[closing bell] streak, weye losing have the dow and the s&p looking at their best day in a month. the s&p is higher for second day, the nasdaq is having its best day in two weeks. it was a sea of green all across the board, technology was leading the way up right 2%, followed by financials and energy. thecan see that echoed in 10 year yield hitting an eight-month high as you see money flowing out of the bond market. we are seeing money flow into the bond market. to break it down with us, joe weisenthal. finally, an update. joe: finally. allbig story today, we were set to say -- ignore it, same old same old, but we got some exciting headlines about greece today. finally, some excitement.

germany is perhaps willing to consider some sort of staggered aid to deal where maybe greece commits to light one reform, which i found to be hilarious -- just do something that set -- so that we can credibly give you money and not have it be a total loss of face. markets were already higher going into that. the funny part to me is that it came out right away. joe: i think this is one of those where there is smoke there is fire sort of them. but the interesting thing is that a picture, we have been going for months talking about what's happening with greece and what gets lost is how devastating this uncertainty has been to the economy. a couple of charts i want to the first one shows greek private sector deposits, basically how much they have in the banking system. ever since things became clear last year that they would have an election and possibly a new

government, money has been fleeing the banking system. that's not good. the flipside of the same coin, another chart the a sickly looks at ecb emergency report -- support and it looks like the exact opposite. as soon as it became clear that there was going to be a new election, possibly new renegotiation, the ecb has had to provide much more of a backstop. alix: seems like they are going to max out at emergency liquidity. we are 83. joe: we have been saying that for a while. alix: true. netflix has risen the most since april. you did have an up rate waving their price target to $722. does that really move on and up rate? does it? maybe not. but within the report was what saidnteresting, analyst that the idea that international markets would grow is core to

netflix business. plus downloads on mobile devices investors put in a proposal that paved the way for a stock split, that is echoing through there as well. the big stunner today was -- bp annual review come came out, it has oil nerds like you, they love it. one of those charts blew my mind, the u.s. is now the largest producer of oil in the world. as you can see, that orange line has just passed saudi arabia. knows abouteveryone production, but i still found that completely astounding. but i'm sure that you found tons in the report? alix: i love it. i was just talking to ed morse and he said the u.s. is producing over 13 million barrels per day when you account for all liquids. beating out even russia. russia was really the stronghold there, with natural gas.

he expects u.s. production to continue to grow. it is all about shale flexibility. you see prices rise. you see hedging. you see the frack log come back. get in there, get out, it can bring up production fairly quickly creating this new player in this amazing market. i was pumped. joe: here to discuss all of these things, jim keenan, the blackrock head of u.s. credit, editor,mberg stock michael reagan. thank you for joining us. something else the caught my eye were the buybacks coming in today. talking about the announced buyback of 50% this year, seems like a big number. if you dig deeper now may be a distinction between announced back -- buybacks and completed buybacks. it will not be trivial in the market and turn out to be not that big of a deal.

>> it is this kind of shell game that some companies play and then you look act a few years later and they did not really purchase that much. they get an authorization for that, but what the strategist at barclays are saying is that announced the buybacks are actually good for the stock, completed buybacks are better. that the big jump in announced buybacks is basically due to a couple of big names. ge announced a plan to buy back as much as $50 billion in stock, but in 2015 they will only buy back about 8 billion. he is saying that this boom is not necessarily going to buybacks thisted year. one of the fascinating data points in the report was that if you add up to the dens and buybacks in those countries -- companies, they are paying out more than they are earning and profits, which is a kind of unsustainable thing.

you cannot continue to pay out more than you are earning. he did not get into this, but especially with interest rates headed higher and cutting off the credit that companies are using, making it more pensive to buy back shares. alix: people have been -- joe: people have been talking about the idea that these companies are borrowing so much for buybacks that they are becoming significantly weaker because of it, their balance sheets are deteriorating. looking at these things from a credit perspective, does this make sense to borrow to buy back shares just to boost stocks? the i would separate question. i think that after the financial crisis we went through a time for corporations were just trying to get their balance sheets in order for a potential recession and what you look at at this point in the cycle, where we are and where interest rates are and where corporate spreads are, you see a lot more companies starting to read their buybackver

sheets. interest rates are low right now, the equity market is actually benefiting in favoring companies doing these stock buybacks. even though credit risk is increasing as they do that, we are not seeing it as excessive and you are seeing it more in that market than the high-yield market. alix: there was a note out from 3.7 trillionabout in the past decade and most of that inventory is in the hands these three big types of investors, like foreign investors, insurance companies, and mutual funds. this is like the constant talk these days. bond market liquidity. a few months ago no one was talking about it so for little bit and now every day there is some new warning about bond market liquidity and potential dislocation. i'm curious as to how you see this from a stock perspective.

