>> from bloomberg world headquarters in new york, good afternoon. this is what we're watching this hour. the underlying questions over china's economy and the slumping oil remain in the background and bank of america falling the most after struggling to increase revenue. expense cuts have not gone far enough, some say. and could global expansion give netflix the boost it needs? bloombergo the markets desk. ramy: we have ended up near session levels, at session lows right now. let's together look at where we are right now. the s&p 500 giving up all of the games we saw earlier. the dow jones industrial average

of by the most of 2/10 of a percent. the nasdaq now slipping into red territory, down by a third of a percent. go into my bloomberg terminal, and let's take a look at the imap footage can -- function to see where we are at. earlier this morning, all of this was in the green. now we are split 50-50. the biggest laggard. down by about 1.5 -- sorry, 1.8%. we have to look at the price of because with crude that is exactly how things are going. 3.3%, at session lows. david: you have investors still looking for places to staff their cash, looking for h avens? ramy: yes.

those are normally gold and the 10 year. it is pretty much flat here. earlier led a gold has been rising. volatile, and then fall into a session low right around the 6:30 a.m. mark. we're just about five to where we started the day. year, that is also seesawing back and forth over the course of the day. line, rose byflat as much as seven basis points, up around the 9:00 a.m. timeframe, and now we are back to where we are basically unchanged. david: thank you. check on bloomberg first word news. mark crumpton has more from our news desk. mark: there are indications that drug lord walking el chapo guzman had business dealings --, mexican actress kate according to an interview

published today. inspectors are investigating possible money-laundering, but the do not have legal certainty that a crime was committed. president over obama's immigration reforms is heading to the supreme court. they will hear a challenge to the president's plan. it would spare up to 5 million undocumented immigrants from deportation. the challenges from 26 states claimed the resident sidestepped congress. the white house press secretary speaks. >> we have a lot of confidence in the legal arguments we will be making for the court. of executive actions that the president took a little over a year ago now to try to bring some much-needed reform and greater accountability to broken immigration system

were clearly consistent with the precedent established by other presidents. mark: immigration reform and other topics will be discussed today at 5:00 p.m. new york time. the former u.s. defense attorney robert gates appears on bloomberg politics broadcasting with all due respect. refused to take up a new constitutional challenge to president obama's health care law. the justices returned a cited appeal that said that lawmakers used flawed legislative procedures to pass the affordable care act. they have upheld core parts of the law two times since 2012. the mayor of flint is in washington seeking help for her city. she wants the federal government to declare flint a disaster area. that would make it eligible for more money. it seems many people still need to step it up when it comes to choosing secure passwords. fifth list with the

of most popular passwords used .n data breaches star wars, a new comer to the list ranked as the tournament more popular dust 25th most popular -- 25th most popular password that was hacked. david: thank you. this morning on surveillance, china isge noted trying to go the way of greece to deal with their prices. >> they are trying to do with greece did, they are internally devaluing to make their exports cheaper. david: the twins defense is still pretty weak. a hedge fund manager who one big

predicting the subprime crisis says that china should weaken its currency five other 50% this year because only then will it convince markets it is acting from a position of strength. joining us now is a world bank china director at the u.s. treasury department emissary to china on financial matters. what kind of effect with the devaluation have? >> that would be very risky, and china's leaders do not like risk brady you are a small economy you could have a big evaluation, count on stimulating your economy, and the rest of the world can absorb it. but china is the second biggest economy and the biggest trader. it had a $600 billion trade surplus last year, the biggest in human history. as they devalue by 50% number you are talking about, and a lot of economies around the world will have to get out ahead of hat.

