>> from bloomberg world headquarters, i am matt miller. here are the stories we are watching this hour. stocks rising in a session high with u.s. equities extending the best week of the year. is this just the call me for the storm of further volatility? 51 of the remaining 65 stocks from the s&p report earnings this week. what to look out for from some of the biggest names in retail, including macy's, target, and gap. could hillary clinton and donald trump grab their party's respective nominations as early as next month? bloomberg politics makes the case for the paths of both candidates. julian.ad over to she has the latest on the rally. julie: stocks rising to highs,

and is one of these catalysts rallies we have seen over the past week or so, that nothing necessarily fundamentally a change. oil rally,ng european stocks rally, and now that has right to the noted date as well. -- united states as well. take a look at the imac, the sectors on the move. materials doing good, industrial also on that list. all of the major industry groups on the rise. if you look throughout the session, you will also see we sort of built on earlier gain. this was characteristic of the rally we saw last week, the chart of the s&p 500 was again at the open, and stating another leg up. that is what we are seeing today. all of that data, it has been relatively low volume, and that has been true over the past week

or so, with last week the best performance of the year. it is a lower volume. for the s&p, below the 20 day average, and the industry groups falling except for materials, where we are seeing a surge in volume. that is the exception rather than the rule today. materialscatalyst was and commodities. oil before the bell was topped up 7%. julie: what was the catalyst for oil popping up? matt: just saying that was the catalyst for commodities. julie: let's talk about commodities. matt: do you know the car list behind it? -- catalyst behind it? julie: oil rising with a gain of 7%. the move in gasoline, retail gasoline, which has also picked up. we are still talking about very low levels for gasoline as well.

all of this helping energy stocks, as you might imagine, of some of the large cap stocks. chevron, conoco phillips, and more. matt: thank you for that market roundup. now let's go to first word news with mark crumpton. mark: i am worried about you. president obama is asking the nation's governors to push his free-trade agenda. the white house today, the president called on governor to talk to their congressional delegations on how these trade good boost businesses in their states. a: we actually had a campania and bill -- companion bill to our trade promotion authority that just passed the house and the senate, and i again prepared to sign that would give us additional tools for enforcement. more resources, more personnel

allows us to take more aggressive actions. firm, are going to see tough enforcement of our existing trade laws. administration is facing grim prospects for using it transpacific partnership through congress. mitch mcconnell hasn't suggested he will not bring it up for a vote before the november elections. the hedge fund founder stephanie has decided to support john kasich for the presidency. four states, michigan, california, new york, and annsylvania, can give kasich path to the republican nominations. he said that senator marco rubio is the most electable republican yet misguided. bestasts one of the investor track records over the past three decades. an endorsement for hillary clinton from the prime minister of italy.

he says mrs. clinton should be the next president of the united states. he also says he admires former president bill clinton as well as president obama. the prime minister says his governor will work with whomever wins the presidential election. michigan governor rick snyder is under fire for failing to turn over documents related to flynn's water crisis. representative elijah cummings says the governor ignored an earlier request. he wants the panel chairman to compel slider to turn over the documents. the governor has declared a major hurdle after i failed attempts. -- five failed attempts. people are remembering justice scalia as any reversible spirit. the supreme court went back to work after the death for the first time today. all seasons, and we will miss him beyond measure. his chair will remain draped in black until next month.

the justices will switch seats to reflect seniority. powered by 2400 journalists and more than 150 news bureaus around the world. matt: investors are starting to load up on stocks. the s&p 500 heading for a six-week high amid signs crude prices are stabilizing, even rising. will gains continue, or is volatility just around the corner? with me is michael roderick, a joe's trading's analyst. what you think about this? we are back to levels we have not seen since the first week of january. >> this is similar to late september from november last year where we had a shock to the market, up in volatility, a lot of investors hedging their books, their position, their future and things like that. a week and a half ago, people got very irish. -- bearish.

