. welcome to bloomberg markets. betty: from bloomberg world headquarters in new york, good morning. i am betty liu. here is what we are watching at this hour. we are half hour into the trading session. stocks are pre-much mixed right now. we are kind of paring back some of our gains. willa volatility continue this year? we will get insight from hank greenberg. and also phil miller joins in on whether the stock market is a buy. the vti crude is still near $30 a barrel. we will tell you why some analysts are forecasting a 50% rise by the end of the year. we get inventories out in about half an hour. yahoo! ceo marissa mayer unveiling another turnaround plan, this one involving job cuts and the possible sale of the company -- of the company. a closer look.

let's head straight to the markets desk where julie hyman has breaking economic numbers for us on the services side of this economy. the non-isn manufacturing index for january. julie: the nonmanufacturing index coming out at 53.5, worse than the 55.1 economists had been estimated. we saw a revision higher in december to 55.8. this number is an important one. the largest part of the u.s. economy. we have seen stocks turn lower in the past -- i should say in the first 30 minutes of the session we have seen it give up gains. it is the fourth consecutive month we have seen manufacturing declined, but we are looking at nonmanufacturing to see what happens on the services side of the equation. all three major averages are now lower. the dow is not lower by very much. i also want to mention some headlines that came out of wells fargo. it denied a report in hedge fund

alerts that it was in talks to buy banks and credit squeeze businesses. fargo spokeswoman has denied that speculation and denied that report. moving on to some other things that we are watching today, i want to call up imap to let you know what sectors are on the move in the wake of not just that piece of economic data, but also the adp employment report earlier that came in ahead of estimates. financials and consumer discretionary doing the worst in the s&p. andrials and utilities energy are up today, although energy is not up by very much. we have a lot of earnings out today, and a lot of big earnings movers. general motors falling after earnings per share ahead of analyst estimates, buoyed by sales of light trucks in china. yahoo! declines are accelerating after we heard from marissa announcementer the

that it may be putting itself up for sale. merck diabetes drugs missing estimates. chipotle sales declined in january. also disclosing a new subpoena in california related to the investigation into the food safety issues that it has been having there. having an impact on the markets as well is the u.s. dollar. julie: we have seen some weakness in the dollar, which seems to be good news for commodities prices. let's get commodities -- let's get to commodities. oil prices have been rebounding. we have an oil report in 27.5 minutes. gold and copper -- let's take a look at the metals. the 10-year note, the yield has been going higher in the week -- in the wake of the adp report. let's see how it is reacting to that services report. it is going back down now.

finally, let's take a look at the dollar versus the euro and the yen. first of all, the euro rising sharply against the u.s. dollar. it is taking another leg up in the wake of that services data. interesting how much that is happening in effect. also, take a look at the yen. similar movement here, the dollar falling against the yen. all of this is just, what, an appetizer ahead of the main course of the big jobs report on friday. betty: thank you so much, julie hyman at the markets desk. vonnie quinn has more from the news desk. senator randcky paul is jumping out of the race for the white house, this after finishing near the bottom of the pack in the iowa caucuses. forms of foreign intervention, often finding himself out of step with other candidates. he is also up for reelection for his senate seat this year. hillary clinton has raised nearly $27 million by locking in

alliances with 33 state parties. that is based on a bloomberg analysis of the federal election ee filing. president obama traveled to a mosque near baltimore. is a house sources say it deliberate rebuke to republican candidates who promote islam a phobia. former president jimmy carter says a scan conducted last week found no signs of cancer that doctors discovered last summer. despite that news, he will go ahead with treatments scheduled for next week. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world, i am vonnie quinn. julie: the s&p -- betty: stock guru bill miller thinks this is the time to buy.

he tells me, "the markets are a gift, in the sense that there are prices out there that make absolutely no sense. almost everything out there is a buy, in my opinion. many of the cubbies have just reported, including exxon, 3m -- many of the companies have just reported, including exxon. is it a buy, a gift, a present? >> i have known bill miller for a long time. he is really smart. his fund was down i think 20% in the month of january, and here he is completely optimistic and bullish, and aggressively bullish. i would never ignore someone who has that kind of a record. if you look at the valuations, you have to say he is right. there are a lot of companies who are relatively attractive. unfortunately, you have a situation where the backdrop is becoming more and more questionable. that is, the world economy.

