>> good afternoon. i'm scarlet fu. alix: i'm alix steel. the glut in oil actually good news for the tanker business. so why are stocks getting hammered? the founder of art and more will explain the contradictions. scarlet: we will look at what turns sentiment soured. alix: analysts are primed for earnings news from amazon. we need to get a snapshot of today's market activity. let's head over to the markets desk, where julie hyman has been tracking. julie: snapshot is a good word. at each moment you see a different picture. there's been a lot of volatility in relatively tight range, that we have seen a stock vest light between gains and losses here.

right now we are seeing a mixed picture, the nasdaq doing the best of the three. the s&p and dow taking a hit here. we have been watching oil very closely today as well. we've had conflicting reports about potential talks between russia and opec producers potentially cutting production. the russian energy minister said there was likely to be a meeting next month. some of the other opec producers have contradicted that idea. though oil has come off its ideas -- it does seem as though directionally we have seen similar moves here. the big difference is stocks are trending more negative, whereas oil, it's advance is still higher on the day. has been increasing talk over the past couple sessions about more of a decoupling of o il from u.s. stocks. alix: historically that has not

been the case, they tend to move in opposition. what are some of the biggest laggards today? we are seeing anything that reflects concern about the global economy and u.s. economy. we got a durable goods report this morning that came in with a decline of 5.1%. weighing on things like the dow jones transportation average, which tends to be a proxy for economic sentiment. the nasdaq i/o tech index is also taking a hit today. also in terms of what is lagging today, it is this idea of u.s. economic sentiment. if you look at the 10 year note, it's been vacillating quite a bit as well. 2% is where we are of the yield. the yields come down a bit from yesterday. the dollar index is also lowered.

coming up in about 20 minutes or so, i will dig more into what is going on with the dollar versus other currencies. alix: thank you, julie hyman. scarlet: let's get a check on the bloomberg first world -- first word news. mark: the world health organization estimates there million cases of see got in the americas over the next year. the estimates based on previous numbers of infections of dengue fever, also carried by mosquitoes. in beinguspected behind the birth of babies with abnormally small heads. the who called an emergency meeting to discuss the outbreak. the democratic presidential candidate senator bernie sanders says he is doing well among independents, but he says he doesn't think he can replicate president obama possible return out in 2008. he discussed the importance of voter turnout during the bloomberg politics breakfast in des moines, iowa. >> the punditry talks about

young people being turned off from the political process, we are engaging a lot of young people, a lot of working-class people. if those folks come out on caucus night, i believe we will win. respect"ith all due will be live from des moines, iowa this week ahead of the iowa caucuses. coverage on bloomberg television begins at 5:00 p.m. new york time. a judge agreed to delay sending a hush- sentencing in money case. the attorney said the former u.s. house speaker nearly died last november. sentencing is now set for april 8. someone $3.5pay million to conceal what prosecutors called prior misconduct. the michigan senate has unanimously approved $28 million in additional funding to address the lead contamination of flint's water. the emergency spending bill includes money for more bottled water and filters and services

to monitor for developmental delays in young children. the house is expected to send the legislation to governor rick snyder later today. global news 24 hours a day journalistsur 2400 in more than 150 news bureaus around the world. i'm mark crumpton. scarlet: the glut in crude oil is slowing down the tanker industry. oil companies are asking them to take their time delivering their cargoes. told our colleagues in london just how much they are being forced to cut fees. >> all ships move slowly at the moment. oil is everywhere. people wanted off the field so they can carry on producing. they put it on board ships, they sailed ships relatively slowly, slower than they might do in

a normal market. alix: joining us now is someone on the front lines of the tanker business, anthony gurnee, founder and ceo of arden moore shipping that transports petroleum products to companies around the world. you transport oil products, not oil. nonetheless, you give a front row seat on what is happening. do you see oil being stored as far as ships moving slowly? >> 100% right. over the last three or four , the ships have not speeded up. part of that is a logistics chain issue. very often our ships get discharged and they can wait weeks before they can discharge. do you feel like that is a demand or supply issue? you have fairly strong underlying demand growth for oil, but also it's a supply push. the congestion in the supply

chain is being caused by the oversupply. scarlet: when you look at we knowstock prices, the backdrop here is falling oil prices. what do investors get wrong when it comes to the dynamics between oil and what you do? that theytake made is considered we are part of the energy complex. the factors that have been damaging the energy sector broadly in the last year and a half have the opposite effect on our business. scarlet: if you look at that chart, you can see their moving pretty much in correlation. alix: absolutely. i am an oil nerd. one of the products that has a lot of excess supply in diesel, the huge concern in the market is that there will be so much diesel product that that will really weigh on oil prices because there will not be that demand. we have a function in the terminals called z-mapp. -- vm ap.

here are all the vessels in the world currently carrying oil products. there's a lot. do you see that being a huge risk for the markets, this glut in diesel will wreck oil? produceu want to gasoline, you will also be producing diesel. now a major exporter of diesel and that is good for our business. i think the reality is the diesel will be moved and consumed. i would not anticipate the refineries are going to pull back because of that reason alone. there is good demand for gasoline. overall you say volatility in oil prices is good for your business. can you explain that more? what is the tipping point for wear too much volatility becomes a negative? >> i do not think too much volatility is ever a negative in our business. our biggest customers are oil

traders. it's not just exchange volatility, it'salso physical which drives, arbitrage opportunities for the traders and when there is more volatility, typically on average the distances we ship oil increases. what kind of tanker rates are you looking at for this year? >> rates are pretty much the same level they were in 2015. it's a record year for us. those rates on those conditions are continuous. the dry if you compare index, how much it costs to ship stuff like a goods, rom interior around the world, and the dirty index, how much it costs to ship oil, they are converging. the dirty index keeps rising. what is your interpretation of that market anomaly? >> the dry cargo index is iron ore and coal, grain, things like

that. the dry index as well as container shipping is more directly affected by the global economy,'s whereas the oil market has a life of its own, and that life actually is increasing demand for our business. scarlet: let's talk about supply in what you do. new vessels have dropped off significantly, but you say demand is still growing. what kind of pricing power do you anticipate over the next year or so? >> is an interesting point. the amount of the percentage of our type of ship on order now is the lowest it has been in 15 years. those ships will deliver over the next 2 years at relatively low rate. we should be in a much better position to drive rates up. i think we have very strong near-term dynamics in our