it will be very disruptive in the world economy as end up with less chinese exports. david: what kind of intervention are you protecting? >-- predicting? >> i thought the news we got overnight was pretty good. in the fourth.8 quarter. a lot of investors from the e worried it would slow much more. that is good news. it did not carry over to new york. other good news, the consumption is holding up well. the service sector has become the largest part of the economy for the first time. there is some good news, and that is another reason why there is no call for china to do desperate things. david: it is a bit of relativism here. we had the weakest quarter since 2009. but that constitutes good news. were so because they

high? >> they were at a very small level in the world economy. they have done very well with their export oriented strategy and a lot of investment building up housing in manufacturing. but now they are the biggest exporter in the world. it is hard for that to grow much more. they overbilled the capital stock in housing, manufacturing, so they are going through painful adjustment. the smart thing is to accept that define structural reforms and encourage new parts of the economy. sectors, new industries, new valuation that would stimulate the old economy, and a sign that they were going back to their old ways. were appropriate 20 years ago, but they have run out of steam. david: you have spent a lot of time over there, living, traveling, you have watched this transition happen firsthand. how is it going? we have seen such turmoil over these last few weeks. stepping back a big further, how is that transition going for

this country? >> think in many ways it is going pretty well. they have not helped himself this year with the number of policy moves. it was a mistake to let that big bubble developing the stock market. when it began to pop last summer, they came in when it was high and tried to slowed the dissent of christ. that is never a good idea, it undermines confidence in their decision-making. they are trained. or possibility in the exchange rate, but they were a little more awkward. slow the to devaluation in the exchange rate, but they were a little awkward. helpare going to have to close some of this industrial plants and equipment. they have a lot of excess capacity. they need to shut it down and help workers adjust to new jobs, new sectors. they face a lot of challenges.

i do not want to. picture -- paint too rosy a picture. but they are doing fairly well with his adjustment. they have hurt themselves with some of their policy moves. are talking about ways to stimulate the old chinese economy here. when you look at the new chinese economy, are the growth targets that were in place for that old economy transferable? of 6.5% see the goal growth going forward, is that feasible if we see the kind of thing we have been talking about? >> it is natural for the growth rate to slow down as countries develop. to 6.5 percent is feasible for china. i am a little bit nervous that long gone to the 6.5% target because that is high this year. h to seeit them -- them go back to the stimulus when they have so much industrial capacity. it is better to take the pain,

move on to the new sectors. that combination of declining industry, rising services, that may give you a growth rate somewhere between 5% and 6%, as long as the labor market remains tight. that will be fine. the real issue, our chinese lives getting better? the answer until now has been yes. david: china on the one hand, on the other hand it is oil. we had the chinese president on a five day trip visiting tehran and cairo and other capitals. what is the point of the trip? why make it now? still a major importer of metals and energy. this industry means growth rate of their usage is declining. but they are still using more and more petroleum every year. they are using more and more energy. i think some of the metal used actually declined last year, but that could be

temporary. they're going to need more natural resources, they are not demanding at the rate they did in the past, but they need more resources. president is out making friends with middle eastern countries that are potentially big suppliers of energy to china. they are looking for down the some of thenking current problems are temporary. they are still going to need resources, and that is what he is doing. david: thank you so much. the chinese slowdowns is one of the major challenges leaders will tackle this week. bloomberg television's lives - - there beginning tomorrow morning. coming up in the next 20 minutes of bloomberg markets, one of wall street's biggest balls makes his case for u.s. stocks. as the worst start of the s&p 500 ever. are there more job cuts on the horizon?

lows of the session, failing to hold on to earlier gains. markets could drown in oversupply and send prices even lower. ♪

david: welcome back to bloomberg markets. let's head to our markets that where we have a check on some company movers. i'm looking at the major indexes in the red, but the nasdaq turned red first. ramy: it's just into the red at the 12:00 p.m. hour, and now we're solidly in the red. they are down by an exactly 1% -- by exactly 1%. let's take a look at some of the stocks that are falling, and a few that are rising. let's look at apple. apple is down by 1.6% right now.

interestingly, apple has been down your today 7%. and in the past 30 days it has been down 12%. goldman sachs says that apple at its current price is a purchase opportunity. in that read, it looks like investors are not really believing that. william blair that they are going -- lowering apple because of a crowded competitive landscape. we will know all about what is happening with apple next week and when the reporter quarterly earnings. -- they reported their quarterly earnings breaking th. expressharma world, scripts has been downgraded to underperform. the company is losing share to cbs health. going down, mattel today. it down by nearly 4%.

