from bloomberg world headquarters in new york, good afternoon. here's what we are watching at this hour. stocks opening strong, selling off the bed -- selling off a bit . the dow is nearing its 15th triple digit move and 18 sessions. one of the big gainers as facebook, which is helping the nasdaq higher. investors are buying amazon as the e-commerce giant reports earnings after the close. and shares of under armour are often running thanks to huge sales in speakers. can they silence their critics? we are about one hour away from the close of trading today. stocks rising but it has not been a straight path i any

means. julie hyman has the latest on the markets. julie: there has been a lot working against the market today in addition to working for it. we had durable goods orders coming in disappointingly versus economist estimates. investors are looking forward to tomorrow's gdp report. looks like the good news and the overwhelming the bad. look at the s&p 500 over the course of the day. definitely not a straight line. a lot of tips into negative earlier in the session before rising for most of the afternoon. take a look at the bloomberg terminal and we have the groups helping to lead gains today. energy stocks of the most in .ercentage terms health care is the only group lower at the moment. at oil prices, you see why energy is doing well. oil rallying for the third

straight session. there are conflicting reports over whether russia will meet with opec producers to figure out a production cut plan. the idea that it might happen is enough to lift oil prices. betty: outside of oil, tech has been on the move, particularly facebook. i facebook is rising in on its blockbuster earnings report. amazon is out with its earnings after the close. this is a group that has been battled this year. tech at the moment is accounting s&phalf the game in the 500. underard betty mentioned armour -- that's the best individual performer with a 22% gain. paypal is another earnings stand out.

looks like the winners are outweighed the losers today. thank you julie hyman at the markets desk. let's get the check on headlines with bloomberg for short news with mark crumpton at the news desk. mark: the brazilian president has invited all nations and latin america and the caribbean to invite ways to cope with the ika virusead of the z and has also declared war on the mosquito that carries it. of what meeting american and caribbean states is set for next weekend uruguay. the president of iran is an president -- is in paris meeting with the french president. he will also meet with french ceos. iran says it will buy 118 airplanes from airbus. creating abama is task force to marshal resources across the federal government to prevent, treat, and cure cancer. so-called moonshot is a

priority of vice president biden who will chair the group. son diedpresident's last year of brady can't -- of 46. the new york attorney general says there is a reason all those bruce springsteen tickets are gone within minutes of going on sale. he says the game is rigged. , he report unveiled today promised to crack down on ticket resellers and proposing an cap -- a cap on what they can charge. >> the ticket industry is on notice that investigations are continuing until all new yorkers can get a fair deal ticket -- fair deal on tickets. mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: mark: global news 24 hours a day powered by our 2400 journalists in 150 news bureaus around the world. now on whether

we are heading into an outright recession. earlier today, the chief international economist at deutsche bank said conditions are really not that dire. the real issue is the markets are signaling something really bad is coming, but we are not seeing that in consumer sentiment. it's as if mainstreet doesn't care so much about the things we talk about in the markets. gives a onext guest in three chance of a recession. how is it that we've gotten to this point where investors are more pessimistic than main street? eddie: people are pointing to china as a sign of weakness. ,e've known china has been weak but there are signs the economy in the u.s. is weaker than perceived. we track rail closely so goods

and thee over railed pmi data, the durable goods numbers were week, so there are signs the economy is weak. the jobs number and wage growth tends to be backward looking indicators, so there are some reasons for concern. betty: you think the stock markets are indicating economic weakness? 500 is a leading economic indicator. it often gets the economy wrong. i'm not necessarily negative on stocks simply because the economy looks a little soft. if it leads to the fed going on hold, it will weaken the dollar those good for some of value oriented parts of the market. betty: where are you cutting your losses? onie: we have a lot of focus

tax management. normally, they would delete in losses in'm booked december. we think it might the reversed earlier in the year. we have had to take losses in stocks that have fallen, so you are maintaining exposure to the market. you have booked a loss and can utilize that earlier in the year. betty: so take your losses earlier, but does that mean the market is about to bottom? eddie: we are up from where we were a week ago. there are signs some of the parts of the market are leading. there are signs maybe we are rotating into a value led market. if we got leadership from a new set of stocks, that would be good for equities. betty: doesn't it seem like the

oil story is far from over? we haven't really seen the damage from the oil market, have we? you seen some macro, but i'm talking micro. what about the energy companies? eddie: we have seen some bankruptcies and there are more to come. we are expecting a markdown in the value of the reserve. the market is forward-looking, so look at where bank stocks have traded in the first part of the year. the equity market is forward-looking and this is a good opportunity to maintain exposures to equities. betty: how does the fed fit into this? eddie: i think the fed is struggling along with the rest of us to figure out the direction of the economy. they are more bullish on the

