from bloomberg world headquarters in new york, good afternoon. here is what we are watching at this hour. stocks are fluctuating between gains and loss. after the three-day rally, the strongest in august. crude oil also giving out gains. walmart, one of the big drags on the dow jones industrial today at your forecasting disappoints. the company sees slowing growth in retail sales despite spending billions to take on amazon.com. and tech stocks have been bouncing back in the past week that are still down for the year. names, amazon, facebook, and netflix. an hour from the close today,

let's head to the markets where julie hyman has the latest. julie: the direction is downward. , wer the three-day rally saw them gain more than 5%. it is not down for the dow, bouncing around between gains and losses, slightly higher. the nasdaq is the underperformer of the day. some of those stocks are notably selling off. if you look at the s&p over the course of the day, it has in a it has been for all major averages. -- 1/10dow, right down of 1%. there has been little bit of ounce the around. we have got the sectors on the move to the interest rate groups are doing better today. telecom, the groups that tend to rise when interest rates are going down. energy shares are the worst financials selloff.

if the last three days were a flip-flop of the script we had seen this year thus far, we are now flipping back to what we're -- where we have been for most of the year. and the impression on energy stocks, it is still positive. big -- downward. inventories actually trading at the highest for the inventory numbers. we have seen oil has, the highs sharply. gold prices talking about this year now on the rise. up by 2%. and finally, looking at rates doing well today, we see rates .all 1.7% after a three-day lift, it is a reversion from what we have seen

for most of 2016. thank you. let's get a look at the headlines. ramy: thank you. first up, a war of words has erupted between pope francis and donald trump here at the pope told reporters that trump is not christian. pope francis said christians told bridges and not walls and speaking in south carolina today, trump fired back. >> i will leave that up to your judgment. of makingonly thinks a wall again again and not building bridges, is not a christian. >> trump wasted little time responding via twitter. vice president joe biden talked about what his boss will look

for in a new supreme court justice to replace antonin scalia up. president obama is looking to nominate someone who had report from republicans. the world bank said the spread of zika virus will have a modest .rag the lenders making $150 million available to assist in the fight against- the virus. rare birth defects in brazil. a broken well, that has been spewing natural gas for several months. as much as $300 million, and that does not include potential fines. thousands of residents have been forced to leave their homes. global news 24 hours a day powered by more the 150 news bureaus around the world. back to you. carol: thank you.

more now on the markets and the challenges facing the u.s. economy. earlier, we discuss the outlook for inflation. >> we're in a new world where the challenge is not excessive inflation. the challenge is getting inflation up to 2%. markets are saying that will not happen in any major place over the next decade. >> joining us now from boston is the director of global macro -- good to have you here with us. inflation, how does that factor into your view of the market. inflation, of course, and that is one of the major problems. it happens when you have too much debt into little growth. this is why, as mr. summers said earlier, you look at the inflation breaking, there is no inflation on the horizon and it

seems unrealistic how little the inflation is priced in the market area there is not enough growth and too much debt. do you agree with larry summers assessment we will not see inflation in the next decade? >> who knows. what he is referring to is the pricing breaks even. forward with what the fed tends to look at, something like 201.3%. inflation expectations, the lowest since the financial crisis. that is a snapshot in time. it does not mean that will not reprice that he year from now at 2%. i would caution against looking too far into the future because who knows what inflation will do years from now. the market is not expecting any. you sayavid: --carol:

we need to have three pillars to have a healthy stock market and you talk about earnings and growth and reasonable valuation. we are not doing well on that front. >> we are 143. trailing around 16. that is pretty fair for where earnings are, kind of in the middle of the range historically. the other two pillars are earnings growth and the liquidity environment. liquidityight environment because the dollar is up and china is trying to manage this in the yuan and that causes global tightening in order to do that. the fed is looking to normalize rates. it is less supportive a liquidity environment that used to be.

growth has come down as well. at first, it was just an energy story. though overall earnings were down. over the last five or six weeks, earnings expectations for the down by four or five percentage points. we are 143 right now. paying a federal reserve close attention to what the markets are saying. out thed to be pushing fed tightening cycle probably as long as it needs to with inflation expectations this low. that is very much a silver -- lining. carol: they have come down dramatically in terms of what the fed may do.

