david: from bloomberg's world headquarters in new york, good afternoon. gura.vid gora -- will concerns of china outweighs signs of strength in the u.s. economy? bill gross says it may be a tough time for bonds, it relies on job growth for a way to raise rates. bonds are looking sad ahead. steve cohen will be able to manage money until 2018. why that's good news for the billionaire investor. let's head to the markets desk with bloomberg's julie hyman with the latest. julie: not blockbuster stock activity by any means. without was bouncing around and lack of impetus. i do want check on yahoo! very quickly. we just got headlines in the past few moments, a scoop.

yahoo! is now reconsidering a sale of its main business, rather than a spinoff. its main web business, that is. we will be getting more details i'm sure throughout the hour with this scoop again by our reporting team. you can see shares spiking by more than 3%. broadening out to the major averages today, we've seen quite a bit of bouncing around right now. all three major averages are very little changed, even after that jobs report. something's counterbalancing include continued worries over what's going on in china and volatility in the markets there. if you look at the s&p, speaking of volatility, over the course of the session there's been quite a lot of bouncing around. the s&p get a little more decidedly negative in midmorning before recovering. just been bumping along a little changed for the rest of the day. some of the winners during the session include some of the natural gas related stocks, we're seeing natural gas higher today. consol energy's, viacom also participating in buying in media. on the downside, we have some of the retailers doing poorly.

gas -- gap coming out with results worse than estimates in terms of sales, holiday sales, particularly for old navy. kohl's following along with it and seagate suffering from a down. today along with competitor western digital. lookingo surprise here, at the commodity close in a few minutes, we'll is having a big influence on the market. julie: this is a chart we've been looking at a lot over the past few months. as a will in the s&p 500. it's hard to tell where one leaves and the other begins. we'll is the a line, the s&p is the aligned. the movements are very much in tandem today says the correlation between them has been on the rise. oil prices if you look at the week, we are talking about a very weak start to the year, now down 10.72%. barrel dip below $33 a earlier today as what's going on in china weighs on it. something adjusting, david. we got the weekly oil rig numbers about an hour ago. they actually showed a decrease in rigs.

normally that would cause an increase in oil prices. it didn't happen. david: julie hyman, thank you. let's check on the bloomberg first word news. ramy inocencio has more. ramy: first we had the mexico, where president says the fugitive drug lord el chapo has been recaptured. back in august, the u.s. government offered a $5 million reward for information leading to the recapture of guzmán. he's been taken to one of most -- he escaped one of the most secure prisons in july using a sophisticated mile-long tunnel that opened up in his shower. bells and investigators think they know where the pair attackers built their bombs. a prosecutor confirmed today traces of explosives were found last month and a brussels apartment. also discovered were fingerprints from the man sought in connection to the attacks in november that killed 130 people. members ofhill,

congress want tougher sanctions on north korea for its latest nuclear weapons test. leader nancyt pelosi says the new measures aimed at kim jong-un's regime could be voted on as early as next week. each of north korea's three previous nuclear tests led to a tightening of international sanctions. u.k., is not london fog, but london smog they are dealing with. it's only eight days into the new year in the city has already failed the eu smog limits for the entire year. levels of nourishment dioxide in west london exceeded the limit 19 times so far. the biggest factor is vehicles with diesel engines. a warning, cut your alcohol consumption to less than one drink a day. new u.k. guidelines warned that any level of alcohol consumption raises the risk of cancer, and that both men and women could -- should consume no more than six pints of beer or glass of wine a week. the government is advising people to have several alcohol free days each week.

global news 24 hours a day, powered by 2400 journalists and more than 150 news bureaus around the world. i'm ramy inocencio. david: the big story is the u.s. job report. topping even the forecast filed by bloomberg and revisions at 50,000 jobs for the previous two months. it was a strong finish for jobs in 2015, but will the momentum last? john williams, president of the san francisco fed expressed confidence that it will. -- jobpect job grace growth to be strong in this year, and very strong come into asiana bulimic continue to drift down to about 4.5% during the year. david: the u.s. jobs report comes in the midst of market turmoil centered around the turmoil in china, plunging commodity prices, and the global effect of a stronger dollar. joining me is michelle myers, economics,ctor of

