bell. ♪ u.s. stocks closing higher this afternoon. joe: the question is "what'd you miss?" scarlet colin a winter tantrum has had no impact. digging deeper into the technicals. 500 andt says the s&p gold miners could still double. david cameron attacked his fellow conservative. we look ahead to the referendum. our market.ay with the s&p 500 climbing to a six week high. investors are loading up. you have a banks arising for a fifth time in six days. energy, materials among the big

gainers. oil is that curious trend we have been seeing. certainly helping to give equities some support now as opposed to the plunge. were talking about treasuries, gold, the end -- the yen. of thel subcategories s&p 500 doing well. we started off superstrong last weekend took a bit of a part. alix: the rally started overseas. dubai,take a look at stocks and a bull market. valuations were at a four-year low. now up 20%. a ferocious move in not that long a time. on the flipside, the vicks falling to the lowest level this year. the company points out the vicks upward slope.

this is a risk on more calm markets, which is what we have seen over the last few days. scartlet: a huge change from the start of the year. alix: absolutely. talk about flipping a switch. it has been a tremendous rally. 87% rally from the low, trading it highest level since september. months ago, we were talking about the potential insolvency of this company. it's remarkable. joe: it really speaks to what scarlet was talking about earlier. meanwhile -- alix: a quick disclaimer from glencore. bloomberg iser of a nonexecutive senior independent director of glencore

so we need to make that disclaimer. joe: speaking of fixed income markets, yields rising again as you expect to see. nothing too big. not a dramatic jump in yields. the 10 year only rising to 1.76. we have seen this huge surge over the last week on risk assets but it hasn't been reflected so much in the treasury markets. alix: where are the bears? they are out. the biggest mover in effect was the british pound today. the london mayor, one of the most popular british politicians, said he will campaign. we have already seen how traders have a push them back to their bets on when the u.k. is likely to raise interest rates. we estimate currency fall as much as 2.4% against the dollar.

the referendum isn't even until june so look for months of volatility ahead. alix: we did see a huge spike in oil prices come at one point up over 8%. we see this volatility continue in oil. iron ore above $50 a ton. kind of bottom with certain commodities, especially ones like these? looking at how u.s. stocks kicked off 2016 with their worst start ever and last friday, had their best weekly performance since november. what does it mean? take a look. mid-january, the s&p 500 has pretty much been stuck in a 140-point range here. the top is 1950.

the bottom is 1810. we really haven't gone anywhere over the last few weeks. if you come inside, there's what when i have is chesapeake debt and the green line is chesapeake equity. you can see what happened to the debt over the last few weeks. this is a company that was trading for under a dollar but see that come back? acyclic, there's confidence the company can make a 500 million dollar plus payment in march. they don't have any huge payments until 2017. the idea is we have averted bankruptcy for now. joe: perhaps a real heroic trade for people buying in their way at the bottom. alix: if you have the stomach. theme,ntinuing on in our here is a look at the biggest london.in

these are the best performing stocks, these ones in green. anglo american, glencore, some others. top ones -- shell is a big one. those mining stocks everyone hated, some of those have seen huge gains at the start of 2016. perhaps knowledge people think about when they think about a negative start to the market. -- perhaps not what people think about when they think about a negative start to the market. we will revisit that in six months. scartlet: you can see all of these charts on twitter. alix: i want to bring in our chief international economist at deutsche bank. scartlet: there is a growing disconnect between what the market predicts and what the federal reserve predicts. when you look at the atlanta fed , it currently shows 2.6% growth while treasuries kicked off 2016 with a big rally.