>> i think there are two scenarios. one is that the fed should normalize rates at some point over sometime through some level, which nobody really knows, including the fed. pacing,matter of the how long it takes and how far it goes. >> that has been the question for how many we -- how many years already? but with 4.9% unemployment, the fed and modelss to look at these is saying it is more now the time than it has been in the past. to its credit, the fed is listening to what the markets are same because they could just as easily those economic models onto the market and that would be a policy error if the market is not ready for them. if the fed is willing to delay the cycle, because we have a files it -- policy diversions,

as long as the fed is flexible path, i think we are in good shape. there is a more dire scenario that says it is not a question of whether the fed should tighten now or later. it is a question of whether the fed should tighten or ease. the hurdle for the fed to switch around and start easing, not even mentioning it has little ammo to do that, i think that is still very high. i do not think the fed is anywhere near coming to that type of conclusion. that is the bigger debate and when we saw the markets coming few weeks, iast think the markets were pricing that kind of risk. they are data dependent. we are going to run. thank you. coming up in the next 20 minutes of bloomberg markets, is the presidential election helping wall street volatility? we will hear from oaktree's howard mark who says trump and

company are not helping. walmart sales following 1% after a strong dollar and higher wages pulls out profit. what can the largest retailer due to jumpstart growth? stick around. take a look at two major movers in the dow. we are talking about walmart and ibm heading in opposite directions today. we are back in a moment. ♪

carol: welcome back. we are 14 minutes away from the closing beltre. let's look at the s&p 500 bouncing around off the highs and lows of the session. compress and telecom

of the market down across the board. let's look at the dow jones industrial average mirroring what we are seeing in terms of the s&p 500, the dow off about 23 points. up toward the nasdaq. that average down .8%. decline.37 points the nasdaq at 4497. it is time for a look at some of the biggest business stories in the news right now. exitroup is planning to its retail banking operations in argentina according to a person familiar with the matter. city has maintained operations in the companies for more than one century. it has been scaling back its global footprint to cut costs and boost profit. brazil pulses economy shrank more than 4% last year according press, whichated sites the nation'central-bank, worst performances it was created back in 2003. brazil experiencing its deepest

recession since the 1930's. and canceling a bond offering less than two days after the securities were priced. it comes in the wake of a decision to downgrade the nation''s debt. $60. to raise 700 declines after the announcement. market volatility has quieted down in the past week. a little bit of volatility today. stocks have made gains. earlier, bloomberg was joined to talk about volatility. >> fits of volatility were normal. i wrote a memo recently been talked about the airline pilot who described his job as hours of boredom to just punch weighted by moments of terror. of ornament interrupted

by moments of terror, that is how you describe investor life? >> that is right. last six weeks in the stock market, those moments of terror. the reasons are not quite normal. we have one off. people have gotten used to economic cycles, recession, recovery, etc., but we have cosmic issues that people do not have experience with. terrorism, rates, just for example. >> is the fear exaggerated or punctuated i the presidential election? when you see donald trump up there, dare i say putting fear into the u.s. economy, speaking in such declarative statements about the disaster situation you're in, does that affect the market? >> i cannot tell you

definitively because i do not have research, but i would guess so. they are scaring people. says the mexicans are shipped -- killing us, japanese are killing us, but we are going to get the jobs back. people tend to believe him. equallyompete to be fearful and dramatic. it is hard for them to compete and say the latest information from the commerce department says -- they do not want to hear that. >> that is more social volatility. the 30 day volatility for oil has written into a seven-year high. you can argue that would have

happened with or without donald trump's insane hairdo? >> i'm sure that is true. i doubt he had much to do with the price of oil. we are just talking about mood. >> but this has a lot to do with moments of terror in the equity markets. >> yes, but it tries me a little listening to i was what you said before. oil prices up and stocks are doing better. why? matt: asset classes get tightly correlated in times of fear? >> but oil is not an asset classes. i believe higher prices of oil are bad for our economy on balance and bad for japan and europe and all the places that do not make it. high oil prices are not