what are the chances that something dramatic could happen? michael: maybe jim will have some perspective on this as well, but obviously the regulation has brought a lot of dealers out of the market, there are less people warehousing credit instruments. i wonder, will some middleman eventually step into that role? the credit and bond markets are going this way to, getting more electronic, so the liquidity is sort of automated in the stocks. i'm wondering if there is a role for a new middleman to come in where the dealers used to be. jim: i agree. for one, with respect to the growth of the market, you are talking about a significant change over the last 10 years. when you look at that a lot of the credit that used to be owned by the banking system is now owned by investors insurance or pension funds or households, which has provided a significant

new opportunity for investors and savers to access the market and a pretty good product. the liquidity has certainly changed. due to the shift in the financial crisis, the fact that there is no volatility in the market, there just is not a lot of turnover and trading in the credit markets right now, but it does present risk and the fact that there if is a shift in the market you see more volatility and pricing. i totally agree. in the sense that there will be an evolution that you are seeing right now and other people are stepping in and what is the medium for the exchange many ofs community and our clients out there are the ones that own the risk and as you see volatility pick up they will want to change that relative value picture on that. the banks will play a key role but it will not necessarily be warehousing risk like in the past. alix: you raise a good question

on where we will see the risk and that brings me to steve schwarzman talking about where the next financial crisis will be. an op-ed in the wall street journal, he said politicians and regulators construct an expansive unregulated framework that will have unintended consequences for liquidity in the financial system and may well fuel the next financial crisis. mike is laughing here. we see ceos blaming regulators for this as well, but the idea is that there is risk we don't know about. michael: it's not the question of will there be, it is just a question of where it's going to be. that cracked me up. i don't know, is it an inevitable thing, necessarily? who am i to say? i don't know. it certainly is a question that a lot of people are wondering. joe: could there be a situation with a big crack up in credit where the stocks to find? michael: it is amazing to me

that the volatility has remained outside the stock market. credit, for ex, a lot of people believe it is inevitable and that it will find its way into the stock market. i wrote how goldman called it a boring stock market because of the tight range we have been in. there is this sense of another -- inevitability that it will return, but we have been waiting for months and it is nowhere in sight. take jim, we are going to a quick break and we will continue talking about where the risk and volatility are, including high-yield. we will be back in just a few moments. ♪

♪ welcome back to the "bloomberg market a." we want to get straight to some of the top headlines this

afternoon. the clinton foundation is facing andw you over its finances goals. former president bill clinton spoke live on bloomberg earlier today from the clinton global denver.ve in no -- in he was asked by betty liu about the foundation's future if hillary clinton were to win the presidency and whether he would continue to make aid speeches. president clinton: i don't think so. once you get to be president you are just making a daily story. speeches,ll give though, i really enjoyed those things. the former president defended his foundation saying that the financial disclosures are more expensive -- extensive than those of most other private institutions. president obama is sending additional troops to iraq to train and reinforce in the andy barr province. the u.s. is also sending more military equipment to iraq.

already 3000 u.s. troops there and months of airstrikes have not stopped the islamic state from capturing large chunks of the country meeting privately with pope francis today, the pontiff spoke about serious attempts to bring peace to the troubled eastern ukraine. talks were reportedly focused on the middle east. thats the second meeting vladimir putin had with pope francis since 2014. those are your top headlines. back with jim keenan, he is fired up right now talking about the volatility in the bond market. where does that spread? what is cross asset correlation? we are going through a. of time right now where the economy is improving, there is deleveraging, and inflation data is starting to move, economic data is starting to move to

dispersion between different economies and you are starting to see volatility pickup in the rate and fixed income market around the world, but it is coming off low levels and remains at low levels, you are talking about a 2.5% 10 year right now with the treasury. these are not levels that are shocking the economy or are going to disrupt significantly. it might you volatility in the equity market, but at this point we are not talking about rate that would slow the economy in a significant form, which i think is different from the comments that you were reported with regards to steve schwarzman. there will be another economic shock and that could come from a variety of different places. what that means from a credit and point and duty is that i think we have to see and as regulation evolves how and when how thata shock liquidity is going to come back to allow the economy to continue to function in an economic