and steve wood at russell investments. thanks for being here. michelle, let me start with you. we have to talk about wages. we had the white house press conference a few minutes ago saying they've administration a disappointed with where wages are. it's still a point of weakness. michelle: i did say that the one point this disappointing. we saw no change in wage growth. year-over-year, you see a modest up tick to 2.5%. that's largely because last december was so weak. it was favorable base effect. i think it is a bit of a puzzle. we are seeing rapid job growth, well in excess of what we are seeing in other indicators of the economy, including gdp, and a recovery at 5%. and yet, we are not yet realizing much in the way of wage growth. perhaps it's a matter of time. maybe we are not yet at full employment, or maybe we have to fall through full employment and pull that estimate before you realize the momentum in terms of wages. david: good to be you've had people who were outside of the labor force coming back in, that's a factor this depressing

wages? michelle: that's the idea of hidden slack. that's weighing on wage growth. if you simply look at the unemployment rate, it's not a sufficient measure of measuring the amount of capacity there is in the labor market. have's the case that you this underutilization, or people it could be engaged but are not yet quite in the labor force, if they come back in, that does bring downward pressure and wages. if you look in the last three months, we do have a pickup in the labor force participation rate, so that's one potential theory. david: let me ask you have his number complicates things for you as an investor. we have others writing about the goldilocks number today. in terms of what the fed might do in the future, how does this number kabul gittings going forward? thee: this number speaks to fact that the fed is under no pressure to do a thing it doesn't want to do. the economy is improving, the labor market is improving, wage pressure is not going to force their hand. the fed right now can set a

schedule, and keep that schedule, there's nothing forcing its hand. right now, i think the fed is going to look at this wage don't we had in july and august. a lot of the things we saw them, we're beginning to see now. tohink the fed will begin get more data dependent than they would have anticipated a couple weeks ago. david: i'm going to ask you what we saw yesterday. this number placated markets a bit. what do you make of we saw in china and around the world yesterday? steve: this is one of the older stories. the chinese economy did this already. it's going to decelerate to 6% or 7% because the chinese government wants it. that's a stated goal, they're going to get with a want. what we've seen over the last couple of years in a commodities space is a repricing to the new growth rate. the chinese equity markets are very volatile, they are choppy. we look at chinese growth is a contributor to global growth, we don't see a recession in the u.s., with there's going to be a lot of volatility and challenges, but the best case scenario right now is the 2016 look a lot like 2016 in terms of aegon the growth. david: the me ask you about the

note you and your colleagues are written on the heels of this job report. you talk about the unevenness of the u.s. economy. for this report into some broader context because you looking at the u.s. economy writ large. michelle: that was in the perspective that you have this divergence between the good side of the economy and everything else. for example, manufacturing will continue to fall covered some 50, and suggesting we are in a mini recession, if not more than that. and a factoring side of the economy. and yet, the service side of the rest of the economy is still expanding. that's what driving continued growth and jobs and in terms of gdp. it is uneven. i think there's a lot of uncertainty right now. there's uncertainty because you have this divergence. and uncertainty because we don't exactly know how the weather is playing a role. presumably, there was some upside to december payrolls,

given how warm the winter was, or has been so far. that could potentially reverse. there's a lot of uncertainty as far as analyzing the data. david: i want to ask you about the fed come at it might do in the future. would love to get your forecast in terms of how often the fed might raise rates in 2016. i'm curious about the importance of the jobs number to the fed now that rates have begun to rise. is this the thing they are looking most closely at? steve: i don't advise the fed. i try and forecast the fed. as long as dr. yellen and company have looked at the labor market as one of their most important indicators, we will continue to look at it as being important as well. if you look it inflation getting closer to the 2% number, it's not quite there yet. i thought there were couple of pieces of data. one is with the vice-chairman said last week, they are getting into a zone where they think three or four rate hikes the share would be appropriate. and also what happened with european central bank.

