market day." i'm alix steel. ♪ [closing bell] alix: you are looking at markets finishing lower today, napping a two day winnings the, the dow jones off by 85 points, at one point was down by as much as 102 points on the section low. the s&p was really a big reversal here, closing time at andpoint, pulling back fending off about 10 points. the big story is also those yields, the 10 year yields climbing to their highest level so far this year. we do have some breaking news now for you, the federal reserve or just announced five former private bankers barred from employment from the banking industry, all previously helping americans evade taxes. we want to bring in peter cook who has more details.

peter? dates back to 2011 and the case that they brought at that time for helping americans at credit suites -- .redit suites -- credit suisse now the fed is taking the additional step of saying that they cannot work in the banking industry, they are and from the banking industry under the fed guidelines and this is just one more punishment. of the folks identified by the fed have not yet turned themselves into face justice in the united states area they are still abroad, still the, if you will, so this is just one more step by the federal government to go after them and perhaps the most recognizable name for anyone who has followed the case is marcus walder, the head of north american offshore banking for credit suites -- credit suisse. all of these individuals worked

in that department and helped americans evade their taxes. you will of course recall that they settled with the government, paid a hefty fine some years ago, tried to address the concerns that were brought forward by the justice department, by the u.s. government, but there are still some left over issues, if you will, and one of them is the status of these individuals in the fed has now taken an action that was previously discussed by the federal reserve but now official, to ban them from the federal banking industry, not clear entirely what this means is them, but there certainly no chance for them to do banking work in the united states. some great news from the fed on an old issue involving bankers. alix: thank you so much, peter cook, our chief washington correspondent. i'm joined now by joe weisenthal. joe, it was sort of a bumpy day .or stocks at one point it almost closed high but then pulled back to about 10 points. real story today

has to be what we continue to see in the market in europe with the german boon selloff, the 30 year treasury going after 3% for the first time in a while, a continuation of what we saw last week and several days ago. that ite idea being takes deflation of the table, mean we are seeing a little bit of european growth in the forecast as upgraded by the commission and perhaps that are global growth. do people buy it? is this an inflation try -- inflation trade or more the hey, you know what? thatthere are signs european growth is better than expected, but those signs have been here for the entire year. some talk about china stepping up its stimulus efforts, removing the forces that might be on the global economy. or it could just be a technical factor of the selloff in changing her mind. i think it's too early and too difficult to say. alix: especially when you have

first quarter tracking by economist who say they are going into negative territory after that. taking a look overall at the stock market, nevertheless we had a major rally last week and we are seeing a bit of a pullback with small caps rallying but not really enough to offset the rally with a deep decline in energy that has been driving at lower all day. joe: look, stocks remain close to all-time highs. exercisehard to get to about today's selloff or whatever. stocks in many places have been on a huge rally. frankly given the selloff we have seen his interest rates and parts of the thin -- fixed income market, it's was and how well equities are holding up. activists reporting first-quarter properties in

their first report since completing the acquisition in march, they are today raising their full-year earnings forecast to include top contributions to the ceo and bloomberg speaking to and an exclusive interview earlier today. >> at the end of the day these businesses require people to execute and gain traction with momentum to the -- discover new drugs. when you set up a hostile situation you really create bad blood and it takes years and years to integrate that blood companies. as you probably know, most integrations fail. alix: what is interesting here, joe, is it seems like he's creating a new category of growth pharma with big pharma getting outpaced in biotech. costs and maybe also use money for r&d and still grow. pretty impressive. joe: he is calling out sort of what we have seen for the last pharma forths -- in the last several months.

