from bloomberg's world headquarters in new york, i am david gura. stocks sliding in the u.s. technology shares taking the brunt of the beating as stocks like amazon and netflix are getting crushed. the january jobs report is not enough to lift the market. the unemployment rate at an eight-year low. hear what bill gross has to say about the economy. jessica alba's company is working with banks towards an ipo. with the market so rocky, will it fight enough buyers? julie hyman has the latest. it looks like all the major indexes are down. julie: with all the stronger than estimated jobs report, a great number even if it was not better on the nonfarm payrolls number. we have seen stocks fall in the wake of that. we have been seeing the chances for interest rate increase

priced in the market go higher. the nasdaq has been the laggard of the day down 30%. here is the nasdaq 100, down more than 3%. it has been accelerating and deepening its declines throughout the day. in terms of worst performers in that index, tesla is leading declines. cut its price target to the lowest on the street, $160. it is right around that level now. the analysts pointing out there are rising costs for the company for things like labor as well as r&d. also lower gasoline prices make it less attractive for customers to buy an electric vehicle. netflix also tumbling today. it is reflective of the performers from last year, underperforming this year. adobes systems down as well. we had negative results from a smaller software company putting pressure on those across the industry.

tesla has been underperforming. there was an interesting chart posted today. this is tesla versus volkswagen adr's, that is shares traded in the u.s. going back to september 18 when we first heard about the emissions scandal at the company, tesla shares have done even worse than vw since that time. they are down more than 30%. are down about 27%. interesting these concerns about tesla's production and demand. david: we have seen rates rise and now a reversal. julie: it has been a strange day in terms of that reaction. if you look at the 10-year, we did see an increase which is what you might expect. now they are coming down again. he does not seem there is a particular catalyst in the wake of that report. the other curious thing is the dollar has held up relatively well even as the 10-year yields

has started to come down. the dollar hanging onto its gain as we look at the bloomberg dollar index. i did want to point that out even if i don't have an exact answer as to why. it is a bit of a head scratcher. david: julie hyman, thank you so much. mark crumpton has more from our news desk. economic victory lap today for president obama who is praising the january employment report. the labor department reports the jobless rate fell to 4.9% last month,'s lowest level since 2008. the president told reporters at the white house the u.s. economy has come a long way since the recession. president obama: we should be proud of the progress we have made. we have recovered from the worst economic crisis since the 1930's, the worst in my lifetime and the lifetime of most of the people in this room. and we have done it faster, stronger, better, more durably than just about any other

advanced economy. mark: the january employment report showed employers added 151,000 jobs. columbia is reporting its first three deaths blamed on the zika virus and 100,000 people could be infected. brazil is the hardest hit. researchers found the active zika virus in saliva and urine and are now agreeing to send test samples to the united states. the prospect of a north korean missile test is prompting some airlines in asia to reroute flights today. japan and south korea are mobilizing ships and missiles in anticipation of the test. pyongyang says it plans to launch a satellite this month. the uss any test would violate long-standing united nations resolutions. a japanese volcano erupted overnight with a fiery blast. the eruption in southern japan caused lightning-light flashes and sent hot lava rolling down it slow. no injuries were reported.

67 people were killed and 2014 when a volcano in central japan erupted. officials say a nuclear plant about 30 miles away is operating normally. , in new hampshire marco rubio has moved into second place and is closing the gap with republican front-runner donald trump. according to a poll from cnn and is at 29%. senator rubio at 8% --18%. of the survey found about one third of likely republican voters in next week's primary have not decided which candidate to support. global news 24 hours a day powered by our 2400 journalists in more than 150 news boroughs around the world. i am mark crumpton. back to you. david: now that the bank of japan has adopted negative interest rates and the bank of england has decided to keep it at record lows, what will the decide reserve

to do next. what they about should do next if monetary policy fails to spur the economy. >> once monetary policy has been drained of its potency, and certainly we are seeing that now on a global basis, fiscal policy has to take up the slack. my doesn't that take place? because the mindset is anti-keynesian. look at what happens in europe with germany and their balanced budget regulation that is enforcing the entire continent. look at the united states and i.m.f. in terms of its capacity to lend money as long as these emerging companies -- countries balance their budget. if you're going to be anti-keynesian, if you are not going to spend money on the fiscal side, monetary policy cannot do the job. janet yellen and mario draghi and others, they