it has been a pretty sharp rally. people got hedged up, down at lowe's, now we are chasing the rally. i do not think it is buyers feeling more confident in the market here. a noteohn put out earlier saying the s&p may look cheap at these levels. i have a chart of the s&p with 16.5ows it has fallen to, here. you can see big rallies that came up after they hit that several. what do you think about this right now? >> i read the bloomberg story on this, and the pe, the dividing point, those are still high levels. it is the lower end of an excited range. that should be a concern in monetaryts, if policies differ going forward, and if we had a started --

tighter world, that can cause multiple contractions through the bottom end of the range. the pattern in the past, not sure it is the pattern of the future. if you think of 2011, the s&p 500 in august and september corrections, it was 11 times earnings. multiple expansion attraction can be very dangerous. matt: i look at w.a.r. p which is the interest predictor based on futures trade. you mentioned the fed. we don't see the possibility of a rate hike climbing even to 50% in any months this year. know theyhe fed, we were shooting for three or four year rate hikes this year. .25 -- 1.25 and 1.5, they recognize the volatility in global markets, but that does not mean we will stop and pass it on. they will have a long-term path

for banks to measure interest rate risk and things like that. they may pause, but unless you see that accelerate -- that is the interesting thing. we get the price indicator at the end of the week, and inflation metrics, which is the highest it has been in months. matt: it is a 2.2%. >> these are taking up, the job number was good based on the headline, and industrial production had a nice step back. you are seeing an increase, so andtility in equity financial markets. this puts more ammunition in the head -- gives them more ammunition later on. i would not be too presumptuous taking we would not do additional rate hikes this year. fed, around the world, the still easing in order to put investors to riskier assets.

people can access on the #gepberg in the office, but the white light is the dividend on the dow. the blue is the average you can get from a bond fund. you can see the yield spread continues to climb. investors -- want especially in europe, you don't want to buy negative bonds. >> things are falling with asset inflation policy. people are trying to force others into riskier asset investments, so the problem it is a regular arguments. five -- inhousand 2005, people would say i am going to buy this house because it is cheaper to buy than rent because my mortgage will be so low. we know the problem of that. if you pay the bear price of an asset, based on another indicator, that is going to hurt

you in the end. just because odds are really expensive, it should not pay a premium for stocks. is 6.5%.ck 50 john parra points out companies and dividend. especially with commodities producers. >> going forward, these are historical lows. you did to 16.5 times earnings. that is historically high, the historic average going back to 140 years is 15 times, so we are not close to being on the cheap side of the equation. matt: i was feeling bullish all morning, and you are bringing me down. coming up in the next 20 minutes of "bloomberg markets, " macy's will be the first to report earnings. the global strategy and e-commerce help to offset a recent drop?

also, yahoo! is seeking potential buyers for its core business. the companies in the running and the ones that make the most sense coming to you after the break. ♪

♪ matt: it is time for your business flash, looking at the against stories in the news right now. could sell its swift well management and by public shareholders according to people at direct knowledge. the brazilian investment bank may use the proceeds to rescue financing obtained after its founder was arrested in november. btg management is negotiating

with the dental partners for help with the -- potential partners for help with a buyout. a bigger stake in glencore per than its rival. they have 8% after buying in recent weeks. that is up from 7.1% that have wrote that he controlled before. .4%. and berg owns a - 8.4%. starbucks is changing its rewards program. people who buy a regular cup of coffee will have to spend a lot more to earn a freebie. they will award the stars based on the dollars spent. people will have to earn 125 starts to get a free food item instead of just 12. that is her bloomberg business flash update. now let's go to the markets desk where julie hyman has the latest. you are looking at the transport.

dow jones transportation average, i am using that as the proxy. it is up 2% rallying with the market. there was a call from bank of america merrill lynch upgrading the ratings on half of the truck and rail stocks under his coverage. he cited a number of different regions, stabilization of loads, ganyue -- values, and the trouble shepherd survey. -- truck shipper survey. we will get to that in a moment, but when he talks about valuation, he talked about year to date, and we have seen this bounce in transports even though they are down, a bounce since generate 20th of more than 10%. that and be overly bullish on this group, but he is bullish on a number of different stocks. , i want about railcars to show this graphic. this looks at each of the past

two years the rail carloads. you can see a white line, this is this year's us far. thus far. r as for the individual stocks, union pacific and csx upgraded to buy, and wyoming upgraded to neutral. and we have the trucks up as well, swiss and kfx going to buy , which was raised to neutral. all of that happening today. matt: think you very much for that. let's talk about retail. we are heading into the stretch of earnings season, and the results are mixed. 80% of s&p 500 companies reporting results, 74% of those reporting estimates for share. fortop sales estimates beating the bottom line, not the top. many will report next week