market, which are helping us. over the medium term, there are real constraints on the willingness and ability of shipyards to build our type of ship as well as capital availability. in a the other big theme tanker industry has been the u.s. able to export oil that was listed in december. the rhetoric is, it is economics. wti prices are not low enough for that to make sense. what on the ground, what do you see? not there.-- arb is brent are about the same right now. until there's a significant spread, the u.s. exports really won't be competitive. scarlet: where in the economic cycle are we? where in the world are we recession bound? >> it is something we do think about her and we are not experts, but our view is we are in a phase of disappointing slow economic growth but not really

risk of recession. distancingr hand, ourselves from quantitative easing, that will indicate market volatility. alix: thank you so much for your insight. read onget another another facet of the shipping industry, trucking. scarlet: the ceo of one of the biggest freight transportation companies in the u.s. will be speaking with us. bradley jacobs is coming up in the next hour. alix: coming up in the next 20 minutes, what is holding investors back right now? are we headed for a recession? barry diller called what amazon

is doing astounding. ♪

alix: welcome back to "bloomberg markets." scarlet: it is time for the bloomberg is miss flash red alix: the european union may investigate the deal with back taxes that amazon struck with the u.k. british parliament will question google's president for europe at the hearing next month. lesset: contracts grew than forecast. pending home sales increased 1/10 of 1% in december. celebrating success of all-day breakfast, mcdonald's

will open another morning favorite to the lineup, the mcgriddle. the chain plans to offer all-day breakfast menus. mcdonald's expects the test to last for 2 to 3 months before deciding how to proceed trade that is your business flash update. the turmoil in the financial markets will likely slow u.s. economic growth. the debate now is whether we're headed into an outright recession. scarlet: earlier today blackrock's chief investment officer of fixed income, stephanie ruhle asked him about the investment risks he is seeing in this economic environment. grow this pretty good in the company. we do think it is decelerating, and there is something important and relevant. topline revenue is sliding. there is something that is really important when you think about the fed, were talking about a fed funds rate pretty darn close to zero.

costs for companies have expanded so the actual capital markets every price the debt. it's a critical dynamic when you think about forward investment. you look at your return on potential invested capital against your cost of capital or cost of your debt. up. markets have cheapened open a's ability to invest notative to their debt -- recession, but those numbers in terms of topline revenue, very hard to grow topline revenue in this environment. days at disney, cost of capital is something we looked at all the time. saying cost capital is rising for corporations? >> what we lived in the last 4 or 5 years, what happened was there with this tremendous demand for all forms of assets.

what happens is your debt cost came down to the floor. your return on capital against your debt expanded to historically wide margins, despite the fact that we're still talking about it being 25 or not 25. the high-yield market is out hundreds of basis points. it has to two dell your willingness to invest going forward. in some industries, like technology, like health care, where you think the return on that capital is significant, it does not really matter if that up. in the markets has gone >> one thing i would ask you is how many companies borrowing to get return on investment and how many borrowing to buy back stock or pay dividends, companies have so much cash. is it possible your scenario

will not play out like that? of yourndous buy back stock, and companies wondering why are you buying back stock. what are you rewarded for as a business? influence youoe have quickly. if you have the same benefit because your debt cost is so low and depending on how you are rewarded, you get the same benefit from buying back your stock as you do a 3 to 5 year on on your investment-- row your investment. as companies think about what their longer-term return is against what is a more normalized debt cost and cost of your capital stack. >> you have a hurdle rate, and it's the same rate whether you are buying back stock or investing it. you have to clear that hurdle. in theory you should not be buying back your stock unless it's a good investment of the shareholder's money.

stephanie: i see were talking, you are painting a catastrophic picture. you have companies that are facing increasing debt costs and not investing in a way that can boost inflation. this could be potentially really damaging. >> i don't mean to exaggerate the point. wages are heading up. to boost your revenue, your sales and general administrative is going up. your margins are compressed. you think about money you're spending on inventory. the u.s. is in pretty good shape. i do not think we are falling off a cliff. we are being a buoyant economy that is miss measured. we talked about auto sales. the u.s. is such a driver of growth in the world. that is something you have to be thoughtful about. there are people who are quite credible that think it is going

to move faster than that. i don't believe that because i think the consumer is still in a good place and will be there for a period of time. >> so where specifically are your investments? spreads have moved out dramatically. commercial mortgages, nonagency mortgages, parts of europe in the credit markets and the sovereigns you talked about earlier, parts of the emerging markets that get thrown out with everything else we think are pretty interesting. india is a great story, depending on where you own, it is seven and change percent. economy --h a good coming up today, the question on people's minds, is

the u.s. slipping towards a recession? more perspective in a special edition of "what'd you miss?" that starts today at 3:30. scarlet: the dollar extending its longest losing streak in four months. ♪

scarlet: we need to head over to the markets desk, where julie hyman has been tracking the dollar. julie: the dollar has been declining, if you look at it versus the euro and yen. this is the dollar versus the euro and usually we look at the euro versus the dollar. what we have seen is a four-day decline for the dollar versus the euro, the longest streak of decline we have seen since last september.

with what ido talked about earlier, increasing negative sentiment not just about global growth, but it is seen about u.s. growth. we had the durable goods report that came in below estimates, we coming upreport tomorrow morning that should give investors more clues about what is going on. interesting there. the dollar,versus the pound pricing as well. the dollar gaining in a little bit of strength versus the yen. finally, you have the dollar versus the yuan as wel. -- well. one other market indicator we can look at to read sentiment on the u.s. economy is the vix, the so-called fear index which measures volatility and options activity in the market. according to goldman sachs, because we have not seen more spikes in the vix, that means there is not the perception on the part of the folks trading this that we are going to enter

a recession. typically you get higher spikes. as we have had going into recessions, rather than the more muted spikes we have had this time around with the vix averaging 24. this is something that mark sebastian talk to me about yesterday in our options insight great he said, if you were really seeing this panic or fear about the u.s. economy in the market, you would see a vix that had not been spiking much higher than it had been. alix: thank you so much. scarlet: coming up later on, amazon will be reporting earnings. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you.