talks abouttions he now, if they are right, he will make a lot of money for shareholders. if the world is not do quite so well -- here is his rationale in a very simplified form. home building. homebuilders are not affected directly by what is going on in china. they are not really affected in many ways by oil prices. the oil industry does not affect whether holders will build more homes. it might be beneficial if lower gas prices put more money in consumers' pockets and they have more money to spend. so he says why are homebuilders down so much? they are a screaming buy. michael: and he may make a lot of money with them. so the fact that stocks are down a lot, he says the margin of still make some money if things get better.

we will make a lot of money. is looking at heads i win, tails i do not lose very much. that is what makes him a great investor. his point, both in the u.s. and the rest of the world, particularly china, from the real world, as what companies are doing, the markets have been much more frenetic and scared that the numbers would justify -- and scared than the numbers would justify her here is what is going on with comcast, 3m, exxon mobil. day after day we have these frenetic moves in the downward direction. betty: so how are you making money? what are you buying? michael: times like this, you look for companies that are really attractive and have been eaten down so much, you cannot not own them -- and have beaten down -- have been beaten down so much, you cannot not own them. on oil, $30 --

betty: are you buying anything in oil? schlumberger is one of my biggest holding. iso not know if the bottom 20, 25, 30, 32. i think at this point a lot of people who know more about it than i do are saying that we are probably approaching the bottom. about oil's talk later. i want to get to china because obviously china is a big part of your holdings. syngenta, cam china, huge mega-billion-dollar -- syngenta, cam china, huge mega-billion-dollar deal. in the very long-term view, they have 20% of the world how speculation and 10% of the -- they are running out of room

and they are running out of food, so this is a very smart move. , the dow andpeople do pot, that have this syngenta kind of property. it is a very -- and dupont, that have this syngenta kind of property. it is just a smart strategic move. betty: it is strict the supply and demand, right? michael, stay with me pretty we have much more ahead with mike holland. exxon andxpert with schlumberger. is this the much needed relief for the oil bowl? we will talk about that in a moment. ♪

betty: good morning and welcome

back to "bloomberg market." once a year there is dinner at the cirque inviting the best of the best. billions of billions of dollars are represented at the table. once a year he honors someone, and this time it was former aig chairman and ceo hank greenberg, who talked with me beforehand about what he thinks about the markets and where he is investing. the price of oil has been an overhang on the market. the politics has been an overhang on the market. the political situation around the world has been an overhang on the market. so we have many events taking place, and, you know, in all fairness, it appears to me that the u.s. walked off the stage. we spark other problems. betty: in the middle east we haved off? hank: where you

a vacuum, it is filled. it has been filled by other countries, and that makes the world even more dangerous. so the market reflects all of that. it is a trading market. you buy stock in the market, many of them, you sell in the afternoon. or vice versa. betty: do the markets make sense to you anymore, though? hank: no. you roll the dice right now. betty: you build businesses. hank: we build businesses and make long-term investments. we are investing in china. betty: you mentioned argentina, too. hank: i am very impressed with the new leadership. morehave done in 30 days to unravel what they did in the last 12 years. they devalued their currency,

which is overvalued. they took off and export tax on agriculture. that was the dumbest thing anybody could do. they got no foreign-currency coming into the country. all the ministers i met were first class. they are all experienced. they all run their own businesses. it is a very wealthy country. to putare you looking investment dollars in there? hank: absolutely. betty: that was part of my conversation with hank greenberg last night. back with me is mike holland, chairman of holland and company. when he says the markets make no 1941 managed of

to hit the carnage this year. what is that tell you? michael: you will have bill miller on. his record is unparalleled. he has done 20% of the month. there is carnage everywhere. with the exception of the 2000 people you talked about. the markets around the world were in a very bad state, and that is his point, i think, hank greenberg, that the markets make no sense short-term. it is a voting mechanism, and in the long-term it is a scale. long-term, you can make a lot of money. if you take advantage of this when the voting mechanism is goofy. in argentina, things are getting better. i would pay more attention to what he said about china. i think he is still bullish on china. 4% of the world penetration is a normal number for life

insurance, like in the u.s. it is less than 2% in china. betty: so there is a lot of room to grow. speaking of long-term, you mentioned you were in exon. would you be in on if they started to chip away at their dividend? michael: oh, god no. they weigh more than earned their dividend. they are the only major who covers the statement the way they do. there is no question they are committed to contain the dividend. betty: even in the face of a possible downgrade by s&p? you saw those headlines yesterday, right? michael: i do not think there is a chance. betty: what is your projection for oil prices? michael: whatever yours is is mine. i do not think that oil is something you can predict. but if you look at what companies are saying and doing, there are continued bankruptcies over the next six to 12 months.