starting with home depot and macy's, and sales numbers are going to be watched very closely. donning us with a preview is the u.s. consumer reporter shannon. macy's.art with they have been lowering guidance , aiming for that bottom line, how will he going to do it with revenue? reporter: this is so important because it included christmas and it will say a lot where consumers are, not whether they are feeling good or not but how they are spending their money. macy's is tied into malls. there been declining mall traffic in a lot of places. macy's has trouble getting traction online and mobile. how are they going to do their? nothing is more traditional retail then macy's, all of their apparel and home where. lureing away, they want to them back in with discounts and branding and marketing. matt: do they have a better online experience now?

have you heard from customers or investors were impressed with their website over the last order? that was three months ago. reporter: still not one of those folks when people point to who is doing well online, macy's is an example. it is something all retailers are struggling with three amazon is getting more into clothing and apparel, so they will continue to struggle. the lid company anyone talks about having it all figured out is amazon. that will still be a struggle for them. we thought nordstrom reported , and if i lost track, they didn't do great. they typically have a better online,usiness, 37% which is significant from about five years ago. it was less than 10% for them. they still struggle, even though nordstrom has a good online presence. matt: what about home depot? reporter: they have been doing

really well because people are investing in their homes. they view homes once again as an asset. it is almost like making investments, fixing your kitchen or redoing your home. as long as people view their homes as an asset, they will continue spending on them. there is not signed that home depot will start to slow down. they are getting that benefit. online, ie a grist of have been shopping for -- aggressive online, and they are one of the more sophisticated. they are really pushing the buy online, pick up in-store, try to get people in and drive a foot traffic. it will be surprising if they don't come out with a strong quarter. matt: i look forward to talking with you on "bloomberg " we will continue to report on earnings across the s&p. on bloomberg markets, we are going to talk about yahoo!, let the hitting begin.

-- bidding begin. they will approach buyers as soon as today. ♪

♪ matt: welcome back to "bloomberg markets." shares of yahoo! are climbing today. bloomberg news learned the tech company may be approaching buyers as soon as today. last week, yahoo! announced it would create a committee to explore strategic options. we have details from san francisco. corey, it is today. are they approaching buyers? reporter: it is today. you are right, as always. today is different, because today there are a number of buyers already talking to yahoo! about individual businesses they want to take away from yahoo!. also the goal is to leave yahoo!

with a pared down version of basic alibaba assets. ,ompanies like verizon, comcast at&t as well as private equity flight bain capital, kkr, and others, all looking at pieces of yahoo! that are generating some cash and have a billion users a day. they went to drive the value in the market, because they are essentially worthless when it comes to that state that is the alibaba asset, the yahoo! japan asset, and the giant pile of cash upon which yahoo! sits. matt: what is the best case scenario for yahoo! and what kind of prices are we thinking about? reporter: they want to take out pieces of business that actually have some sort of future to them. even businesses in decline like the yahoo! homepage, yahoo! mail, yahoo! finance. hundreds of millions of people use them every single day, they

should have some value with someone, but yahoo! has been unable to realize as for his public markets are concerned. ideal for them would be to sell off the businesses, not engender the massive tax bill that alibaba did, and take the cash from those and leave aside essential asset in the remaining cash from alibaba and yahoo! japan. matt: where does the ceo go? reporter: she might go home. matt: everybody we talked to said regardless of what is happening at yahoo!, she is a brilliant hot product person and would love to work with her. reporter: it is hard to imagine she would go. a positive example of a drive and acquiring this company. using them as a medium, and ad serving business. imagine they would have

melissa meyer running a much smaller business, but it is something you could see in the future. home there,found a maybe there is room for melissa meyer as well. how much you take with you when you buy businesses? what do you take in terms of salary and commitment and where does the remaining business sit? now still ahead on oil going markets," through 2017. what does that mean for exxon mobil? take a look at the major averages as stocks rally. we are looking at games of 1.3% in the snp, dow jones adding 227 points. ♪

♪ from bloomberg's headquarters in new york, this is bloomberg markets. let's go to first word news with mark crumpton.

