alix: we are moments away from the closing bells. this is bloomberg market day. i'm alix steel. you are looking at markets closing on a pretty uneventful stock day. the s&p relatively flat with the dow up by 15 points. the nasdaq is definitely the weaker of the day. overall you have the energy sector lien on the sec and oil prices continuing to fly.

we also have telecom materials as well. what gives with the markets today? i will bring in carl of bloomberg intelligence and a company.rtner of the big guy that came out today with housing permits. housing permits up to 10%. it seemed like the markets interpreted that as a rate hike earlier rather than later. do you agree? certainly is good economic news. i don't think it changes the timing of the fed liftoff here. i think september is reasonable. the housing sector is simply too small to save the economy from the larger downdraft we see as where -- elsewhere with consumer spending and business investment, and then export sector that has fallen into contraction due to the strong dollar. some good news that will propel

economic growth, but i don't think we are really changing the fed timeline. alix: but as we take a look at the treasury market, what happened there? guest: the data has pushed people's expectations. if you look at the fed fund future, if you saw a meaningful increase in the expected rate in december, people did start trying to bring forward their expectation for when the fed would high great. they're looking for reasons too high great. any good data is perceived as another little notch in their portfolio of things to look at for when they decide. alix: we do have some breaking news about yahoo!. stocks tumble. julie has more. julie: i have an answer for you alex. we saw yahoo! shares really dive in the final 15 minutes. there was a report in the economic information daily out

of china saying authorities are considering whether to raise the import tax on goods sold by e-commerce companies like yahoo! to ensure fair trade. this report coming from an unidentified industry. something called economic information daily. taxa currently has a 10% rate on imported goods sold and mailed directly to consumers in china. those yahoo! shares really taking a sharp hit. on the flipside, if you look at alibaba shares, they spiked. the magnitude is not the same. we did not see as big again in alibaba as a decline in yahoo!. but two sides to the same coin of this report. china might be raising the import tax on cross-border e-commerce companies. we will continue monitoring that and try and figure at -- how is there anything is to this report. alix: thank you julie.

jeremy, we were just talking with lisa about the markets expecting earlier rate hikes. what is the danger of the fed hiking? foremost, a and june rate hike is unlikely. however, it is not priced in at all. one thing we have to consider it , if everyone is focused on the fact that the loss of the hiking will be very low, meaning the slope will be very gradual. makes the second derivative assumption that the bond markets actually care of the fact it will be gradual. i'm not so convinced that once we don't star hiking that people just automatically shoot out to the roast -- worst-case scenario. interesting point. home depot talked about what the impact would be on a fed rate hike on their conference call today. here is what they said. analysis would suggest that insist treats could rise 200 basis points and the

affordability index would still be north of 100%. even in the face of potentially higher rates, we don't see any near-term pressure on our business. interpretation: whatever. [laughter] they have to say that. from a certain perspective they are right. from the consumer spending perspective it isn't going to make or break things like buying a home. if the borrowing cost is 1% higher. etsy earnings crossing right now. julie: reporting a loss per share of $.84. revenue rose by 44%. to $58.5 million. the company is also talking about the number of active sellers and buyers on its site. active sellers, about 1400, that

is a 26% gain year-over-year. of 36% year-over-year of active buyers. 22.8 million buyers. if you look at how the shares are trading, on the screen behind me, you can see we are seeing a decline in at the shares -- in etsy shares. back in april it had its ipo at $16 a share. it rose 88% on the first day and then decline since then. it has more or less maintained that. silly look like we are going to see a decline from those levels as people are going to go through figuring out if there are estimates that there and how it compares. the stock has waned a little bit we recently as analysts have questioned whether there is a lot of counterfeit merchandise being sold on etsy. it has declined as of late on those questions. alix: thank you, julie.