there are 500 coming on with iran, russia continuing to blow it out. a lot part of the year, listening to people who know something about it, and i am not one of them, they will be a huge reduction in the demand-supply crevice. my guess is, if you have to give me a number, we will be at or above where we are the for the end of the year, not below it. betty: let's talk about my favorite subjects, politics. that is greenberg's favorite subject as well. michael: it is not mine. the super bowl. money would you put your now behind rubio? and your support? hank: probably. probably. betty: when would that become a certainty?

hank: when he gets one or two states. betty: he sounded down on jeb bush. will this be a mitigating factor for the market? michael: it is already there. one of the reasons the market is so frenetic is they see this maelstrom not just in the u.s. this is a little messier than normal. the markets are situated down. if rubio makes sense to him, i would go with that. who makes sense to you? michael: michael bloomberg would be my choice. betty: outside of mike, though -- does it factor at all the way you view long-term? michael: i think if donald trump -- i think it is a big? . we do not know what he would do because there has never been

anything like this. jeb bush, we saw what he did when he was governor. we have seen what michael bloomberg has done. is a little rubio bit of a young senator. betty: untested. mike, good to see you. mike holland, chairman of holland and company. oracle's cloud strategy -- we will hear from ceo mark hurd. that is coming up. ♪

betty: that is a live shot right now of martin shkreli coming out of the broken courthouse. about hearing, speaking the securities fraud allegation against him. martin shkreli is being represented by his lawyer, who is speaking in front of the , whoas, benjamin brockman

has represented many colorful people in his career. let's listen in. benjamin: we want to try this case in the courtroom and not in the media. with respect to the controversy this, we want you to understand that has absolutely nothing to do with this case. and yet because of the pending criminal charges, it is required to appear before a congressional committee to mark -- if required to appear before a congressional committee tomorrow -- betty: again, that is martin shkreli outside a brooklyn courthouse. tech giants are shifting into high gear with its cloud strategy. talkedceo mark hurd about the futures of the businesses, moving to cloud. that is with cory johnson of "bloomberg west."

mark: over the course of the next five to 10 years, you will see perhaps a majority of i.t. shift to the cloud. for us, it is an opportunity. the fact that we have such a it will beise base, important to make those two world's work together. it's for us, building a whole new cloud stack capability from applications to platforms to cannot workre that without that premise base, it is a huge possibility for us. throw out the baby and the bathwater with whether it is database software or other things with software, why for newer companies -- think it is interesting that vendors say that, but if you talk to customers they will say something different.

they have to run their businesses sort of every day. do not get me wrong -- the bulk of the work is moving to the poem to offor a long time you will have to get applications that work together. the ability to share information, so i think it becomes key to manage most of our competitors purely on premise or, to your point, purely cloud. the fact that you can bridge those two worlds for the period of time that they have to coexist, a big opportunity and a big advantage for us. so much cheaper because they are charging by the hour or whatever. you guys have a different pricing strategy with what is going on. work inou make that terms of transitioning to a cheaper software looks like. not know that i would call it cheaper. it is more variable. shutting something off when you do not need it to get a variable

price -- i would not say that is cheaper, but it actually allows you to have somewhat better control of your costs. for us, we love the cloud world. we love the un-prem world. both business models are extremely attractive for us. we are about as agnostic as you can imagine. we as a company have invested in driving our clouds back, and that is what we're focused on, that transition to the cloud. betty: that was oracle ceo mark hurd speaking with cory johnson on "bloomberg west." still ahead, is it time to privatize the nation's air-traffic control network? we will speak with bill shuster. ♪