the question is who is right? debatethis is a big going on at the moment. i'm overwhelmed that people continue to tell me we are already in a recession. even remotely close to a recession on that measure. you could say who knows, it's still early. at the end of the day, it's clear when you look at many of the indicators, we just are not seeing that slow down. that is why i think markets are rebounding a bit. are the areas -- you hear a lot about tightening financial conditions. various banks have different measures. the most important thing is what is actually happening to lending. you point out that the lending is still flowing so you can talk about tightening and tightening financial conditions but for the most part --

this is hard data looking at every week, one of the banks in this category shows across the board on consumer loans, credit cards, commercial industrial loans, residential loans, it's showing a very solid improvement in credit growth. overall, i think most people understand there is a risk things could deteriorate. right now, there is no sign of a credit crunch. alix: is there a lag? guest: absolutely. down, weprices went are now 19 months into this. how long can it last? onyou look at what is going

and with financial conditions easing, you wonder maybe we will not get a recession as a result and maybe two-year rates are just way too low. now that we've had a recovery for a bit over the week, have the recessions here subsided? guest: there are a lot of of people chewing hard on these the stories we tell each other all the time, how are they different from the ones we were telling three months ago? in some cases, new stories come in and you say i should take this into account but in other cases -- particularly that there is too much debt in the system, you still sit there and say you cannot face your investment hassor with something that been a story for the last three years. it has to be new. we still look at the credit growth and say you just off see any slowdowns. i'm still very hesitant to

accept there should be a dramatic recession coming as a result of what we saw in january. joe: i want to talk about inflation for a second. look atk at -- let's that report we got last week. several measures show inflation in core services. ex energy running at 3%. i remember late last year, a lot of economists were saying the risk underappreciated by the market and there was a possibility for higher inflation. then the turmoil completely stopped. data show that risk of higher inflation story that people are talking about late last year? guest: i would say so. inflation expectations have absolutely collapsed.

we have a huge divergence between what the market believes is coming and what is happening on inflation. the markets general fear that we are about to slow down. i frequently hear the argument that the month it will be terrible. we have seen for at least six months. we already seeing stabilization and oil prices. maybe we will not get that recession. that means maybe the market measures of inflation are too low. at a 10 are looking year yield of one point 75%. what should it be right now based on growth? guest: if you do a simple numbers, thathe number should be closer to 2.2% or 2.3%. completely -- it's

fascinating as you spoke about, we've only seen the risk come back and inequities whereas this is something we have seen. great to see you. thank you. scartlet: coming up, how s&p 500ved is the rally? it could fall to a slower 1600. as 1600. low ♪

time now for bloomberg's forest ward news. jason dalton has been arraigned on six charges of murder in connection with the weekend shooting rampage in michigan. he was denied bail. the county prosecutor says delta and raved catch waived his right

against self-incrimination. -- waived his right against self incrimination. miller says four states can give to thejohn kasich a path republican nomination. rick snyder under fire for to are to return documents u.s. congressional committee. eliza cumming says governor snyder ignored an early request. towants the panel's chairman have snyder turn over the documents. the supreme court resumed its work today for the first time since antonin scalia is death. 's death.n scalia his chair will remain draped in black bunting.

global news 24 hours a day powered by our journalists in more than 150 news bureaus around the world. i'm mark crumpton. the s&p could fall below 1600 according to our next to get, president of eagle bay capital. you were long-term bearish on in theuities but short-term, you do see a turnaround. longer-term, i think we go under 1600. areink that's where we ultimately headed but we care about what is happening now. we need to make money this week, this month. joe, you asked me, i have been gloom and doom four months, what

will it take for you to change your term? lows -- theseeing list was expanding in january -- but this month, we have half the amount of lows on the new york stock exchange then we did in january so we are seeing that improvement. go onow high could we this? guest: 2000, maybe more. i think the real value, the real strength is not in the u.s., it's elsewhere in emerging markets. particularly, countries with energy exposure and mining exposure. bottom inse countries january well the u.s. -- while the u.s. was still making lows as of the last couple weeks. if you look at these emerging markets -- south africa, peru