just barely off the session lows. lowest prices since december. star wars, force awakens dropped from its top walks off his charts, and people are not seeing an opportunity for merchandising. it is down in sympathy. look at netflix, and google, we talking about netflix all day, up 3.3% after being the top stock in 2015. it has fallen 9% year to date, but ubs says those concerns about growth around the world are being a little bit overplayed heading into quarterly results. in those results are coming out right after the bell. david: thank you. we will be talking more about netflix with cory johnson toward the end of the hour. sticking with markets, it has been a wild ride in 2016. mostly on the downside with the

s&p 500 index losing about 7%. thatne investor says stocks will rally this year. he spoke earlier on bloomberg. s thathink that thing overhang the market reflects the development of the last year and a half. strong dollar, week oil. as we get through 2016, a different story will emerge. i do think that earnings, which have been really hurt by this dollar headwind, start to become positive year-over-year. cory: actual earnings growth? >> yes. >> is this going to adjust to the dollar? >> yes. the trade dollar is still strengthening because of the current scenes -- currencies. but when you look at the share of the s&p, it is more dependent on the euro, the palace, the canadian dollar, yen, and the

real. three out of five are starting to become flat year-over-year. last year the dollar had with was 10 dollars for s&p share. this year it could only be a dollar. that is a nine dollars swing on earnings headwinds. talking, we have been about being bullish. -- $23.25. 20 $3.15 >> is this the turning point for sentiment? >> if you wanted to say how bad is sentiment, and a lot of measures today say this is a or deviations of negative sentiment. it must be the fourth lowest in history, and every other time -- people are extraordinarily

bearish right now. this has traditionally been a contrary indicator? >> yes. this is just this inverted as a was in late 2014 and in august, when we had that vertical rally. i can tell you that our clients think this is a recession. we know that no one is sitting here with a exposure because they think there is a recession. it is hard to see which earnings are recession and which are gdp recession. if markets start to turn that will be a great catalyst. thisat can actually kill 2016 bull run? reflexivity. the turmoil in financial markets leased to credit tightening, which in turn causes the economy to give into recession. you want to watch financial conditions.

for the most part, that has not been a problem. unless you are an energy producer, investment greatest of all this year. i do not think financial conditions are tightening in a way that would cause a recession. david: still ahead on bloomberg markets today, two big banks rolled out positive earnings reports, but investors are having a mixed reaction. we will break that down, coming up next. ♪

to bloomberge back markets. today bank of america and morgan stanley reported fourth-quarter earnings, both beating analyst estimates through a wave of cost-cutting. let's bring in our bank reported to break it out. let's start with bank of america. going into this earnings season there was so much concern about

fixed income, without earnings we got last week. they're have been cuts there in that division. >> absolutely. he would think surprising, you would see the stock get involved today. from bfa sayutives that the revenue outlook could be changing in the future. there was a little bit of consternation in the investor class of what that means in light of all the craziness in the markets. if the markets are terrible and the fed does not raise interest rate, then it a harder time. david: compare that to what has been going on and morgan stanley. to juxtaposesense those two because morgan stanley is saying on a certain level we have thrown in the towel on fixed income. we have cut 25%. we have unleashed a new cost-cutting initiative.

david: project streamline. i love it. basically, $1 billion over the next two years. the investors they have a little bit of optimism. on top of that they are getting out of fixed income which people have been pessimistic about. david: you had a jamie dimon saying it is not weighing on that bank that much, it is relatively light. when you look at these two, is it a different story? energy is a big part of their portfolio. >> if you're talking to banks can you say we have this huge portfolio from all these different industries. one part is looking bad, but it will be contained. there is some consternation giving everything else -- given everything else going on with markets.

where these reserves are police types of loans that can be worse than what people say. there is a little bit of concern that energy will turn out worse than indicated. on theand any word personal moves at morgan stanley? fixed income a restructured a lot of the heads. greg lost out to keller. and now the ceo really has no excuses. he has all the right people in the right places and the need to execute. we will see. david: thank you so much. still ahead on bloomberg markets the iea warning that markets could drown in oversupply. the commodities closest coming up next. that's close is coming up next.