mark: thank you so much. apple wants congress to get involved in the dispute over unlocking the iphone of one of the san bernardino starters. apple was ordered to help the fbi in a court order. they say the government should withdraw the court order and congress should form a commission to discuss privacy and personal freedoms. the facebook ceo mark zuckerberg discuss the controversy during an appearance at the mobile world congress wireless show in barcelona. >> what is the benefit of this one? we believe in encryption, that is an important tool that people are going to find a way to get anyway. , i think it is not the right thing to try to block that in the mainstream products that people want to use. it is not going to the right regulatory economic policy to put in place. mark: the associated press

attorney thatn represents victims and affected families of the san bernardino shootings say they will file documents in support of the federal government's order. in other news, a prosecutor is charged with six counts of murder and six counts of attempted murder in a series of random shootings in kalamazoo michigan on saturday. the 45-year-old will make an initial court appearance today. he was working as an uber driver at the time of the shooting. he is cooperating with investigators. in connecticut, a judge is hearing arguments at this hour to dismiss a lawsuit against the makers of the rifle used in the 2012 massacre at sandy hook elementary school. the wrongful death lawsuit was filed by some of the families of the victims. 21st-graders and six educators were killed in that shooting. florida senator marco rubio is "anti-prostitution" and he says he would make it a federal crime in order to start -- stop the

practice where it is legal in nevada. he made an appearance in the state. wifedent obama and his entertained a 106-year-old woman. she was so excited she started dancing. her one dream was to meet the obama's. she was invited to the white house for black history month the liberations. -- celebrations. journalists in more than 150 news bureaus around the world, i am mark crumpton. matt: if i have that much energy when i am 106, when i'm 76, i will be happy about that. commodity markets are closing. let's look at the biggest movers of the session, starting with zinc. it really to the highest since october, putting the metal on a bull market. other market and mining shares climbed.

oil climbed with oil equities, or equities climbed with oil. some opec members and russia could eventually help debate the surplus. 1.6% surge in new york at one point, and it is $31.48 a barrel. oiln did not replace the and natural gas it pumped last year with new discoveries or acquisitions. until now, exxon has achieved ratios of 100% or more. the reserve ratio is one indicator of the long-term ability to maintain or expand output. what does that say about the energy industry? joining me is gadfly columnist william. thank you for joining us. it seems clear this is an industry that would be investing a ton to bring new production given where oil rises are. the majors like exxon

should be investing now because the whole point of those companies is that they generally have the wherewithal to take advantage of lower prices, acquire up of the companies, and things like that. it is interesting that exxon is struggling at the moment. came offcement ratio the announcement by s&p that it might consider cutting the companies credit rating, and also the company is cutting its share buyback program. even majors are struggling right now. matt: why are they struggling? they don't have access to the cash? they don't want to risk borrowing more money or selling more shares in order to get the money to invest? isorter: the problem leverage has climbed for all of them. it is not a crisis level, but with exxon you want to look back over the last 10 years or so. , they produce more oil and gas than they did today,

which is remarkable if you think about it. they have not grown. last year they made the lowest in cash flow since 2003. ,osts went up during the boom the companies announced struggling to bring the costs down while maintaining the dividend payments and growth. it is a big problem they have with the cash flow map. iea'sa story on the executive director saying oil prices will reach $80 a barrel by 2020 because of supply. syria keeps plunging. reporter: that is essentially seeing that money is not being spent on new production. -- lower have loyal production later this decade, which will lead to lower prices. it seems fairly predictable. the problem now, even though it bounced today, is the $80 oil in

2020 does not help it now. the market is oversupplied, there is crude oil and gasoline and other refined ruddock's lying in the tank -- products lying in the tank, and that does not help a rally. matt: if you look out six months , we see oil futures much higher at that time length or even three months, frankly. in the majors like exxon position to hold oil offshore or even at storage facilities unsure, or is that becoming more problematic? reporter: it is becoming more problematic because storage is starting to fill up, and the problem that presents is that as storage hills up, it becomes more expensive, especially with foreign oil offshore. they usually have to compensate for that with spot price oil going up even further to allow you to keep making that trade.