, brazil -- they are all up 20%. see the: you can divergence between the emerging markets. latin america and brazil not far behind. japan still struggling. what about the rotation? we have spent time talking about how the best performers this year our last year's losers. does that give you a sense that we are 80% through this cycle, 50% through correcting? guest: are you talking about time or price? time, we have a long way to go. , the stocks in companies doing the best or the one to beat up last year. because anything metals, mining, energy-related last year got destroyed so now that we are

stabilizing and oil, emerging markets stabilize income anything middle-related are going higher and i think all of those companies with that of the mining amount of exposure that got crushed continue to go to the upside and the u.s. underperforms. what is your timeframe for u.s. calls? now, -- forright right now, i think we had about 2000 in the s&p 500. the bill strength is elsewhere and ultimately in april, may, we start rolling over again. let's talk more about the metal exposure. at the beginning of the show, we were talking about these mining stocks of 50%, 60%. this is the kind of move oversold that looks like it could continue -- move that looks like it could continue? guest: in the fourth quarter

-- weear, we broke below broke to new lows. now we are back above those lows. there's an old saying that from old -- from failed moves, fast moves. that is what we see with the gold miners. as long as we are above those 2009 lows. the risk is well-defined. scartlet: what are you willing to give up? guest: in terms of risk? is 2008, two thousand nine. i don't really think of switching out of stuff. our downside targets were hit in january. it's not like we are getting out of anything to buy gold miners. if anything, we want to allocate cash we have on the sidelines into things like gold miners. call so it's not really a

on gold, it's a call on the risk part of gold miners. guest: right. if you're in precious metals, you will get the most amount of miners.n the gold the move we saw in january in gold and silver is something we cannot take lightly. i think they will go higher. alix: how high? guest: gold, 1500. joe: your first time coming on the show, you are really negative on apple. what do you think these days? guest: hated apple. for the last year, super bearish. the target was low 90's. we hit that last month. that debt's part of cut bounce that we are seeing. alix: another thing we talk about is the 10 year yield. what is your call on the yield? guest: a great question. our target in 10 year yield was

165. we got there a couple weeks ago. the bigger picture last time, we talked about the yield curve. it has been getting destroyed. all at eight-year lows. that narrowing of the yield we were talking about it, it was above 120. rights the trade in bonds now. i think that goes below zero and we have a new version of the yield curve. alix: we love it. thank you very much. australianoming up, banks. we have the chart you can't miss next. ♪

scartlet: there is new divergence in copper inventory. let's start with aussie banks debt. australian banks are starting to be something adventures are really focused on. the cost to insure those from default has been climbing. the white line is the average credit to fault for australian banks and the blue is the average. you can see how it has been climbing. another way of looking at it over the same timeframe is to look at the thread between --tralian and u.s. banks let's go back for a moment. let's move this up.

you know what? sorry. live television, everyone. there we go. there is the spread between the two. what's interesting here between australian and u.s. banks debt is australian banks are very specific because they rely on want issuance -- bond issuance. the australian housing market is showing signs of's tumbling. -- of stumbling. and the economy there is highly leveraged to the slowdown in china. joe: there was a great video going viral today talking about the crazy housing market and these auctions everyone lined up for and their these big spectacles. bignd they are these spectacles. that would explain what we are seeing in the markets. one other thing puzzles

me. that's copper. i'm looking at coupler inventories versus shanghai inventories. that white line is chinese inventories and right now, they are at an all-time high for february versus lme inventories, lowest since february 2008. it could be weaker demand legitimately or there could be some movement around different warehouses but no one really knows. scartlet: doesn't have anything to do with the chinese copper trade? alix: possibly. bond to warehouse inventory has also been rising, which could potentially mean weaker demand. something to watch out for. a strange crossover. coming up, the pound as it's a worst day in over seven years.