necessarily good for us. i think the fact stock prices go up really proves most will do not know how these things work. matt: do you think etf's are one of the recent popularity, one of the reasons that correlation get stronger? less i think you are probably right because etf's for some people are a way for you to gamble. if most people wanted to take a position on oil, it would have been challenging. today, it is very easy. they can get in and out and they have a pure play. most other companies had other businesses. is a component. all the derivatives trading has basically made it easier to bet

on short-term speculation than it was in the past. i would house -- that was howard marks on bloomberg . still ahead, a look at how the options markets are trading. a lot of energy stories at play. we are back in a moment. ♪

carol: welcome back. stocks are about seen around today but going lower in the past 10 minutes or so. it is time now for the options inside with julie hyman. julie: joining me is dan, managing director, joining us from chicago. so dan, as i was talking about earlier in the market up date, it feels today is -- what we have seen for the year.

the same playbook we have seen thus far in 2016. >> it is possible but it is interesting. it is a little bit different from a short-term perspective when you look at what is going on in the volatility space. interesting there is a little bit of a foundation or at least a holding had earned for the last days. carol: what are some of the signs you are looking for the market that maybe we will not see a resumption? >> a couple of anxiety looking market is attained in the last three days and second of is still als like it little bit higher short-term. we are buying squalls as opposed to selling, it does feel like

needs to beit neutralized. >> one of the other things we ise been talking about today the correlations, that we see oil in stocks moving so much in tandem and now we're seeing a decoupling of that. is that a good sign to you? >> from a short-term perspective, yes, it could be a key to what some of these options are. in the market has been lower, the correlations are not so much just growing one way or another. short-term, that is offering a reprieve here. that wille if persist. a foundation around 30, having the market took a cue from that here the ecb looks like they will move significantly and that is also serving us a short-term buffer. you are revisiting

something we talked about a couple of months ago. what hacker you taking today? >> related the 205 foot spread, that was the march for its spread and i'm looking to roll out and rolled down that protection here because we have got a nice little bounce and i think over the next couple of slow, 182. test go i'm looking at the first spread in april. for protective positioning the possibility of a pullback in the next couple of months. we weret does seem as talking about that if there is more upside here, the trade is higher, as you put it, and there is going to be a short-term event. >> i think there is heavy resistance overhead. i think the 195 level is heavy resistance and i think there are still more hurdles for the

market to contend with in the interim. those correlations going away from each other, serving as a buffer. i think the downside is a higher probability now. still ahead, walmart limning the strong dollar. work in the retail giant finds next source of growth? that is coming up next on bloomberg market. ♪

carol: live, you are watching bloomberg markets. i'm carol massar. let's start with a look at the headlines.

up, donald trump says he is proud to be christian. he made the comments today in response to comments from pope francis. is pope told reporters he not christian if you wants to build a wall on the u.s. mexican border. pope francis as christians build bridges and not walls. trump accused the mexican government of using -- as a pawn. take a listen. poperump: they tell the that things about me because i am very strong against illegal immigration and we have got to stop it. they tell the pope and he said something negative ramy. it will be all around the world. who cares? i don't care. i don't care. it is disgraceful to question a person's faith. released anton

emotional advertisement two days before the caucuses, featuring the former secretary of state comforting a 10 euro girl worried about her parents being deported. a narrowing race between clinton and rival bernie sanders. their outreach to latinos is key to their strategy in the state. president obama is making a historic trip to cuba, saying that smart, he will travel to cuba to improve the lives of the cuban people to more than a year ago, the president and the cuban president did agree to normalize relations. the company have been estranged for more than half a century. approved moreouse than $30 million to help pay for .esidents water bills the lawmakers unanimously okayed the measure, which now goes to the senate where it is expected to pass. it will go to rick snyder for final approval.

