a.m. on the west coast. welcome to "bloomberg markets." ♪ i am matt afternoon, miller. when itthe tea leaves comes to the fed rate hike. and price gains brought to a grinding halt for oil. yahoo!he pressure for investors intensifies. we will look at what the future holds for this internet darling and its ceo. first off, let's head over to the market desk where bloomberg's julie hyman has the latest. jules? julie: shouldn't you have said

once internet darling? matt: i should have said once internet darling. [laughter] julie: let's take a look at the stocks, the s&p and dow are down. this has been another low-volume day. below the 20 day average at this particular time. the sort of mixed picture you see, the sort of drift that you see, it is reflective of the market. we saw the nasdaq overall at one third of 1%. we are seeing large tech stocks outperforming. this is a rotation that is coming back a little bit over the last week. we have seen strengthening markets overall. tech markets have been underperformers and stocks like facebook are trading higher today, for example.

amazon and elba bet not gaining much, that they are definitely helping the nasdaq to some degree, matt. matt: is mexico ready to currency?with its i see the chart behind you. julie: you do. draghi inke pulling a the other direction, instead of weakening a currency here, we're seeing the dollar versus the remember, the country had a surprise rate increased on wednesday. the idea here is that the currency has been pummeled by lower oil prices, by exports, and now the mexican government is trying to support it to some degree. on the headlines that we got, this has also affected the

weakening that we have seen of the peso. you can see now at the year today that it is up 8/10 of 1%. it sort of started at an underperformance before it went up. some of the companies we are watching, today we are seeing a mixed performance of max poll -- mexico bolsa. so a mixed performance of conglomerates and in some cases, manufacturing companies in mexico. matt: thank you, julie. now let's go to radio and the newso -- remi at desk. remi: thanks, matt. there was a motion to block a junction -- block an injunction from the government to open up an iphone used by the sammartino

terrorist attackers. we heard from the white house a short time ago. take a listen. strong encryption is good. it protects the civil liberties of private americans. but at the same time, we don't want to allow terrorists to establish a safe haven in cyberspace. groupa kurdish militant has claimed responsibility for a car bomb attack that killed 28 people in a turkish city. on its website, it said that it carried out last week's attack against kurdish rebels in the country's southeast. the country blamed the syrian backed kurdish military for the attack. and of course, the zika virus is brazil's future.

the president of the country said that they will develop all of the resources needed to develop a vaccine. the country has been hit hardest by the virus and it causes a rare birth defect likely brought upon the virus. chiefe nation's climate is stepping down. she will leave in this july after six years at the diplomatic effort of fighting global warming. this comes two months after an historic international agreement on climate change being adopted in paris. 24 hours a day in more than 150 news bureaus around the world. back to you, matt. fuel prices on food and rose the most since 2011. this broad-based gain may have emboldened the fed as market

turmoil may have hurt the economy. yesterday, we found that the data could be doing just fine. >> the surveys, in all honesty, are really good coincident indicators. so they don't tell you about anything next week. but as of this week, they are growth.ed with about 2% on unemployed may claims, i have very strong readings that wages are accelerating -- on unemployment claims, i have very strong readings that wages are accelerating. joining me now to talk about the economic data and more broadly is former chairman of the council of economic advisers for the white house, alan krueger joins us now. your thank you so much for

time. i know the fed likes to look at the cord numbers, but now we are looking at inflation of 2.2%. i have a graph here and we have a client of this high since 2012. why do we'll we hear that inflation is nowhere to be seen or nowhere to be found when cpi is strong? years,ell, for several we have had extremely low inflation. i think we are seeing the economy start to evolve in the way that you would expect, with the unemployed and rate below 5%. i think that will feed into prices and i think we are seeing that reflected in the latest core cpi data. matt: what do think about the jobs data? at hyman mention that just yesterday that initial jobless and if you to 552000 look at that, it is going just