hostile takeover bids, it's really an extraordinary raleigh of intense deals happening right now. do have some, we breaking news concerning gap. julie: coming out the sales were last month, much worse than anticipated. orderl for the first comparable sales were down 12%, estimated to be down only 7%. i believe that these are the u.s. numbers. globally sales were down 15% the estimate was for the climate 15.5 cent and it looks like are in all of the company's various brands. banana republic, old navy fell 6%. all of this looks like it's weighing on the shares, although not too heavily. rack space, the cloud computing company that we were anticipating coming up with earnings, indeed they did, we are looking at $.19, that's what analyst had been anticipating,

but it looks like revenues coming up short of estimates or a slightly, $480 million, of about 14%, analysts were looking for $481 million. the company in the second order says the revenue growth will be in constant currency terms and that margins will be between 32% and 34%. the context here is that the shares of almost doubled over the past year with a lot of speculation over whether the company might intentionally be bought. it has touted its strong cloud computing customer base and has really focused on the higher end of the market. these numbers come in pretty much in line with estimates, but that does not look to be good enough in terms of traders as we have seen no shares fall off. thank you so much for the update on cap and rack space. a purchase of rosetta resources in a $2.1 million merger valuing share. at $26.52 per

while bigger cut immediately welcomed the acquisition, noble shares fell as much as 7.8%, the most in four. it does point to be the first of many consolidations coming after post-oil called deals market collapse. with this they will add 1800 drilling locations to two of their three biggest u.s. shale oil field, including 50,000 acres in eagle furred and 50 thousand acres and crimean. joining me now is joe weisenthal and peter pollock. peter, good to have you. i've ever spoken you before, but i like the biggest rupee of you guys. peter: good to be here. alix: this is the moment we have an waiting for? heater: is a moment. one transaction and one deal does not make a trend, but this is the first big one in the space and it has a lot of of servers asking if it is the

first of many. we are about to find out in the days and weeks ahead. joe allin is the turnaround here for shale? last week numbers were up. alix: five in the muck, one in the primary an. peter: as they have come off of the bottom, companies have raised their guidance and been ine optimistic about output 2015. what it might do for oil prices is add supply. the 38% premium. what did you make of the pricing behind it? alix: their key the keys -- joe: -- reserves were in the low cost basin, obviously they are privy to adding to it for good acreage. what are some of the

other companies people on looking at in light of this deal? peter: the key things to look for our good acreage and -- weak balance sheet. -- eagle for it, but that balance sheet refer to liquidity problems. unfortunately cannot give us those names, but can you tell us about the quality of the see? we might part of the issue was that prices fell and the companies were still being rated to prevent these deals from getting done. peter: that is the biggest conundrum in the space. they are too wide. this is the first time where it actually met. and what was the catalyst? , you don't rosetta have the lowly you are about to get? >> it obviously has an impact on the liquidity of the cap me.

withis a company that is two of the most relative plays. alix: such a pleasure to meet you. i'm going to have you back every day. peter: pleasure is mine. alix: thank you for helping me make it down. coming up on "market day, coast they with us. --," stay with us. ♪

alix: welcome back. the purchase of rosetta resources in an all stock merger, noble shares fell the most in four months.

with rosetta at 1800 billion locations and two of the biggest three shale oil field assets include 86,000 in the basin. abigail hopper is the director of ocean energy management and she joins us now on the phone. abigail, the other huge news today was, horse, shall getting the green light to potentially start drilling in the arctic. does that clear the way for other oil companies do the same? abigail: it certainly is an important step forward for shell . it would be part of their that shell approval still requires to get permits from several other agencies, but it is a good first step for them for this drilling season. 20% of the worlds oil could be under the arctic.

all anyonethink that in this industry worries about in the games that they play in as arctic think of it important and lucrative, but my expectation is that companies will wait and see how it prevails. alix: shell has been preparing for this, but how much does it cost to drill in the arctic and how quickly could well come out? abigail: i would obviously be better source for how much it would cost, it's clearly quite expensive and there are for having aeless rig right there, so they are going to have two of those rigs over the summer if they receive all of their permits. they are doing exploratory drilling right now, sending out proposals to drill six moratorium wells, two of them summer and another in the