the california home of the aother of syed farook is -- navy veteran. abc news reports the fbi has not ruled out the possibility of a third attacker. news 24 hours a day powered by our 2400 journalists. the u.s. stock market closes in about 30 minutes or the nasdaq on pace to have its three-day winning streak snapped. abigail doolittle is there to what is driving the benchmark into the red? you have seen pressure. >> you're right about that. the three-day rally, unless there is a rally, it appears there will be behind big tex, facebook, itetic, turned down quickly. down as 1% just minutes ago.

one of the biggest percentage losers is jack-in-the-box. shares plunged after the company missed first-quarter earnings and sales estimates, by about 10% or the management gave week like thend it looks mcdonald's all-day breakfast is one of the problems for jack-in-the-box. there is one analyst defending the stock saying the weakness should be bought. the stock appears to be positioned variously, down 30% over the last 12 months, now over the buying support of lows, suggesting the weakness may continue in jack-in-the-box. on the other side, we have nvidia shares up. the company put up another strong quarter despite weakness and fears around china slowdown and fears of the strength was really given via the segment that allowed for a 7% sales beat. the company gave a good guide for the first quarter per all of this has nvidia bullishly back

above its three major moving averages, suggesting buying average may continue. irol: that is a gainer and want to go back to the losers. i'm talking about dish, another earnings related stock move. what is going on? >> on the year, down 25%, the nasdaq.ing the big losses are on the company's first quarter. a missed estimates. what is really concerning to investors is the fact the company continues to lose tv subscribers and it appears the burden is on charlie ergen to come up with a plan well above the satellite tv business and one that will capitalize the company passes vast airways access. carol: we will talk a little bit duringout walmart today the holiday quarter. -- largest retailer also revenue forecasts for year citing continuous strength for

the dollar. reporter froml bloomberg intelligence. shannon, kick it off with you. >> you mentioned lowering their guidance in october. a constant currency basis. i will -- they came out today and said, we through currency and because we live in a world that exchanges currency. it will be flat. they come out and he missed a big trend. shannon: maybe analysts were notc factoring and how much it would affect currency. in the u.s., expectations were already pretty low for what name store sales would be and became a little lower than that. it is just expectations that they are missing. there will not be a lot of growth. carol: we know walmart has been

troubled over the last year and the share price showed it. shares in the u.s. are trending lower. what is the fix for the company? iswhat we are knowledge yet this year will be weak and we knew that in october when they tovided the guidance cuts 2016 m in 2017. i think if you look past 2017, and things continue to remain low, another two.'s, if you're looking at just this year, we have a week outlook. that is not anything you would expect from walmart. you would expect better results. in terms of what we do to give investments time. they have to change how they were doing business question mark question is, if you are an

shares fell and what we're seeing today, maybe there are not many places to put your a number of but companies out there are growing, amazon maybe? we will see target earnings next week. other places are out there where we are seeing some growth. sharet has been doing buybacks. if you're looking for places to put your money, a lot of choices are out there. the stock had a run-up this year as a defensive move. todayalysts i talked with said maybe there is a reality check, that things are not going great there. >> you look at the retail industry overall, there are players doing well. is alone.that walmart it is just that they are so big. >> most of what you're talking about, you saw a lot of weakness coming and that is

target does not have international exposure. or a tjlike walmart maxx, they will still have that pressure and that will not going away. evenwas going to mention if you do not have international's bulger come you still have inflation, which will more talked about not only in and meet, but also oil prices coming down and shipping costs coming down. even in the u.s., -- they have this other inflation. collectively see from walmart? what else should we see from the company? want to see really their e-commerce platform improve p are we know wages are going up. margins may be able to take out better margins. they are slim, but that is because they are not investing in price as much as they should

be. that is a shocker because we would expect walmart to be -- but they are pushing that off. put a lot of money there. we are seeing go up on the digital front. that was 702 years ago. a big jump their they're not posting the gains you sought amazon. twice it has been slowing. it percent in the quarter last year. 20 or 30% growth from them. amazon, so yes, i think there are questions about what needs to happen there. >> virgins in terms of the retail sector. theythink they indicated may do something on price. we will see. with walmart shoppers. >> thanks so much. amazon,p, speaking of we just talked by the company that has been giving walmart headaches in e-commerce with the recent fall in amazon stock here it is it now an attractive time