we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. alix: welcome back to bloomberg markets. scarlet: let's start with the headlines. thank you so much, the

youth and health agency says the spread of the zika viruses explosive. world health organization will meet monday to decide if the disease is a global emergency. the virus is carried by mosquitoes and is linked to birth defects. it has been found in 20 countries. and wecovering the story go to our bureau in sao paulo, brazil. what is the status of the outbreak in brazil? we are on high alert with the virus here. the house ministry is investigating 4000 babies suffering from microcephaly. the first cases were identified a few months ago. of the messidea

with which the virus is spreading. is the brazilian government making any progress now an average to contain the virus? it's a tough fight because we've got to fight the mosquito spread. yesterday, the defense minister said hundred thousand soldiers would be on the streets fighting , theirus -- the mosquitoes gypsy mosquito which is the one but also otherka viruses. the way to do it is to bent them from breeding so they have to eliminate all standing water. you have no idea how hard it is to do in brazil because we have a lot of land, it's a tropical country, and the mosquitoes are everywhere. we have been following a big spread of other diseases. mark: in addition to the human

impact, z how is the spread of theika virus affecting companies? >> we felt the impact on tourism. airlines are offering cancellations or changes of tickets and clients that don't want to go to the areas unaffected. it's a terrifying story. i myself have a couple of pregnant friends who are buying mosquito nets and all sorts of things. take care of ourselves because this virus is really spreading quickly. mark: thank you so much. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. thank you so much.

if you look ahead to this afternoon, amazon is set report fourth-quarter results after the bell and the expectations are fairly high. bearish andn is according to a copy of his recent presentation paper, he is now shorting shares of amazon. let's show you what the numbers say. there are three key stories driving the company's profits. first is their prime service. they would not say how many people in the annual subduction fee but data this week indicates that i'm in the u.s. is now 54 million strong. that leads us to the second narrative which is fulfillment. amazon has increased its share of the u.s. e-commerce market. the growth is coming from third-party sellers. they pay fees to amazon so the storageinclude and customer service and the shipping of goods under that amazon brand.

the third part of the story is cloud. amazon has built its business at a time when the cloud market is growing at 31% annually. the overall market should be worth $25 billion by 2018. huge chaos inn a the cloud which i -- which is a higher-margin business been there e-commerce business. the revenue totals now $2 billion. you got time, fulfillment, and the cloud hosting amazon's possibilities. gross margin has grown steadily years.we get two a closer look at amazon finances later today when the company reports earnings after the close of trade. it does not mean it's all coming up roses for the company. amazon has not had a wild success in its hardware division and it's not just a retailer anymore. it is facing a lot of

competition. here to talk about the amazon is brad model stone, the head of global technology coverage. us from sanith francisco. we're also joined by research analyst neil doshe. what is the biggest risk that amazon has to face in earnings today? risks are the two going to be if there is a macro slowdown, what will that do to the overall revenue numbers. hint thatzon start to investing in the business again with transportation and logistics. servicee meal delivery and other extensions of the model.investment if they go back into an

investment mode, margins will pay compressed and that could bring the stock down. alix: brad, you wrote the book on amazon and we think of it as a retailer. what is the real way to look at it? >> it's such a complex business. at andric i always look maybe it's a broad one of the overall rate of growth. overall retail in north america is basically flat and we have seen e-commerce grow around 17%. is growing 25% over also its eating share. some estimates put it at 51% of all e-commerce growth will now be taken by amazon. it shows you this is a very large train that is putting up speed. there are many important numbers like the number of i'm users estimated around 51 million. not only the tip and $2 billion quarterly revenue that's expected but the prophet. aws is a high profit business that allows amazon to make way

in new businesses like food delivery but international markets. little about the spring and expectations for amazon. extent is 120% gain last year and it's 10% some of this year reflects earnings outlooks? we see these big swings up and down on amazon stock. investors get nervous. they have had a tremendous run in the past year. can they continue to drive margin expansion? said, they are using the nice profits they are getting in indiato reinvest and food delivery and other parts of the business. a lot of what they are doing is they will take a nice tailored not double down quickly, i think week and continue to see margins expand

on the stock to work. if they double down on competing with you to guess and buy a bunch of planes, we will see the stock taking it. i don't think that will happen but i think we will see a measured approach to operating. story ist of that amazon trying to control all aspects of its business like the shipping and the trailers. are they at with becoming its own ecosystem? logistics, it's taking its first steps perhaps to become a competitor to ups and fedex and the postal service. companyyears, this is a that likes to control the customer experience. they tend to say during the holidays that their partners cannot keep up with demand so we have seen them require airplanes

and outliners and they are putting their brands on trucks. i think is the beginning of a long-term effort. ,nvestors may not like this providing an option that they can control. this is early days. sometimes you see amazon trucks carrying amazon fresh or amazon. country food services i think we will see more of it and it will be a slow ramp up. amazon: to that extent, is moving into logistics at a time when crude oil faces are a 12 year lows. doesn't that at unpredictability? >> i think it's a very small step they have made. i think they have leased 20 or so airlines. alix: go ahead. can you hear me now? >> sorry about that. alix: it's a small part of their business? >> yes, they want to take a measured approach. we are not seeing them making

massive investments. i think what they want to do is the experience and ultimately, they probably want to fill in some gaps so if ups or fedex cannot meet the demand, amazon has their own ability to fill in and back that up. the fiasco to decembers ago when people did not get their christmas presents. they will take out advertising in the super bowl for the first time. they want to promote echo. what is this product and why is it in it? -- why is it important? >> it is really a hit. maybe it's a west coast thing but it's a cylindrical listening device. you can ask it purchases or information.