they're looking for not only expanding but deepening their quantitative easing. europeans are beginning to from 2014. if he gets wonderfully into the dollar, which will tempt on inflation. i think the fed is going to be more cautious, but i expect them to get back to policy. david: steve, michelle, thank you. coming up in the next 20 minutes of "bloomberg markets," bill gross warns for a tough time for bonds of the fed relies on job growth. of rateghts on the pace hikes, china, and this week's market turmoil coming up next. and steve cohen will be able to manage money again, but not until 2018. more on that developing story. and too big to value, why ipo the saudi aramco would be so a story, it might change the markets. ♪

david: we'll be back to "bloomberg markets." time for the bloomberg business flash, it would be the news right now. stephen cohen will once again be able to manage client money, but not till 2018 as part of a settlement with u.s. regulators who accused cohen of failing to supervise a former trader at sac capital. his family office will also be subject to routine examinations by the sec. he neither admitted nor denied allegations he failed to supervise. in the first time in more than two years, goldman sachs and morgan stanley are trading more -- below their book value. this after the two largest equity trading banks dropped more than 3% yesterday. both report fourth-quarter earnings this month. and donald ross senior, a former

ceo at new york life insurance company has died. ross doubled the company's assets by adding mutual funds in the 1980's while shunning junk bonds. tenure, he oversaw to less the growth of more than 100%, topping $50 billion. donald ross died at 98 years old. the bloomberg business flash. it said the markets desk where julie hyman is a check on company movers. julie: and assorted selection. time warner is one of them, we've seen media as a whole perform well. warner, interesting story, there were reports that 20th century fox might be interested in making another bid for the company. then, the company denied that speculation. but the shares remain higher, they are authorized the session, but they do remain higher on the day. sun edison, one is really volatile stocks, plunged yesterday after the company announced plans to be capitalize -- recapitalize. shares are up 6%.

a couple of analysts have mentioned the company policy really -- the company positively. he's moving to the sidelines after all of the selling we've seen. apple suppliers are in focus out with preliminary results for fiscal third-quarter that were below its estimates, as well as analyst estimates. to 1.6ared losses percent. seagate and western digital also down today, downgraded on a we get look for personal computers. these are both hard disk drive. all of these companies get about 2% to 3% of revenues from apple. apple, the other hand, is actually bouncing back today after some we performance recently. it's up by more than 1%. david: julie, thank you. let's go back to this morning's blowout jobs report, reporting a whopping 200 92,000 jobs added. bloomberg's tom keene and michael mckee ask bill gross how the numbers might influence fed policy on raising interest rates.

>> the three or four fed steps that took stan fisher and janet probablyem to confirm, are on track, at least in turn of the verbiage. don't big it's possible to raise interest rates by 100 basis points in this lever global economy, which reflects a stronger dollar. i think the fed, at the moment, we'll talk that talk. tom: they will talk that talk, but with the humility of the first four trading days of the year, even with the 340,000 statistic, with revisions, is this the federal reserve that must pay attention to international affairs? >> i think so. as i mentioned yesterday, they go in and out in terms of their statement or their emphasis on global affairs, certainly in the past several weeks and all we've seen with china. to my way of thinking, they have

to take into consideration global affairs and the movement of currencies. will they? i think it's number three or four on their list. financial conditions are probably down the scale, to the extent that market settle. perhaps they will mention it, but not react to it. i think ultimately, they should. >> given that, how do you explain the reaction of markets and the fed reaction to that? after what happened the last couple of days, we saw bond yields in the u.s. go down tremendously. the dollar did not rise, it fell during that period. how is the fed specific about this? >> it is confusing, mike. and you are right. it did fall relative to the one. -- to the yuan. the compared to emerging companies, were talking about china and china has devalued against the dollar.

we are talking about mexico and brazil and other important countries, 50% of gdp. the dollar strengthening. it pays to look both ways, in terms of developed and developing. i think ultimately, the fed has the world central banker, let's face it, the fed is the world central banker, and they have to become his and of the effect of that stronger dollar on emerging markets and developing countries. those countries over the past three or four years, basically are taking out a huge amount of inlar-denominated money terms of sovereign over debt within their own countries and ultimately, a stronger dollar at some point leads to problems, and in some cases, defaults for developing countries. >> do you worry, as some have suggested over the last couple of days, and we could be in a situation where they can't pay those debts back and we are looking at another financial crisis? flexes some companies, certainly some oil related companies.