lower and lower, which is where you want to be. ,eople counter that it is weak that people are taking a job that they don't want, that people are not learning as much as they were earning in the early 2000's. alan: i think the market is clearly cementing. we had an awful shock and his is taken quite some time -- and it has taken quite some time to gradually progress and now we are at a point in time when we are going to see job growth accelerate. to take more effort on the point of employers to sell vacancies and i think that is going to push wages up and i think we are going to see that process take place. matt: i want to shift to the political environment here because we are looking at caucuses and primaries this weekend and because a lot of the candidates, donald trump, bernie sanders, seem to be gaining because people who are

just disgruntled in this country as far as the economy, they feel left behind as far as mainstream washington politics as usual. why are they doing so well at the economy is recovering well as you see it? an awful recession and on top of that, we had three decades, really only interrupted in the late 90's, we had three decades where the middle and the bottom stagnated or fell behind. so i think this frustration has been building for some time and i think people are ripe for something of a populist message. i think it is important for the candidates to be responsible with their messages. forink it is irresponsible them to make claims about how they are going to cause the economy to suddenly take off, where what we are suddenly seeing is the gradual improving of the economy is going to

continue to show strengthening job growth, strengthening wage growth, and incomes. matt: bernie sanders has said that he has a plan to boost gdp to five point 3% growth to 5.3% boost per year, meaning incomes that would bring down on a planet rates to 3.8%, i think he worked on this plan with the university of massachusetts economist gerald freedman. otherd other advisors and heads have said, this is not realistic, this is pie-in-the-sky, there is nothing to back up this data. alan: well, to my knowledge, senator sanders hasn't cited of those rosy forecasts, but his campaign has. i think it is important that the campaigns be real, that they be realistic, that they don't mislead the american public. the thought that we would have the unemployed rate drop below 3.8% and stay there for three

years with the federal reserve just sitting there on the sidelines not trying to intervene, the thought that suddenly we are going to see productivity growth go from over half of .5% a year to 3% at a sustained level, that is just not plausible forecasting in my view. so both sides of the aisle should use responsible forecasts or don't make forecast at all. they should just argue for their policies. they should know that their policy should be grounded in evidence. democratic side, because you're obviously a democrat, do you feel like the media has given senator sanders a pass because it is such a great story, it is such a fun story? alan: my focus is on economic policy, so i am going to stick on commenting on economic policy. the letter that i wrote on that, it got a lot of attention. so i think it is important that

the media keep all of the candidates honest and it doesn't let the campaigns get away with ridiculous claims. you know, hearing donald trump say that his tax cuts could raise the gdp 5.5% a year, that is just not plausible. we have seen what has happened with big tax cuts before and the economics are not all that pretty. so i think it is important to the media tries to keep the campaign's honest and that the public doesn't get misled by some of these outrageous claims. matt: all right, we are talking about it with you right now. from so much, alan krueger princeton university. thatow investors could see there could be more to come. also, the u.s. filed a new request to have apple r comply with phone unlocking.

the crucial details up next. ♪

matt: welcome back to "bloomberg markets." i am matt miller. let's head over to the bloomberg terminal with julie hyman. julie: there are some analysts who are coming out with a sell rating or an underperform rating to put it another way, and initiation of coverage, over at wells fargo. this is in regards to valiant valeanteuticals -- pharmaceuticals accounting being

under question. have seen a big drop in market value of the company and we are expecting to get fourth-quarter earnings from valeant but the shares are selling off at 8% in today's session. we spokewent down, and --with analys analyst who says their shares are off by 4%. and trinity industries has a forecast out that is below estimates. it sides a weakening in the industrial economy. byir shares are tumbling 22%. they are pulling down their competitors. having an effect on many railroad and railroad manufacturers. matt: those are big hits.

