david: from bloomberg's world headquarters in new york, good afternoon, i'm david girl. gura.id companies are cutting back thanks to the strong dollar, and market turbulence them even more. the central bank of japan taking up page from the ecb playbook as it introduces negative rates. does the governor have any leverage left? toox taking drastic action cope with a changing market, splitting off services acquired five years ago. will the decision address the fundamental issues the company has faced? first, julie hyman has the latest. julie: stocks are near the high for the session today, a friday where people want to belong into the weekend. it's been a rare occurrence. it looks like the second straight up week as well for the

s&p 500. specifically all major averages seeing the high. if you look at the s&p over the course of the day, you have seen rather than the more dramatic volatility that we have seen lately, yesterday, for example we bounced between gains and losses, we'll bring much hung on to gains for the entire day. and built upon those gains. groups who at the are on the move. we have technology that has been leading gains throughout the day. helped in part by microsoft earnings and also the general bounceback in large technology, which has been suffering this year. it's a more broad-based rally, all of the groups in the s&p 500 are higher. consumer discretionary is the lag, amazon is in that index, not in the technology one. that accounts for the relative underperformance. industrial at number two. we been talking a lot about tech today. let's switch to industrial. honeywell without with earnings this morning, the company matching estimates. unlike boeing, we heard from the other day, aerospace sales for honeywell were strong.

general electric is higher as well, making an investment in italy the got some headlines this morning. and 3m also gaining on the day. a lot of earnings related movers are in. david: what has been lagging? julie: we've a mixed bag. i don't that we can bring that up at the moment. i know the dow jones transportation average actually looks like it's trading higher at the moment. we've had some differences from we saw earlier. oil is when we have been watching as well. of -- a relative lack laggard, but it's notable because of bad volatility that we have seen today. and also because stocks have not followed oil today. not as closely as we have been singing it recently. all of this volatility we've seen, where is on the stock chart, it looked very different today.

there's been some talk this week about decoupling of stocks from oil. this is the other day when that's happening. david: julie hyman at the markets desk. this check on the bloomberg first word news with mark crumpton has that from the news desk. mark the president marked the seventh anniversary of the signing of the lilly ledbetter fair pay act. the legislation was the first that mr. obama signed when he became president. the president also announced he is expanding a data collection program aimed at ferreting out abuses of equal pay laws. u.s. and british intelligence spied on israeli drones operating in the middle east from was 20 years. it's according to documents leaked by edward snowden and published in international media today. the report said the intelligence agencies were able to watch information that the drones in other aircraft broadcast back to their handlers. israel was the focus of the program, but it also hacked into

systems in egypt, turkey, iran, and syria. egypt has lost hundreds of millions in tourism in/years suspected bombing of a russian plane. hotel occupancy in the resort cities of sharm el sheikh and regatta stand at less than 20% and the cities lose more than $250 million every month. russia suspended all flights to egypt, and britain halted flights to sharm el sheikh in october. lawyers for the boston marathon bomber filed appeals of a. earlier this month, a judge denied the bid for a new trial. no details were provided on the grounds of that appeal. was convictedaev last year and sentenced to death in connection with the bombing. news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton, david, back to you. david: we are talking with the u.s. economy.

new data out today, fourth-quarter gdp road -- rose today. yearhold spending less rose at a steady clip, well companies are pinched by strong dollar and weak overseas sales. points ofhese data just about the health of the u.s. economy, and we expect to see a rebound in the coming quarters? let's start with gdp. disappointing, but not altogether unexpected. we had slightly -- we try to estimate what the fourth quarter is looking like. we expect a .6 increase. we've seen a weakness across the board. some of it is because companies have too much inventory they are trying to pull back, some of it is the trade story just mentioned. but some of it is just weakness that i don't fully understand. it's not consistent with the broader picture for the economy.

