betty: from bloomberg world headquarters, good morning. i'm betty liu. oil is surging to a three-week high even after opec delegates came out and said, no, there is no plan to meet with russia to discuss any cuts. they're going to be flexible on interest rates. how many basis point moves will they make this year? topping and alibaba -- estimates as they make their way to global domination. let's head to the markets were julie hyman has some more data on where the economy is headed. julie: pending home sales coming up with a gain of a 10 of 1% month over month, worse than the

9/10 of percent is estimated by economists. -- aa revision lower prior decline of 1.1%. the original reading had been 19th of 1%. another negative data point adding onto the durable goods report showing orders for business equipment fell in december by the most in 10 months. a pullback of 5.1%. this by that, we are seeing a rally in the markets. at least in part by the stronger than estimated facebook, though shares have been selling. we haven't seen a comeback in large technologies. amazon is trading higher. facebook shares up 13% after the revenue rose. people are serving more on mobile. the company's ad revenue has been surging.

i went to check on european stocks quickly because they are, we are not seeing a gain. overnight in asia, we did not see gains. areerms of europe, earnings hurting in europe in the region's largest drugmaker. projections.alysts' it will continue to see pressure from currency effects after the company's missed estimates. a bit of a dichotomy around the globe. let's talk about the spike in oil prices. it is an interesting. there have been reports on what is going to happen between rossi .- russia we saw headlights coming out. russian said they will discuss production cuts.

it could be as much as 5% according to interfax. even if saudi arabia is not agreeing to it now, the idea that it is coming is enough to let while prices. -- lift oil prices. it is still down. we see an enormous lift from the closing low that was on january 20 of less than $27. we have seen a gain of 28%. given that, oil is still down about 8% for the year to date. yeart to check on the 10 given on the economic data this morning. we have had a quite volatile 10 year. after therop in yield durable goods order came out. then we saw yields coming back as we saw oil prices rise. it has been bouncing around quite a bit. is stillget the fed

feeling repercussions. still a factor. betty: thank you julie hyman. let's check in with vonnie quinn. vonnie: donald trump is maintaining his big lead. according to the politics poll, trump leads with 34%. marco rubio is 14%. ted cruz is at 12%. the other republican candidate is in double digits. programming reminder, with all due respect from des moines, iowa all this week ahead of the iowa caucuses. coverage at 5:00 p.m. on bloomberg new york times. sick and i percent of americans feel anxious about trump's presidency according to a new "washington post" hole. -- poll. 43% have anxiety about bernie

sanders. refugees drowned today when sale from turkey to grace. to greece. i'm vonnie quinn. betty: thank you. back to oil surging to a three-week high after russia's minister said opec and other producers will need -- meet next month to discuss a potential production cuts. opec officials say there is no such meeting plans. what is going on?

oil was up close to a percent at one point, ryan, after this came out. what is the situation? administration says there may be a meeting next month and on the table they will discuss a 5% cut. energythat, the russians -- they had a theoretical conversation. this began the whole chatter in the market about whether a cut was coming when the iraqi oil minister said he got the saudi's were more prepared to cut than they have been in the past clearly that is one of the reasons we have seen oil get pushed up over the last couple of days. i do have to say, just a few

minutes ago, we did hear from or different opec delegate saying there is absolutely no meeting land between russia and opec. if they were to get together, theoretically, collectively, they produce 40 million barrels of oil. they could have a big impact on the market. betty: they certainly could, but isn't russia going full steam ahead with their production? ryan: they are. that is the irony in all of this. rusty production as the price of oil has declined, -- rossi and russia production is the pricen of oil has declined, they are fighting to pull in revenue. for need those oil sales 40% of their budget. the idea they would get together with saudi arabia i think is really a big askk.