thanks for that, julie on a check on the markets there. in the last hour, the department of justice has filed a new motion that would force apple to comply with a request for user access on those iphones. this is all in hopes of getting into one iphone used by one of the shooters in the sam bernadino terrorist attacks. we are joined by a cyber security reporter. and it is interesting to me to say that apple will tell you that it doesn't have currently a way to get access, isn't that right? they have spent years developing a system that i think they believe would take them out of this whole equation. they have basically build a system of encryption that could be used in the hands of a user and they couldn't do anything about it. i think one of the things that this debate has showed is that it is not really true. another thing that it shows is that the fbi has spent a lot of

time looking at apple security protocol and how encryption works and have discovered some very interesting workarounds. i think by going to apple and saying that, "you know what, you don't have to help us break encryption and we can still get the data," i think that is the view of the government strategy from here on out. they may not need a back, they may just need some workarounds. matt: the government, just to be clear, don't we know that the government has already figured out ways to break into the iphone on its own, and in fact, apple has already helped the government get into iphones in at least 60 other cases? michael: yes, and it depends on the model, the older iphones were built a really in terms of encryption and apple had responded to the warrants in those cases, but in new cases, i think we are entering a territory that apple didn't quite expect. again, they thought they'd told a system that would take apple

out of it, and in fact, the government has looked at the user and how it is validated on the phone, and they said, "no, no, you can help us to get the pin, and if you don't help us get the pin, we are back where we started." matt: so the nsa doesn't have a way to hack its way in? michael: i think a lot of researchers would say that if you just spent enough brainpower and money, you can figure out how to get into these phones, not about breaking into but other ways. the difference between the nsa's capability and the fbi's capabilities is that the intelligence agencies might have certain capabilities, but i foundthey may have just an opportunity to force an issue that they are not going to let go without apple. i mean, they would really like just a smooth a system where judge'se a

signature on a warrant, then they could finish this. matt: so it depends if they want to spend the money and use the brainpower to do this. michael: i think if they lose this battle, it will just move to the next phase. matt: thanks so much for that. michael riley with bloomberg news. next, talking about the mexican finance minister. more news on the peso to come here on "bloomberg markets." ♪

matt: you are watching "bloomberg markets." i am matt miller. rate hikeurprise

surprise the peso. a portfolio manager at blackrock weighed in on what is ahead for the country a little bit earlier on bloomberg television. >> when you look at emerging economies dominated by concerns on china and loyal -- and lower oil prices, you want to think of places where you have a strong policy reaction. alix: like mexico? gerardo: you want to look at places where the dependency of oil dynamics is low. mexico takes all of those three boxes. financesics affects thenot productivity, so

reforms passed through congress in the past couple of years means that mexico is one of the biggest emerging economies out there. alix: is the exception of the past six weeks, it has been a really rough go for the mexican stock market. at the end of the last year, it did not end up so well. ultimately, you have to believe that fundamentals will sustain over the long-term. oil and a dominance of oil dynamics across the financial markets, and you have a lot of uncertainty regarding china and the debt dynamics in a dominanthave been factor. not clear that, it is in the short term.

reminding investors of that, of course, the environment changes, then you have to adjust policy accordingly, and that is something that is very positive. what yousounds like are saying is that if we do see ever version of fundamentals, that mexico is well-positioned and that this may be a good time to buy. be one of themust nicest stories out there in the emerging world, the cousin has a strong macro fundamental, it is androng and stable country it has that going for it. that is for the medium term. you are talking about equity markets. , thosemarkets in mexico sectors are going to be driving the next wave of growth. --x: our bonds better maybe are bonds better maybe?

gerardo: mexico has one of the better bond markets out there and that is one of the more attractive possibilities in the country. matt: that was gerardo rodriguez earlier on bloomberg tv from blackrock. and we will take a closer look at the world economy with final gate fromdel oppenheimer. from oppenheimer. ♪

matt: from bloomberg world headquarters in midtown manhattan, this is "bloomberg markets."