david: from bloomberg world headquarters in new york, this is bloomberg markets. let's take a quick check of the markets now. they are near session lows. the dow down by about a fifth of

a percent. we're seeing the markets of drive down with oil. we want to go to first word news and mark crumpton have that at the news desk. the u.s. reports of government budget deficit will rise to 544 billion dollars this year. that is an increase over previous estimates. much of that can be blamed on tax cuts and spending hikes that congress passed last month. the report from the cbo, the congressional budget office, also says that economic growth will be slower than previously forecast iran has successfully transferred some of the billions fourth of frozen overseas assets. move follows the limitation of the nuclear deal made with world powers. that iranians are looking to see how fast their daily lives will improve credit card still do not the republic, and atm

machines remained separated from the rest of the world. people ares say to dead and 18 others are hurt after a greyhound bus on the side of the northern california freeway. the bus was traveling north on highway 101 and san jose around 6:40 a.m. local time when it flipped onto its center divider. at least 11 people were killed, 17 others were killed in an explosion by a suicide bomber today. there has been no claim of responsibility. global news 24 hours a day from the bloomberg first were no desk --first word news desk. david: let's look at the big movers. gold fell again. rose, princeton's

closing at $8.80 a bushel. global oilwanting markets could drown in oversupply. iran's oil ministry ordered to increase in that fight $500,000 a barrel. , that on thises -- for more on this we want to bring in our analyst . the is not an issue for banks, but it is for some of the smaller ones. >> absolutely. they have seen charge-offs move higher. like you mentioned, we have seen with the bigger banks, that same trendi--

is occurring. we would expect this to be a problem, but we are not there yet. david: this weekend, there was a long vacations that the sanctions would be lifted. it happened over the weekend. --e we seen this the gun to this begin to impact markets in? yet? >> the unknowns when it comes to this or how many barrels will be immediately released to the market, and how much discount tehran will have to review to offer to the markets to regain the market share. out withe iea coming pretty strong and worrying language about what might happen. >> we have been drunk on oil for a long time. i am glad the iaea is caught up with the rest of the world. but in 2016 you will see the mentality of lower for even longer pervade the marketplace.

people expect of a short bounds , andil, oil to move higher it is positioning. if you look at the commitment of traders data, which indicates people are presenting in the oil market, in particular commercial hazardous and noncommercial speculators, the neutral position for these noncommercial investors is nearing highs we have not seen since the 1980's. if we see this happen in the market, watch out for a huge trade. you have talked about the sentiment and psychology of the market, in the light of these lower and lower oil prices. what will it take to change the sentiment of the market? >> we need to see some positive catalyst. news pieces have been telling us that everything is going wrong with oil. that is reflected in the price. anything could turn that

mentality run but we have not seen it yet. we are waiting for the one piece of positive news which might indicate there's more positive news on the horizon. unfortunately, it is not here yet. david: i want to talk about saudi arabia signaling that it will push for a plan that has had for a long time now. it is a funny cycle we are seeing now. opec countries relying on so much oil. the prize getting so oil that they have to put more. it is a vicious cycle by definition. the availability of credit to you with shale players is another factor. china's weakness is continuing, which is another negative feedback loop. there is not a lot to talk about in terms of the long side. david: thank you. coming up in the next 20 minutes, the supreme court to rule on president obama's immigration plan in june. that is what we to stoke a fiery

immigration debate in the 2016 campaign. it has been more than a decade since they installed the installation in central park. we talk about their next installation coming up in june. netflix plans to enter the chinese market and many others. ♪

david: welcome back to bloomberg markets. the obama administration is getting its day in court. the supreme court has agreed to the administration's case were deferring the deportation for as much as 5 million undocumented workers. a reporter who

covers the supreme court for us. remind us what is at stake here. this was announced back in 2014 but we have not seen it implemented yet. >> it has never taken effect, and it could affect as many as 5 million people. these are people who for the most part have children who are citizens or permanent residents, and it would say to them that for the next two years you are in no danger of being deported, and you can get for permits. -- work permits. in a strongly opposed by republicans. david: it has risen through the courts. what is the argument they have made it is this going into effect? forc this is a question congress. the immigration statutes do not let the president say these 5 million people will not be deported. it is wanting for the president to say this particular person will not be deported, but they argued that the immigration statutes will require the president to get congressional approval before doing something this large. david: quite the argument there.