there is another bearish signal three of. matt: so the rally is ruining the tango trade. reporter: it certainly doesn't look very sustainable. matt: liam denning, bloomberg gadfly columnist. das onre, you can go for bloomberg or search bloomberg gadfly on the internet. in the next 20 minutes, are hillary clinton and donald trump on parallel paths to their parties nomination? the latest from bloomberg politics on how they could have things locked up already by next month. also, apple called on congress to form a committee on privacy and personal freedom. the latest response from silicon valley ahead on "bloomberg markets." ♪

♪ matt: welcome back to "bloomberg markets." managing editor mel copper and -- mark halperin said -- the eyes are on favor with hillary clinton and donald trump to be party nominees. so now at a campaign even for ted cruz, would you bet on these two? mark: i would. trump has found himself in this position gradually, and clinton a cute surge. bernie sanders raised expectations on how he would do in the caucuses, and he lost.

now clinton is in the position to win the contest, coming up super tuesday, a week from tomorrow. i think there may be some force that intercedes here. people in both parties are floating. if you are done with that, you will bet on trump and clinton. they may be the nominee by the beginning of march. matt: so for the democratic si investment, this is -- establishment, this is a sigh of relief that hillary clinton would take it. for republicans, it is got to be a nightmare to have donald trump clinching the nomination. on it,ou put your finger the mirror image of the democratic side. members of congress, party officials are happy to see hillary clinton the in the position to close this. on the republican side, this stress and panic. is there some way to winnow the field that someone to take on

trump one-on-one, or give to candidates where trump could team up? could you stop him at the convention in cleveland? the establishment is trying to figure out at this late date if -- given he has an overwhelming victories, is there anything they can do to stop him. matt: we saw one will be republican donor attempt this morning, putting his official backing and financial backing behind john kasich. is there anyone who really has the chance to knock tromp off the pedestal? if so, is a kasich or rubio? rubio are thend ones that could say they could do it. most think he will be marco rubio, but a lot of people look at ted cruz's ability to stop trump in the south. others look at john kasich as the governor, who has the

temperament and experience. the point is, all three of those guys are doing good in their set campaigns, but this is the one guy, and is setting up very well for trump. for people in the field, three on one against trump. trump can win primary after primary, caucus after caucus, 30% to 35% of the vote, so it does not matter if he still gets the most votes in the contest. -- abc news is saying bob dole will endorse marco rubio. are there any endorsements that are key and we have not got right now? anybody that can sway voters? mitt romney, his financial network, and jeb bush, and his financial network is something candidates would like. marco rubio may have an inside track on this, but a lot of people in the establishment, even donors are worried. this,ay trump may have

and they don't across trump at this late point and be seen as a group as the truck stop trump movement three at -- i think they would've liked to see him do better in south carolina, but i would not say he is in his only because both trump and rubio are looking for support from cruise, but as a religious conservative and someone who has carved out a distinctive position on these issues, he does have his supporters, and they are enthusiastic. they come from the case of iowa, as compared to trump. matt: thank you for your time. mark halperin from las vegas. you can read his latest article on bloomberg right now. don't forget to catch with all due respect on 8:00 on bloomberg television.

let's look at the biggest stories in the news. 41go has acquired the group $.3 billion, i am talking about sysco, not the other one. europe inooking for an attempt to buy competitors. verizon is buying a fiber-optic from carl icahn's xo communications for $1.8 billion. lease thell also wireless sector from xo with the option to buy the unit that controls the airwaves by 2018. peter mondavi, who steered the winery for more than half a century in california's napa valley has died. fermentation to reduce crisper wines. he was 101 years old.

that is your business flash update. now we have julie hyman with a look at the movers late in the session. moving certain stocks around, let's start with go-go, the in-flight wi-fi provider. seeing a rebound after last week's announcement from american airlines, finally it found some of its other rivals competitive, they offer competitive service. that raised concerns that american was going to be able to get out of his contract with go-go. but they dismissed the declaratory judgment, they have not filed against go-go. the shares lost 27% last tuesday, so they are not recouping all of the losses, but they did see a leg up today. also looking at another company american airlines was going to sign on with, they have gone down but since recovered some of the losses, more than 1%. we are looking at a potential deal in the industrial sector, a

merger. the acquirer,d be united technologies the target. cash,ade off with some and supporting people familiar with the situation telling us that honeywell, which had risen, has now gone lower. you noted technology has remained higher by 5.4%. around $80 market billion. and the brazilian investment pactuel has gained momentum after its founder was arrested. they plan to be pale -- repaid withailout with this management business, which was just announced. they will buy out public shareholders. brazilian trading now up 7%.