next couple of summers. if they do find some reserves it will obviously take more years for them to develop, so it could be a five-year or 10 year commitment on their part for production. if they get to start drilling tomorrow, talk about what else they have to do to make this liable. abigail: it has been conditionally approved. get to drill from the department of the interior and marineff under the mammal protection act and endangered species act and the national marine fisheries service and a couple permits from the state of alaska that are's ill outstanding. alix: coming up on -- alix: abigail, thank you so much. earlier in the markets you thought treasuries continuing to pummel and take a heavy needing since late april with the global bond route sending the 10 year

friday, a 2015 high on all of this coming is the u.s. gets ready to auction billions in coupon bearing debt. joining us now is phil from the global head of the income strategy at j.p. morgan private bake. hi. how are you? about what were seeing in the market -- what's the catalyst and where does it go? phil: we are having a bit of a route involved markets, but the deal that was just broken about in terms of noble and rosetta points to another part of the market doing great, the u.s. high-yield market, which has actually held up well despite of the backup and treasuries over the last and is out almost 4% for the year. some parts doing worse and some parts doing better, but ironically it the risk bs -- risk free aspects of the treasury doing worse because the rates have gone up. the credit market in terms of

the high-yield and emerging-market that are doing fine for investors. risk to, say,the agrees. what happens to a market in that cap circle? phil: our concern going forward be a repeat of 2013. with the tape -- taper tantrum pointthe raised rose to a high-heeled. u.s. which hasn't happened yet. the fact that it hasn't happened is one of the reasons i am of it or constructive with great settling down right now. if the credit markets decided -- you know what, i'm out of here because this is permanent, we will be more worried. we are still perhaps thinking with energy.

year unfortunately that is a bit dependent on oil prices. in terms of u.s. credit markets one of the ones we still like a lot are u.s. bank for because in terms of tank preferred they are technically dividends and very advantageous from attack respect. thank you so much, i love your perspective on a day like this. that was the head of global and todayme strategy we are going to talk to the ceo of novell energy about a $2 billion bill, coming up next. ♪

♪ welcome back to the "bloomberg market day." them first you -- first major

u.s. the company buying rossetti resources in an all stops deal worth $2.1 billion, giving them position into the largest areas of texas shale oil production and with that for an exclusive interview is the novell energy david state -- david stover ceo. thank you for joining us on this merger monday for you. why now? why was right now at the 38% premium the right time price? market: -- david: i appreciate your calling me and when i reach unconventionalw plays in texas, the eagle first premium is two areas that we have been looking at for a couple of years now in developing some understanding of that.

it just happens to be now that and its own basis proper to time to put together. have seen oilg we stocks is a big spread with sellers wanting higher prices and buyers. what was it about the current environment that enabled you to come to an agreement? >> i think it's mainly around the rupture of the deal, when you think about it. and all stock transaction, like he said, enables close companies the larger,rom combined company and its ability to then have the upside potential, if you were -- issue and i think somewhat of the

tiring road its good. what's next, you have a block to the delaware basin, or going to see symbol on acquisitions in texas? david: i think that over time you. i think it right now it's about integrating the companies and focusing on the exit usually what we see. i think that in and of themselves right now they are very material and have a lot of running room. they lend themselves to additional opportunities in the basin. if you go back, one of the key elements of our building blocks was when we did a patina transaction in 2005. beyond that u.s. for the exploration had smaller transactions, so these sites of thing, if you get a foundation in here with a more, there is a

lot of running room in the weight for future opportunities but right now the focus is on equities. alix: what do you have to say to david einhorn? last week he came out and said it players were mother factors not raising the cash flow that investors want to see. what do you think about that and >> you haveto him? to look at the opportunity in front of you. one of the things you don't live with this asset days is that by managing cash flow we can still significantly grow this asset. we are in a position that is one of the right time to get into the asset right now. taking a look of the oil price, is the next move up or down? >> i don't know that any of us

could predict that. i think we wanted to make sure that we written our portfolio with premier asset that can with dan actuation in either direction. that's part of the reason we like a diversified out to manage that risk and in this business is all about managing risk. indeed. david, congratulations on your buyout effort. a $2 billion acquisition. that does it for the first "bloomberg market day." we will have many great episodes coming up. have a wonderful evening. ♪

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