it is difficult for the russians to cut production in the winter. if you suck production at a you, you may -- at a rig, may have issues. you cannot turn it on and off. believe that the saudis are not being sincere they were going to cut of the russians would play along. they think the saudi's are out to get them. that the saudi's are out to get the russia economy. they are not going to run to a meeting with the saudi's and think they can cut without serious, serious measures. betty: indeed. there is certainly a lot of mistrust on one the nations. thank you so much, ryan. for more on how oil is, taking

this global outlook, i want to , portfoliom rickard manager at weschler group who says, that he after the fed meeting, the central bank is committing the great blunders and monetary history. he joins us from our washington studio. was a pessimistic, jim? am just an analyst. to tighten supposed when things get hot. they should have tightened it in 2010. to run still make a right. just because they feel to raise then, does that mean they should raise now because the economy is getting week. that is what i mean by blunders. that is my view. i think it is important as analysts is going, what is the

fed inking? -- thinking? we will see about june. maybe the fed will realize we are in a recession. betty: what did you read in a statement yesterday that makes you think the fed is still on track for a rate hike? they have a base case. it is based on a model. they say tightening labor market conditions, they think inflation is right around the corner. pro this day. it was nothing in the statement that changes the mod-gul. we want to move out?

nothing in the --tement -- there were words there was nothing to change the scenario. january jobs creation under 300,000. we are not close to either one. erik: that seems unrealistic at this point. betty: i want to get back to your statement that they are creating one of the greatest blunders. what are the consequences of that? fed has obvious 1 -- inflation going up 2%. they have not been close for three years. inflation has been going down. when you raise rates, you strengthen the dollar.

it doesn't make sense. the head of the reasons for doing it. the fed does not look at the real world. does that mean we tip into a recession here? jim: they are doing a good job of causing a recession. the economy is bigger than the fed. this expansion is seven years old. no one should be surprised. we were probably headed that way. that is why it is called a blunder. betty: this uppercase the situation -- this complicates the situation. the bank of japan's meeting tonight on her own monetary that policy. at -- theime we spike

key to watch is if we continue spiking, is something going to break this time around? the fed is concerned about excessive dollar depreciation. everyone wants to depreciate their currency. the most likely figure is that we are going to see a higher trade weighted dollar. betty: would you agree with them that there is a level where something breaks and then what happens? jim: i agree completely. the plaza court? that was the all-time high for the dollar. manage thes, they dollar. where is the leadership? where is the james baker? -- in said domestic labor

don't really see the leadership. betty: what you think the boj is going to do? jim: the fed is giving everybody a test. they are tightening. that gives everyone in the world a pass to trade cheap and are currency. the u.s. has become a spot for all the deflation in the world. has a 2% inflation goal as well. baggage, betty, you can only open and close the capital account -- betty: but -- that is right, although did the boj mr. window of opportunity, too? jim: i agree with that. you always get another chance. i would not be surprised if they try to keep in the yen. do other than

sheep in a currency? betty: jim, good to see you. thank you for joining us. much more ahead. mind,estion on people's is the u.s. getting closer to a you just heard jim say, yes, it is. ♪

♪ betty: good morning. welcome back to "bloomberg markets." it is time for the business flash. a look at some of the biggest business stories in the news. alibaba posting quarterly sales and profits that beat wall street expectations. .evenue was up 32%

the chinese economy is slowing down, but alibaba was able to offset that by expanding into role areas, and by setting a record for sales in november. another milestone for mark zuckerberg. he is now the sixth richest man on earth. -- rich -- sixth richest person on earth. the facebook founder now has a net worth of the $7 billion. $45 billion. this is according to the bloomberg billionaires index. that is your bloomberg business flash. let's get more into facebook. social networking company reporting fourth-quarter sales. profits more than doubling.

1.1 billion people are using the network. mark zuckerberg talk to investors about video. >> video is a part of the facebook experience. it allows people to share and consume the most engaging content. 100 hours of video are watched daily on facebook. now -- joining me now is george -- paul sweeney. mark is going after google and youtube. >> it was another great quarter. on many of the metrics investors -- the company beat on all measurements. across the board a solid quarter.