about let me ask you durable goods. we got the number yesterday. also disappointing. economyectors of the that are very sensitive to global factors, whether it is the oil market or the dollar are really hurting. , theu look at the economy manufacturing side of the economy is in recession. ,ining is in a deep recession the service sector is doing great. services don't depend on a global economy. the construction industry, at least for home building, is doing great. it doesn't the panel the global economy. anytime we get one of those manufacturing indicators, you know you're going to get a little bit of disappointment. david: we starting to see the binary, amore of a domestic economy and a foreign facing economy. remember gone most of the time of the economy has a slowdown, there's a more broad sharpening economy. when the fed hits the brakes hard and tries to slow growth,

it generally hurts every sector. everyone is paying heritages rates. when you have a credit crisis, it tends to affect everyone. this is a very sector focused shock. it's very much due to the dramatic move into things -- the dollar surging and oil prices collapsing. anything that touches that is been hurt badly. big dichotomylly between the unaffected sectors and the damage sectors. i think it's expected. i dig we have to live with it to some degree. david: perhaps most emblematic of that is capital expenditure. we've heard from energy companies unveiling their budgets for the next year, slashing by 30%, 40%. it continues here. ethan: there's been two stages to the oil shortage. an initial big drop in oil prices the cause of pullback in the sector and started a major recession. and then one oil prices, instead of picking up in the second half of last year, started to fade wave wasn, the second

lower in capital spending in the sector. the good news is, things can't get below zero. the slashing has been so aggressive so far, the further damage to the economy is limited , but it is still playing out. the oil shock is still being felt from month-to-month in the economy. david: the white house mentioned this today, it's of the outperformance of job growth relative to gdp growth is notable. the mirrors what we saw in fed statement earlier this week, a real focus on job growth versus growth generally. ethan: i'm not sure i'm th encouraged by that involvement. it's good news of the overall economy isn't as bad as the statistics we got today. we need to kind of taken averaging across the labor markets statistics and the gdp data for the truth, which is kind of slow growth economy. the other hand, the big gap is telling us that workers are not

very productive right now. to meets in the effort the demands of consumers and businesses are having to hire a lot of people to generate output. lots of jobs, not that much output coming out of it. .hat means productivity is weak fundamentally, that's not helping the long run for the economy. productivity is important to having strong growth for a long time. sucking moreeep and more workers and eventually we run into full employment and inflation. i don't view it as an encouraging sign that the gap between strong jobs and we gdp has gotten so big. david: you mentioned your models of the top, let's close by getting your outlook. what are you looking at going forward? than: average across the news. i don't dismiss the strengthen the jobs market, the economy is facing some big headwinds. but i still think that growth in

the year ahead is a little above 2%. i think we should to some degree be happy with that. the good old days of 3% growth being normal argon. we have more of a 2% or less. unfortunately, it's a diminished expectation. ethan harris, cohead of global economic research at bank of america, merrill lynch. on monday, don't miss a conversation with stanley fischer from the council on foreign relations with tom keene. he sits down with mr. fisher to discuss the economy. in the next 20 minutes of "bloomberg markets," the bank of japan governor surprises investors with a negative rate. is he running out of options? two, theitting into move may give shareholders a short-term boost. does it address fundamental issues?

later in the hour was big with greg thompson, president and ceo of a cancer center about president obama's new task force on cancer, which meets for the first time on monday. ♪

david: welcome back to "bloomberg markets." a look at the biggest business stories in the news right now. boeing's newest 737 jetliner gunned his engine's and headed into the sky. it's already the best time seller with more than 3000 orders. customers were on hand for the initial flight. the french maker of steel tubes

for the oil and gas industry is preparing to sell about $491 million in shares to write out the industry slump. as a going to be both emily with the matter. stocks fell the most in three years, capital increase may be announced as soon as next week. the jury has awarded more than $31 million in damages to a former walmart pharmacist in new hampshire. claim she wasen wrongly fired after reporting safety concerns about the workers -- coworkers dispensing prescriptions. she was fired after losing her key. walmart has said it plans to appeal. that is your business flash update. let's head back to the markets desk with julie hyman and a check on company movers. julie: the best performer is consol energy, which has been at the bottom of the list over the past year or so. the coal miner coming out with a whiter than estimated loss, revenue beat estimates. on the conference call, management saying it's being

patient on what assets to sell, and does not believe the company needs to sell assets to support the balance sheets. perhaps is one of the things that is boosting the shares. the stock by way of context is down 73% over the past year. when you look at that 19% gain today, you have that in the background. on the downside today in the s&p, eastman chemical. especially guilty -- chemical maker. -- a specialty chemical maker. , and hassappointing partially to do with the decline in oil prices, which affects the pricing of some of its chemicals. the company plans to cut costs by about $200 million, that's double its previous target. some of the other stocks that caught our eye today, netflix is not participating in the big tech rally today. amazon isn't either, but facebook, microsoft, apple. netflix is down another 4% today. just something to note is it's one of the so-called fang stocks.

