a new housing boom? rick: people tend to go with a jobs are. we are seeing population growth and high wage population growth. mark: the fact that the housing market continues to recover from the depths of the great recession what does that tell us about the severity of the downturn and damage it caused? rick: it was enormous.

the story with bank of america paying out is an indication we are running at indicate -- running at foreclosure levels -- we're still clawing our way out of that mess. mark: is the housing crisis over officially? rick: about two years of backlog. a lot of markets have foreclosure backlog there working through. this is like new jersey, new york and illinois. we have another 18 to 24 months to go. mark: are we in a brick -- are we in a cycle where americans who want to buy a home will be left on the sidelines? home prices relative to their incomes, still out of whack? rick: home prices have appreciated much more than wages have increased. the middle class income, we've seen the numbers go down. that is a problem we do not have

a short-term solution for. mark: according to the urban institute, the should've been or million other housing loans written by now. why do we continue to see this lack of available credit? rick: the new rules that have been put in place. the ability to repay rules have a debt to income ratio that knocks about 38% of african-american and latino borrowers completely out of the picture. thanks are not taking on much more risk and are making it difficult for the average bar were to get a loan. mark: what are you guys seeing at auction.com as it relates to that? rick: we believe we will have flat home sale this year. we're not seeing credit loosen up. i'm surprised it is taken as long. we're starting to see non-bank lenders come in. we are probably six months to a year behind where i thought we would be. mark: we have heard a lot of talk about institutional investors coming in taking over apartment buildings, blocks of

homes in selling them. rick: investors by a lot of properties from auction.com. we are seeing the volume of purchases by institutions go down and being picked up by smaller investors. there is an appetite for rental properties because there's only 4% vacancy rates in apartments and single-family rentals across the country. a lot of new households being formed our rental households. mark: lending tree ceo said borrowers are in the driver seat . now's the time for homeowners to refinance mortgages. is he right? rick: there is a good-sized group of people who can still benefit from refinancing. the people that are current and have equity in their homes and have loans with rates five or 6% -- 5% or 6%. not huge number. mark: when the federal reserve starts to move on interest rates, where is that going to leave the overall housing market? rick: i think we are going to

see an uptick in activity in the spring because buyers are going to want to lock in before rates go up. the big question is when the rates are going to go up. we are looking at historically low interest rates. it screws up the market because we have a 4.5% interest. mark: any sense on when the fed might move on rates? some people say this summer. rick: i think it will be later in the year. i have taught summer but some of the recent numbers have been too weak. mark: rick sharga of auction.com. always good to see you. scarlet fu will return with a closer look at the release of the beige book and what it may mean for traders going forward. stay with us. ♪

mark: that does it for this edition of "bottom line." thank you joining us. scarlet fu is up next with the charts. see you tomorrow. scarlet: thank you. headline numbers show that china's economy is growing at the weakest pace since 2009.

joining me now from boston is jeff klein hop. welcome to off the charts. our first chart i wanted to pull up points to china's structural challenges. the excess growth in credit. you can see that the white line tracks corporate and household debt which is now over 200% of gdp. the yellow bars showed that servicing. currently about 32% of gdp from the low 20% late 2008. why is this chart so frightening to so many people? jeff: the pace at which it grew. around 200% or so -- it is not that the level is too high for an economy is largest china's it grew. that was in response to global economic sluggishness post 2009.

fortunately, we start to see that pace slow over the course of the last year. scarlet: as china's government tries to engineer this transition is that the kind of growth it wants or does it want to see that growth to for off? -- see that growth taper off? jeff: it would like to see growth taper off a little bit. a service sector economy is not as capital intensive as a heavy industry. you would expect to see that pace of debt growth slowdown as they successfully make this transition. there is a lot of room for gaps as they make that transition. scarlet: let's bring up our second chart which shows china gdp over -- year-over-year. a data point that came out overnight with the latest reading of 7%. that is half the rate china notched in its go-go days. this is an intentional slow down

engineered by the government which measures economic successes in other ways. what does it want to see? jeff: this is a great example. i dropping they want to see a number as soft as they saw in the first quarter. -- i do not think they want to see a number as soft as they saw in the first quarter. the impact of currency movements impacting trade. you also had this impact with moderate prices going back. a lot of different factors helped weigh on that first quarter. since then, rates have come down inside china. we have seen activity pick up in europe. that should help the q2 number to look stronger than q1. scarlet: perhaps q2 will see a pickup. let's pivot to the united states. we got data today, the fed -- manufacturing is still struggling even as services and employment remain fairly robust in the u.s.

what does it mean for the fed on april 29? jeff: more softness on main street. i think that the specter into the fed's thinking and takes a june rate hike off the table. probably does not derail a rate hike at some point this year. the economy is moving along at a brisk pace. scarlet: stocks rising right now on this wednesday afternoon. "street smart" is next. ♪

>> welcome to the most important our of the session. --hour of the session. this is "street smart". treasury secretary jack lew speaks with bloomberg about china and germany's finance minister talk to us about greece and what berlin would do in the event of a grexit. start --"street smart" starts now. ♪ here are the top stories we're watching at the closing tell. a war