have complained about it for a long time. it is a limited task. tom: you have to invest in it. your shareholders have to live in the financial repercussion we are in. if we are not going to stimulate as others say we should, what is the solution to break ourselves out of this low return lethargy we are in? bill gross: to me, that is the solution. in terms of monetary policy, central banks continue to pursue the theology that the lower interest rates go, the more you can create a wealth effect that eventually flows into the overall economy. to be fair to some extent, that has been true. europe is above the line. japan is above the line. the u.s. has averaged 2%, but certainly anemic.

lowering interest rates into negative territory with no limit as mario draghi has suggested, to me that is almost a negative aspect at this point in terms of its effects on the real economy. tom: to touch on where we are going in the negative rate, we are anytime of completely unorthodox economy and investment. how do you invest given negative rate monetary economics? logicross: i think the does not work all the time because interest rates are volatile and stock prices go up and down. but it central bankers are true to their outage of being gradual -- adage of being gradual in any direction and not surprising markets, what an investor can do is assume that and sell that

assumption in the form of volatility. david: that was bill gross speaking with tom crean -- tom keene and michael mckee earlier today. coming up in the next 20 minutes, bad news for banks. why more wealthy banks are shunning big banks for robo investors. company algorithms may be misfiring as loan write-offs top forecasts. oil heading lower today for its first weekly drop in three weeks. my guest from morgan stanley says the trend is likely to continue. ♪

david: welcome back to

"bloomberg markets." i want to look at the nasdaq. the nasdaq down 125 points. the dow and s&p are also down. time for the bloomberg business flash. it looks like mentors are back in the market to buy. starter homes are more expensive but financing does not cost as much. f.h.a. loans became cheap when insurance premiums were cut last year. it accounted for 22% of all loan originations in december, up 17% from a year ago. a chinese investor group is got a foothold in the highly competitive u.s. equity market. the chicago stock exchange has agreed to sell itself to the enterprise group. we don't know the details of the deal. the chicago exchange handles about .5% of u.s. stock trading. apple in an attempt to encourage upgrades says it will take busted models as trade-ins for newer ones. credits only fit

has an in text screen and working buttons and applies only to iphone 5 and later models. let's get back to our markets desk where julie hyman has a look at some company movers. julie: media stocks are suffering today. gate start with lions which came out with results that missed estimates. the company saying third-quarter revenue was about 12% below what analysts had been anticipating. the company had its latest "hunger games" release would did not sell as early as the early releases in the series. lions gate says it does plan to start talks on a possible combination, something we reported as well. starz is getting dragged down with lions gate. we also had earnings from news corp. after the close yesterday. the second quarter earnings missing estimates on declining ad sales. that is personally -- partially because of the u.s. dollar. media companies have had a rough

road. news corp. down 9% if you look at other media stocks, we are seeing similar declines for them as well. viacom also has been declining in the wake of its announcement that the c.e.o. would become the chairman as well. 21st century fox, disney, cbs on the list. i built a chart looking at the media stocks versus the s&p 500. the worst performer i have been looking at is disney. i chose disney because it's results in august of last year are what sparked the selloff in many of these media stocks. there is a lot of concern over people cutting the cord, how much of their content -- how much is the content worth. the shares are down by about 23% or so. the s&p 500 media index is down 15%. outpacing the 10% pullback in the s&p 500. there was a recouping of losses

at one point last winter. and now, they have gone down once again. this is sort of a continuation of the pain a lot of the media stocks have been feeling. david: thank you so much, julie hyman. it has been a quiet start to the year for the ipo market. one company is coming out with plans to go public. the honest company started by actress jessica alba and reportedly valued at $1.5 billion is working on an initial public offering. alex barinka is covering the story. the c.e.o. has not been shy about talking about the hopes the company will go public. alex: we have heard him talking about it for a couple of years. it seems this is kind of in the books for them. a lot of these companies want to be the big public companies one day. now it is seems -- now it seems they are taking steps. it has been quiet and tumultuous in terms of ipo's this year. david: it was not a great last year. this year does not look much

better. alex: we have two small biotech listings about $100 billion each this week. you have not been any really big names going yet. across the street, i'm hearing companies are still getting ready. they are looking for that window that might come in march or april. these ipo processes can take six months from starting these conversations or longer until you list. they have some time. people are waiting for equity markets to calm down. we have seen the vix consistently above 20, the nervousness gauge. 20 almoste week above every single week of the year this year -- it ended the week about 20 oh most every single week of the year this week. they are still looking for the summer-spring window. honest could be one of the bigger names. david: volatility stocks near session talk about why the timing seems to be right.