i wouldn't go so far to say petrobras, that's ever known for the most part. but certainly, some companies that are associated with oil and emerging-market countries and associated with commodities, as you know. the commodity indexes at a cyclical low. oil.not just any company that makes their money and services their debt with commodity-based revenues is a risk. continue, i know the national team used to work for bill gross at pimco, now over janis. the new national team is the chinese government. the chinese government is trying to get through the day, and i guess they got through the day friday. i'm guessing, bill gross, you can't say all clear on that some old -- the tumult in chinese equities. >> how can anyone? wrapped in addle

mystery wrapped in a conundrum. wasbasically, what they did unfixed the currency, but they bought stocks and manipulated their market in another way. i think investors are very concerned, not just with financing in the currency rate going forward with the economic 5%wth rate, china suggested to 6%, other statistics -- electricity consumption a generation, and lending basically suggest something like 2% to 3%. with: bill gross talking tom keene and michael mckee. you can watch the entirety of that interview on the terminal or at bloomberg.com. still ahead on "bloomberg markets," steve cohen can manage money again, but has to wait to do it. what's next for the billionaire, after the break. ♪

david: welcome back to "bloomberg markets."

i'm david gura. steve cohen will be managing client money again, we just have to wait two more years to do it. to talk more about this is bloomberg's keri geiger. we learned about this through an fcc statement this afternoon. keri: we've been waiting for a while. it does seem to be like a good deal, and a happy ending for steve cohen. at one point, during this whole process of the investigation, the sec looking into sac n steve cohen himself, they had considered seeking a lifetime ban on trading. now we have another two years of very from what we've reported on in the past, successful family office in terms of returns and money, and when he's able to get back to his investors, and now i would imagine, considering the kind of dismal performance that we've

seen with so many hedge funds in 2015, you probably going to see an enormous amount of interest for people wanting to get in on steve cohen right when that man ends. ends.t ban david: we've seen people going to smaller operations. other indications he wants to get back in the game? keri: i can't speak for steve cohen, but he ran a very successful hedge fund for very long time that had an incredible track record for returns and a lot of happy clients. of course, until department of justice and the fcc kind of came down on that. i'm kind of foisted to reconfigure and come up with this family office structure. it's hard to tell what he'll do. i do know there will be interest in this. of course. people want to make money. obvious the, the markets right now are giving people a lot of concerns about the outlook for 2016 -- are we going to see more bad returns for hedge funds in the year ahead? there's someone

out there who can make you a lot of money and has a track record for doing it, people want to put their money there. david: to be clear, he did have to admit or deny anything. keri: it's great for him, it doesn't look great for the sec. they made a point to trying to get people to admit to wrongdoing in their settlements over the last couple of years. years, he didn't have to admit or deny, so executive settlement for him. david: keri geiger with bloomberg news. still ahead on "bloomberg markets," the world's largest oil producer says it's considering an initial public offering. why is the move being met with skepticism? ♪

david: welcome back to "bloomberg markets." i'm david gura. .et's start with the headlines ramy inocencio has more from the news desk. ramy: in mexico, president

enrique pena nieto says joaquin el chapo guzman has been recaptured. he wrote in a twitter account, mission accomplished, we had an. in august, the government offered a $5 million reward for information leading to the recapture of guzman. he escaped from one of the most secure prisons in mexico using a sophisticated mile-long tunnel that opened up into his own shower. a philadelphia officer that was ambushed overnight is expected to survive. he was shot 13 times at close range while sitting inside of a police car. the suspect is not in custody and the city commissioner said that he confessed to the shooting and said that he did it in the name of islam. president obama has vetoed legislation to repeal his signature health care law. many measures push by republicans lawmakers in

2010 but the first two clear both houses of congress and make it to the president desk. that legislation would have cut funding for planned parenthood. the state department has released another 3000 e-mails from hillary clinton's e-mail account but admits to falling short of their court order ged goal. released 82%t has of the 55,000 pages of e-mails mrs. clinton turned over since she left office. day.l news 24 hours a commodity markets closing in new york. let's take a look at today's movers. futures fell, snapping the biggest five-day rally in almost a year. the metal has outperformed other commodities this week as 4 trillion dollars was erased from global equities.

day but for a fifth rebounded slightly on-the-job support that we got this morning. u.s.umber of rigs in the fell slightly. saudi arabia remco is considering the world's largest , around 10 julian dollars. with oil prices at historically low levels, the question remains why now? joining us now is tina davis. let me ask you to put this into some context. compare this to the biggest producers here in the u.s. or russia. this is a huge company. thend is enormous, 10 times reserves of exxon. it produces more than the entire u.s. does. so when you talk about huge potential ipos, this could be bigger than most gps, so it's astonishing. whyd: put this into context saudi arabia is considering this.