economy than i am. i give a one in three chance of a recession this year. there's two thirds of a chance we don't have a recession investor, youod need to take account of the range of possible outcomes and i think recession is one of them. betty: so you think it would be a mistake for the fed to tighten further? eddie: i think they will go slower than anticipated and i think the market has it right. we will have fewer than anticipated. betty: eddie perkins, chief equity investment officer at eaton vance. of next, under armour shares of the most in two years. stories about the brand using -- losing market share a bunch of hot air? and is the u.s. heading for a recession? you just heard eddie say there's a one in three chance. we have a special report to try

to answer that question. market stocks are higher, hovering near the highs of the session. the dow in triple digits but it has been a choppy way to the top today. ♪

betty: good afternoon. the stocks are rising in the tech heavy nasdaq is fueling the gains we have seen across the board buying of tech shares. abigail doolittle has more from the nasdaq. nasdaq stocks are trading higher but the worst point drag on the indexes qualcomm. shares are lower after the

company offered a profit forecast that fell below street estimates. the company expects to make between $.90 and the dollar. the street was looking for $1.02. one analyst says the issues are structural and are not going away anytime soon and competitive pressures could worsen. down more than 45% the its peak in 2014 on trajectory that makes you wonder whether qualcomm will find its lows from last decade. some of the big tech names trading higher -- facebook leading the charge. the company reported a great fourth quarter. right behind facebook, amazon is up nicely. week, amazon traded in a bear market on an intraday basis. those losses have been cut in half ahead of the company's fourth-quarter report.

the amazon web services unit and the company's move into the cloud, the stock has been volatile, basically ending where it started suggesting that what we will see ahead are big swings up and down. betty: abigail doolittle at the nasdaq. sticking with tech news, the founder of barrio is back with aother attempt to disrupt major industry, setting his sights on the wireless business. he has lodged the company that broadcast,lace wired basically replacing broadband. big driverink the will be video at the end of the day. people want more video and the need for broadband emerges more and more. you have dsl and businesses that don't have access to broadband.

take a step back and say who is going to wire new delhi or mexico city? nobody. we started this with a view that says we have a two or three decade-long cycle we can invest a great deal in and it is a global opportunity. betty: they are slated to launch in the summer in boston. went bankrupt after the supreme court ruled they violated the copyright of broadcast networks. let's switch gears and talk about under armour. shares getting a huge pop and the stock is having its best day in almost two years thanks to a strong earnings report. profit gains last quarter prompted the ceo to increase their forecasts for next year. joining us now is a jeffries analyst. these numbers enough to quiet the critics of under armour? guest: i think they are.

the market got a little too negative on the stock. are clearlyapparel overblown. the company is doing a great job getting share in footwear and keeping its share in performance apparel. we see a strong athletic apparel trend continue. we upgraded lululemon at the beginning of the year and they are doing nicely year to date. everyone in the sector is putting up nice numbers on the apparel side and footwear side. betty: how were they able to buck the trend of the warm winter? guest: when it comes to winter and christmas and hanukkah -- people want what they want. the top brands usually underperform in the holiday selling season. beyond just cold gear, they have a diversified product offering

the matter what happens. why were so many people down on under armour? guest: the stock was down from about the 100 level and went down into the mid-60's. people were concerned the growth rate of the company was about to slow. theirid lot to silence critics and have done a great job showing the power of the brand. i think people got worried the footwear business would slow and a little worried the market share in apparel would go to other players in the marketplace. they have line themselves up with some pretty big and/or servers. just signed up the rock this week. how important is that? guest: i don't know about the rock, but he's a great

personality and a great brand. aty are doing a great job picking the right people to have an underwhelming not in-your-face personality. the personalities can really be ambassadors and good guys for the sports they participate in. we are going to fight on to win and that's the name of the game. you mentioned lululemon earlier. how does it impact them? guest: i think they will do a great job this year. have very strong underlying demand. they have had some self-inflicted wounds. they peaked at 28%. job are doing a great improving their pants offering, more fashion in the assortment,

and they will be going through that same process along with improved supply chain. recover margins will and we have seen strong numbers out of nike and strong preannounced numbers that suggest the category is growing. we suggest it will be good for lululemon and good for nike. betty: thank you so much. ahead, we are going to look at the options market as we had to break. a look at stocks reporting earnings after the bell. the big ones are amazon, microsoft and visa. ♪

betty: welcome back to bloomberg markets. -- it's time for the

bloomberg business flash. is telling a blood testing startup to stop sending customers to one of its labs. u.s. regular sound severe deficiencies at location. the companies partner for californiatems in and arizona. j.p. morgan chase is buying the naming rights to the golden state warriors stadium. the arena will be called chase center. it scheduled to open for the 2019 season. financial terms were not disclosed. mattel is adding three body types to its barbie line, .ncluding a curvy model this is after a long time criticism the doll represents an unrealistic body image. images include tall and petite body types and different skin tends and outfits.