downturn, because it will happen. alix: in that turn is the high-yield market an indicator of how well the economy is performing and how much risk there actually is in the market? historically it has been, but that does not mean it will be the leading indicator in the future. the structure of leverage in the system globally is different today so it does not necessarily mean that that high yield will be the leading indicator. it certainly is an indicator because it ties to the health of the credit in the market but i think really have to look at the equity markets, currencies, the credit markets as a whole to look at that. will not be as the same as the last 1 -- the next one will not be the same as the last one. alix: what areas do you avoid the 10 foot pole? [laughter] we think thatm:

high-yield is a good asset to value balanceive portfolio because we think it will get you 6% to 7%. the economy is improving but at a slower rate. the corporate market is in very good shape, there's not a lot of excess risk that will create credit risk and we think that some of that increase rates, once done at a slow level it likely impact volatility and equity markets. as an investment from a fixed income perspective they like to go down to own different kinds of products and those type of instruments to try to get committed high single-digit returns. alix: historically how has it performed during tightening cycles? jim: this one will be different. if you look at the market, high-yield is tied -- less

interest rate risk. it is not as exposed to a rate environment on the long end of the curve. in an improving rates rising high yield tends to do well. as the market continues to go further and the rates tight and, that's when you have to you market is with the risk to corporate and equity at that point. alix: jim, such a pleasure to have your perspective. great to have you on the show. coming up, we are going to hear from the chevron see you know about how he runs the oil giant. ♪

the secondon, largest oil producer in the u.s. is active in 180 companies -- countries, with pumping 1.2 6 billion barrels of oil every day. ceo, john watson, faces tough decisions about oil prices, political risks, and the dual threat of independent crackers and renewables. erik schatzker sat down for an exclusive interview to find out what makes this oil giant stand out from the rest.

john: we are little bit differently weighted. the geography is different than some of our competitors, host -- both in the downstream and where we have chosen to invest. we are under way in the middle east relative to some of our competitors. we have had to make some choices based on the investment returns that we see. we have chosen up till now not to be a part of southern iraq, even though we have done a lot of work to try to be prepared to participate. >> it seemed that when oil was at $100, the independent had the best business model. this is a different time in different place now, at several months later. was big oil built for price environments like this? -- john: we have been

there before. costs can change, positions can change. you have to have a portfolio with different risks, different political, geographic and other risks that we encounter area you have to have options because you know that the pace of the projects will not be what you expect, but we have to have that balance in the portfolio and we have the advantage of being able to do that. perhaps we have a different view on the business over the short-term view of the u.s. business, which has been a blessing for this country, but it will my be only thing needed to bring energy to the world population. last elaborate on that oink. john: shale has been tremendous for this country. independence has largely fueled the growth to a comp was great things. if you look at the shale type production of oil, it is about $45 million per day.

the world market for oil and liquids is 93 million barrels per day. that after theg success in the united states the expectation was that this would happen anywhere -- everywhere. there have actually been fewer places where the economic system is in place. the world is going to need lots of energy it will meet shale production and it will need deep water and other forms of oil and gas in order to hit the needs in the marketplace. alix: that was erik schatzker with the chevron see eo, john watson. we have breaking news for you concerning greece. julie: it's not shocking, the greek reddit rating has been downgraded for -- downgraded to .cc from ccc plus this is tied to everything going on with greece. they talked about the delayed payment to the imf on friday,

"it appears to show that they are scheduling over debt service obligations." credit rating is being downgraded, the outlook is negative. i have not had a chance to go through the entire statement as of yet, but we have all been following the situation in recent closely i know that they are still trying to renegotiate over the repayments and potential bailout. alix: it also seems like the s&p is trying to get political, saying that greece needs to take its reforms more seriously. much, julie hyman. thank you so much for watching the bloomberg market day. have a wonderful afternoon. ♪

get ready for tesla autopilot. we have everything that you need to know for elon musk's next three months. ♪ emily: i'm emily chang, this is "bloomberg west." spotify lands a huge round of funding over and eight billion dollar valuation and 20 million new subscribers. is it enough to fight off apple? the sec to back off. i will be joined by