[indiscernible] talk about the pressures saudi arabia is facing now. >> $30 oil. this is a nation that did very well when oil was in the triple digits and they have had to retrench. we saw them cut the subsidies they have for water, electricity, gasoline, so the people inside saudi arabia are now feeling the effects of low oil prices. david: this is a country where most people have benefited from the country's oil, a big part of the country's gdp. they have run on for so long. it is really a sea change in the way they operate if this happens. david: i mentioned potential valuations. talk about the difficulty of assessing this company, and it it were to go public, what can we learn? >>+++

behind the scenes at saudi aramco. it is a very close lipped black box corporation. if they went public, they would have to be more transparent, there would have to be independent audits of their reserves, so there have been questions raised about how much oil they actually have. for the first time, somebody could independently go in and look at that. david: any indication for a timetable on when this may happen? >> the prince said in the next few months. if they are going to roll out something as big as the parent company -- which is up in the air -- that would take quite a long time to get together in terms of the underwriting and how the sale would go. david: tina davis, thank you. i want to bring in gordon johnson, managing director at axiom capital. a of that conversation we were having and look at the global oil market. what difference could this make it this were to happen? with thek the issue

global oil market is, if you look at what caused the downturn in oil prices, it was really only 3 million barrels of oil oversupply which caused inventories to be built. i don't see this as a major game changer, i see it as a company that would provide clarity that some people say are a black box. david: tina mention the role of cheap oil. saudi arabia has played a role in that, going back to the last opec meetings, the outcomes of that, and the new role saudi arabia seems to be playing in opec. they have kind of dumb themselves in a little bit. gordon: the key thing for us come in the u.s. market, you had a lot of easy to drill wells, and that is providing a lot more oil than people expected in the u.s. the question is when that ends. we think it is probably toward the end of the year. that is on the supply side.

what about on the demand side? we think that things are going to get worse in china. exchange inreserve china, record outflow. that suggests that things are going to get worse. the question is when china will fully correct and that will be a two-your dynamic. david: you talk about the demand that china has had for oil. what has it been like? gordon: it has been massive. if you continue to have weakness in china, there could be a couple million impact on oil. any respite for oil prices soon. in fact, we expect them to continue falling. let me ask you about the back-and-forth we have seen between saudi arabia and iran. when you look at geopolitics in that region, how big of an effect might that have on oil prices going forward? gordon: significant, but people are expecting iran to be --

rather, the global country to be more inclusive of iran and that more supply to the market. we think that will be more of a head wind versus a tailwind for prices. david: we have heard iran say, if this package were to go theugh the u.s. senate, markets would be standing by with a ton of oil to put into the market. might this complicated that at all? gordon: i don't think so. about you had a note out sun edison announcing some debt restructuring. you're not impressed with what they had to have to say? older, youneck we have to be upset with what happened. effectively, you are being diluted. the issue for sun edison is simple. put a lot of eggs into one basket, assuming people would be for a while.t --

the stock was higher on some headlines that came out but that does not answer the question if they can make it through 2016. with this announcement yesterday, there are more questions than answers. david: you look at clean energy development. how big is leveraging still? gordon: across the industry, there has been massive leverage as companies have built these projects effectively on balance sheet. a lot of solar companies were assuming that this euphoria was going to state existed and that was incorrect. now you have a bunch of companies with billions in debt of projects they built that they hoped they could sell. the question is what they will do with the projects and that is what investors are missing. you have some chinese company looking to go private, so there are issues for the solar guys. we have seen a lot of big companies abandoning projects for development, increasing production.