to buy? we are looking at how sectors are performing today. utility is the leader in consumer discretionary laggards. back in a moment. ♪

carol: welcome back. time for a look at some of the biggest business stories in the news right now. the government wants to make it easier for you to buy cable boxes from companies other than your cable provider. if you have -- 3-2 party vote. writing new rules which will likely take several months. when it is all said and done, companies including apple could be allowed to deliver a cable for streaming devices.

general motors is planning to sell 30 your notes to the payments on huge -- workers. it would be $2 billion. the end of last year, gm's hourly pension plan was by 24 billion dollars. walmart lowering its annual forecast today come a big story. the stronger dollar is hurting the value of retail giants overseas and in the meantime, fourth quarter sales in the u.s. fell short of estimates. that is your business flash update. it is hard to believe a company whose stock is worth more than $500 a share could be considered a bargain but that is what is going on with amazon. amazon is telling client is a massive buying opportunity and he is not alone. on the stock, the average price target at 750 per share. what is his call? a he moved it from a hold to

buy. amazon was the biggest gainer and s&p 500 up something like 120%. he is now jumping on and saying it is a buy, down 25% since the start of the year. he is taking the opportunity to say ok, this is your chance to get in when you were not before. >> where was he last year? >> he is basically apologizing to investors and saying, thank goodness for this -- thank god for this decline. this is about a 40% increase from where we are now. a good return. e-commercethe industry, and amazon is a huge dominator and it is still only 15%, global retails, 10 or amazon would be a big beneficiary of that. not talk much do about is cloud computing services. it has been a big portion of the revenue. 70% last year.

expecting further growth each year. a huge benefit. carol: what does this mean for the broader market? >> last year, amazon added 60 poison the market. with his 25% decline, it is actually the biggest decline are in the market. it has been leading with amazon down and the market is down, if amazon is up, the market is up. carol: thank you. talking about amazon and what is going on there. amazon, areinclude somewhat market favorites. a goodse market gains reflection of the value? what did you miss will be discussing this on the broadcast . joining us now is joe weisenthal p are what are you looking at? >> we will speak with an nyu professor p are his whole expertise, he teaches a course in how to value stocks. with the market reevaluating,

all the tech stocks so far this year, it is time kind of like with the discussion you just had regarding amazon, to say, are these more compelling now that they sold off? youhis is something i know look at a lot to understand evaluation can what are the correct valuations in the tech universe? >> it is the key question. something like amazon, people have been calling that overvalued since i can remember, but anyone who used traditional metrics has obviously missed out on a huge opportunity to on the flipside, you have a stock like apple and people say, it is so andp, they are so gigantic they have a huge mountain of cash and yet the stock has not done anything in a while. a lot of the traditional valuation questions, they have not worked well for investors. onyou look at what is going with silicon valley, young companies, a ton of money is being thrown at them and

tremendous valuations pretty quickly. >> that is an interesting story i think for the year. to be theem are going huge companies of the future, no doubt. a lot of them are not going to be. some of the companies worth $1 billion or more, some of them will go out of business and some of them will take huge down rounds to we do not know that much about the internal finances of most of these companies because they are private, but using various proxies with mutual fund companies, looking at the performance of recent tech ipos, looking at the performance of those stocks, you can start to get those proxies and the priority seems to be large cuts to the valuation. why few look at some of the tech names and what are some of the best metrics to follow? >> tech investors like to see strong business performance. have a company like twitter. it is just not operating that well and people are punishing

that one severely. companies like facebook are doing great. they keep knocking the ball out of the park. their acquisitions are paying off and it seems as long as these companies continue to operate at high levels, investors are still into them. quite a great topic. thank you so much. joe weisenthal coming up in a few minutes. coming up now though, the close of trading is 12 minutes away. let's take a look at major averages. dancing around not the tone we have seen in the last three days. we are down across the board. the dow jones industrial average down one third of 1%. looking at about a half percent 10 points.t down the nasdaq, if you look at it as a percentage based, you look at the s&p come utilities and telecom folks, those were the only groups gaining among the major industry groups in the s&p 500. stick around. ♪