that is your bloomberg business flash update. how is the option market playing this rally? julie hyman has more. julie: joining me is the senior market strategist at trading advantage, joining me from the cboe. seems as though the rally has gained some traction today after a lot of bouncing around in the session. i wonder what you are seeing in the options market in terms of forward-looking here. what are people hedging out in terms of what we are seeing? that's a great question and what i'm seeing is some decent put buying in the s&p. volatility is off from what we saw last week but there's still some skepticism. there still a mentality to save

the rally and try to take a little bit off the table. are not seeing the vix drop as much as we should have. we had the selloff yesterday but it seems like trading outside the early report, it seems like the market is just trending. the market gets back to trading ofthe fundamentals and some the economic reports rather than just following oil. with all the impending scuttlebutt out there that russia may cut production, if anything, we have seen a real turn of events and the upside in oil, that is where the pressure is to the upside. julie: is there much buzz about the gdp report tomorrow? guest: not at all. almost insignificant. julie: interesting.

i want to get to your trade. logistic company, the transports have not been reporting well, reflecting this idea the economy is not on great footing right now. right. and we will see some report tomorrow but you just hit the nail on the head. see hrw is a great company, but they have some major headwinds going into this earnings report. the trucking and logistics sector, they are going to have trouble here with the economy. that is why i like this cheap downside play. buy a put spread for about $.70. make $1.80. i can

there are some technicals above that, just run with the stock is trading, there is some major resistance. into this, there's much more downside than there is upside. julie: thank you so much. we will be watching that earnings report. betty: thank you so much. it for me today. we have a special report coming up next as we try to figure out whether the u.s. is really headed for a recession. ♪

scarlet: live from bloomberg world headquarters in midtown manhattan, i'm scarlet fu. joe: welcome to a special edition of "what'd you miss?" alix: we will investigate the

chances of whether the u.s. is bound for a recession. here's a look at where stocks stand right now. the dow jones up by almost 1%. the s&p up .5%. facebook adding 21 point two the nasdaq. fedets digest earnings, the and slowing growth in china. joe: the question is is the u.s. headed for a recession? the smart money says we are not in for a redux of the 2008 economic crisis but we have three charts that suggest a suggestion could be near. scarlet: we will analyze the risks with our guests. alix: and we have you covered on

amazon and microsoft expected to report after the bell today. scarlet: first let's start with a check of the headlines on bloomberg first ward news this afternoon. the senate committee approved a bill expanding sanctions against north korea following its latest nuclear test. the legislation calls for sanctions against anyone who aids the country with developing weapons of mass destruction. house of representatives passed similar legislation two weeks ago. a nominee to be the next american commander in afghanistan says the security threat in that country is deteriorating. john nicholson junior told u.s. lawmakers today that he would do a thorough review of u.s. troop levels needed within 90 days of taking the job. succeedrmed, he would john f campbell, who is

retiring. more trouble for detroit toss embattled public school system. suing overents are mold, rodents and other problems. they want the problems fixed in the emergency manager fired. protestingve been over school conditions and poor pay since the start of the year. is 500 millionem dollars in debt and may be unable to meet its payroll by april. 69% of americans feel anxious about a trump presidency according to a new poll. about a tediety cruz presidency. 51% say they are anxious about hillary clinton becoming president. 43% have anxiety about bernie sanders. " will be due respect live from des moines, iowa all this week ahead of the iowa caucuses. coverage begins at 5 p.m. new york time on bloomberg television.

30 years ago today, tragedy struck america pass space program as seven astronauts died when the challenger exploded. nasa held memorial services at the johnson space center in houston and arlington national cemetery. news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. scarlet: with oil prices tumbling, stock prices falling, though word recession is getting tossed around quite a bit. here are three charts that support the idea that the u.s. may be entering a downturn. profits are set to drop for a third straight quarter. the s&p 500 are expected to have dropped 7% last quarter. that's the blue bar at the far right side. , you have manufacturing. the already slowing sector closed out 2015 with a thud.