talk about what this company has become in a short time. alex: they have raised about $229. they have a lot of crossover investors. these are investors that also invest in public companies getting an early. they sell organic, natural. they started with baby goods. she has expanded that into cosmetics. they sell those things print they also have subscription revenue coming in from selling parents diapers that show up at the door on a timely basis. they like the subscription revenue. it is very study. this could be a company that would comp to the likes of amazon that investors could see a growth story for. jessica alba and team have said we will expand outside of baby goods. that will be the opportunity for the ipo. david: thanks, alex barinka.

from one possible future investment to who might be advising on these investments in the future, we are talking about robo advisors. a trend making banks nervous. where talking about real money. are estimatedts to a broom to $50 billion. a definitional question. we talk about robo advisors. what do they do exactly? >> they use computer algorithms to help investors allocate their portfolios. you fill out a questionnaire about your risk tolerance. they put you in a portfolio that corresponds to your risk tolerance. they have been gaining speed among young investors, millennials who are comfortable with computers and sharing information. banks are noting wealthier investors are trying them out, too. david: what is attractive about them? the fees are lower? peggy: the way they make it work

and make fees go down is to put you in a portfolio of e.t.f.'s and a few index funds. that is how they execute it. they are much cheaper than the 1% financial advisors charge to allocate you into different types of managed mutual funds. another thing in terms of performance, the data is very scant in terms of whether they are performing well. they have not been tested in a down market like we've started to see this year. there is a real question as to how they will perform over time and whether investors will be happy. david: are we at a nascent stage? our people beginning to experiment with them? can we be reasonably confident they will do well? peggy: we have seen a flight of capital go into them. we've seen big money managers try different variations. last year, vanguard entered the market with a hybrid. they connect you with a financial advisor. from june to december last year, they attracted $21 billion of new assets into that hybrid

program. that is a lot of money. david: talk about the tricking us of the limited -- trickinne ss of the bank space. peggy: banks are developing and could bes coming out with robo type offerings this year. they still believe clients will want a human person to pick up the phone, especially when markets get volatile. but they understand more investors are looking for slick technology. they basically challenged the price of advice. they have put pressure on advisors to say i'm giving you more than the robo, and this is why i am charging you more and this is what i'm giving you in addition to what they can give you. david: thank you so much, peggy collins. a favorite is taking a fall. we are looking at how the lending club's model may have caused a misstep.

the nasdaq down about 3.5%. more "bloomberg markets" coming up after the break. ♪

david: welcome back to "bloomberg markets." lending club is taking a tumble, falling on news its model may have kinks. recommend investors sell the stock after pointing out problems with the company's algorithms. explain how important these algorithms are two lending club's line of business. >> it is just about everything. parlors go to its website. they fill out the couple of pieces of information and lending club assigned a credit rate to them. they verify some documents and information. go-betweenre is the

investors who want to fund these borrowers. it is all predicated on them being able to accurately assess someone's credit worthiness and at what interest rate they should be charged. david: how high are the write-off rates? >> it is interesting. we don't have precise data. this was all part of a slide and presentation lending club put up on its website. the expectation they had three certain cohort of borrowers was basically that they would be for a five-your loan around the 4% range and they were seeing actual results in the seven-8% range. david: you talked to the company and their response was moving on, nothing to see. >> their argument is this is part of the normal course of business. they are always tweaking their algorithms. they say in some cases, they underprice loans and in some case they overpriced loans.