if things were to improve, how difficult to get back online to get back to those projects? gordon: i don't think it's extremely difficult. i want to highlight there is a risk to the negative oil thesis. the risk is the fed basically reversing their policy. we are actually going to cut rates. if that becomes market psychology, then you'll have a decline in the dollar which will cause investors to rush back into oil, commodities. however, for that to happen, we think the data has to get significantly worse. as that happens, the price in stock will come down. david: gordon, thank you so much. managing director of alternative energy research and axiom capital. joaquinp, drug kingpin el chapo guzman has been cut again. we will dig into the mexican president's war on drugs. and yahoo! is changing its tune on selling its web business.

iphonesabout demand for sending apple stock into a tailspin this week, so why are shares higher today? ♪

david: welcome back to "bloomberg markets." i'm david gura. mission accomplished. that is what mexican president henrique pena nieto announced when he announced the recapture of el chapo guzman. he called him the world's most powerful drug trafficker. what does this mean for mexico's war on drugs?

joining us now is brenton case. what does this mean for president pena nieto? he vowed to find this guy six months ago, good news for him. >> it is a triumph for the president, or mozart, a triumph after one of the biggest the oscars since he's been in office. when chapo guzman's in july, it was the second time in 15 years that he escaped from a max and security prison in mexico. tunnel that was about a mile long and with lighting, ventilation, a motorcycle that went on rails. the guy escaped in style. david: talk about how the government has pursued him, as the government is trying to track him down? this was a very involved manhunt. >> it was a relentless effort. pena nieto was able to bring him in in early 2014, 1 of his early tryouts in office. huge embarrassment when he escaped.

he sent everything he had after guzman to try to catch him again. original navy squad that caught him in 2014 may have gotten him again this time. david: there was pressure when he was last in prison to be extradited to the u.s. the mexican government has resisted that. any sign, in light that yet this escape, that that might be on the table again? will certainly be considered. we will have to see how the mexican government reacts. certainly, it was a giant humiliation that they had said when he was caught, that first, he would be tried in mexico, and then maybe the u.s. could have been after 300 years, a direct quotation from the attorney general at the time. this time they may have to reconsider the view and think more seriously about maybe action letting him. when you look at the significance of capturing this

guy, is it, in large part, symbolic, or has the effort to find him done something to reduce the violence of the drug wars in mexico? >> probably mostly symbolic. the violence tends to flare up when there are two competing gangs that are trying to win the same territory. guzman has always been seen as the leader of the settlor cartel, one of the most successful groups, most powerful group within mexico, one that win large amounts of territory. if this contributes to greater drugtition with rival gangs for certain border crossings or other areas, we could see violence go up. time will tell. david: we appreciate that. let's turn to a developing story. considering selling its main internet business rather than a selloff. alex sherman help to break the story and is with us. it seemed like earlier this week

we were focusing on an accelerated push to get a spinoff through. talk about how this has come into the four again. alex: yahoo! realizes they may not have time on their side and that was the initial thinking. the market value of the internet business is zero today, so we may as well wait and give ourselves a chance to turn this thing around. marissa mayer had children recently, so she comes back and basically, let's say, put this on pause for the time being, that the media attention died down a bit. what we are hearing is in that process, there has been a shift of thinking. maybe they don't have as much time here. proxyrbird goes to a fight, everyone could be out before the market can readjust, so we could be in a position where we have to sell and it's just a matter of time within 2016, let's say, to do that.

at whathen you look they might sell, what do we know about the value of those assets? a lot of people are still flummoxed by what yahoo! is today. what is potentially valuable? tech they have their ad platform. that was part of the reason they bought aol. you could marry those platforms, if they work. cnbc has a story out today that says there is a lot of ad fraud within that. yahoo! but that for $700 million. yahoo! has all of its internet platforms. we have heard estimates ranging from $2 billion to $8 billion, depending on who you speak with. it's hard to know. it probably ends up being somewhere between those two benchmarks.