mastercard and visa each reacting to earnings, visa is out this morning. both of them talking about the negative effects of currency, both reporting increases in revenue. and usually they were down in premarket trading this morning, but since then, they have recovered. david: julie hyman at the markets desk. long a pioneer of adopting holidays, the bank of japan is taking a plan out of mario draghi's playbook to stoke inflation and growth. >> with most important is sending a signal to corporate and consumers of the bank of japan is ready to take any action in order to achieve inflation targets. this will help shift people's minds toward higher inflation. after theyumbled rejected the idea of negative rates. professor now is takatoshi ito. becomen the running to

the manager of make of japan. the me ask you how surprised you were when he made the announcement? i was surprised. he's been denying negative interest rates. said he came up with this decision. david: suddenly he comes up with this decision. do you think this was something that he was planning for a long time? or did something change? professor ito: over the last couple of weeks. i think he wants to go one step beyond what the market is expecting, always. it's a very important to him. ton the market is expecting expand the purchase program, that's being expected. that's something else. he found this negative interest rates. david: does the philosophy behind this make sense to you?

there are people who disagreed with it, didn't understand it. does it make sense to you what he is proposing you will do in japan? professor ito: i think he wants to keep the momentum, and once you make the decision, he wants to lead the pack area five to four is fine with him. david: this will be applied to one kind of deposit. i think initially, there was a real swoon, a huge psychological effectiveness. what is the most positive impact of this? professor ito: i think the currency, bonds, and equities, those three aspects which are reactions are very much expected. be in theill to 125.ble range of 120 bond yields will shift down and phlegm. that should stimulate investment. housing and others.

up to 20%.s one we'llne i'm not sure stick, because it's influenced by many other things. talk about the risk. you are putting financial services in a risky position. professor ito: that's the side effects. that's why they introduce this three-tier system, it continues to earn 0.1 positive interest rate. accessories will be charged 0.1 negative interest rate. some ofoing to shield the institutions from this. david: i would to the statement today, was reading what dissenters said about why they dissented. there was concern that perhaps this was happening too quickly. what negative interest rates should be reserved for crisis situations. all good points, do you think? professor ito: that's the concern, i understand. i think the overwhelming other

side of the concern is that market is so much in turmoil, and also the expectation is influenced that it resolved the question. this is the right way to regain the confidence. david: let me ask you what this means for the timeline of this program? do you think this will prolong the quantitative easing? professor ito: it depends on how the inflation comes rate in the gdp growth rate comes back. it's hard to predict. said, he expects to present -- 2% will be achieved. david: professor takatoshi ito joining us. xerox blitz into, we get the details of the company, coming up next. ♪

david: welcome back to "bloomberg markets." it seems like xerox is taking carl icahn's advice, splitting in 22 publicly traded companies. a document technology company which includes its namesake copier and a separate services business. to ceo says the decision split was driven solely by the board. >> what's been reported is that this was driven by carl icahn. interestingly enough, it was not. the board did its analysis and came to his conclusion without speaking to carl icahn at all. is what she is saying ring true? this was not engineered or push for by carl icahn? if they are breathing

down your neck, sooner or later, he will force you to do things. david: i outlined the split in broad terms. how you see it shaking out? it's similarurag: to what ibm is undergoing in terms of their business and focusing more on hardware. you have a hardware division that is not growing very fast, you have a services division with stable revenue streams and decent margins. that's what they are trying to do. david: why not sell off the hardware business? anurag: i'm sure they looked at all alternatives, it's been going on for a while. if you can't get a good price for it, what else to do but wait for a day when the valuations pick up? scarlet: what do you anticipate --david: we do anticipate carl icahn will do with seats on the board? anurag: it's not going to be a quick trade for him. one of the things we think it's