20 years ago, amazon had a bomb at the fire phone and they figured out that maybe their second hardware act after the this.al kindle is 10 years ago, jeff bezos said we were not advertise at all. towill allow the customers spread word about amazon through word-of-mouth and they see tactical reasons now to not only throw out a product but date a below around the brand i think that's what a good super bowl ad is about, getting notice for this product but making people feel good about amazon when there is a steady stream of stories about the stuff that goes on in the phil's -- in the fulfillment centers. they are cap $5 million per super bowl ad. likeet: do you see echo drone delivery? could it be a game changer? i think it could be a game changer. it's one of the top-selling products in the holiday season. this is amazon's entry into the internet of things and internet of the home. you can talk to this device and

order items and ask at four directions and ask it about the weather. it becomes like your friend in the home. if amazon was more into the home and locks and controlling different things, echo could be the center of that base. this is their big for a into the internet of things. more importantly, it's taking from googleshare that if you tell echo i want to more tied laundry detergent, those one search less you are doing at google and going straight to amazon. excellent point that if it could talk to my 16 month old daughter, that would be amazing. thank you both so much. it sounds like echo is a combination of internet and siri. alix: my daughter talked to siri scarlet: but it does not

understand her. coming up in the next 20 minutes, the japan economic minister resigns over a corruption scandal. mexico is feeling the pressure from low oil prices. a supreme faces court aerio about his new venture. ♪

scarlet: you are watching bloomberg. alix: this is your global business report. scarlet: deutsche bank is moving -- losing market share in businesses that want to explain alix: -- expand. alix:one of the biggest

retailers in europe assembly alarm on the stronger dollar in scarlet: a scandal is shaking up japan and why the economic minister is stepping down. first, let's start with deutsche bank that reported a one billion dollar fourth-quarter loss at its security unit. revenue in fixed income currency 16%.mmodities the kleins the ceo has been scaling back trading so he can poster -- bolster returns. made by then was supervisory board not bonuses to board members for their role as per members this year. that includes people were on the board at the beginning of the year and no longer are and board who were not on the at the beginning of the year but were at the end. bank's cfo spoke to us about the company balance sheet. >> we have our plan and we baked

or eventsf measures that we expect represent the burden. we have been explicit about this. morenow there will be litigation costs in 2016 with a clear view on what amount of money is necessary on the restructuring side. we also have a clear view on what we think we need to invest into driving down our normal for units. we have some flexibility in doing some of that. in particular as it relates to our non-core units. in that sense, we think we can manage our way over the next oh-18 months which admittedly will be tight. from what we can see, we think it's absolutely doable. h&m warns its warnings -- earnings will get squeezed by the stronger dollar. the protect public health by more than a percent in the quarter. he gets 80% of its product from asia were clothing prices are linked to the dollar. scarlet: one of the key

japanese moneye program has a great graft scandal. the finance minister is stepping down and he and his staff, it is said, took money from a construction company. the resignation could prime minister shinzo abe. he apologized in tokyo today. the british economy to a little speed at the end of the year as gp rose one half of 1% in the fourth quarter. the british consumer gets the credit and the service industry rose while industrial production and construction fell. scarlet: in paris, hotels are feeling the pinch from the terrorist attacks. last month fell 19% and the terrorist attack led to booking cancellations and lower demand for rooms. this has been your global business report. for more stories, visit bloomberg.com. alix: let's go to abigail doolittle in the nasdaq.

let's start with ebay. absolutely, the stock is punching today after the company's first-quarter outlook missed the street estimates and it comes in the context of a disappointing december quarter. its market share grew only 2% relative to overall e-commerce growth. targetlyst cut his price saying that the -- that ebay is unlikely to attain overall growth and he and others have questioned whether ebay was correct to buy out paypal. paypal is up. icahn for therl split and called paypal the jewel of the old business. the company's fourth-quarter performance would desert vindicates his view. the company beat estimates and added customers and posted transactions. citibank is saying by paypal

after an outstanding quarter. scarlet: thank you so much. prices areoil putting tenex in mexico in jeopardy. alix: we will go to mexico city the latest. ♪

alix: welcome back. crash and oil faces has been devastating the state owned oil company in mexico. the finance minister says the government may have to bail out the company. bring in our mexico bureau chief. we know oil prices have fallen and so many companies are in trouble.

why might they need a bailout? pemex isoblem for their financial problems began a long time ago before the collapse in oil prices. it has been almost a since it has been posting losses. , they expectagine to have to build debt of $100 billion. what has the company been doing all this time to reduce its obligations and expenses? they have been offering some early retirement packages for their workers and recent layoffs. have 100 billion dollars in debt, that's not enough. they are delaying some of the most expensive projects. the short armd in and nuts for the government is saying we are willing to help

you but there are conditions. you have to show a plan that it shows you can be profitable at this level of prices that it's about us. alix: you have really seen the reaction in the debt market. if you come inside the bloomberg ismal, and -- terminal, this how much would cost to protect against a default. that's a huge run-up as oil prices have fallen. does not trade on stock markets of this is a way of measuring the risk out there. have onw long do they till it need some sort of cash infusion? that's a good question. we met with the deputy finance minister yesterday and he that they've together a plan that will get up early by the finance ministry so they can get cash. they did not want to offer a timeline.

they are also transferring more money to cover some of the bush and funds that the government agreed to absorb last year. they have already spent 50 billion pesos to cover that. they may be a little bit higher as the state finalizes the figures. scarlet: is there any discussion what precedent this might set for the countries other oil the and and companies? -- oil dependent companies? >> it is a worry that this is the beginning of the end for pemex but the way the oil market is, there is more to be seen. the oil thisn how is will be the second half of this year. that will make a difference for become ather they smaller company or not. alix: what was the worst mistake they made? you have a lot of oil there. they should be doing well. >> it's all about efficiency.

for each employee and they have over 150,000, the company makes about $790,000. if you look at exxon, breach of their employees, the company makes $.8 million. that can give you a good example of the inefficiencies. alix: that is huge, thank you so much. coming up in the next hour, an exclusive interview with the facebook vice president of business and marketing. emily chang will speak with him next. ♪

alix: it is 1:00 p.m. in new york. scarlet: welcome to bloomberg markets.