28 million active buyers. have been good, like home depot. some numbers have not been, like walmart here it what gives? weren't we supposed to see the best of the best? we had lower oil prices, a guest: -- gas test tax. i think it's too early to declare the failure of low gas prices, given everything happening in the first quarter where we saw volatile consumers ending. spending.r we did not give consumers the opportunity to spend. we saw unanticipated increase in savings. which will soon be liquidated but may not have just happened quite yet. with the walmart -- home depot story, i think households are recognizing that house prices are increasing and they are getting to the point where they can go to the bank and say, can

i get them loan to remodel my kitchen? and they are finally able to tap into home equity. alix: as long as house prices are expensive. if your home is worth over $200,000 than it is good. otherwise not good. had a note about what the consumer is doing. we are just spending on different stuff. right, and part of that people are spending more for experiences. well,ample, years past -- you might have saved some money at the pump. maybeight go instead into something more experiential. as technology transitions and as we have these additional opportunities, what is not to say you are buying more on netflix then going to a

restaurant or a retailer please tell like the retailer --? we still like the retailers, but for six years we have had zero interest rate policy. eventually we will have wage pressures and that is when retailers will benefit more now than ever. alix: hold on. earnings. otto earnings are crossing. auto desk, the most important thing, it is cutting its forecast for the full year. second-quarter earnings sharply below what analysts had , revenuecipating rising to 4%. that has been a gain of three to 5%. adjusted earnings-per-share will be at most $1.10. analysts were looking for $1.17. again, autodesk cutting its

forecast and shares falling as a result. how: we keep hearing about these doing better but the results are not echoing that. to jeremy's point about experiential spending, that does not show up in retail sales. retail sales are good. the whole gas price thesis will be the summer riding season. airline bookings, all of those categories which fall in services pending. we will have to see what that looks like in the first half of the year. alix: so long story short, home depot should get a spa and a park. puzzled. the same amount of money they're going to be dying for the whole program, what is the difference if they frontloaded that? guest: i think what markets pitch engine to is the fact that

-- markets paying attention to is the fact that he came out and said we are going to unload. but what that really means is the ecb is they will be more possible with their program. the same time, you have something a little under the radar that has been underreported. president came out and said if we don't hit inflation targets, we are going to go even whether all into this qe or nontraditional monetary policy programs. i think that came together. alix: and just two weeks of people were questioning when the ecb would move away from their easing program. this basically -- all those questions out of the water. this is not even on the table anymore. they are saying we are -- they are all in. inflation has really got low. one thing, european markets moving in the exact opposite directions. guest: i think it is a greece

buffer. alix: thank you so much. ♪

alix: welcome back. i'm alix steel. let's take a look at top stories. agreeing their bags were defective and has reached an agreement with u.s. regulators. they will reveal possible causes of the defects. they have agreed to expand the recall to 34 million cars, including 11 manufacturers. their bags have been linked to at least six deaths. housing surged in april. the increase, 20%, was the biggest in 24 years. housing is being revised by a stronger job market and mortgage

rates near record lows. senator elizabeth warren wants congress to demand the release of a draft text of president with's trade deal asia-pacific nations. she expressed her concerns on capitol hill. this iswarren: for me not personal. it is about protecting american workers. about protecting american environmental regulations, to regulations with health and safety. she says any trade deal including bank regulations would not be considered under fast-track. that allows the president to submit trade deals to comments without the threat of an amendment or filibuster. on the campaign trail and i were, hillary clinton also weighed in on the tpp. hillary clinton: i want to judge the final agreement. i have been for trade agreements and against trade agreements. i have tried to make the evaluation, depending upon what i thought they would produce. that is what i am waiting to

see. alix: in the meanwhile a judge has ruled clinton's state department e-mails must be made public on a rolling basis instead of a mass release in january. the force is strong with star wars creator george lucas. fortunately so are the disney chick -- shares. they have made $2.2 billion profit on the disney stock. those are your top stories. biggest names in economics and public policy gathered in washington today for the sixth annual peterson foundation fiscal summit. betty liu moderated a cap -- panel with former fed president richard fisher and former reserve president alan greenspan. >> we have been taking money out of the market and investing long. theaverage maturity in foreclosure we accumulated with big bond purchases is closer to the tenure level. treasury issue short-term debt. at some point you have to pay the piper.