bloomberg'sfrom world headquarters in midtown, manhattan, you're watching bloomberg television. i'm betty liu. oil inventories are expected out

at any moment. we are another buildup in inventory for crude oil. 3.7 million is the estimate. let's go to julie hyman for more. julie: oil has been rising. definitely different than what we have seen recently for oil prices. i'm looking for the headlines to start coming out. 7.7 9oil inventories up million barrels. that is much higher than had been anticipated. gasoline up 5.9 4 million barrels. across the board, we are seeing higher numbers than had been anticipated. i'm going to call up a chart to show where we are. it is a smaller build than what we saw last week, but nonetheless, we now have four weeks in a row where we had inventories building week by

week in the crude oil market. this number is about twice what analysts had been anticipating. let's look at oil prices to see how this is playing out. to take a little bit of time for markets to digest it. 2% -- oilier was up earlier was up 2%, it is now .5%. stocks. back to we have been seeing so much interplay between stocks and oil. we had some negative earnings weighing on things today. date has seen this in norman of nearly 19% on top of already weak years. there is some optimism being expressed by analysts. whether they are right is

another question. for oilan forecast prices at the end of the year is $46 a barrel. here's the oil price. here, thise around red line. we are below those levels. here are stockpiles. you will start to see these come down. build weeknventory after week, that is not necessarily a signal that that is happening. take a look at oil stocks. exxon mobil not much changed following its drop after earnings yesterday. despite that big buildup, we are seeing oil come down, but not a huge move. julie: not a plunge. sometimes you see delayed reactions. we will see what happens. and if the dollar is down -- the dollar is also taking a leg

lower. betty: thank you, julie hyman. there could be big changes in store for the nation's air traffic control network. under a proposal out today, the faa with the overhaul. the job of guiding planes would be put in the hands of a new nonprofit. airline passengers would not be able to talk on their phones while on the air and some baggage fees would be refunded if the bags are not returned. joins us now from the hill. congressman, thank you for joining us. this is a pretty big revamp. how do you plan on getting this through congress? >> thank you for having me on this morning. we intend to introduce the aviation innovation reform and reauthorization act. it is a challenge, but this is a transformational bill. it will separate the regulatory

and safety function of the faa and leave it back in government where it belongs and taking out of government air traffic control and turning it into an independent nonprofit corporation. we believe this will allow them to deploy the technology for a 21st century management system of our aviation. this has been talked about for 30 years. the faa is incapable of getting this done. betty: have with this independent nonprofit corporation work exactly? -- how would this independent nonprofit corporation work exactly? >> it would look like a co-op. the users would be the governing body. it would be an outside corporation. they could go to the markets and borrow the money they need and deploy this technology that exists today. this is nothing new. 50 countries have done this. this is something we have been talking about for the last 20 years. we believe the time is right for it and we are taking on the

establishment. the bureaucratic establishment and some establishment in congress don't want to see this move forward. that point, some congressional leaders from both aisles say that -- it's not broken, congressman. why fix it? >> it is broken. betty: how? towe have not been able deploy a gps-based system, which will not only make error airways safer, but more efficient. betty: it's a very safe system already, though. >> we can make it safer, like other countries have proven. we are using 1940's, 1950's equipment to manage our airspace. we can do this much more efficiently and increase the airspace by 30%. use less fuel. reduce the congestion and delays. this is something that has been talked about for 20 years.

we are finally in a position to move this forward. betty: ok. >> it's going to be beneficial to the traveling public, to the commerce americans want to see move more efficiently. betty: there is one part of this bill that is puzzling to me about banning in-flight calls. what do you mean by that? when i go on an airplane, i don't get on my mobile phone and make phone calls during the flight. >> presently you don't. they are banned. in europe, people can talk on their phones. we just think in close quarters, we think it's better -- we say type, don't talk. use your text messaging when you are in the air for a more pleasant -- betty: what people do that already. >-- but people do that already. >> and we encourage that. speaking, generally