what is the appeal say? >> they say all presidents have made discretionary decisions about who to support. going back to eisenhower. the only thing that is different here is that it is a bit bigger than other programs. they say the court should not second guess the president's judgment on this matter, and that he has the ample authority to do what he is doing. finally, that the republican led thiss that are challenging do not even have the right to be in court to challenge this. david: what are the ramifications of this? it seems like there could be ramifications in other cases? andhere are, both political legal ramifications. one interesting question will be if the president wins this case of the supreme court, if you go --ad with me for deportation and go ahead with the deferred

deportation program, what happens when we get a new president? it may be 70 who wants to revoke that policy. and they have all of these people who had piece of mine who now suddenly oregon back at risk of being sent back to the country they came back. david: thank you. we will be covering those arguments in april. kevin joins me now with a recap of this week's democratic debate. something i did not talk about with greg is this argument about immigration getting to the supreme court, and i assume this will be on the campaign trail. >> absolutely. what you are seeing right now coming on the republican side of things is of course donald trump who has made immigration and border control security a key tenant of his presidential campaign. every other candidate trying to size up against that. on the democrat side of

things, we have everyone else pretty much in line. it was on a sunday, buried in a three-day weekend, but viewership was kind of high. let's start with bernie sanders, he was on the attack, attacking hillary clinton about a series of speeches she gave. >> about that was a surprising moment coming from senator sanders, attacking secretary clinton forgiving those paints beaches, receiving money from financial institutions on wall street. we currentlyhing here, for the republican side. whats represented himself populist rhetoric than is taking this line of th attack. but he also came out on different things going to -- differentike things like i'm control.

control. hillary took center standards to tell you saying that she has a better record. she wants to continue to work to defend obamacare, the affordable care act. she is arguing that senator sanders would rip it up and tear it out and start all over. reform, on wall street moreor sanders having much liberal socialist policies and secretary clinton, having to walk that fine line with the far left of the party as well as the more pragmatic progressive wing of the democratic party. david: really quick, we had some news from the cbo this week saying that the deficit is going to rise to $554 million that billion dollars. dollars.

i have to be honest, i've been on the campaign trail, following many of the republicans. this is a key issue for them. they point of course to the labor participation rate. they point of course to stagnant wages. think the consensus eyeing getting from talking to voters is that the pace of this economic recovery is heavily on their minds, but that is why you're seeing people like senator sanders and donald trump resonate with such a large faction of their respective parties. david: thank you. now we get another check of your markets with the spider sector report. biggestergy is the laggard right now. i am looking at my terminal and percent down.3 most of the sectors on the s&p are down, seven out of 10. let's take a look at the reason why. reason why.e is the it is down by 3.6% right now.

just barely off of the session low right now. low,d hit a fresh session not seen since october 30 of 2013. we are breaking above the high of the $30 handle. $30.21 or so. this is off of the iea saying that the world is just a drowning because of all the oil around the world. iran u.s. engines coming off the table, there can be another 600,000 girls letng on the scene, so the -- global got will be -- 600,000 barrels coming onto the scene, the global glut would continue. ever since the noon hour or so chevron, the energy

select sector are down. we're seeing a fall on this . an individual stocks. let's see how chevron and sound are performing today as they are some of the biggest part of the xle. 3.2 5% on by thre chevron, and exxon is down by 2.8%. the breadth, interestingly enough, in the green. here -- by about 8% .8%. they had rebounded nearly 6% off the lowest close in a dozen years. but it is falling to its session lows right now. david: thank you. we are at session lows, the nasdaq down by 1%.

it was just over a decade ago when the artist christo and john claude installed saffron gains in central park. that art installation captured public's imagination for 60 days and made them household names. his unveiling a new project in northern italy. i sat down with artist to talk to him about it. ,bout 60 miles east of milan there is a lake with a small island, home to about 2000 people. it is a population that is totally dependent on boat and ferry. christo, who has outlined whole island with right-thinking cloth, got an idea. they walk across the water. fabric, onf yellow top of plastic cubes.