i am matt miller. on world news.e ramy inocencio has more. on the eve of the nevada caucuses, recent polls shows hillary clinton has fallen into a tie with bernie sanders. former president bill clinton is at some last-minute campaign events. meanwhile, in north carolina, donald trump has gone to local primaries. the fight will be between ted cruz, marco rubio, and jeb bush for third place. -- second place. a'sjust as antonin scalia flagged draped casket is at the supreme court as his body is line in repose right now -- s flaggedcalia'

draped casket is at the supreme court as his body is lying in repose right now. couch is-- ethan now back in juvenile court after killing four people while drunk driving as a teenager. he fled to mexico and was brought back. he now faces 180 days in jail. and the international space station just got a whole lot tidier. got rid of over one ton of trash and jettisoned it out over the pacific ocean where it will burn up in the atmosphere harmlessly. that is a lot of garbage. matt? matt: thank you. let's take a look at the world movers.

iron ore has been making a quiet comeback. steelmakers in china start to boost output after the lunar new year break. 3% in these nearly session. and wti crude fell below $30 a the small gains it had tacked on for the week raised. this is after u.s. supplies raised to the highest level since 1930. solo more supply than demand. -- so a lot more supply than demand. and we speak to the head of research at bank of that oilnd he told us falls on rising u.s. inventories. freeze in oil production,

coupled with russia, should be pretty positive for prices down the line. ont: let's get more insight oil now. joining me now from new york is fadel gheit. he is the senior strategist from oppenheimer. , they were at high levels were they wanted to freeze, so this wasn't like a cut. it is not going to ease the pain on oil producers. it is not going to impact supply because saudi arabia and russia are producing basically at full capacity. maxing out. so global demand continues to , the currentfore rate of production is likely to sustain for a lot longer than

many people are saying. so it is not a step in the right direction. it is a step to know where. -- nowhere. are we seeing places with a production cost of much lower than $30 per barrel? expense,e operating once reduced in the u.s., have lower cash costs elsewhere. cut in capital spending, and that is not likely to stop production at the current level. so we are likely to see a decrease in oil price. saudi arabia has an agenda. saudi arabia has a geopolitical objective because of russia

meddling in the middle east. nation has not accomplished their goals yet. how much lower due oil prices have to fall before russia, i mean, does russia even have a choice to even stop producing? not, correct,ely absolutely not. all current production is showing a need for cash now. they do not want it next week or next month, they want it now. somebody like russia or saudi arabia or another country are over flooding the market and they are playing the market share game. and unfortunately, they will lose. would you have a price war, the commodity price will come down, pretty hard -- when you have a

price war, the commodity price will come down, and pretty hard. wants their neighbor to go down a but they will stay up, and for all practical purposes, the iranians, the iraqis, the venezuelans, the nigerians, all of these countries are not producing. only saudi arabia and the gulf states are producing at or more than what they are allowed with typical growth. saudi arabia is producing one million barrels a day. , obviously, is not going to be able to increase production even if oil prices go up or go down or go sideways, but on the other hand again, they are not participating in any production costs -- cuts. so this is really going to fall on saudi arabia.

they are not going to have unilateral cuts in oil production. so we will put pressure on oil prices. , i grasped earlier today that oil production growth in the u.s., in saudi arabia, and in russia, over the last five years, the u.s. production growth has been amazing, right? we have had 4 million barrels a day in less than four years. what is the situation look like here in the u.s.? producersentioned having production cost of less than $30 per barrel, so are we going to see production falling here? production, surprisingly, was more resilient than we thought. the reason being is that companies become very small and very very efficient

quickly and oil prices will collapse. there is no room for error. have proven again and again that they can produce at a much lower rate. but they are not going to be able to replace the oil that they are producing right now at these prices. eventually, oil production will decline, the market will come back into equilibrium, and that is what will bring oil prices back to a sustainable level. it is not going to be $20 per barrel, but it is not good to be $100, either. to happen. likely what gave us the $30 oil bloom was not $100 oil. so we are likely to see a new normal and that new normal will be established over the next two or three years. as we said, it is not going to be worth $30, and it is not