several major companies have come out in opposition. the latest in a. ♪ -- next. ♪

mark: apple once congress to get involved in the dispute over unlocking the iphone of what are the san bernardino shooters. apple is resisting a court order to help the fbi. the company says the government should withdraw the court order and congress should form a commission to discuss privacy and personal freedoms. apple says helping the fbi would create a dangerous precedent. on the eve of the republican caucuses in nevada, kevin mccarthy says the contest is now between two candidates, donald trump and marco rubio. out ted is counting cruz, saying trump's victory in

south carolina dealt a blow to his hopes for a nomination. the republican presidential hopeful marco rubio says he is anti-constitution but wouldn't make -- anti-prostitution but wouldn't make it a federal crime . he made his comments ahead of a campaign appearance in the state. i do enforcement for hillary clinton from the prime minister of italy him as saying mrs. clinton should be the next president. he also said he admires former president bill clinton and president obama but says his government will work with whomever wins the presidential election. global news 24 hours a day howard by our 2400 journalists's in more then 150 news bureaus around the world. alix: a quick recap on how u.s. markets closed. the s&p 500 closing at a six week high. a lot of the losers from 2015 have turned into the winners.

stocks leadingl the advance. stocks moving in tandem with oil. joe: a really strong day. we got off to such a strong starter last week that it was kind of quiet but this is such an impressive rally. a lot of things up on the year. s&p 500 up, which is remarkable. a half ago, wed were talking about a correction for the s&p 500. joe: hardly seems like anything right now. alix: "what'd you miss?" the pound had its worst day in u.s. banking crisis since 2009. pound volatility hit its highest level since 2011 after a london mayor backed a grexit. isning us now to discuss

philippe lagrange. got you said david cameron a solid deal for the u.k. in negotiations with his eu counterparts. as grabbed the contours of why you think david cameron did get something meaningful to make the u.k. better off. a veryi think he got good deal considering. the eu is a club with 28 countries and it operates on the basis of give and take. here, one person has come in with a set of demands and it has obtained a large part of what he was looking for and giving nothing in return. that is the first time it is happened in the history of the eu. contents, there is an annual review of business regulations. there are guarantees on sovereignty for example that the commitment to the union does not apply to britain. there are guarantees that

britain as a nonmember of the eurozone will not be discriminated against if the eurozone integrates further. there are some small measures to cap welfare benefits for migrants. chandler came out today and said if britain does exit, the u.k. will have less sovereignty than if it stays. what do you think about that? guest: certainly i think the idea that sovereignty is really something decided in a exercised rather than in the lodge where markets and economies are global were all sorts of things can cross borders and where you need to cooperate in order to achieve what you want to do, whether it is control migration or tackle climate change. i think he is absolutely right. alix: we want to bring in what david cameron has said. he spoke about a potential

grexit would impact trade. >> country after country have said to me they could sign trade deals with britain but they also said their privacy would be trade deals with the eu. by then, they said these deals would be bigger and better and a wouldn't beitain possible until we settled opposition outside the eu. for those members who care about signing new trade deals outside the eu, we would be looking at years and years of delay. joe: is cameron right? how difficult would it be for dealsk. to negotiate new with these other countries? guest: it's quite easy to negotiate a bad trade deal. it harder to negotiate a good trade deal. if you are willing to go to china and say whatever you want, you can have and we ask nothing in return, you can sign quickly.

if you say will actually these are the things that really matter to us and some of the things you're asking for yard willing to give you, that could drag on for ages. britain has the fifth-largest economy, small to china or the u.s., will have much less reverent than the european union, which is 500 million people. scartlet: i want to get your weighingon johnson into this debate. he has come out and said he will campaign for a grexit. why is his stance so influential? he's a popular politician but many people can make the case he is an opportunistic politician looking to set himself up for something later on. guest: he is certainly opportunistic. this veryked at

closely and decided it's his best way of replacing david cameron. clearly, he's popular and has the ability to reach beyond the party, to sound optimistic about the future, and to grab attention for himself, which certainly helps. at the same time, there's a difference between liking someone and trusting them with the future of your country. when you have as big a decision as whether we are going to leave the european union, who do you trust more, prime minister david cameron or boris johnson, i think it's david cameron. joe: looking at the big picture, do you think ultimately david cameron got enough concession that as his campaign goes, he will be able to secure the votes he is pursuing? guest: i think he has achieved a good enough deal that he is able to go out and vigorously campaigned on the broader case