david: i have to imagine what we have seen with the fed has also played into the way this company has adjusted rates. argument isub's that pricing is dynamic. you have seen this over the years. they have tweaked their interest rates quite a bit. they did that in december after the fed raised rates. they also did a rate change last week which took a lot of people by surprise because there were a lot of credit markets where rates were going down. lendingclub was increasing them, largely on their lower quality borrowers. david: how is what we have seen here compare to what we have seen at competitors? how competitive is the field? >> it is quite competitive. lendingclub was one of the earliest and they are the biggest. it is a little hard to tell. we have not seen much data from competitors. some are private so we don't get the data. ist i have heard anecdotally

the problems were fairly pronounced at lendingclub. david: how does lendingclub make money? >> lendingclub makes money primarily by originating and servicing these loans. they charge fees for that. the worry is maybe they will lose some money on the servicing fees. but longer-term, they are 100% dependent on investors by -- lining up to buy these loans. if there is a decrease in appetite for loans, it is not good for the company. david: thank you, noah. oil prices are not getting higher anytime soon according to morgan stanley. we will hear the firm make the case for this bearish call next. ♪

david: from bloomberg headquarters in new york, this is bloomberg markets big breaking news in the markets, selling off big-time.

looking at the s&p 500, down 2%. dow down 1.5%. now, let's start with the headlines. .ark crumpton has more mark: president obama says the 4.9% unemployment rate is prove his economic policies have succeeded. american workers are starting to see progress. >> this is finally beginning to translate into bigger paychecks. at theire grown fastest rate since the crisis and policies are designed to give workers even more leverage to earn raises and promotions. the january employment report showed that employers added 151,000 jobs. the flint michigan water

contamination crisis will be the subject of a congressional hearing in march. the house energy and commerce committee will hear testimony on the matter with the panel plus ranking member -- panel plus 's ranking member sing the water was not properly treated, resulting in high levels of lead. international health officials were frustrated at brazil's refusal to share viral samples. material will be shipped to the cdc. white is being remembered as a groundbreaking decision whose music remains the soundtrack for many people's lives. he was the creative force behind heth, wind and fire

suffered from parkinson's disease for more than a decade. fire.th, wind and david: commodity markets closed in new york. let's take a look at the biggest movers. it is finally safe to jump back into gold. after touching a two-month high. choppy trading today for brent, unchanged for the day. strategists looking for a bottom, morgan stanley has a bearish corporate prices will not begin to rebalance until 2017. used to be a supply problem morphing into a demand problem that will suffocate any meaningful rise in prices. let's bring up the call. it is a bearish call.

what are you looking for h ere? >> when you think about how oil trades, there are several different inflection points to think about in terms of what will actually drive prices. as long as you are oversupplied, oil depends on where the u.s. dollar goes and using that the past couple of weeks with data coming on dollar down days and oil rallies. resilient inzingly this downturn. wants somebody else to do the hard work. we understood that and we can see when that might actually play out. is not going to retrench, windows demand catch up? -- when does a demand catch up? forecast,s is your you are looking ahead to the first and second quarter of 2017.

adam: correct. we see oversupply persisting until then. as long as that is the case, where the dollar goes oil goes. important than the prices the duration of the cycle. when you look at past cycles, is this one somehow different? adam: somewhat different. look at the last 30 years, most downward turns -- opec and others would respond. the last time we had a major supply driven downturn was 1986. that ushered in a decade of low prices. you have a supply driven downturn and because there's no cartel to fix this and economics must drive it, these things take a very long time. david: what is rebalancing look like? adam: is one of the key

questions. when do we rebalance the moment only up the inventory overhang and when did we get producer hedging? the rebalancing is windows demand exceeds supply. -- when does demand exceed supply did you just a start the recovery when he rebalance. we have to go through a long period of drawing down this overbloated inventory in the world. if you go back to 2009, you can see, we went from oversupply to undersupply quickly thanks to opec drawing one million barrels a day. it took a year for prices to go to $100. david: we will face that again. you mentioned hedging. alix steel was particularly struck by something you wrote

about hedging. these producers hedged production last year. have to keep producing going forward. there's two problems with this. one is management incentive. economics that always drive behavior. the hedging aspect is something that has been there for a long time since the shell revolution. edge to makeh your creditors happy. get,pportunity they can they will try to hedge and lock-i in a price. what can we enforce and supply resilience? forives an opportunity producers to hedge and there is a nine-month lag between that activity and that decision and supply growth.