going to be worth $100. matt: is there anybody trying to offshore and store oil or is oil too high for that? fadel: exactly, and this is the difference between investing and speculating. speculators look at the oil industry every week and they see the market heat up or whatever, but it is supply and demand and demand will eventually see the oil prices go. oil production in the u.s. will hit the floor for oil prices. with just four point $5 million a day, that is 50% of our production. that is a five fold increase over the last five years. that,re important than production in the u.s. is double the production in kuwait. and opec countries, russia

other producers around the world, see this as an aberration and it is not going to last. guess what? who is going to be right and who is going to be wrong? oil production is here to stay and it will affect oil prices for a lot longer than we have a stomach for it. thank you so much for your time, fadel gheit, senior operating strategist at oppenheimer. coming up, the six remaining face-off in south carolina where donald trump holds a commanding lead in the polls. we head to the battleground state. and ahead of a corporate battle here, yahoo! explores more strategic options, we mean an internal battle, by the way. looking at the pressure they are facing now. ♪

matt: welcome back to "bloomberg markets." i am matt miller. weekend in presidential politics. hillary clinton and bernie sanders face-off in the nevada caucuses tomorrow. and in south carolina, voters cast their ballots in the gop primaries. bloomberg politics managing editor john heilemann is there. john, how is the weather? : it is really, really nice here, matt. thank you for asking. it looks amazing. i know that george w. bush has been down there hanging out with his brother, while donald trump badmouth him in the debate.

is there any indication whether george w. bush helps jeb or that donald trump's bashing of the campaign helps jeb? bush was down. here earlier in the week, he was down here monday, he was down for one day, he covered an event for jeb that i attended. it was well-received and well attended. but it was an amazing thing. i talked to the crowd and not all of them were going to vote for jeb bush. many of them liked george w. bush, but they were going to vote for ted cruz or marco rubio or donald trump. in pretty jeb bush is big trouble, he is hovering at about fourth place behind trump, and rubio, which is the marist poll, probably the last good pulled it will come out until tomorrow. matt: what about donald trump? are there a lot of catholics in south carolina?

does the pope carry a lot of weight down there? john: the pope is not very popular down here, matt. you would probably be surprised to learn. south carolina is a religious state, but they are not catholic. the fight bit the pope and donald trump got into yesterday, as you noticed, the pope basically backed down here today, as one of his spokesman denied, rather implausibly, that he would even mention donald trump. trump, 1,tly it is is trump, 2, and pope, 0. today we learned that mark sandberg, the former governor of the state, hasn't burst ted cruz. so there are could be a little cruzmentum at the end here.

matt: he is accelerating there. what about nevada? and i talked about this just talked with alan krueger and he said the he wrote a letter that bernie sanders has a bit of a pie in the sky idea of reallycs and it is not backed by sciences. i guess people who feel the bern don't really feel that way, do they? over the long run, over the long run, i have respect for that guy a lot, arguments about whether bernie sanders's economics are pie-in-the-sky or set a clause economics, that could be a real problem for him. i was in las vegas yesterday, matt, and you would be happy to know that they got a lot of time out there.

it is impossible to know. politics is a weird thing. reliable polling. both party thinks they are very close, neither side is a sure they're going to win. right now, they are out there scraping for every last vote, every last endorsement, really going casino to casino working with casino workers to try to get the casino workers to come out this afternoon and caucus for them. i don't think anyone knows what is going to happen out there. this will have a big consequence if hillary clinton doesn't win only what as she has iowa, and only by a very slim margin. this will be all the more important for her, especially if she falls short tomorrow. matt: i will have to continue to watch "with all due respect." thank you so much, john

heilemann, managing bloomberg political editor. don't forget to check out "with all due respect" today as it carolinar the south primaries. that is at 5:00 p.m. in new york. that is probably my favorite live television show. thelet's head down to markets desk where julie hyman is taking a look at stocks on the move. julie: your favorite live television show that you are not on. matt: that is correct. i can't watch when i am on. but when i am home, i go home and watch "with all due respect" on apple tv. julie: sure. nordstrom is coming down with his numbers -- with its numbers. that is lower than estimated earnings per share. we have similar things plaguing similar retailers. company has been hurt by the

