you are looking at snob -- stocks snapping a two day losing streak. the dow settling up to 29 points. at one point up 95 points. still relatively higher on the day. the u.s. dollar hitting a 12 year high against the yen. is going into stocks. i am joined by the bloomberg markets managing editor and they don't collect merger monday for nothing. but is definitely part of the driver here. >> another deal in snapping the losing streak. $1.5 trillion of m&a

this year of 21% versus last year and $500 billion worth of deals waiting on the sidelines that have not gone through. those are grazing numbers. >> the big number i was surge.ed about was the we got a nice upward revision to march and that might actually be a little better than was expected. few signs that maybe there is some sort of spring recovery. see what ist to happening in retail. julie hyman is looking at those. julie: the maker of calvin klein and tommy hilfiger clothing of the company earnings coming in at better than expected. the company of course was as weed by currencies talked about. revenue on a constant currency basis of 3% and the company say a lot of the gains came from calvin klein products and

particular. the company is raising its forecast for full-year earnings and now looking for second-quarter earnings per to $1.30$1.50 including the impact of $.30 from currencies. that is below estimates but the full year is what is going higher. the company also said that there is a $500 million share buyback. the shares move higher in the after-hours session in reaction to all of this. alix: buyback the word of the day. you were talking about construction data. what i was digging today was talking about the core cpi and pce. they are diverging. 1.2%.re cpi at -- isives and how does that dealt with? >> tom keene wrote a post for

the website today on inflation. he said his favorite measure was the cleveland inflation measure. everyone should go check that out. alix: shout out to tom. data point this morning was income and spending. income is a solid. you would think things would be fun but the spending was mediocre. the we get tons of more data this week? the first week of the month is always really fun. manufacturing didn't come up in structuring -- manufacturing data. you learn a lot more about the economy over the days ahead. alix: for now, we talk about the biggest topic of the day. i want to bring in michael. he is the chief market strategist at jones trading. thank you for being here.

welcome to the crazy. what we're really digging today was the goldman sachs report that talked about bubbles in the takeaway was are we in a bubble and if so, so what and should you actually the invested? michael: they spoke to all of these people -- the great quote today said i fear crashes but i also for that this adds up to a world where stocks and bonds are offering west. what do you see from here? i am in the bubble camp. i think this is totally unsustainable. i think it is really telling what you have jeremy siegel saying he only sees 10% upside. that really makes a statement as to how stressed we are. yes but a lifetime telling people to invest in the stock market. -- quote you highlight their

the term bubble institute is there some rational reasoning behind this behavior, some reason people are acting this way and obviously, valuations are expensive. alix: he did say the 30% increase in valuations before you get worried. is fine.that you have a guy like siegel saying there is 10% more after the market has gone up 250%, are you really going to hold out for that last 10%? the goldman sachs guys saying valuations are in the 90 percentile. the oz are not in your favor. alix: we take -- audit's are not in your favor. stockse likes european being cheaper versus u.s. stocks. what do you think about that call? michael: i would be heavily weighed toward cash. alix: do you mind gold? gold is okthink

here. gold has gone down for four straight years but as the dollar has appreciated over the past 10 month, gold has held in and that is an asset that should be hurting more with the dollar being so strong. we talk about interest rates being so low and stocks being cheap. this dollar move -- if you see , it was because of the dollar and the currency. the fed may raise rates and may not but this is definitely a tighter environment going forward. one last point on the interest rate. they are going up in the future, not down. peoplet understand what make the argument stocks are cheap relative to industry. alix: you sound like robert stiller. what's take his quote. -- let's take his quote. is there something to that?

we might see a bubble but there is something different going on. michael: it is the fear of missing out. this market has been remarkably resilient. disaster, theomic fed stepped in and do great things to prevent that, but as we recovered, they did not take the traditional role of removing the liquidity and tightening policy. six years of zero interest rates. we don't know what it is like to we are stillke and at zero interest rate. we have a long way to go. >> one of the things stiller says is stocks are expensive but that does not tell you anything about what they are about to do. it may be several years before there is a correction. what is the timing? when are we going to see the correction? michael: i don't have a crystal ball but you have to position yourself so that you can digest these environments. the perspective

of risk versus opportunity. at the end of 2008, there was tons of opportunity out there, potential for things to work out. right here, there is a lot of risk, a lot of things that can go wrong. right now, nothing has gone wrong. we see a headline every week they are about to go bust that they don't. we don't know what will happen but the 10% is not worth playing. >> speaking directly to your point, siegel plus quote on the --it may take a year or two to reach that level. argument?ieve the michael: you have had six years of interest rate policies. if you're using interest-rate as your rationale to buy stocks, you are late. alix: if you take a step back and you are in cash, wouldn't you be missing out?