possible they can do is take a look at the portfolio contracts these companies have. some of them are incredibly long-term legacy contracts. if they are not getting you the right margin, you might even decide to step back and say we don't want to participate in this thing. i'm willing to take a revenue hit. get my margins up from single digits to double-digit's. david: how big a hit can they afford to take? anurag: if they have carl icahn's backing, it's possible he can take a larger hit as long as the profitability improves. we saw the computer sciences did that in their portfolio for the last couple of years. investors have been very kind to them. david: you mentioned carl icahn will be around for a while. how about ursula burns? anurag: she's recognized as one of the ceos to watch. whatever it is out of the secular trends of the technologies -- it hasn't worked for xerox at this point. it's possible they give her more time to see that she can turn the services business around. david: with this company in the

context of the whole cloud ecosystem. you think of the cloud, you may think of like a soft -- amazon. survive thehave to hp, csc, xerox -- all of them are struggling because people are going towards more cloud-based services, more cloud applications. if you are a good consulting turn yourou could portfolio around and say we're going to help you get that. that's what cognizant has done, it's really worked out for them. if you can turn your company around very quickly, you can change that. david: anurag rana, thank you. ♪

>> "bloomberg markets this is "bloomberg markets." our crumpton is of the news

desk. are: health officials trying to determine how the olympics in brazil might be impacted by the spread of the virus. more than half a million people from around the world are expected to attend the summer games in august. the world health organization is holding a meeting about the epidemic. the virus has been found in 24 countries. michigan leaders may have known about the poisoned water before they publicly acknowledged it. state workers were offered bottled water in january of 2015. notcontamination did emerge until nine months later. the governor signed a bill that will send $28 million to help point. pentagon officials are saying more help is needed to defeat

islamic state. the new york times reports officials say they don't believe airstrikes alone can dislodge iraq andants from syria, telling the white house the united states and its allies will have to send more commandos and trainers in the coming months. the u.s. has about 3700 troops .n iraq and a handful in syria bernie sanders is releasing a new tv ad critical of goldman in the financial meltdown. it airs today in iowa and makes no mention of hillary clinton, who has received $600,000 in speaking fees from the wall street firm. her campaign is accusing senator sanders of breaking his pledge not to run negative advertising. "with all due respect" is live this week ahead of the iowa caucuses. coverage begins tonight at 5:00

p.m. new york time. global news 24 hours a day, powered by our journalists around the world. i'm mark crumpton. david: commodities markets closed in new york. gold, choppy trading today. it futures rallied 5% for the month. turmoil in chinese markets and leaving investors reeling, boosting the demand for traditional safe havens. prices are meeting resistance at the $34 level, closing at $33.60. russia's energy ministers says the decision for oil cuts will happen if all exporters agrees. he spoke with ryan chilcote who is here to tell us more. to dial back the expectations we might get a meeting where the big oil

producers would discuss a cut and any expectations there may be a cut is imminent. he made comments yesterday he says were misinterpreted. many thought he said there will be a meeting in february and they will discuss a 5% cut. he says that is not the case. venezuela is calling for a meeting. they will attend the meeting. he said it is not clear the meeting will take place and if it was to take place, who would be there and what would be on the agenda. what he also said was that if there was an interesting cuts, everyone would have to cut. this is something we hear from opec. it makes it difficult to get a deal and there are many more obstacles. it is not easy to turn off the tap in the wintertime with the freezing temperatures and you have the distrust between russia and saudi arabia, they would

have to be on board. they would have to be in agreement. opposite sides of the conflict in syria with the theians backing assad and saudi's backing opposition. many don't believe saudi arabia is being sincere when it says if non-opec producers contribute, they would do it. many things saudi arabia is out to get russians and their economy and this is a ploy. thanks to ryan chilcote in london. coming up, donald trump may have skipped out on the debate. did the other candidates exploit his absence? arees of electronic arts

tumbling today on a worse than expected forecast. emily chang will have more with the ceo, andrew wilson. and i will be speaking with someone about president obama's new task force. ♪

david: president obama is following through with a promise he made to create a task force to fight cancer. president obama: last year vice president biden said america can cure cancer. tonight i'm announcing a new effort to get it done and because he has gone to the mat for so many of us, i'm putting joe in charge of missing control. david: here now is dr. craig