from bloomberg world headquarters in new york, good afternoon. chuck kenosha once took on television but now has his sights set on major corporations. amazon it is after the close of business today that alix: we will have an exclusive interview with the facebook vice president, david fisher didn't r. scarlet: let's go over to julie hyman. julie: bravo to the underwriters. writers. what we are seeing is a rally. an interesting day

beat gains and losses and stocks are rising to the highs of the session seemingly without much of a catalyst. the s&p 500 of the course of the day looks like this. basis, you see all of these v's so not quite at ,he highs but nearly there close to beginning of the session this morning. you can look to technology earnings. looking ahead to amazon and microsoft and looking back at facebook which came out yesterday to it as seeing it again today, up 16% after the numbers beat estimates. they have increased engagement and mobile and are seeing more ads. technology is coming back as well. amazon is up 75% ahead of its earnings report. that is fundamental news and bounceback news. it seems to be giving a list of some stock did alix: oil is

still a big focus and i got a report this is russia and opec have a false hope. that says it all. julie: accept the market does or are tradingt as if there is a glimmer of that russia and opec producers will talk about cutting production. we had a russian ministry -- a russian energy minister saying it's not going to happen. we saw oil come off the highs that we are taking another bounce up. even though we are seeing the third straight update for oil, let's get some perspective. this is year to date for prices, down 10%. it bounced from the close on january 20 but it's a 20% gain in oil prices. the negative 10% is still sobering. scarlet: that's pretty large. thank you so much.

alix: let's check in on the first heard news. you, the iranian president is in paris meeting with the french president. meet with the french ceos and iran says it will buy 118 planes from airbus. donald trump is standing in his decision to skip. tonight to skip tonight republican presidential debate he claims he will is treated unfairly by the sponsor, fox news. the latest poll shows mr. trump lead. wide national senators ted cruz at marco rubio are the only other candidates in double digits. respect with mark halpern is live from des moines, iowa this week at of the iowa caucuses. tonight at 5:00 p.m. new york time on bloomberg television. president obama's trading a task

force to marshal resources across the federal government to prevent, treat, and for cancer. moonshot is a priori to of joe biden who will chair the group. died last year of brain cancer at the age of 46. today, tragedy struck america's space program as the seven astronauts who died when the challenger exploded are being remembered at cape canaveral. >> 30 years ago at this moment, we work awaiting the launch of space shuttle challenger. we remember that cold winter day. at the time, we did not realize there was a lot of debate to launch or not. unfortunately, we did and we know what happened, tragedy. nasa is holding memorial service at the johnson space center in houston and arlington national cemetery. global news 20 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world.

alix: thank you. kenosha is no stranger to a challenge. he tried to take on tv networks but was stopped by the supreme court. gearing up to take on cable giants now to revolutionize how we access the internet at home. his new venture is called starry. >> the access network is a chokepoint. we knew somebody had to solve it. it made a lot of sense to go ahead. betty: you have hired a lot of people from aereo? >> we started this together. i think we are 45 or 50. betty: barry diller is in on this? >> yes. betty: why is he not partnering like he did with aereo? >> he was a great investor at aereo. betty: buddy's not leading this?

last time, he was there at the supreme court. >> the goal is to avoid all of that this time. betty: let's talk about the business, what is it -- what will you bring to the consumer with the service that verizon and comcast are not already? >> the first product that we're putting out is calledts youry station and a gives all the channels available. it's got a great touch screen salzer connectivity problems. so it's bringing broadband access into your home wirelessly. they connect but the first product has gone on sale and it's a device at home and the second product or service

starting in the summer is broadband access product itself. that's an interesting way of thinking about the technology we have built. it's a fixed wireless technology using high-frequency waves. the big benefit is you get lots of speed. it costs to build the network drops dramatically. betty: because you are doing it wirelessly. >> exactly, nope the wires in the ground. .he endpoint is all the work betty: why wouldn't the broadband giants do this themselves? >> they already have their cable. betty: i believe it was tried at some point? clearwire is the latest example. been up and down for a

lot of these companies. people wonder of its possible in the simples way to think about it is my five that's a fixed wireless application. has been data execution about technology. alix: that was the founder of starry. under armour shares are rising for the person after footwear sales boosted earnings calming fears that the company's growth streak was cooling. scarlet: why are they doing so well despite a mild winter? let's ask matt townsend who covers retail. under armour was a football up toro company originally? footwear was not its original business? matt: yes, they got him from pfizer years ago and they seem to have a bona fide hit, the

seth curry line of shoes. saide call today, the ceo we have never seen sales like this for any shoe before. it's unheard of. admit their outdoor apparel had some problems with inventory left over. the shoe sales were enough to beat the street estimates and put the stock. alix: we also had that from kevin plank - to your point, each comparison. a few weeks back, morgan stanley said they were worried about these shoe sales. does this debunk what morgan stanley was saying? matt: i think the concerns are still there. it's a leisure to end has taken off and everyone is piling on selling yoga pants. that was the basis of that statement by morgan stanley. percent andll sales

distal competition but the big story is even with those potential problems, the shoe business was able to take care of that. the footwear sales increased 95%? matt: that's unheard of. scarlet: will he come out with a new shoe every quarter? matt: they would like that but i think they are on a schedule of one year to scarlet: what about other players? do they have endorsements? matt: they have a strategy to go outside the sports world. they have a deal with gisele dchen. they say they have a deal with the rock it he is built and is very muscular. alix: he's in great movies. a fine actor. matt: he is on hbo show.

they cannot compete with nike for the big contracts like kevin durant. they cannot find the top athletes because they don't have the money. maybe in the future they will. they have had hits are getting seth curry before he was a big star and they got cam newton out of college. stuff, this was a huge surprise in the market. thank you very much. scarlet: coming up in the next 20 minutes, microsoft is transforming itself to focus more on the cloud and less on windows and we will tell you if this is a smart strategy with a preview of their earnings later today. company has care been found to scarlet: jeopardize its patients health. scarlet:facebook is the only tech stock in positive territory this year after fourth quarter results that were strong.

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alix: welcome back. let's go to our markets desk and a julie hyman. give us a broad landscape. julie: we are now rallying. we have been back-and-forth today. taking a look at might come in all, we see that nine out of 10 industry groups are higher. the one group that is lower his health care with negative earnings out of that group.