nobody does. why are you banning something that nobody does already? >> there are some that want to do that. we want to make sure that they don't. in europe, they do that. and there are some in this country that don't want to and we think it's a bad idea. betty: thank you. we will leave it there. congressman bill shuster joining us. where are we going next? ok. let's get to vonnie quinn on first word news. vonnie: the syria peace talks are collapsing as they barely get started. opposition groups are threatening to pull out unless russia and syria quit bombing rebel held areas. united nations mediators are overseeing the process and hoping for a nationwide truce. the french government is calling for a three-month extension of the country's state of emergency. it has been in effect since the deadly attacks in paris in november. the measure now requires

parliaments approval. end februaryled to 26. the mosquito behind the zika virus seems to operate like a missile of disease. in the past, the weather has played a key role in mosquito control. scientists say you cannot blame one thing for an outbreak and caution it is too early to link this to climate change or any single weather event. the governor of mission wants to use $30 million to help flint residents pay their water bills. the governor will offer details on the plan to help residents hit by the city's lead contaminated water. the aid would cover the portion utility bills for water.

betty: thank you, vonnie quinn. some breaking news over in germany. we have been in this negative interest rate environment in europe. the joomla! -- the german 2-year ote yield has dropped below -0.5% for the first time. european yields have gone lower and lower. we are seeing german 2-year note below 0.5%. we will get back to politics. republican congressman scott rigell is leaving the treacherous waters of d.c. for calm of hisd hometown in virginia. >> i think our leaders have to model where we want to go.

for me it was to give back 15%. betty: we will get back to that. congressman rigell is joining us next to talk about dysfunction in washington. ♪

betty: welcome back. this is bloomberg markets. back to that breaking news. the german 2-year note yield .5% for thelow -0 first time. a lot of the concerns about global growth have driven investors into safe haven assets. and german bonds have been one of them.

here, below -0.5%. republican congressman scott rigell of virginia says he will retire next january. when he took office, he pledged 15% of his salary to help pay down the national debt. it was a gesture that impressed warren buffett. that's when i caught up with both of them in omaha to talk about it. >> our leaders have to model where we want to go. for me it was to give back 15% and decline a range of benefits. will helpl that this elevate this topic of aligningonal reform, congressional benefits with what is commonly available in the private sector. betty: congressman scott rigell joining me now from the hill. congressman, that felt like so long ago that we were in omaha.

why are you leaving now? >> you have covered my public service from the beginning. thank you for that. i was coming up on the six-year mark and i really saw it as a pivot point. do i continue and try to become a committee chairman or take this exit ramp? i think about why i first ran for office. i felt like at the time we were headed in the wrong direction financially. spending was out of control. to some degree it still is. i pulled for six years. by the time i finished my term. iran for a year and a half. -- i ran for a year and a half. betty: are deficit has shrunk in the last several years. but it's about to balloon again given our tax and spending package. so why leave now? don't you feel like you still

have more work to do? >> i really consumed with our nation's fiscal trajectory. i will be before the budget committee speaking to this very issue. aevating the importance of complicated fiscal solution, i have advanced one that you can holding in your hand. it is the only one i know of that's an actual holding your hand document. tell them weg to need political courage at this hour. the american people can handle the truth about where we are financially. but we need men and women on both sides of the aisle to lead. i'm going to keep fighting for that both in office and when i transition out. betty: congressman, can we call a spade a space? -- a spade? are you just frustrated with your own party? >> i get that question a lot. i really ran to the fire back in 2009 when i was campaigning and

then took office in 2011. i want to share this. members can get some things done. i think i have made some degree of impact here. i think every member would always leave thinking there is more to do whatever they have been here 30 years or just two. for me, six years was the right term. it was not on the bucket list of life to serve. it will be seven and a half in total. i knew it was time to transition out. betty: you leave on an election year. and a republican party that some say is even more in disarray. do you believe donald trump is a threat to the gop? >> i don't think he's good to the gop -- good for the gop. i don't think he measures up in any way from a character standpoint to his policies. i'm not a fan of donald trump.