who is devoted to treating cancer. let me ask you about the objective, is curing cancer the most sensible approach? i certainly think the attention on this comes at a critical time. bunch of new treatments we can employ. that is just the big c, complicated. cancer is not just one disease. it is hundreds of diseases and different approaches are going givingost effective in the best outcomes to patients with specific diseases in the course of their treatment. there will not be one big cure for cancer. there will be many and there will be advantages by more research and more attention focused on delivering the best therapy to an individual patient. david: how close are we to that

happening? do you think a moonshot could accelerate that? dr. thompson: the attention will help. we are close to having a really fundamental new set of paradigms to help a variety of patients with cancer. the new advances in therapy, to harness our own parties -- body's immune system i've only been realized the last five years. we don't know how to employ those the best and the new research will facilitate that. council is comprised of people from government. do you think that is a missed opportunity? i certainly hope in fact to the private sector will be brought in. the largest group involved are the doctors and the nurses and the hospitals dedicated to

helping cancer patients and their families and equally important will be engaging the advocates of the different diseases. we have to have attention paid to the full spectrum. america are going to get a diagnosis of cancer. 40% of women. today there is hope for all of them. two thirds of people are alive five years after they are diagnosed. there has been advance. we still need to help the 35% the best benefits we have and this is a chance to deliver on that and understanding there will be a different approach to different diseases and the patient community is going to be an important voice. the hurdles of scientific, or financial as well? is that needed? hasthompson: the president

called -- it is important to recognize there does need to be new money into the game. at last year the president announced a new precision medicine initiative. a half billion dollars was devoted to that. second, in the debate around our it was a bipartisan support led by the vice president to bring new money to thenih. we spent $3 trillion on health care in this country and the money devoted to research is less than 1% of that. there is need for money and it is important we understand how to empower these treatments. the government can be a convener in that. is if wee key things personal to realize

medicine, to have it reimbursed by medicare so we can take the right treatment for each patient. so far, that has not been accomplished. david: president obama working with government. do you think there is room for more collaboration? we saw joe biden, could more happen? thereompson: no question could be more collaboration. we have to remember the database is the need to be shared our private. they are the patients' information. we have to safely protect the privacy. many of us are struggling. the task force will help us figure out a way forward, respecting vivus c and yet getting the power of these very powerful databases that are accumulating.

dr. thompson, thank you so much. the equities at markets, looking at the dow and nasdaq, all up almost 2% each. turning to politics and the race for president. the leading candidates are gearing up for the iowa caucuses, talking voter turnout. let's bring in stephen who has been in iowa and joins us from downtown. i want to ask you about the debate. republicans on stage except for donald trump. what stood out to you? stephen: donald trump was not on the stage. the first question was about donald trump. several candidates mentioned donald trump in their answers

and talking about policy, a lot of the policies talked about last night, immigration, obamacare, things donald trump has been talking about on the campaign trail and people are -- candidates are, have shifted in ways that they may not have had trump not been in the race. i know you had breakfast this morning with ted cruz's campaign manager. what did he have to say about the outrage the campaign has planned for the caucuses on monday? i know you have looked into that. how does their strategy compared to others? steven: yes. a breakfast and he went into detail about how they are feeling in this last week and the work they have been doing to prepare. and is a sophisticated

robust operation they half. 12,000 volunteers and they have raised $19 million and that is a big number. the signal they are sending is ted cruz is not like some of the other people who have done well in iowa, who weren't able to pull off the rest of their campaign. ted cruz is trying to send a signal that he's got the money and the organization and the will to go much farther than monday. deploy $19do you million in an effective way? there is a lot of conversation. how can the money be deployed with just a few days left? steven: so a lot of what is happening in iowa is what has

been spent. hiring staff, mobilizing volunteers, things like that. there will be more of that the next several days. now it is about turning out voters and training voters to know what to do when they arrive. that money is also for future states. a lot of states in the south. campaign isruise looking ahead, as are others, about how to set up the table. thank you so much. ath all due respect will have special two-hour edition on monday live and a pull comes out tomorrow night. look at some of the biggest business stories in the news. volkswagen may buy back some cars. that is according to the new