hes is the first project will do without his wife. she passed away 2009. they will be in place for a limited time. >> this project will never be a permanent fixture. >> they will disassemble it after about two weeks. time have very precious for a few days. know every human is unique, and they like to with the something unique. david: what is also unique is how these multimillion dollar projects are finance. d. probably on they decided to do things differently out of the sensitive. collectors and dealers are notoriously slow payers. >> we could not pay them on friday, because men who bought it could not pay them. formed aey corporation, headquartered in delaware.

it sells his original sevare from the 1950's to the present. drawings, collages, fabric. there is a subsidiary for each project. three ofking on them, including the floating walkway. david: he also buys back his work if he season on the market and it is undervalued. in on the market and believes it to be undervalued. these projects often take years. getook 24 years for them to permission to do the gates in new york city. david: has he gotten easier to do these, pass the regulatory hurdles? >> no. it is very difficult. i will never do it the easy way. david: christo keeps busy.

we spoke he was days away from a to workabu dhabi on his other projects. he is 80 years old, and we asked him if he has more projects planned? >> we are very easily excited. we will have a new idea and we will do it right away. idea, we will do it right away. ♪ david: coming up on bloomberg markets we will take a look at netflix and ibm earnings out after the bell today with cory johnson, bloomberg editor at large. ♪

david: welcome back to bloomberg markets. reportingitans earnings after the bell today. netflix and ibm. january is not been kind to the streaming media company, down

after investors saw a stop race more than double in 2015. double in 2015. the spring and cory johnson -- let's bring in cory johnson. they are both worried about amazon in a way, right? cory: absolutely. netflix is also worried about his streaming service. cory: you're absolutely right. that is the biggest competitive pressure from both of them. netflix might also feel pressure from hbo, showtime, you name it. that is what we will be listening for on the conference call. the most important number for me is the commitment to contingency ve for the future. i have promises of payments, but

they do not see how th -- say how big. they have cash flow growth, they should be able to pay those bills. but they all over $10 million to these commitments. the reason that the costs are going up so much because of amazon, showtime, hbo, all of that original programming all theseng on platforms. the reason that they are most ofd now is because their geographic expansion has already happened. now it is about adding customers. you need programming to bring those customers in, and the marketing dollars. those are the things to watch for. david: i know a lot of analyst have talked about the veracity of the subscriber numbers, it reminds me of the early days of satellite radio. they were keeping a pretty close hold.

is that something amazon is worried about? cory: those marketing dollars are the thing to watch. --ompany can control almost control how much product is in the hands of people. it just depends on how much they want to pay for each customer. onflix spends a lot of money marketing, and they will get a lot of new customers. how much is marketing determining how much they are keeping? the cost of marketing is one to watch. david: let's turn to ibm. how will that company positioned to hell for this move to the itself forsitioned this move to the cloud? very they have a successful cloud business for the software and the hosting side. it is all these other illnesses that are anti-close. they are still trying to hardware and software. be the 16thkely

quarter in a row that revenues have not increased at ibm, despite billions spent in acquisition, mountains of debt. they have bought back a lot of shares. what we look for is the pace of decline in revenues, how bad the situation is. i will look for profits, because that will be important. what we will ignore absolutely completely is earnings per share. they are spending money to buy back shares, at head to that they have lowered the guidance so much that this should be a low bar for them. david: thank you. tune in later to bloomberg west thee cory interviews homeaway ceo. that is coming up at 6:00 p.m. eastern time. ♪

york, 3:00 p.m. in new 8:00 p.m. in london, 4:00 a.m. in hong kong. markets." "bloomberg

from bloomberg world headquarters in new york, good afternoon. i am very view. -- betty liu. -- a renewed selloff in crude oil is driving down 1%kets did they are near losses, at least on the nasdaq. china's economy is growing but the growth is slowing down. the weakest quarterly numbers since the heart of the financial crisis. will this speed up the country's transition to a consumer big economy? and spotlight on netflix. the streaming giant opens its books after the bell. can the company delivered another strong quarter of subscriber growth and get cost under control? we are about an hour away from the close of trade. marketso head to the desk, where ramy inocencio has the latest