we are sing nine months from the spring or summer. david: what are the ramifications for this across asset classes? adam: we worked with a lot of our different teams. good -- it does put balance sheet distress. assetwe looked across classes, is this problematic for hield? -- high-yield? it causes some issues in the banking sector. more issues in the regional banks. issue that worries me is that low oil may not actually be good for the global economy. the ripple effect throughout other industries, whether it's industrials were our trading partners who are now slowing down, we're seeing signs that the consumer is slowing down.

it has long-run implications across the industries. david: thank you so much. now, you look at the markets before we had to break. the nasdaq still down 3.3%. the dow down 1.5%. the tech heavy nasdaq leading the declines. here is a live shot of san francisco. a lot of events for super bowl 50. ♪

david: welcome back to bloomberg are gettingks crushed on this friday, especially the nasdaq. abigail: we've been looking at some selloff here at the nasdaq all day. when that has accelerated and intensified as the day has gone on. the main reason for the outpacing of the selling here is biotech. the sector is down more than the nasdaq itself. biotech market only gets worse, down 35% from the record peak last year. regeneron, concerns that rising drug prices could spark new activism in congress. something few investors want to be involved with. been whether or not this would bleed into the nasdaq overall. the nasdaq is down more than 16% from last year plus record peak. peak.cordar upon

the big technology names including amazon, facebook, microsoft, alphabets and apple all down in sympathy with linkedin. the question about whether or not we are about to have a macro momentum stock bubble pop. amazon and netflix were down more than 25% from the record peaks last year. perhaps a tale of what is to come for technology here at the nasdaq. we will continue to keep a watch on this all afternoon. hillary clinton and bernie sanders win after each other on stage at last night's democratic debate in new hampshire. they thought over who is more progressive and took aim at wall street. tomorrow night, all eyes on republicans. let's go to manchester.

margaret is there. talk to me a bit about last night's debate. there was a townhall earlier in the week. where the focus had been on republicans in the hillary clinton turned her attention toward bernie sanders. margaret: the townhall they ,eferenced earlier this week both candidates came across as human beings, they were humanized, they kept emphasizing how much they liked each other. under the surface, this was bound to come to a head. a lot of increasing rhetoric, sanders questioning clinton's credentials. we finally saw the anger, motions directed at one another. absolutely galvanized this debate with you have to blow

up the system to fix it and clinton saying you have to work within the system to change it. while rejecting the notion that she is establishment. a lot of fireworks here. a real focus of the criticism. sanders was turning toward clinton and clinton trying to turn that back to wall street while saying it is ok for her to take campaign contributions. david: we had some snow here today in new york. you had some up there as well. margaret: donald trump came into new hampshire very strong in the polls. lates campaigning until last night and went back to new york and figured he could slip back into new hampshire unnoticed. -- event was is no doubt snowed out.

the streets are slippery. through what the candidates have planned for the weekend. hillary clinton will leave new hampshire for a few hours. >> she is going to flint, michigan. the focus of this controversy over the tainted water. she is going there in part because she makes it an issue and she is looking ahead to where the urban boat and minority vote and black supporters will be increasingly important to her prospects. super tuesday states, bernie sanders and his campaign are talking about how he is working hard to close that gap to make sure black and latino voters get to know him better. the clinton campaign today denying their trip to flint has anything to do with trying to deflect that. sanders will be on

saturday night live. both of them having some national attention directed their way as we can. -- this weekend. david: don't miss mark halperin and john heilemann tonight. they will talk to judd gregg starting at 5:00 tonight eastern time. stocks selling off big time today. julie: not just today, but this week, we have been seeing declines. i want to start with the recent tally for stocks here. you see the intraday numbers for some stocks. stocks decline for the first week in three. the biggest losses we are seeing today, they are some eye-popping losses. stocks down 49% after the company reported revenue coming in short of estimates.