for britain to remain in the european union, whether it's the benefits of being part of the largest single market in the , whether it is the guarantees of national security or being part of a bigger block when we are faced with new threats from russia or isis terrorism, i think that trying to make that bigger case for membership of the european union, which the prime minister has had to do, i think it ultimately will hopefully win. alix: if the country does vote for a grexit, what happens to cameron's job? guest: i think you would be forced to resign. alix: there we go. coming up, plunging oil prices usually means more consolidation in the sector by this time,, things are different. we will explain where it has all gone. ♪

scartlet: "what'd you miss?" a report that honeywell the tech giant about a possible merger. is the deal still on the table? jesse is the managing editor at bloomberg news. this is not the first time they had discussed getting together. guest: in 2000, they were talking about a deal and ge got in the middle of it and made a bid for a new well and got blocked by regulators in europe. they started talking about a deal. i think technologies approached honeywell about a deal ended think it was december honeywell

went back and approached them. alix: why now? guest: i think if you are honeywell, your shares are a bit more aligned so it makes more sense to do a deal. soted technologies had grown they could maybe get a deal and honeywell would be the one who would run the business. i guess that's part of the appeal right now. it seems like united technologies is very resistant or concerned about regulators talkingt of people at about regulators. people are concerned the obama administration in their last year is becoming stricter in scrutinizing these deals. scartlet: is there an angle for investors? guest: no. this deal reminds me of something we wrote about a couple weeks ago on hasbro and mattel. these are deals people have talked about a couple years.

scartlet: it keeps popping up. guest: exactly. this has been a time that deals people have talked about are getting done. these are deals people considered in the past and fell apart. joe: do you get the impression that are deals on ice waiting to see if we get a republican administration next year who would be more willing to let some stuff go? guest: that would surprise me. i think some people have hit the pause button because of what is going on with the stock market. people said let's see where the market is in six months. scartlet: what are the odds of this deal getting done? guest: less than 50%. the fact they keep coming back after 15, 16 years shows there's a lot of energy and common sense to do something but i don't think that ucf is going to let it happen. scartlet: making a call on this potential merger. oil and gasg to the

space, oil prices down 60% since the end of 2014. m and a down nearly 40%. lower oil prices can wring out of the oil buyers but it hasn't happen this time around. .oining us is bobby tudors father, thank you for joining us. where is the m&a? in the proverbial tug-of-war between fear and greed, fear's wedding. the few buyers who have balance sheets capable of writing big checks are interested in protecting what they have and their dividends. we have a short buyer list and they are not willing to bet we will have an intermediate term rebound in commodity price. there's just not a lot of activity. alix: it seems analysts are

fairly confident in their longer-term forecast one it comes to oil. what is the tipping point that will make those companies want to buy? guest: we need some stabilization and slight upward lift in price. hopefully, today is the start of that. there's been such volatility in price and enough factors that worry people. theust haven't seen kind of confidence built among buyers that you need. the secondappen in half of this year? we think we will see a market balanced but until that happens, we are unlikely to see a lot of m&a activities. rather than selling assets or themselves, we have seen an uptake in bankruptcies. guest: there's a some of that for sure. buyers are worried.

you really are not in the kind of market where just combining with someone else does a lot for you because putting two that balance sheets together doesn't help. a lot of the balance sheet do need to get restructured if we will have a commodity price around these levels for any extended time. the restructuring of those balance sheet will help and we started see some consolidation with those companies. alix: what kind of companies are on the shopping list right now? in goodell, assets places with a lot of option value like places like the in oklahoma,n, places with multiple zones and break even on the low end of the commodity price spectrum, in the 30's and 40's. those assets are still moving. outside of those places, there's