i am for marco rubio. but this isn't a commercial for him. they really troubles me to see where we are as a party and i just want the american people to slow down and think and make good decisions. betty: it looks like marco rubio is a distant third. what about senator ted cruz? do you think he's also bad for the gop? >> as i have watched him operate up here, his strategy execution, his ability to build a coalition is nonexistent as far as i can tell. cothink someone like mark: has the skill to navigate through these challenging times. we have threats around the world. we have our fiscal situation. we need strong leadership in every area. i don't think that is ted cruz. i certainly don't think it is donald trump. i think it is marco rubio. betty: before we go, as a

private citizen, are you going to lend any support to marco rubio? >> certainly i will do everything i can to help them. yeartransition out about a from now, i'm still going to fight for my country. i'm going to help fellow americans reject apathy and cynicism. this is what i think is a material threat to our country. do we believe that we can shape our future? i believe we can. i'm going to still fight for that. i'm going to not give up on our country. as i look around the world, we are the best thing going by far. our children's future is worth fighting for. betty: congressman, good to talk with you. followingn a pleasure your career through congress over the last six years and you still have some time left on the hill. congressman scott rigell of virginia. still ahead, yahoos the io marissa mayer. issue running out of time?

-- still ahead, yahoo! ceo marissa mayer. running out of time? ♪

betty: welcome back to bloomberg television. i'm betty liu. let's take a look at how u.s. markets are trading right now. abigail doolittle has more live from the nasdaq. yahoo! shares are plunging after the company ironically the fourth-quarter estimates. -- beat fourth-quarter estimates. it could be this last point is really dragging shares down as the company realizes they may be admitting defeat about the fact not -- that a turnaround is possible.

it seems unlikely that the stock is going to turn around anytime soon. betty: thank you so much, abigail doolittle. back to yahoo!. spoke withe ceo bloomberg west anchor emily chang about selling their core business. we view all three of the areas as being very complementary. in the one business we are focused on being the best version of yahoo! that we can be. recognizing the value that we have in the asset that we built here. in terms of different transactional pieces are aimed at separating the alibaba state, -- stake, we think they can be pursued in parallel. they are complementary as opposed to conflicting. we announced just yesterday that our report will be engaging on strategic puzzles and exploring

different strategic alternatives. where not commenting further on that process unless we reach an agreement. emily: your cfo told terrence that there have in -- barons that there have been offers for the company. however they privately expressed that to you and how have you responded? >> we not going to comment on that. those communications would stay private. emily: let's talk about your vision for yahoo! as it compares to the board. a lot has been made of the fact madechairman maynard webb the statement about strategic alternatives. there must be debated among board members about the future of yahoo!. charles schwab just left the board. do you feel there are current members who don't share your vision? >> i want to give a compliment to chuck.

terrific board member and a leader i have learned a lot from. overall, on the board, management and the board are very aligned. situation ishoo!'s complicated and that's obvious to everyone. particularly with some of the assets we have in both yahoo! japan as well as alibaba. i think that's one of the reasons you see that we need to have somewhat complicated solutions. we need to address how do we really see the most value we can from the operating business and then how do we realize the most value we can from the alibaba state and maximizing yahoo! japan. some have valued yahoo!'s business at zero or less than

nothing. how much do you think it is really worth? >> everyone models this differently. goal is to that my just make it worth the most -- it can possibly be worth. really managing costs well. doing the best we can to return shareholder value. shareholdersned to over $9 billion of shareholder value. we are trying to manage all those different pieces. i stay more focused in the tactics. my goal is to maximize it. emily: shares are already opening down this morning. what is the message that you think investors aren't getting? what is the message you are trying to send to star board?

are you prepared for a proxy fight? message is really that we have a strong future. we think that we built a great foundation in our end-users and audience. we feel we have a strong foundation of revenue to move forward that can carry us for the next few years. i'm very hopeful and confident in what yahoo! can achieve in terms of our operating business. and we feel that we have solid plans in terms of how we should approach the alibaba stake. ♪

11:00 in new york, 4:00 in london, and midnight in hong kong. good morning. i'm betty liu. welcome to the european close. mark barton is joining me live from london as we close of trade

in the next hour. we are now three for three in losses in europe. european stocks dropping for a third consecutive day. anxiety about corporate earnings overshadowing this rebound in the oil price. the european close starts right now. ♪ betty: we will take you from new york to london in the next hour. tell us more about the declines in europe. mark: the only positive thing i can say is we were down as much as 2.5% half an hour ago. the stoxx 600 is 1.6% lower. declining for a third consecutive day. this is one of the rare days where the stoxx 600 and oil are actually moving in oppose