michael: the question is you have missed out on a move and it has been a great move but to sit there and say you are not investing for today, for now, the 10 years from interest rate environment is going to change. alix: you brought up the ust's global equity strategist for goldman sachs. he seemed to imply we had high valuations but you will want to buy stocks anyway and part of that story is about buybacks. they say they will search 18% this year, exceeding $600 billion. 30% of the cash meaning who cares? has been a big theme throughout the recovery. if you go back 10 years ago, if an individual company bought back their stock to grow earnings that way, then what happens is investors but a lower multiple on that environment.

we had yet to see that materialize here with the market. on a single stock basis, we call these low-quality earnings growth and you build a multiple on it and the market has not done it and i don't know when they will but that is a risk to playing that strategy. are there any areas of equity markets around the world you think are interesting? michael: the points brought up that there are small pockets of value but honestly, there is nothing i would set year and say that is what you have to buy. the u.s. treasury bond versus european sovereigns. i don't think -- when everything is expensive, i think relative value is very dangerous and can get people and a lot of travel. alix: if you are sitting in cash, how do you make any money? lose moneyu won't when these asset prices correct

and that is being willing to forgo the short-term to protect yourself for the long-term. alix: interesting. for beingso much here. that was a fun debate. >> it was. we don't get a lot of able calling it a bubble. michael: i appreciate that. alix: thank you for joining us. chief market strategist at jones trading. good to talk to you. coming up on the bloomberg market day, chronic diseases are the leading cause of disability in the u.s. we discussed one company that takes advantage. ♪

alix: welcome back to the bloomberg market day. crossing the terminal at this

hour. top level talks dealing with greece reportedly underway in berlin. the meetings designed to him out a proposal that would give greece is only realistic chances of avoiding default. present as a creditor institutions are meeting with the german chancellor and mario draghi. secretary of state john kerry is on his way home to boston from geneva to get treatment for his broken leg and on this what come on orthopedic surgeon and additional medical personnel. in france over the weekend that will limit his ability to travel. talks with iran entry crucial stretch. they want to curb the nuclear program in exchange, would ease to -- agree to ease economic sanctions. a lawsuit coming abercrombie & fitch illegally denied a job to a muslim teenager because she wore a headscarf.

the rule of law require businesses to be more terrible about religious discrimination when they interview applicants. those are some of your top stories at this hour. and i diseases are the leading causes of disability in the u.s. and account for 70% of all debts. think of things like depression, addiction, schizophrenia. millions don't get treatment. one biotech company is trying to change that. use technology to make drugs longer lasting. one for once a week instead of once a day. it currently gets 85% of revenue this company to big companies. there focusing on its own pipeline of drugs. how could be this -- could this market be? joining us now, richard. when you take a look at the big guys who deal with ms, hepatitis

c, hiv, how could -- mickey mantle ole miss the in comparison? richard: mental illness is one of the biggest houses of human suffering in the world. diseases like depression, schizophrenia, addiction. the bio gender just 10 years were small companies. you can get so big in this because youuickly can make new medicines that is something that has not been done before. alix: cancer patients want treatment. there is a really big stigma about mental health and a lot of people, especially schizophrenic or bipolar, don't know that you have it and and take it on a regular basis. richard columbia for some of the biggest pharmaceutical markets in the world today. one of the things we started doing whiskers or for an yet was developing once a month formulations so patients don't have to make a decision each day

to take their medicine or not. particularly in addiction, it is the wrong conundrum for a patient to stay should i take this as an today or abuse this substance? alix: do you have a dollar figure of how big this part of the industry could be for you? richard: for us, i think it is measured in large numbers. the goal for us is not to focus so much on the revenue side because that almost takes care of itself. our job is to make the medicines and the medicine we will make because there are large markets with many generic players -- our job is to make medicines that are truly better than the medicines that precede them. how long does not end up taking? is to love partnerships with johnson and johnson. do you cannibalize your current partnerships when you are trying to make these drugs? richard: no. we made a decision years ago that we would walk before we would run.