there is a sale process. yahoo! continues to work with advisers. they have not actually selected a bank to say sell this thing. today we are still talking prematurely about the sale. we are saying that thinking is evolving. expect something maybe this year to happen. when they do sell the company, we will see who comes to the forefront. our sources and other media outlets have said that verizon , at&tely to bid, iac possibly. multiple bidders. the chance they could get the price to go up a bit. david: as somebody who has followed the story, it seems like there is some hunger from -- this week we had star board saying we don't have time for the board together any longer about what melissa miami do. this may provide clarity in

quick order. >> and it stays off a proxy fight. it's possible that the activists back up and say, do that. that is what we are looking for, monetization of your assets to some degree. do that, and then you can take care of the yahoo! japan and alibaba stake. yahoo! would then become a holding company for those two, and then you can figure out a way to spin or sell those, depending on your options, based on a tax standpoint. apple stock isp, higher today after a very rough week. is the worst over? ♪

david: welcome back to "bloomberg markets." i'm david gura. it's been quite a week for apple . higher today but earlier the stock took a beating falling below $100 a share after analysts warned; the iphone may be losing its grip on consumers. worse thanned and expected quarterly results blaming sluggish demand for its mobile devices. let's bring in emily chang from san francisco. this seems to be a theme -- becoming a theme, that demand is not as high as it could be. reports earnings twice, so these are the on audited financials. we will get the audited financials in a couple of weeks. right now it looks like they are missing on profits, operating -- coming ing in

the $5 billion, less than what analysts estimated. it's not been a great start to the year for samsung, as it has been for other smartphone makers, shares down 7% this year , and down the last three years. obviously, this is another sign of softening demand for smart .hones worldwide of course, concerns about a slowdown in china specifically, a huge market for samsung. samsung has been getting hit at the high and low end. competition for apple at the low end, competition on the low end in china. we have been talking about apple for the past few days. xiaomi is also missing 80 million sales targets for the year. the market, it seems, is changing. either customers are not upgrading as often, or they are waiting for newer phones, or they are quite happy with what they had. it is not a good report from samsung. david: i want to ask you about

some folks in washington. josh earnest talking about some folks paying a visit to silicon valley here to talk about cyber security with executives. able toinly being demonstrate their ability to protect some of privacy is good for their business model. having that technology be used by terrorists, i'm not sure is. they would know better than i. i'm not involved in running their business and and not able to look at their numbers, but i do speak with a lot of confidence in saying the vast majority of these technology companies are run by patriotic --ricans and i do believe and you can ask -- they are more liquid have the conversation .ith you than me but i have confidence that those companies run by patriotic americans are not interested in seeing their tools or technology used by terrorists to harm innocent americans. david: josh earnest talking

about groups of americans heading the biggest tech companies in the world. the government has been try to get them to come around to the idea of putting a backdoor into the technology to allow the government to surveillance if need be. the attorney general loretta lynch and fbi's director and james comey is talking with these executives about these issues. it is well-known that terrorists are using these platforms to communicate, but the company do not want to get information to the government because they don't want to be seen as spying on their customers. trust to beot of rebuilt since the revelations of edward snowden. to find ay's are try way to give them access. the companies have maintained a fairly hard line. we heard from tim cook who said if we give anyone a backdoor, that means anyone can get in, not just the good guys. david: thank you, emily chang.

you can tune into her show tonight at 6:00. she will have michael chertoff. i want to go back to julie hyman quickly. julie: we have another news instrumentsng texas and analog devices have decided against an acquisition of maxim integrated products. had said it was hiring goldman sachs on strategic alternatives. shares are heading lower. [inaudible] holding study today, not doing much. texas instruments down 2%. we will be right back with more bloomberg markets. ♪

york, it is 3:00 in new 8:00 a.m. in hong kong. welcome to bloomberg markets.

-- and 4:00 a.m. in hong kong. welcome to bloomberg markets. good afternoon, i'm betty liu. 2016. week to start the markets are taking a small breather today. they are still declining, though not as much after all the turmoil sparked by china. all on pacedaq, s&p to finish the week 5% lower which banks the question, are short-sellers having a banner 2016 so far? bearish bets against the s&p are hitting four-year highs as volatility remains a name of the game. and could yahoo! soon be on the blocks? the company could be backing off of its spinoff plans and looking for an outright sale of this web businesses. pressure growing from activist investor star board. we are one hour away from the close of trade. julie hyman has the