vonnie: good morning. i am vonnie quinn in for betty liu. opening lower a day after hitting a six-week high following crude lower once again today. president obama set to make good on old campaign promise from 2008? we will hear from the president on his proposal for the future of prison at one -- one, and obey. does the microsoft cofounder stand with the rest of silicon valley? that is ahead. let's head to the markets desk were julie hyman has the latest on the markets. julie: breaking news on a couple of economic fronts. of homes unexpectedly rose

in january to the second highest early 2007. closings of 0.4% to an annual pace of 5.4 7 million. prices are climbing, as we heard about in december this morning from the shiller report as well. consumer confidence coming in ofow estimates at a reading 92.2, 90 7.2 is what had been anticipated by economist. that is a fresh number for february here. it is still at a three-month high even though it came in looking at a conference board. i'm getting confused between the various cymer confidence industries. one falling to 92.2 does not tend to be necessarily a market moving number. we are seeing stocks declining on the day on concern of economic growth in china, concern of what is going on in oil markets as well.

let's look at the imap and the various groups on the move within the s&p. a lot of the groups that are done well are now coming down today and notably, material shares are selling off. andgy is also lower today financials are taking a hit as well. oil prices, let's look at what is going on there. we are seeing contracts rolling off to april and that is why it looks like the price is higher when we are seeing a percentage change of down 2%. a lot of movement with oil. we will hear from various speakers at a conference going on in houston. there may be volatility as we get various headlines to one headline we arty got this morning is iran called the saudi output freeze plan ridiculous according to the iranian news agency. we saw a light downward when the

headline came out this morning. that is helping to put pressure on stocks as well. data showing expectations are deteriorating in the next six months and also business conditions. we have got the fed index, which was lower. all of these tend to be volatile. the oil trade is in play again today. >> yes. a couple of movers are on and offering, those shares are lower as a result. we have seen many of these oil companies ranging in cash. southwestern energy also lower. also takingcks are a hit once again today. that dimon is speaking at we're notably, jpmorgan also said this morning that it will need to boost reserves by $1.5

billion if prices hold at $25 per barrel over 18 months time. we see banks broadly under pressure this morning. we are also seeing material stocks pull back. stocks were soaring yesterday. stocks were cut to sell over citigroup. planned to sell some of his assets. because we are seeing the money nete, that could erode the asset value and also u.s. steel is being downgraded on the outlook for flat rolled steel. it was one of those big gainers yesterday as well. vonnie: thank you for that. let's get to the desk now. matt miller is manning that for us. prosecutors have asked apple to unlock iphones at least nine times since october. officials have demanded apple

unlock 12 phones, from a letter to app -- from apple to a brooklyn judge. apple has been fighting a justice department's's request to unlock one phone used by a in san bernardino, california. more today from north korea, kim jong-un's regime threatened to launch strikes against the united states. take action if it appears the u.s. and south korean special forces are preparing an attack. -- obama is set to speak minutes from now. he is sending congress his plan for closing the u.s. prison from guantanamo bay in cuba. the white house does not have much confidence congress will approve that proposal. it calls for dozens of detainees at the site here in u.s. we will bring you mr. obama's remarks live. donald trump is going for his third consecutive victory today

and polls show he is favored in nevada caucuses but low turnout could diminish the size of a victory. the battle for second place may be close. marco rubio counting on support to give him an edge over texas senator ted cruz. the world's oceans are rising at the fastest rate in 28 centuries largely because of greenhouse gases from human activity, the conclusion of a study published in the proceedings of the national academy of sciences. experts are warning rising oceans could lead to many oceans it -- goshen -- coastal cities -- powered by our 2400 journalists and more than 150 news euros around the world, i am matt miller. vonnie: thank you. comeback but brief are headed down once again. major industries still down. the s&p trying more than 6% after the selloff.

than 5% thisre year. how are strategists reading the market fluctuation so far? bring in the equity strategist there who has an s&p target range and joins us from baltimore. it is probably pretty wise to have a range. it is quite a big range you have between now and the end of the year. why this range? >> the target on bloomberg's 2100 year-end. what we have been waiting was around 1825, you have good support in the market and we have seen it tested a number of times. then you have valuation resistance. the fed will commence and there are a lot of headwinds to getting past that level. we talked more about the upside and downside of our target of.500. is it based on economic fundamentals or corporate -- corporate earnings?