these we built technologies and license them to get our first medicines on the market which allowed us to develop a sustainable cash flow. we haven't focused only on her own medicine and diseases where there is so much need for more medicines. alix: what is the revenue mix? 85% of that rolled a partnership. -- of that royalty partnership. what will that be like in 10 years? starts this us, it year. we have our first proprietary medicine in front of the fda and schedule for approval in august. that is a once a month formulations with drugs and the treatment of schizophrenia that should launch in september if we get approval. we are in the last clinical stage of a new important antidepression medicine we call 5461. it is the first new mechanism in depression and a long time. it monitors the opioid system in

the brain without being addictive. alix: at one point the someone pick up the phone and say hey richard, we want to talk numbers. richard: often, the street is willing to pay higher prices in this. we are making so much progress so fast right now and we have so much medicine near the end of sure development where are was noted the valuation would change. fascinating story. thank you for joining us. richard potts. coming up on bloomberg market .ay, the intel ceo merger monday. coming up next.

alix: welcome back to the bloomberg market day. dr. one of our company stories of the day -- back to one of our

big company stories of the day. the all caps joe comes on the heels of the $37 billion acquisition, the largest ever in the semiconductor space. cory johnson is alive with the intel ceo right now. the ceo of intel joins me now. brian, a huge deal. why do this deal now? why not a year ago or a year from now? what really drove this timing was actually our customers. our customers have been asking for products that combine an cpu in areasth our like the data center driving .ssisted cars our customers really have been driving the need for this and in order to get them to market in a

timely way, we needed to do this now. cory: basically the notion of can drive chips fantastic performance. is in power an issue when you are talking about this internet of things? powers may be a bigger deal there than it is in the data center, yes? brian: powers are an issue in almost every product we build now. you have to take a look at the total system power. what happens when you put the size to the workload and the right size of processors -- in iot, you will use an atom processor. is that total system -- if that system power ends up being decreased, then either putting that workload out into the this ornd storage and fpgadisc or on a separate

board. he system power goes down and performance goes way up. performance can go up greater than two times by providing -- combining these parts together. that is a big improvement. cory: i wonder what it is about your manufacturing capacity. wasrior mergers, there criticism that sometimes maybe when you try to run things through the intel way of doing things, the output is not as fantastic as when it is intel designed from beginning to end. other things you have learned to better apply to this acquisition that would let you create ultra chips with -- altera chips with the efficacy you may have gotten out of intel chip's? brian: there are a couple things. we have been doing a lot of acquisitions over the last few years. those taking a lot of

learnings and carrying them into this. these -- altera has been a foundry partner for almost two years now. they have been working inside our design tools. they know how to build on our technology so that the integration of the two engineering teams is going to be weh more quick than if bought someone who was not part of that founding business already. what about the sales force? how does the sales wars -- force differ? where might be a real opportunity for you to reduce cost? brian: what we said was that most of the cost reductions would come from the gna side. the unique thing about the engineering and the sell side was at that there's very specific to these technologies. what is different is our sales tend to be more general purpose logic sales. someone going in and selling

something. in alter a come you go in and sell a specific capability will set you up to work closely with what the architecture and software of limitation is. size it right, scale it right, get the right part in there. thank you very much. one of the biggest deals ever. we appreciate your time on this important issue. alix: thank you. that wraps it up for the bloomberg market day. thank you for watching. have a wonderful afternoon, everybody. see you tomorrow. ♪

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in limboe nsa remains as congress wrestles with the patriot act. does big brother deserve our big data? i am emily chang and this is "bloomberg west. intel defending its data center business. what it tells us about the growing wave in the semiconductor industry. the rise of the one-stop button. i'm joined with the entrepreneur whose technology is integrating into sportswear. i will be joined by the brains behind many of google's most innovative products