thank you. oft: what does the head android think about apple's refusal to help the fbi? ♪

♪ back. elcome the mobile world conference kicks off in barcelona. just ahead of the conference, "bloomberg west" anchor emily chang sat down with the man hand-picked by google ceo to oversee android, chrome os, and chrome cash. discussing apple's latest battle with the u.s. government. >> we focus on building really secure products, but if requested or demanded by law

agencies, you know, of course based on proper legal process, we will make information available. the thing we are talking about here is a completely different scenario in the tech industry, and in this case apple is being asked, it sounds like, being asked to help in hacking their product. it is a very different scenario from the way things work today. it requires a lot of discussion and debate and important decision. i have a lot of respect for law enforcement and of course don't have any respect for criminals, that is not what this is about. it is a completely new way of thinking about things. emily: you have opponents including president obama saying this should be restricted to one criminal, and is going to save the lives. isn't that more important? why would you protect criminals and put innocent people's lives at risk? >> it is a new area, and it

warrants more discussion on how this is actually going to work, what kind of president is being set. more debate, more thoughtful debate is how he put it, and is warranted here. emily: so if that were an android phone, what would you tell the fbi? >> that is hypothetical, not the case we are talking about now, but the same statement stands. we would feel the exact same way , that this is a different scenario now, select and get through and get that debate. emily: edward snowden said this will be the most important tech case in a decade. what do you think is that case? you have the power to control this as the head of android. privacy,k it is about which i think everyone agrees is important. new to talk about these cases in specifics do

matter. i am not familiar with the specifics of the san bernardino-apple situation, so i will not comment on that. it does feel like an important area that does require more discussion. emily joins me from san francisco. what do you make of his answers? heated up want to get into hypotheticals. is android craft a ball -- crackable? emily: apple and android have different approaches to security , but what you are hearing not just from google but also facebook, they are sympathetic to apple's position, but they are glad they are not the ones in that position. there is a lock timer was fighting with apple, but not as far as saying we would do the same thing apple is doing. mark zuckerberg was on stage at the bloomberg conference in barcelona saying i am sympathetic to what apple is going through, but we are

supportive of the fbi, we are supportive of striking back against terrorists, but a backdoor is not the way in. it is interesting to look at how these different companies are responding. the reality is none of them are in the position apple is in, and once again this morning, apple is saying, let's take us out of it, let's form a congressional committee to debate these issues before we go any further. wrong,orrect me if i am but apple is saying there is no way to get into the iphone. them to is asking invent a way to do something they say is not possible. emily: there is no way to get in without creating a new product or piece of software that will allow them to circumvent the password protection on the phone. the fbi put in 10 or so passwords that could trigger this other fisher -- feature on

the phone that would erase data. the fbi says they had the last backup the phone of may to icloud several weeks before the incident. they want to restore it locally on the phone. bernardinoent san engineers, they have done everything they possibly could. somebody at the department in san bernardino county, actually changed the password. since they changed the password, there is nothing more apple can do without building this new software, which apple says would create a master key that could enable the fbi to get into any phone they want anywhere anytime. believe --esting the they believe this is possible. emily: it is technically possible, but apple says they don't want to do this because not only will it in french upon the liberty of one particular

person, but it could compromise all of our privacy. matt: thank you very much. there is more to talk about from eimer,nterview with lockh and we will see it on "bloomberg west." you can catch her interview with him later hour, we in the next discuss the latest with challenges facing a company with the loss of time is like death clients like walmart. it is one hour until the close of trade. ♪

vonnie: welcome to "bloomberg markets."

from bloomberg world headquarters in new york, good afternoon. i'm vonnie quinn info betty liu. industrials and materials make big gains across the board. each baiters getting a breather from volatility -- traders getting a breather from volatility. and the chairman and ceo of global advertising giant -- is here. maurice levy is here to discuss the acquisition strategy and the potential for a british exit from the european union. close one hour from the of trading and stocks of been rallying. let's head to the markets were julie hyman has e