the are starting to monetize their instagram investment. they had been starting to sell as on instagram. the video ased out a big business that makes a lot of sense because if you take a look at the internet at spending overall, which is growing at 50% a year, the two fastest areas that are growing our social onlinefacebook, and video. that is what facebook has been investing a lot of an integrating a loss of into their platform. it is starting to pay off. a bigif you are advertiser then, you would have chosen the broadcast network, or a big event like the super bowl. now you just choose facebook or google? the person that has that their finger on the pulse day-to-day, she made a very you arergument that if a big brand advertiser and looking to reach a mass audience on the internet, there are only two places to go -- google and

now facebook. really trying to establish that it is an advertising medium that really want to micro target, and also for the big brand marketers like car companies in the procter & gambles. that is a big evolution for facebook to get to that stage. 1.1 billionth monthly users, they are providing incredible advertising opportunity. as youit is a battle say. is or anything on the horizon that could break this momentum for facebook? >> a couple of things. whatapp was a big acquisition for them. the company has not yet monetized that. they said they would not introduce advertising there. investors are giving them the benefit of the doubt because we have seen it work before. build a big network and monetize

it later. investors last to see some return on investment. mark zuckerberg took a lot of time on the call to talk about his moonshot investment opportunities, whether it is artificial intelligence or reality. i think, again, some investors are concerned that he may be taking his eye off the core business. i would argue that most investors are going to get his management team and mark the benefit of the doubt because they do deliver the numbers every order. have made a lot of money off of his vision and execution. paul, thank you. don't forget, more tech earnings to watch after the bell. this time is microsoft and amazon. we will be right back. ♪

♪ toty: welcome back "bloomberg markets." i'm betty liu. let's head back to our markets

desk with julie hyman. a yin andm looking at yang offense. -- affect. paypal increasing its numbers of customers do is pay service and also ceo dan schulman saying the --pany is benefiting for from a crowded marketplace. ebay is not benefiting from a credit market is. it is seeing customers go to amazon. if you take a look at the stocks, they split on july 20, both of them are down, but ebay in blue, has performed less worse, but that is starting to change with these numbers we are watching today.

the technologyon front, we are looking at facebook and qualcomm -- facebook coming out with an increase in users, and revenue. qualcomm forecasting second-quarter sales and profits ina fall short of estimates the face of increased competition in the smartphone market. the smartphone market is slowing. the shrieking market -- the shrinking market. betty: thank you so much. billy market -- julie hyman at the markets desk. next, creating choice.

♪ betty: live from bloomberg headquarters in midtown manhattan, you are watching bloomberg television. let's check in with bloomberg first word news. vonnie: the world health

organization estimates that can -- it is based on previous number of infection carried by mosquitoes. one of the key engineers in japan has quit over a grass scandal. he took report says money from a construction company in violation of a political funding law. hurt withation could upcoming elections. u.n. advisors say passenger plane should not carried shamans of lithium batteries. batteries can spark fires capable of destroying planes. can issue a ban.

30 years ago, tragedy truck -- struck america's space program. died arenauts who being honored at cape canaveral. in flint, the drinking water is contaminated with lead. they're going to raise money from business leaders and identify priorities. was anid flint once all-american industry. i'm vonnie quinn. turning now to the high-stakes world of high-tech, the founder of ariel try to take

on news networks with these tiny little antennas. he will stop by the supreme court. he is gearing up to take on the cable giant like verizon and comcast. armed with tiny little airways that will revolutionize how we access and connect to the internet in our homes. this new venture is called starry. cap, good to see you again. i don't think we ever left. betty: that was my question when i was reading through all of these releases. were you ever planning on doing this along with ariel weston aero?- with we knew someone had to solve

the problem. you have hired a lot of people from areo for this? diller is with you again? why is he not partnering with you? areo, he was a great investor. betty: last time, he was there with you in the supreme court. [laughter] >> that is true. betty: let's. about this business. -- what arethink you going to bring to the consumer with starry that verizon and comcast are not already? we are putting out starry station.

it is great wi-fi. it is a hub for everything. it really solves all of your connectivity problems in terms of making things easier. betty: for those who don't know this, it is bringing broadband to access to your home wirelessly. chet: there are two products. the first product is a device at home. come starting in beta over the summer. it is a really interesting way of thinking about the technology we sell. fixed wireless technology. benefit is you get lots of speed.

the cost that it takes to build a network drops dramatically. without all the pipes, wires -- it all goes away. the bighy wouldn't broadband giants try to do this themselves to mark -- themselves? i believe at&t have tried. it has been up and down for a lot of these companies. the simplest way to think about is wi-fi. wireless has essentially had bad execution with that technology. betty: how are you going to succeed when others failed? : i don't think they pocket is a guarantee for success.