. we are seeing biotech and pharmaceutical makers fall but energy is higher along with oil prices utilities are higher as well and technology is getting a lift after facebook earnings and ahead of earnings from amazon and microsoft. guys were talking about under armour doing very well, up 20% after the company surprised it is of its numbers because of footwear. the sentiment going into the report was quite poor. candor morgan is arising. it got upgrades. on the downside today, even though caterpillar is getting a lift, another company that is similar, united rentals, is being lower on some disappointing numbers. of data is falling on earnings and juniper networks is falling on earnings also the chief financial officer is

leaving and not give a reason. is seeing an erosion of market share as more of its customers over to other places like amazon. that is the landscape today with a lot of earnings related movers. scarlet: thank you so much. microsoft ceo said his goal is to make the company mobile first, cloud forest company unless to put it on windows. scarlet: we will get another pressure on that when they report earnings after the bell. cory johnson is in san francisco with more. when it comes to microsoft ambitions to be a cloudburst company, how is it doing? a good comparison, amazon services compared to microsoft, those are the two biggest players in the hosted web services business. amazon is so much bigger, maybe a times bigger.

r is growing by like $1 billion order. it is growing 135% said there is traffic growth. the biggest competitor by comparison. . it's generating a lot of revenue from microsoft this business has grown under the nose of microsoft, literally in the pacific northwest. the business has done so well for amazon. hope tot sees that as a be relevant in the cloud in ways where they can bring strength and be very active in what's happening in mobile. [no audio] as much as the ceo doesn't want

to focus on windows, it is the focus because the windows numbers in the last quarter were superstrong. it was a surprise to many analysts. windows,new release of would a typical release pattern be in effect this time? would it carry over to some more strong quarters? the ceo said no, we are going back to normal inventory levels and more a long-term boost. he said the normal inventory levels will happen in the fourth microsoft. some of the analysts don't believe it. investors think microsoft has got a rabbit to out of the hat with additional numbers. windows is a focal point tonight. there is a question as to how strong that will be. scarlet: how far along is nadella in turning around the company? has made somehe

dramatic changes in an organization that is not been accustomed to dramatic changes. microsoft is famous for fighting against its biggest enemy which is microsoft. -- divisions famously i develop similar software rather than work together. by all reports, he has broken walls and is those more focused on individual alex and killed some sacred cows in redmond to show leadership and new direction for the company. he has been getting great reviews for his ability to change that business and has been focused on the future. microsoft is not quite there as far as delivering. for every person has written a headline that says the pc is dead, they probably typed that on a pc. scarlet: only you would say that. thank you so much. still ahead, another

setback for the health care start up, will this be the straw that breaks the camel's back? ♪

scarlet: welcome back. faranos. trouble for is: the question and it's found that their blood testing technology was only testsused in one of 200 it was designed for. scarlet: u.s. regulators say a twoprocess causes patient health.

what exactly did government regulators find that the lab? what understand exactly medicare is using such strong language and it really is strong -- that's as mean as a gap. it gets. if your doctor asked you to go for a medical testand everything that's involved -- you might have high cholesterol and get it tested and you go to theranos or another company and if they get it wrong over the course of a year, that has the potential to you at risk. to see youred doctor more frequently. that's the kind of risk. it's not that they will make someone sick, it's about the fact that these are needed things and these diagnostics are needed for medical care to diagnose people for care and assess where they are. whicht's not accurate seems to be the concern or if the lab does not have the practices that ensure that accuracy, you can run is a serious problems.

that's where it appears to be. we have not seen the forward it yet but that seems to be the thrust of this letter. alix: what did they do that was wrong? a number of things. it applies mostly to their lab in california which is not the biggest one. it's one of the main labs of the company. have the right supervisors in place and the types of personnel that medicare and the u.s. government would like to see. inspection, we will probably see questions about the accuracy of but we don't know that. generally, the operations of the lab, that they were not in line for patientsndards to ensure that they are safe. scarlet: this is like another piece of bad news to hang over them. >> they have a lot of controversy lately. this company has a $9 billion valuation.

this is a massive company. when we talk about private valuations, this is right up there with some of the absolute biggest companies. imagine what would be happening if this quickly charted company. -- publicly traded company. there happen ongoing questions. this was the darling of the medical technology field for years. it was as good as it gets a man over the last year, there has been a constant drumbeat of questions and criticism about their technology. does it work? the company has said it will we have not seen it. scarlet: how concerned is the company? originallyery open but since the controversy began, how has it been? they are highly responsive to

get back to people and they are good about defending their company. what we have not seen and they promised they will do is the hard clinical research and data by outside experts will take a look at their technology and cup against verifiable standards. yes orll publish that no. we are waiting to see that. it's the type of thing we have seen and they mention big clinical is like cleveland clinic. scarlet: we have not seen that information yet. thank you so much. coming up, facebook is cashing in their gun mobile advertising and so investors. scarlet: an exclusive interview with the head of business marketing. ♪

alix: from bloomberg world headquarters in new york, welcome back to "bloomberg markets." i'm alix steel. scarlet: i'm scarlet fu.

let's start with the first word news with mark crumpton. mark: the u.n. health agency called the spread of the zika virus in the americas explosives. the who will meet monday to decide if the disease poses a global emergency. virus is carried by mosquitoes and is linked to birth defects. it's been found in 23 countries. the five armed holdouts occupying an organ wildlife refuge have posted a video in which they say they will leave if none of them faces arrest. the fbi has established checkpoints around the refuge. the group's leader and 10 others have been arrested over the past few days with most of the arrests occurring during a traffic stop that erupted in gunfire and left one person dead. the group is demanding local control of federal land. very goodders is in health, according to the senate's attending physician who says the vermont independent can

work without limitations. weighster says that he 179 pounds, has normal blood pressure, does not use tobacco and drinks infrequently. alix: thank you. investors are not just liking facebook's fourth-quarter results, they are loving them. the stock is urging after posting record sales of 80% coming from mobile, a sign that marketers are also loving. emily chang is in san francisco with david fischer, the head of facebook marketing. over to you, emily. emily: thank you. david fischer joining me from facebook headquarters in menlo park. david, thank you for joining us. let's start with the quarter.