warmer than typical weather and this is also pulling macy's shares down along with them. and we are looking at ds corporation, and that company's fourth-quarter earnings are includes leet jeans and other manufacturers are being pulled down along with it. and boston beer, the maker of san adams, is coming out with lower than expected estimate. boston beer says it is being hurt by the competition in the craft beer it industry. it is becoming a very crowded market. this company was one of the first and one of the biggest to come out in the industry with a sort of craft beer model. matt: you don't want to be too big if you are a microbrewery, right? being a big microbrewery is not what you want. although i still like the beer. it is still pretty good. julie: but there are not a lot of choices. matt: thank you very much,

julie. yahoo! is bringing in a new team to explore options and melissa is not on it. we will have the latest from bloomberg west anchor emily chang. ♪

matt: welcome back to "bloomberg markets." i am matt miller. yahoo! shares are trading higher today after the company says it has formed a committee of explore strategic options. earlier this month, marissa mayer spoke with bloomberg west's anger emily chang about the company's complicated situation -- bloomberg west's anchor emily chang of company's complicated situation. issa: i think it is obvious to everyone in yahoo! japan as

well as alibaba plus the core, but i think it is one of the reasons that you can see why we need to have a complicated solution in a complicated pass forward. matt: emily chang joins us now from bloomberg west, and now they are looking to completely strip alibaba out of this business and put together an independent board or an independent committee to look at these options. marissa mayer is not a part of that committee. yes, marissa mayer is focusing on streamlining the business right now, she is laying off people this week, and they are having a weekly meeting to accomplish this. earlier this week, they laid off a number of people working on the digital magazine. this is one of her pet projects. it seems to be separating her from this process to allow her to focus on the business and have these independent directors

actually proactively reach out to potential buyers. there have been, of course, some confusion as to whether yahoo! wants to sell. result my was initially on board with this plan. but now where there are -- but now because there are independent members on this board, it seems like they are going in different directions. matt: it seems like she is going to try to make yahoo!'s core business more successful. were they just firing people left and right? it has got to be an awful, awful place to work. place look, it is a tough to work. she acknowledged that in the interview. there are morale issues, but there are a strong contingent of people, including herself, who are working on making the company better. they are going to be working on streamlining the business but also shoring up morale. they're going to try to stem the bleeding.

hows hard to understand much it yahoo! is actually worth minus this alibaba stake. yes, they have business owners going to the site everything will month, but revenue is it really growing. cost instead are rising. that is what you have these vast disparities. 'sat is why people say yahoo! core business is less than zero, and other people say it is worth $8 million. the reason that murtha miller and the board didn't start this earlier is because it was undervalued and they were not going to get a fair price for it and she was determined not to let that happen. spokenverybody we have to in silicon valley, they say that murtha meyer is absolutely brilliant and they would love to work from her -- work with her. i have heard that from marc benioff and other people. emily: she hasn't given no indication that she is anywhere but yahoo! now. she is a product person through

and through. in my conversations with her, i have gotten a strong feeling from her that she believes she can turn this around. she believes that this is not the end of yahoo! she is not going anywhere right now. there are talks of that maybe this isn't the right role for her. maybe she should be choosing products out of a vc firm before they are big because that is really her forte. matt: they are already pretty big with one billion users worldwide. emily chang, she will continue to cover yahoo! from bloomberg west, of course. you don't want to miss this program. up here onater bloomberg television, a special edition of "with all due respect." beckham's up of 5:00 p.m. eastern, don't miss it. have a great day -- that is coming up at 5:00 p.m. eastern, don't miss it. have a great day. ♪

>> 3 p.m. in new york, 4:00 a.m. in hong kong. welcome to bloomberg markets.

from bloomberg world headquarters in new york, i'm carol massar. stocks are mixed today but on track to post their best week of the year. energy stocks tumbling with crude oil but technology squeezing out gains. -- prices rising by the most in four years. in the standoff, the justice department following a new request to force apple to crack into an iphone belonging to the san bernardino shooter. fhe