very little happening. alix: a popular belief in the market among some is that to be fed in part created the shale boom as they expanded their , oil production really took off. as the fed begins to raise rates, where does the capital come from in the next cycle? capitalhere's no doubt was very inexpensive and relatively easy through most of the shale boom, whether that had a do with the interest rate policy or commodity price is up for debate. capital is clearly much tighter now both on the debt and equity side. but the history and commodity-based business is when you get momentum in the commodity, capital becomes available again and we would see no reason to expect anything different this time around. alix: does that capital end up

changing the industry? guest: i'm sorry? alix: short term, does the lack of capital change the industry, forcing out players that otherwise would survive or keeping them alive when they should have died? for the moment, the industry is clearly capital-starved. it is hard to get the money to develop above your cash flow levels. how long that is going to last is anyone's guess. there's a lot of are the sidelines that hasn't participated yet in this big commodity price reset. we could see more of that enter the market but once there is more stability and slight upward movement in the commodity price, the expectation is a lot of the capital will stay on the sidelines. alix: you think the trigger for him in a will be more price driven -- for m&a will be more price driven? guest: there will be a lot of

regulatory pressure on the banks to rein in capital. we see that happening already but all of that is very commodity price sensitive. at the moment, it's all about the macro and until we get some upward direction there, things will continue to be very, very tight in capital. alix: bobby, thank you very much. bobby tudors, ceo of tudor pickering holt and company. numbers: coming up, the don't lie. home depot down 9% this year. ,nd shares of valeant plunging now more than 10% in extended trading. the company will restate earnings in the wake of an internal review. ♪

alix: i want to bring you the latest on valeant. shares plunging over 9% in after-hours trading. that's after reports the company will restate earnings following an internal review as according to dow jones. scartlet: "what'd you miss?" tories over a possible recession in the u.s. have turned the dow industrials third-best performing last year into a loser this year. analysts at deutsche bank see this as a buying opportunity. home depot is a subject -- the subject. case shows an almost 6% rise year on year. the biggest advance since july

2014. future conditions tracked by the remodeling index has followed this trend. that is the orange line. spending on repairs and remodeling jumped to nine percent in 2015. a second indicator shows home-improvement spending will build on that game, climbing through this year. when it comes to home depot specifically, sales stopped dropping in 2011 and have been growing for five straight years. boosting profitability. home depot's operating margins have widened and are almost 2000e what they were in nine. home depot is also investing in channel capabilities. the yellow bars show how the e-commerce sales have grown steadily. these sales now make up more than 5% of total revenue. its lows has been adding to store count, home depot is

taking a different strategy, holding steady because they want to squeeze more growth from its existing stores. home depot is hoping these numbers help push it to its revenue goal of $101 billion by 2018. bloomberg television will be covering their earnings. coming up, what do need to cure up for tomorrow's trading day next. ♪

scartlet: fitbit reported

fourth-quarter earnings and revenue at the analyst estimates but that may be the last bit of good news. the company is forecasting fourth-quarter earnings and revenue for all estimates. shares are falling in extended trading. honeywell approached united technologies about a possible merger. the companies held talks within the past two weeks about a possible deal. about-face from federal health regulators on number liquidators. the cdc says the formaldehyde is three times more likely to cause cancer than previously estimated. and that is our bloomberg business. reporting earnings

tomorrow at 5:00 a.m. and the company's ceo on at 4:00 p.m. tomorrow. pay attention to luxury homes, what is going on in the city. financialhow is our volatility done? talk about how the home building segment is a potential tell when for the economy. we have seen him on her sentiments stabilize but not improve. it will be fascinating to look at those earnings and get some perspective. be a very interesting earnings report in the conversation. earnings from macy's tomorrow at 8:00 a.m.. investors are unlikely to get news.

joe: tomorrow, looking at s&p home price data. you will get the volume data from polo brothers and price data. alix: thank you for watching. ♪

mark: with all due respect, there's a chance that the donald is simply lights out. turn off the lights. turn off the lights. ♪ happy national margarita day, sports fans. cheers to those campaigns that survived the weekend.