slipped to below 50, indicating contraction. to take a line starts leg down as well. another cause for concern if you believe credit always leads. sectorser high-yield saw the spread widening and now it is in fact ring investor grade debt, the premium investors demand to be paid are approaching levels seen in the last two recessions. alix: here with us to discuss the equity and profit angle is the chief u.s. equity strategist at citigroup. you just heard scarlet outlined the scenario. does that have the potential to lead to an economic recession? tobias: usually it's the other way around. if you took out energy, you would not see the profit decline. energy is the big plunger here in terms of the supply-side.

of recessiontion is not to negative quarters of gdp, it is production declines employment declines and income declines. even the manufacturing data -- i hate to argue with scarlet, i like scarlet, the isn has reached -- the isam has reached 54 times since 1990. 11 of those times did not become recessions. sense, if you want to have a negative narrative, it is easy. i was talking to clients -- are you even aware that at 10:00 this morning, he had the best consumer confidence number in seven months? the narrative is so negative that it easy to pick on anecdotal data.

high-yield, it is so credit sensitive, so if you look high-yield market, that is 14% or 15% that. it is a widely bifurcated market. even if there is not much of a contagion risk, people say margins are so high they cannot possibly be sustained. i feel like you are my straightman, so i'm enjoying this. the ones everyone tends to show is corporate profits as a percentage of gdp are high. i'm going to call it the trotsky or marks chart. well but that's

not the right chart. you look at the s&p 500 numbers, they were higher in 2007. nine of 10 sectors have margins below their highest. here,n see on the chart the blue line has not fallen. we have even rolled over and it was higher before. , you fits the narrative are buying the s&p 500. over 30% is non-north american sales already. if you are an automotive manufacturer with production facilities in europe, you booked your overseas profits and divide that into gdp, the part you reduced in germany belongs to angela merkel, not barack obama. so it shows up in the numerator

but it doesn't show up in the percent of gdp components. if you sell to american consumers, they book the profits and we reduce gdp by the value of the imports. years.tiply that over 30 thoroughly misleading, but it's a cool chart if you want to tell people it's frightening and scary and awesome. i can manipulate data also. one of the things we heard was how the consumer is leveraged and the consumer balance sheet is a lot cleaner. they are more levered than we are used to seeing. if you look at corporate debt, you ought a 12 year high -- maybe not as bad as 2007, but what kind of warning signs that send for companies? tobias: it's not that shocking

in the weird way prices come back down. borrow a hundred dollars worth of money, your payment is exactly the same. corporations are taking advantage of that. the one that has been seeing the is health care and that's usually an industry with strong cash flow. alix: doesn't the music stopped then? hen the music stops -- watching fore commercial and industrial loans. ofonly have one quarter tightening and it tends to be very much energy sensitive. the smallk at

business survey, it has shown an increase in small business eight and they are finding it harder to get credit. those might lead you to a recession, but you'd have to see they are deteriorating before it would indicate a recession. i would argue that you are looking -- and by the way, i'm sure there will be a recession sometime in the future. not negotiated the business cycle. look ata great chart -- the red line, which is the credit conditions line. the blue line, sorry. as it falls back, it usually leads business activity by nine months. but look at the past three sessions -- it was way down. we've seen it before and it tipped back up.

i would be wary to look at one data point and immediately extrapolated trends. i think you need to our three to be comfortable a trend is forming. or three, you would be talking about the middle of this year. i'm not saying we will never have a recession, what i'm saying is current data does not support the idea of a recession. there is no inverted yield curve and there's lot of data points that really do not support it. there is fear in the markets and as a result, any piece of evidence is there. coming up on her special report, more debate on whether the u.s. is recession-bound. alix: is there a disconnect the between the markets -- we will get to the heart of the data. scarlet: can highflying tech stocks like facebook maintain their momentum? alix: we will break down earning

reports from microsoft and amazon both out after the bell. ♪

alix: do you think the u.s. is headed for a recession? joe: we have a poll on the bloomberg tv twitter account. 55% say no recession. obviously, say there will be. twitter, fairly evenly split. check out the poll and cast your vote. alix: it is an unscientific poll share your thoughts with us.