carol: welcome back. the markets are closing in just about 10 minutes. julie hyman has the market check. i am so used to saying winning streak. break the winning streak. the declinesading today. the nasdaq has been the leader on the up and the downside if you take any given day as an example. the s&p 500 through the course of the day really has been making new lows and has attempted to rally back it looks like three times today and three times it has failed a doing so though the range has been relatively tight. sung off theaq

most common of surprise once again, responsible for a decent amount of selling. these three are the heaviest weighted for the s&p 500. you can combine the percentage in the index weighting in the s&p and you get these, the biggest drag today. we have seen big technology following or leading the tech -- the markets to many of how you up and the on the down days these year -- this year. a look at the biggest contributor to gains, another tech firm is doing well. ibm is rising after morgan stock toaised its overweight, saying investors really underappreciated the transformation ibm has undertaken. verizon& johnson and also on the rise. with the three-day winning streak and now that the pickup -- a hiccup, we still have a negative returns across the board. again, the nasdaq is the laggard in terms of averages. a couple other things to point out.

oil prices fell sharply after we got the inventories report. it looks like they turned negative once again. finally, the dollar as well. little of a a return to the safety trade, the dollar benefiting a little bit today versus a basket of currencies, not much change. >> the correlation between oil and stocks. thank you so much. of this year,ng investors are shoring the stocks right and left. the same stocks that were shorted are surging right now. since friday, the stuff have rally 10% for the over our -- overall market. will let you take it from here. you have been looking at what has been going on in shorting. >> gets -- yes, a lot. used to have the means and the motive to find your culprit. reading points to

shorts. you have the means getting a real high going into the year, as the markets started falling apart in january, then you have the motive that -- down 11 or 12%. thinking it was a good time to buy and sure enough, a chart showing what happened with short stocks. 10% friday,about monday, and tuesday, or tuesday and wednesday. happeningk at what is , the most short index, up about 10%. the rest of the market is about five. that dichotomy generally happens because the short stocks have a higher update as they go up. but if you look at how it compares to the babies rebound, it is happening to a much bigger

magnitude this time around. moreare outperforming by than they did in august and september, which leads us to believe you have got to think some of the rally, a good bit of it is coming from investors. >> we just assumed for some time because it has been so bearish in 2016, it makes sense you see a lot of folks to a short covering. >> especially when you talk about a decline around the s&p driven by a lot of sentiment. we had week earnings in a lot of places in various reasons to sell. sentiment got very bearish. if you do not think they deserve to be there, of course you might get that squeeze. carol: we were talking about the stocks with joe weisenthal and was skewed what happened in 2016 and may the market look better than it was. the bulk of the market was down last year. for those making money at this point, they probably had a good return on that. >> that is very true.

i think it is part of the reason you have a lot of what you do. when you have stocks contribute in the rally, isolating in a certain sector, you talk about an example, and that trade is coming off a little bit. you have to keep in mind a lot , wenvestors are betting have the tech companies that held on until a couple of weeks ago. then you go in and cover. carol: oliver, thank you so much. that will do it for us. what did you miss and the market close is coming your way in a moment. stick around. we have got the close. ♪ . .

joe: we are moments away from the closing bell. alix: i'm alix steel. scarlet fu is off today.

[closing bell ringing] alix: u.s. stocks closing this lower, snapping a three-day rally. joe: the question is "what'd you miss?" alix: will prime minister david cameron win enough concessions to pave the way for a referendum as soon as june? joe: how much debt is too much? we talk about which countries may be flirting with danger. and negative rates are not a good idea according to blackrock's peter fisher. we will ask him why. we begin with market minutes. we had a monster three-day rally in stocks could not hold on to their gains. the s&p finishing off by not too much but not having a rally there. in terms of sectors, you are looking at health care