lions gate falling after its numbers were also short of estimates, like linkedin. a lot of double-digit declines. that is casting a shadow over a wide swath of stocks. everything having to do with software falling today. we have earnings from other companies causing big declines. athena health with numbers that missed estimates. the insurance company down 20%. traditional insurance operations entirely while it focuses on its long-term care unit. belowbrand coming in estimates. there is this macro view about the job support that makes it more likely for rates to go up

and that is negative potentially for stocks. you have these earnings reports not helping matters. david: thank you so much. coming up, we are talking recession proofing as stocks start a weak february. ♪

david: welcome back to bloomberg markets we are following the markets closely this afternoon. still selling off big time. the nasdaq down just over 3%. 2%.s&p 500 down almost the dow jones down 1.5%. on a day when we got jobs numbers for the month of january. time for the bloomberg business/ . sh.bloomberg business fla

china has surpassed canada as the u.s. plus biggest trading partner. the u.s. trade deficit rose in december as american exports fell for the third straight month. biggest trading partner. fixed barclayso by spinning off its investment bank and selling its africa unit. that is according to an open letter. barclays traded at 40% less. bridgestone recalling more than 36,000 heavy truck tires in the u.s. and canada. the tread can separate from the body and cause tires to fail. bridgestone/firestone will replace the tires at no cost owners. just as global investors are trying to regain their footing, reinforcesturbulence the view that the risk of china led global recession is rising. 2015,the last quarter of

if you correct the chinese data, you get about 2% global growth. that is well below capacity. that is as close to recession as you can get. david: is it time for investors to start thinking about how to recession proof their portfolios? let's start about talking about what recession proof stocks are. david: you were looking at the shares of companies whose business does not tend to fluctuate that much as the economy swings. the senses stocks, telephone companies, utilities, health care and consumer staples. or drugs and food. david: companies who regularly pay a dividend. david: that is part of it, usually. look at phone companies and

utilities, they tend to have the highest dividends. that is part of your recession proofing. david: i imagine you want to look for companies insulated from the global markets. that: insulated in a sense maybe they are not as affected by the moves in the dollar. what it really comes down to is focusing on companies producing things people need regardless of whether there is a boom or bust. youd: listeners know that are the man behind the chart of the day. i pulled up your chart of the day. not all recession proof u.s. stocks are equal. david: it is something based on a report of the chief u.s. equity strategist at bank of america merrill lynch put out today. she looked at the drugs versus the food. the health care index relative to the s&p 500 consumer staples

index. specifically in terms of their value relative to projected earnings for the company. forward price-earnings. you are talking about health care being the cheapest in relative terms relative to consumer staples in decades. the chart shows you two decades. it has been quite some time since health care was a relative bargain like this. david: i will ask you to step back here, the nasdaq down by more than 3%. what has caused all of this distress? david: you can point to a couple of companies in particular whose results were distressing. linkedin very familiar because they are out there with their professional networking website. the forecasts from the company not living up to what analysts were looking for.

there is a country called tableau software. they help companies analyze the mounds of data that poor through their computers. -- pour through their computers. licensing revenue did not measure up to what analysts were looking for. you are seeing both stocks down more than 40%. tableau dragging down all kinds of big companies with it. workday, just and to name two. you have a dollar that is rebounding, metals are generally priced two dollars around the world so they get cheaper for all kinds of buyers. the mining companies, if this holds up, stand to benefit from that. we got this job support,

could be painted as positive or negative. how did the markets react? david: you saw the stoxx tail off. what it means for companies -- think about it. average hourly earnings growing more than projected last month. that raises the issue of companies having to pay more and more the higher wages, concern for profit margin. you can understand why stocks tailed off. david: moore bloomberg markets coming up after the break. ♪

is 3:00 p.m. in new york, 8:00 p.m. in london, and 2:00

a.m. in hong kong. welcome to bloomberg markets. from bloomberg world headquarters in new york, good afternoon. quinn.nnie stocks are poised to end the week in the red. the nasdaq off more than 3%. is it a strengthening dollar? what about monetary policy -- does the jobs report put the case for multiple increases this year back on the table? investors might think so. shares rally. after earnings0% reports. one hour before the close of trading for the day and away, and stocks are falling. let's head to the markets desk, where julie hyman has the latest. julie: we are seeing losses accelerate into the closing bell.