scarlet: let's get a quick recap from julie hyman on the markets. julie: i'm wondering if there is such a thing as the scion -- as a scientific hole. all the major averages trading higher here. has stock vacillation turned into a more solid rally. if you look at the s&p 500, you can see the several dips we have had and now more study of our rally. we had economic aid of this morning on durable goods and a lot of earnings and oil prices, a lot for investors to consider. it still seems to be getting a left from this perception. potentially talk about a production cut plan even though we heard about reports to the

contrary. we saw them spike around 10:00 when we got headlines that was happening and then they came back down. still gaining on the day and energy stocks gaining as well. tech has been one of the underperformers in what has been a week year. big cap tech struggling but facebook is helping the group come back after its strong earnings report. microsoft out with their numbers. a couple of other standouts to mention. there was a lot of pessimism on that front going into the report and paypal reporting a stronger than estimated number as well. health care is one of the groups that has been lagging today. we have some disappointing earning reports. scarlet: recession watchers

point to week manufacturing as a potential trigger for a downturn. manufacturing indexes below 50, indicating contraction. today durable goods showing a contraction and that doesn't help. sayall the people who manufacturing has the power to into a recession, what did they get wrong? : if you look at goods production versus services, services, because it is a bigger tends tothe economy drive economic activity. you look at manufacturing in thiscular, i am struck by is the weakest sector of the economy.

if you look at the different categories, motor vehicles, five of theonly categories are down year over year. when you say manufacturing recession, you have to say it in a broad-based way and that doesn't seem to be the case now. if you come inside the bloomberg terminal, you can -- how long is this kind of gap sustainable? : and about three quarters, we will talk about recovery. this is one of these things where recession is not recession unless it's bills into the labor market. we are running jobs at a reasonably healthy clip and we see consumers remain confident.

merrill lynch right before the crisis, my former boss wrote the four horsemen. to call for a slowdown in consumer spending -- all of those things are going in the opposite direction. you think is going to happen to things like spending on furniture and appliances? revolving credit is generally in recovery. consumer confidence remains quite high. i think there are a weak sectors in the economy and a lot of focus on the i.s. some. but they don't know much more about the world than anyone else and there are strong sectors of the u.s. economy, housing being one. at lemur.al up

he rode up a paper called housing is the business cycle. joe: if we focus on housing specifically, a big picture look at homes, people talk about how there is not that much supply. how much of a tail wind is there? neil: i think it could be a number of years. that's one of the unique features of the economy. you tend to see the housing market slowing and fiscal policy becoming tight. right now, fiscal policy is transitioning to more accommodative. december, then federal reserve revised up their medium-term outlook because of easier fiscal policy. you see a tail wind from housing and i think there's some room -- i thinkrecovery

it's more of a buy signal for stocks. scarlet: thank you for joining us. alix: microsoft and amazon reporting earnings in just a few moments. that chairman and cofounder of stock twist will join us on tech valuations. ♪

scarlet: i'm scarlet fu. we are just minutes away from the closing bell. we will continue to analyze whether the u.s. is headed for a recession. but we are looking at the redevelopment you may have missed in today's market moves. come inside the bloomberg terminal. big spike here for the next. the blue horizontal lines show the monthly average. goldman sachs says even with the vix rising at the end of last year into this year, it remains in a trading range. it's not in the red zone yet.

thatding to goldman, coincides with flat or negative gdp in the u.s. joe: so we're not in the red zone yet. alix: i've been looking at something really boring -- oil. mightg theme was russia get with opec and there might be a joint cut. cut productiont because it actually can't cut production. if you cut production in the winter, it's unlikely those wells will ever come back to service. so if you cut now, they are done forever. producers inil siberian fields, their decline rates have accelerated, so they are paring back production but they cannot go and take the rig out, otherwise that oil is gone forever, sewed don't be misled by the headlines. joe: i did not know that. scarlet: how do you interpret

all of this soap opera drama? and cut,you leave that's a different story and that is what won't happen. joe: i want to look at something else that has to do with oil. we've been watching to see a there some sort of deterioration in the labor market and i like to look at the 52 week moving average. it really gets rid of the week to week noise. line is texas state wide initial claims. you can see a big virgins starting in 2013 but really accelerating at the beginning of last year, shooting higher in those oil states. in those oil states, you can definitely see the labor markets starting to terry rate and jobless claims shooting up at the national picture looks very

quiet. thelet: you had shown us dallas fed was lower than we had seen. joe: the funny thing is not all the data is affected badly. alix: and houston is really diversified. joe: especially more than it used to be. scarlet: we are moments away from the closing bell. we want to give you the final numbers next and break down the earnings from amazon and microsoft. risinga look at the market cap between amazon and microsoft. amazon looming over that time. 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. scarlet: time now for the

closing bell. u.s. stocks rallying with emerging markets. is the u.s. recession bound? we will look at consumers, china and credit as profitable alarms the u.s. is headed for a slowdown. u.s. stocks rising, you did end up with nine out of 10 sectors gaining ground. health care is the only sector to close lower on the busiest day of earnings season so far. alix: i want to bring up one stock in the close right now -- xerox is reporting it will be split into two companies. one is a hardware company and this comes as carl icahn got three board seats at the services company. he has some board