there are a lot of people with deep pockets that failed. context, yout in had lte and wi-fi. wi-max came in which nobody invested in. it was a bad execution problem. we learned from a lot of those mistakes. the right way to solve the problem is the way we are doing it. we have demonstrated technical feasibility and are happy what we can do -- and are happy with what we can do. what you have to go through to get national adoption for this? >> it is going to be a buildout. it is a long road from here to national adoption. it will make a lot of sense

where there is no real broadband. dsl tends not to deliver. betty: how do you guarantee the speed yourself? that it is going to be faster than what you get now? >> that is the easy part. it is no different than it works in cable. except you are doing it in the airwaves instead of using wi-fi on unlicensed channels, we are taking the wi-fi technology and running it at a much higher rate so the technology is already well proven. you can do this at a cheaper cost? >> the construction cost is less .han $25 a home betty: do you expect any regulatory hurdles? >> at the moment, no.

it is a new way of delivering internet. there is no legal problem. [laughter] betty: did you check with your say, wehead of time and are not going to be in the supreme court again? betty: you are sure about that was mark [laughter] betty >> pretty sure. we have not disclose the total amount. it is probably a drop in the bucket. we have a great list of investors. first mark investors have been working with us for quite a while. the kr has an investment in the company. there are a bunch of interesting people with deep pockets. very diligent and disciplined. we have a set of milestones to make sure we can hit all of those.

when you look at the markets, there are a lot of people who cut their cords, and some people don't even have broadband. i think broadband -- the market share has plateaued at this point. 57% of americans have brought -- 67%have brought of americans have broadband. most people use their mobile phones. the question might be is there even a need for this? need broadbandts connectivity. i think that the driver is going to be video at the end of the day. people want more and more video. you have dsl, small businesses

that don't necessarily have at us to broadband. we started this with a view that says, we got to do a three .ecade long interesting cycle betty: is this a billion-dollar opportunity? [laughter] >> i have no idea. betty: is this a big lesson? >> i think we have a lot of confidence. betty: all right. thank you so much. rick to have you again. and ceo of starry, a brand-new wireless internet service. still ahead on "bloomberg markets," more than a month after going on medical leave, valeant michael pearson talking to investors again.

what he is not talking about is when he may we take the helm. company isrent looking to surpass -- the race is on.

♪ global volatility has been a major thing this year impacting all asset classes forcing investors to look for safe havens. seems to behat strong as commercial real estate with prices in major cities sore , like here in new york. manhattan developers announce

that they are holding off on property to condominiums. how should investors interpret what is going on in the real estate world? thank you so much for joining us. we keep hearing people like you say this is going to be a banner year again. when you look at how the market are trading and where property values are going, and some projects that might be delayed, who do we believe here? forood morning, thanks having me. you have to look at the fundamentals. commercial real estate has become a choice for investors because of fundamentals that have improved. occupancies that have recovered across the board. overbuilding,k of which is usually a problem in

the industry that we tend to overbuild when the economy gets overheated. that is not the case in this cycle with the exception of a few pockets. most important, it is the yield. if you look at the profile of commercial real estate, even with expectation of an economic yieldwn, i percent to 7% -- 5% to 7% yield versus the volatility you are seeing in other investment choices, that is what makes commercial real estate compelling. betty: what about capital? if their free-flowing capital available for commercial real estate project at a cheap cost? the investment spectrum, the vast majority of investors and players and commercial real estate are high were -- high net worth individuals. the are very active. this is a very good opportunity.

we consideredhat value add. but from a development perspective, that is where capital becomes more cautious. that is a good thing. becoming more cautious on the development side reduces the risk of oversupply. int is what we want to see the marketplace. we want to see the balance we have enjoyed continue on and that is where the industry has changed quite a bit. terminal has a great function -- you can't see that in the studio where you are. but our viewers can. it shows a map of the united states and were commercial real estate property values are headed. all those red dots on the screen show where values have gone down more than 20% in some places. you can see a lot of it is bunched up along the east coast, particularly new york and san francisco. we may startether

to see big drops in places like texas given the energy crisis that is going on right now? when you see those property values decline, is that a signal that some of the correction is starting already. maybe there is an oversupply and that is already warning sign? i am not sure what price declines you are referring to. if those are driven by some of the revaluations, that is understandable. the institutional and private real estate market is seeing continued depreciation. betty: it looks like it is reappraisal's for property. that could very well be. on the ground, what we are from our clients is continued demand for space across the board.