what do you think grow growth this quarter? if it is mobile, what kind of mobile? was the first holiday shopping season we saw that was truly mobile in nature. comscore reported consumer spending here in the u.s. was up 59% year on year on mobile. the question for businesses is no longer if they need to be marketing on mobile, but how best to do so. increasingly, they are turning to facebook and instagram, where we believe we have the two best mobile advertising platforms there are. one of the things we think is effective is that mobile can serve the smallest businesses -- we have over 50 million small businesses on the platform, big retailers like macy's turn to facebook, online players like amazon. we are seeing a full gamut of businesses investing with us to reach consumers on a mobile basis. emily: let's take the super

bowl, how are advertisers and marketers changing their approach to advertising, when it comes to television or other plant arms, when it comes to this -- super bowl specifically? david: for something like the super bowl, businesses are recognizing that people are spending more time not just in front of the tv screen but in front of their mobile device and facebook. people are forming marketing strategies that play across those different devices and different types of experiences. whether it is the super bowl or things like the world cup, the olympics, things like that, we see investments in people developing strategies for digital and facebook. with respect to the super bowl, we have over 650 million sports ans on facebook connect it to sports page, so we believe we are the biggest community of sports fans out there. we're focused on helping marketers tell their story effectively in the digital marketing ecosystem. emily: let's talk about

instagram. marketers expecting it to account for one out of five mobile ad dollars this year, making 20% of your mobile ad revenue. is that ballpark? david: we will not get into breaking out the numbers separately, but we are incredibly pleased with the success in instagram. this holiday shopping season was the first one in which we had ads fully rolled out around the world. we saw incredible interest in adoption from advertisers. onthe top 100 advertisers facebook in q4, 98 also advertised on instagram that corner, so we are seeing great adoption. we are very focused, as we are on facebook, with grooving out the return on investment that advertisers see on instagram. microsoft xbox promoted their halo five videogame that they released on facebook and instagram using great video creative, optimized created for an online ecosystem, which meant

fast-paced short video. they saw a 10-point increase in purchases as a result. goode happy we are seeing adoption but also good results for the clients investing in us. emily: one of the things you did is increased ad load, showing more ads to people on facebook and instagram. how much more can you continue to increase without alienating users, how much room is there before a breaking point? david: the number one focus for us with anything we do at facebook, be it new features, as our non-ads, we focus on the experience for people on the site. what is consumer sentiment like, what is reaction? carefully onat facebook and instagram and all of our properties. when we have seen as we have increased ad load on facebook and on instagram recently is that the consumers were very happy. we will continue to make that our first focus and make sure

that people are having a good experience. as long as they are, we can be happy with the experience we are delivering. the like button is about to get a dramatic makeover. you are adding some new options. what new monetization opportunities does this open up? david: with this feature that we call reactions, we are giving people on facebook more opportunity than just to like something, to express different types of reactions. you mentioned a bunch of them. what we think this will do is create more engagement on the platform because it will give people more ability to express themselves. for businesses and other people, it will also help get real feedback about how people are reacting. if you are a business and post something, you can get better information about how customers are reacting, and that can help you optimize your content over time. we think this will create more engagement, self-expression, and

create better content. they: what do you see a branding opportunity for messenger and whatsapp? what is the playbook for marketers and advertisers? with the are pleased growth we are seeing from our two message apps. whatsapp has close to a billion people on the platform, messenger, over 800 million. we are seeing lots of people messaging, connecting with one another. increasingly, businesses and people are starting to connect. one of the things we are focused isor both of those platforms to facilitate better communications, messaging between businesses and people. we are seeing growth in those experiences. one of the things we will be testing out over the next couple of months is how better to enable that and what types of there could be in monetization going forward. emily: even though facebook is not in china, you work with chinese exporters that sell outside of china who are on the

facebook platform. what are you doing to grow that business, any plans to open new offices in china? david: we have offices right now in hong kong, taiwan, and as you we have a meaningful advertiser base in china of companies who are exporters, who sell their goods outside of china. we are very happy with the growth we have seen. it was a nice part of our business in q4 as we saw growth from those advertisers. onwill continue to focus opportunities for exports in china, as well as emerging markets around the world, making sure we serve them effectively. emily: facebook possibility of at numbers are impressive, video views as well. has 7 know that snapchat billion mobile views a day. is snapchatmpetitor

in video, how big of a threat when it comes to the video part of things? david: what we are seeing overall in digital is a big move video created and consume the digitally. the numbers you see on facebook, more than 100 million hours are consumed each day in terms of video content by more than 500 million people around the world. when you're seeing with other sites is just that people are investing more in creating digital video and consuming more digital video. what we think we have on facebook that works effectively is the ability to combine the great creative storytelling that video enables, with the targeting that is not available anywhere else. one example that comes from q4, they have in a hard cider brand that is number one in the world called strong bow, but it's not very big in the u.s..

they used facebook to run video ads targeted at people who are frequent buyers of wine and spirits. these were the people that they thought would be interested in their product. in thosehat investment ads and targeting, they saw a nearly 14% increase in sales. we believe the combination of great video content and targeting can drive really good results for advertisers. they: i was speaking with former facebook cto bret taylor yesterday and he said the numbers look great now, but the next big challenge is to figure out what is facebook's next huge business. what10-year time horizon, do you think is the next huge business for facebook, and how does a company think about allocating resources, whether it is away from the fb core to virtually all -- virtual reality and ai? david: we start with trying to

create great consumer experiences and drive consumer engagement. as we discussed, we are really happy with what we are seeing with our two messaging platforms , whatsapp and messenger. we think there is real potential for monetization there. one area that we are excited about is oculus and virtual reality. we believe virtual reality will develop into a critical platform for all of us in the years ahead , but this will take a budget of years. if you think about the types of experiences you can have when you put on that oculus headset, incredible gaming platform today, becoming increasingly important for communication, and an education, commercial applications, all sorts of things. our philosophy is we want to make those investments for the long run, we want to give it time to play out, create a great consumer experience and drive engagement. when we do that, we believe we can monetize effectively after that. fischer, from

facebook headquarters in menlo park, thank you. alix: thank you so much. that was emily chang speaking with david fischer, vice president of business and marketing partnerships at facebook. scarlet: we have some headlines from walgreens. they have halted the use of the theranos california lab after regulators found deficiencies at the lab. this is something that we were just talking about. walgreens suspending sending lab tests to their california facility because regulators found some serious deficiencies at that lab site. we will stay on this as it develops. ♪