york times, citing a lawyer for the company, the clearest indication it may not have the technology to bring omissions into line with regulations without hurting performance. japan's central bank is trying a strategy to jumpstart the economy. the bank of japan governor kuroda hopes it will push banks to lend. russia's central bank is leaving the interest rate unchanged, but warning it may tighten policy if inflation risk intensifies. it will stay in line with all surveyed economists. that is your business bloomberg news update. let's look -- right now we are at session's highs. the dow is up by more than 300

points, pushing the 2% rise mark . taking a look at the s&p 500, it is up. is speaking to the broad rally that has been happening for the course of this entire day, locking it two days of gains, led by tech stocks and health care. i want to talk about some of the movers. amazon is one of them. positivet going in the direction. it is down. one of the outliers. this is the biggest fall since august. it is all about spending. it's missed its fourth-quarter profit coming in at a dollar per share. upf bezos is ramping spending for things from faster shipping and the first super bowl ad that it's going to come out. spending rose 20%.

take a look at microsoft. microsoft is going up because of cloud services. it is up by about 5.6%. $.78 and itcame in turns out more businesses are buying into their cloud services . more than 70% of fortun500 two cloud subscribe to services for microsoft. also getting a bump are the hard seagate andes, western digital, getting nice bumps in positive territory. pc salest even though are following. second-quarter revenue came in , western digital

coming in with second-quarter earnings. rallying as much as 12%. third quarter sales forecast fell short by as much as 400 million dollars, david. speaking to the chronic weakness we were talking about. david: a couple of minutes i'm going to talk to emily chang about electronic arts. perhaps we have reached peak star wars. solo can only do so much. a lot of it has to do with dollar headwinds. star wars is sales were butnitely robust, apparently fails for physical disks and downloads did hurt margins. david: thank you. coming up, electronic arts had a great third-quarter thanks to "star wars battlefront." emily chang sat down with the company's ceo and we will hear

all about it next. ♪

david: a bit of breaking news, -- thatt zero was cut xerox was cut, it announced it is going to split into two with products and services on separate sites. had a greatrts third-quarter thanks to the success of "star wars battlefront." their outlook is not looking so good. it shares were down 8%. emily chang had a chance to speak with the company's ceo earlier today. what did he have to say about the outlook? have we reached peak star wars? a massivey have

quarter. they hit goals, selling 13 million copies which they did not think they would get to until march. the stock is still getting punished. i spoke to andrew wilson about that and he said he was mystified, but explained why they had to reduce their guidance. take a listen. >> more than our full-year guidance in the third quarter, star wars "the old republic has the highest s subscriber rate in threeears. galaxy oheroes quickly went, we are the top five download in 130 countries. sports doing well. listen, we had a spectacular quarter. star wars is just getting started. they said they are being conservative and blaming it on the strong dollar. david: how is this company

transitioning to mobile? we think of these games on gaming consoles. digitalhey had the best quarter ever. another other interesting area for them is virtual reality. apple is working on a secret virtual reality thing. ea is not just traditional game makers like activision that are in this space. so what is there virtual-reality strategy? take a listen. going to be an important part of our industry. first and foremost, it will be more utility. you think about videoconferencing, education, training. revolutionize those

utilities. in terms of video games, there is a bunch of challenges. consumer uptake, technology. we do believe it is going to be an important part. says it may mean new virtual-reality titles from ea. david: thank you so much. hear more of his interview -- her interview, tune into tonight.g west" and on monday, a conversation .ith stanley fischer tom keene will sit down with mr. fisher to discuss the economy and monetary policy. ♪

>> welcome to "bloomberg markets ."

from bloomberg world headquarters in new york, good afternoon. here is what we are watching. we've got a huge rally going on. the dow is near its highs around 300 points. traders getting ready to say goodbye to january. it has been a month of volatility that will go down in one of the worst since august. fueling the gains, a decision by the bank of japan governor kuroda to go with a negative interest rate strategy. is a bold move. he loves to surprise markets. it is at the cost of banks and their profitability in the intermediate term. betty: and as american express falters, mastercard and visa are cleaning up.