we are seeing are investors as active as ever and very much interested in putting more capital to work. to your question regarding different markets, you can't judge the book by its cover. texas, houston has had a dramatic shift to having issues with employment with more exposure to energy. amongten, they have been over the job leaders. it really has to do with economical volume. we have seen that economic metros have the diversity with the benefits of technology, trade, professional service job -- those markets that are creating the jobs are the ones that are leading the commercial real estate recovery. it has become pretty broad-based. we are seeing all metros adding a healthy number of jobs in seeing occupancies rise. much forank you so

joining us. he is senior vice president of market. stocks are mixed with the nasdaq doing the best among the averages. abigail do letter -- bill doolittle has the latest. abigail: lots of volatility driven by a wilds selloff in biotech. it has been more than 5% off. down by the 2%. the bear market only gets worse from there. it question remains is will drag the nasdaq into a bear market? a big drag on the vertex.index is the consistent estimates on their cystic fibrosis drug will be tough to me for 2016 and made worse by the fact that they did not offer clear guidance for the year. worston pace for their

drop since 2012. betty? betty: thank you, betty -- thank you, abigail. billionaire versus billionaire. we are going to discuss that next.

♪ limberwelcome back to television. i'm betty liu. in nevada, customers are in the crosshairs of two billionaires. elon musk, the founder of solar city pushing to get solar panels on every roof in the region. then there is warren buffett who se energy is the main in the state. it is the cover story of this week's business week.

the author who wrote the article joins us from los angeles. i love this cover in the story. you put them in a ring, who would win physically. i would put my money on buffet. [laughter] what is going on here? debate over controlling the customer enough people get energy in nevada. long time a for a monopoly in the state that is now owned by buffet's company. you have this upstart in the form of a company called source city were elon musk help find with his cousin. they are trying to help people lower their energy bills by putting solar panels on their roofs. they have made financial arrangements and were quite successful in using state incentives to get people to go

solar. what you saw over the last year was a fight that happened the started in the legislature last spring. front of then utilities commission, which came out with a ruling in december that was very favorable to buffet's utility. result, you have solar city and other solar companies saying they can no longer do business there. betty: so, what happens next? in an online revelatory discussion in nevada, they will rehear a portion of the case in a bit. one of the big things in nevada -- these discussions are going on all over the country. how'd you incentivize? nevada is unique. 18,000 had oregon solar. these new rate applied to them.

was the first state cannot grandfather people in under the old incentive. they will we hear that version of the case and it is going to continue to be a fight in nevada. solar city is trying to get the issue on the ballot in november. i expect this brawl to continue. we are really just seeking some of the early chapters here. why did the legislators come down on the side of buffet? >> it was in the legislators that came down, it was the utilities commission. ruled that folks who go solar being subsidized by folks who don't. to the tune of about $15 million a year. there is a lot of infrastructure that people have to pay for. they said the subsidies or two generous for the rooftop solar people, and as a result, they needed to pay more, hence these new rates. there is a lot of fun in

nevada. what is this a battleground? -- why is this a battleground? of sense fora lot a lot of people to go solar in nevada. while energy costs are , there is aow strain of the population that is environmentally minded and likes the idea of not buying energy from the utility. betty: thank you so much. great cover story. articleread the entire on bloomberg businessweek.com.

betty: from bloomberg world headquarters here in new york, i'm betty liu. welcome to the european close. george martin joining me from

london as we wrap up the trading next hour.the you guys are under decline after these gains we have seen. >> stocks are down. disappointing earnings shadowing a more dovish federal reserve. close" starts now. betty: we will take you from new frankfurt inn to the next hour. first, to london, where mark is watching the markets. 30 minutes left of the thursday session. investors overlooking a more dovish fed, focusing on earnings as they are in the united states. we have a whole host of blue chips that have