the real issue is, what happens when interest rates go up? estimates have been just increasing gradually. suppressinge been the curve. foreign buyers have been helping us suppress it. i think this is the ticking time bomb of all. interest rate costs and the question of what are we -- whether we do about it. i will let alan answer. >> i will get to that. are you going to let him review that?hat -- rib you like >> if he stopped, i would send him to the hospital. [laughter] first of all, there's a certain on realism about -- this type of forecast will never happen. markets will anticipate well in advance. we are leaving out a critical issue in that things are relatively fixed interest rates. once you start down this path,

you don't get the four and or 5% rates. you get much higher rates. if you look at any system similar to this, market stock to anticipate. but we are way underestimating our debt. largely because we are not including what i would call contingent liabilities. -- which isissue of answered by a question. what is the probability that in today's environment, that j.p. morgan will be allowed to default? the answer is zero or less. alix: managing partner with at old black. what is your take listening to them talk about rates? guest: to be honest, richard fisher knows a lot more than i

do. but he has been slightly offkilter for a long time. he has been hawkish. i think that would have been a mistake had we turned hawkish three or four years ago. i think we are in the sweet spot now. my guess is the fed wants to raise interest rates. taking do not the table as an exercise in abstract thinking is the wrong place for markets to be. there is a risk we had a jobless number coming up this week. there's a risk we had cpi data that is way ahead of where we are -- consensus is that .1% right now. these things can change. they are very temp right now and not priced in the markets. alix: good to get your perspective. we do have breaking news concerning computer sciences. computer sciences saying one company will serve commercial and government clients globally and one will

serve public-sector clients here in the united states. this is the same time as they came out with earnings that beat the average estimate. there was a similar report that this would happen last week. we will give you more a detailed and the after hours after the break. ♪

i'mm julie hyman --julie: julie hyman. computer sciences says it is bleeding into two. one will be a global commercial time -- company and the other will be a public sector company. as a part of the split, it will stay -- pay a special cash dividend shareholders of $10 and $.50 per share. holders will on shares of both companies. a potential split of this type was reported by reuters late last week. also, wanted to bring you an update on other movers. one is etsy.

those shares down sharply in the after hours after the online marketplace came out with earnings and it had an loss of $.84 a share in the quarter. revenue at $58.5 million. the stock just started trading april 15 and rose one -- a lot in its first day. those shares are trading lower at the moment as well. as a result of these earnings, they are down. by almost 11%. finally, an update on yahoo!. we saw shares fall sharply in the minutes before the close of regular trading. there was a report in a chinese the country was considering some sort of increase in imports taxes on global e-commerce companies. though there might have been another reason for yahoo! to be following.

the irs is considering changing its ruling practice for spinoff arerees are businesses that small compared with other assets in a corporation. this is something that could affect yahoo!. this is according to someone who was compensating -- commenting any d.c. bar association event today. the headlines came out around the same time so it's unclear what was affecting the on shares. now it may have been the irs story even more the culprit than the chinese tax story. for the insight. senator elizabeth warren has become the democratic party's most prominent critic of trade legislation. pitting her against president obama and his efforts to negotiate regional trade deals with asian-pacific nations. senator warren spoke with peter cook earlier today from capital. presidents, democrat and republican, for more than 20 years on every deal

have spent the same thing. this is going to be a great deal for american workers, this is going to be a trade deal and it will work for american families. and yet, both kinds of presidents have then turned around and refused to enforce the very provisions in the trade deals they said were going to be so great. the consequence of that is american workers just one punch after another right to the gut. so the president says, senator warren i hear you, but this deal will be different. he has called you a politician like everybody else and your arguments don't stand testing of scrutiny. has the president cross the line in criticism of you? sen. warren: for me this is all about the facts and what is best for this country. i'm out here trying to fight over these very specific he said

-- pieces. we talk about transparency. there has not been enforcement of these trade provisions. i have talked about this special panel where big corporations can go have corporate lawyers decide whether or not they get judgment against taxpayers at home with no resort to the court system. judgment in the u.s. and the u.s. has won every one of those. sen. warren: first 50 years, these were in trade agreements. and they weren't a big deal. over the 50 year span, there were fewer than 100 altogether in the whole world your it but they have taken off. in 2012, there were more than 50 in one year. to petercial thanks cook as well as senator elizabeth warren. that wraps it up for bloomberg market day. have a wonderful evening. we will see you back here tomorrow. ♪

♪ announcer: from our studios in new york city, this is "charlie rose." gates is here. he was secretary of defense from 2006 until 2011 under president bush and obama. just been "duty" has released in paperback. some call it the most candid account ever written. it comes at a time as we addle issues in the middle east -- as we battle issues in the middle east. a major setback for the iraqi army and government. meanwhile, in