scarlet: welcome back to "bloomberg markets." i'm scarlet fu. alix: i'm alix steel. oil has been an important part of the equation in terms of sentiment. all three major averages are now higher. energy prices are higher today as well. if you look at energy stocks year to date, interestingly, they are down, but not the most in the s&p 500. overall year to date it is down 7%. there is an interesting note that our david wilson highlights today in his column, in his chart of the day. saysbs executive director

that we have yet to see a bottom in oil, but maybe we have started to see a bottom in energy stocks, at least stabilization. a comparison of energy stocks versus the s&p 500, and then other groups at different periods of time to see if there are any comparisons to be made. here we have from july 2014 until now. the gap between energy and the s&p 500. , andy has underperformed that has continued to widen versus the s&p 500. the aprils that to 2000 until october 2001 performance for health care technology. -- thesis is that the guide the gap has widened as much is it will, and this is a signal that we could begin to see stabilization and a bottom in energy stocks. he says we are seeing the first

green shoots of stabilization in energy stocks. that is why it is interesting, dated january 22, have started energy, not the worst performing group of 2016, as it was in 2015. in other words, it is not leading the declines in the stock market. scarlet: thank you. in a bid to overcome mounting opposition to oil exports, the canadian prime minister introduced a review process that will have more consultation with stakeholders. alix: this means pipeline companies will have to wait longer for development projects to take off. for more, here is pamela ritchie. is a fair amount of this pure politics or are there consequences to this review policy change? justin trudeau was elected on

a platform that has great regard for the environment. certainly, many of the people that voted for him are hoping he can turn things around on the climate change side of things. this review making pipeline companies put more safety measures when they apply to get a pipeline across the country as well as potentially connecting emissions created to get oil out of the ground to a pipeline being approved to go across -- it is a complicated calculation. nobody is entirely sure how it works, but it has the message that some want to hear. we put the question to john stevenson. >> if we do not get pipelines for taxes in these additional markets, the real will take it away. we think we can still be profitable at certain prices in the future. pamela: but it makes more sense to go by rail. >> yes, about a $10 increase in cost for the producer. that was a clip from

peter watson, actually, who we interviewed yesterday as well. if pipelines are approved, they are, if not, they don't. the reality is, things will still go by rail. rail is seen as much less safe than the pipeline debate. scarlet: thank you. up, the trucking industry is facing some tough headwinds. we will have an interview with the ceo of xpo logistics. ♪

alix: welcome back to "bloomberg markets." i'm alix steel. scarlet: i'm scarlet fu. there is a long and bumpy road ahead in the trucking business. an increase in regulations and driver shortages are all waiting on the industry. alix: xpo logistics is one of

the largest freight transportation and logistics providers in the u.s. and last year the company acquired conway trucking company for $3 billion, giving xp you a more physical assets. here to talk about the headwinds that the company is facing in the future of transportation is bradley jacobs, the chairman and ceo of xpo logistics. thank you for joining us, great to have you. every day, all we talk about is the manufacturing sector being in recession. what does that mean for your business? >> manufacturing is not really interested in recession. pmi went below 54 the first time last month, but the industrial economy has been in a phone for about a year. not new news. we have a diversified business geographically, by customer, types of businesses we do, so we are doing well. scarlet: how are you seeing demand of all? it has been ok. the u.k. is pretty strong, spain

is strong. here in the u.s., retail is good. where you see the weakness is in manufacturers, industrial. that will play itself out. we talk about gdp, talking about inventory, how part of the issue is the overhang of inventory and demand not holding up. what is your perspective on that, and when will it turn? bradley: hard to say, does not feel like it is turning around soon, but there is a disconnect from what i hear from customers and what you read about in the press and the wall street community. the community is much more pessimistic that customers are themselves. i was at a big manufacturer yesterday and we heard that this is was up and she would be spending more on capex. so too early to tell. scarlet: what is the trucking market telling you about the consumer? a good portion of your business is related to the consumer economy. bradley: the consumer and retail

is healthy. in our last mile division, we are the largest logistic providers or heavy goods going into people's homes, delivering refrigerators, stoves, home appliances, electronics. business is booming. where there are pockets of good strength in the economy -- everything is related to e-commerce or technology. you had $6.5 billion worth of deals last year, you scaled up pretty quickly. what are the expansion plans for 2016? bradley: roughly a billion dollars of organic growth. the focus is very internal, focusing on growing these 35,000 customers that we have great relationships with, serving them better, cross-selling all the different services that we have leading positions in. next year, we will think about coming back to acquisitions, but this year is really organic. scarlet: talk about the driver shortage we see in the industry now. what are you doing to gain more

workers, and to what extent are female drivers a part of that? we have a lot of women in our driver community. less thantly truckload and last mile, so those drivers get home every night. we do not have a big shortage. our turnover in the business is in the single digits. it is in the full truckload business, where you have to be on the road for a week or two out of the month that you see turnover. understandable. when you look at the oil industry, oil prices have come down, fuel prices have come down. at thes that hurt you end of the day, because you have less pricing power. bradley: we don't really make money on that part. that is a pass-through that we pay or collect. if anything, it stimulates the economy. we don't have a big exposure to

energy, so it's not a big factor in our success. scarlet: do you see any signs that could lead to recession? we talked about manufacturing recession -- and i know you don't agree -- but do you see anything that could be a worry? other than psychologically, we can talk ourselves to death. everyone gets nervous, it becomes a cell phone filling prophecy, everyone spends less on capex, the consumer begins spending less, and then we have recession. alix: thank you, bradley jacobs. coming up later today, this is a question on people's minds. is the u.s. slipping into recession? ♪

it is 2:00 in new york, 7:00 in london, and 3:00 in hong kong. welcome to "bloomberg markets."

david: from bloomberg world headquarters in new york, good afternoon. i'm david gura. struggling for direction today. the s&p 500 swing between gains and losses. the big story is oil, climbing above $33 on a story that russia is willing to discuss with opec. the world health organization raising the alarm on the zika virus which has spread explosively, they say, to 23 countries in the americas. the travel industry is already dealing with the disease. amazon reporting after the bell today. will they get a boost from web services? will the media take a bite out of the margins? first let's go to the markets desk with julie hyman. julie: it has been a day of vacillating between gains and losses. right now, stocks are in the green.