>> it could peek at the middle of the year. ultimately, the fed will make a mistake. an old economist now deceased said that business cycles do not die in bed. the fed murders every single one of them. there is some truth to that. it is either the fed or oil. they will miscalculate. a big mistake they are making right now is they treat the dollar and foreign growth as -- i know they have a legal mandate on price stability and full employment. they have got to consider the fact the strong dollar is an outright deflationary indicator and foreign growth is not where it needs to be. vonnie: you're making the assumption the fed will definitely make a mistake. has it so far in your opinion? >> no, they have bring down the path since a year ago in 2016

terminal fed funds in a year. that is the right move. 1998 i missed and asia concerns about financial contagion, we have long-term capital management now. the fed cut rates after a major summer of correction in the s&p. the fed has to be conscious of a slow exit. will the next step be waiting or an actual cost? the fed can markup fed funds on a slow basis that one mistake they could make is to not consider the fact that china is really right now and if it decides to devalue and you look at the s&p and moving with lastse trade since about august, if the chinese just outright devalue because their growth hits a wall and institutes capital control for a major basis, that is disastrous for europe and japan and it would spill over to us.

the world economy is all i would say to them in terms of deliberation. it is not just domestic mandates. what about corporations? you are talking about the u.s. exposed to other companies. how would a channel to other economies? we have already seen dramatic outperformance of domestic versus global equities in the last 21 months since the summer of 2014 in particular. the dollar took off on june 30 of 2014. dollar,g out of the time for the rest of the world to catch up and for china to do itstter job finessing rebalancing without having to resort to outright devaluation. the central bank there has become more computer -- community could tip. do you believe them?

quite if you think about it, once you do a little bit of devaluation, you trigger a flood of capital flights. capital outflows in the form of covering their corporate dollar carry trade with corbett's above and dollars assuming the yuan would always rise. that is ok. but when they start losing retail at some point, that would be a problem. we have to essentially work with china and come to some sort of equilibrium and also with respect to europe and japan, the recovery is tenuous. even if it is not fully a global trade-based economy. vonnie: let's talk that the other things impacting stocks and the u.s. potential and target. crude oil, is the bottom in? >> i think so. looks to me like the broader dollar, not the narrow dollar like the dx why or the major currency index, but the broader dollar in market currencies,

shows size of the top. if you look at the last 15 or 18 months, that is the same trade. the dollar is inverted crude. a looks to us crude on top-down basis could go to 43 if the dollar on a broad-based is as flat this year as where it started. vonnie: that is actually my chart of the day later on. you have given us a little glimpse into the future. little comment on treasuries. where we will see the 10 year? >> real rates will stay very low for a long time. the term premium, which is what you pay taken the risk of blocking your money up for 10 to be it is not going very high either. that plus five and five, on inflation, and the fact that we do not have the money or

turnover or velocity, we will have a hard time getting past 2.5% for a while on a 10 year. the fedother reason for not to flatten the curve on the short end by raising short rates. thank you so much. equity strategist, we appreciate your wisdom there. so ahead, jpmorgan ceo jamie dimon says helpful in spending the money. find out how the consumer is the big winner next. ♪

vonnie: good morning. time for the bloomberg's/, a look at some of the biggest business stories in the news right now. shares on the stock's change,

both of those companies are higher today. it is considering an old share merger. he goes through, it would create one of the world's biggest exchanges. the holidays were better than expected for the biggest department store chain. sales fell less than projected. macy's has been under pressure from activist investors. excess inventories. the list oftime to those interested in buying yahoo!'s business. sportsfamiliar say illustrated has heard a presentation from citigroup. time would be competing with copies like at&t for yahoo!. and that is our latest. environment may

tough. question toasks a dan vogel, chairman and ceo at the super return international private equity conference in berlin. he asks if the current volatility is good for private equity. >> volatility fuels private way that is different than i think most other markets are. it is a terrible time is you are a seller. fivete equity has had terrific years of monetizing investments we have made in previous years. my hundred billion dollars returns to investors over the past 24 months. that part is good. you have got a lot of money as an industry to work. you wanted the longest standing names in private equity back in 1978. what are you specifically looking at?

what industries are interesting in the current market? >> there is time for industries to come in and out of favor. in the current downdraft, i do not want to call it a recession or even a better market, though it could be, there are markets across a number of sectors. focused onally have a handful of industries, you willls, so i think see us active there. health care has have the biggest percentage correction, but it is a big part of the economy in the future. technology is enabling a lot going on in health care so we're likely to see interesting things there. i leaves the word technology again because technology enabled as the services are throwing up some pretty good opportunities. we will inquire investment hard work here that is all fine. consumer retail, probably lacking for a bit. a surprise to some, myself

included, that the dividend of lower energy prices has not put enough money in consumers pockets and generate the kind of confidence you might expect. maybe a little bit of a lagging there. i expect and i think most of my colleagues in the industry expect to be a better year for buying a private equity, even though we will see disruption. selling,ms of who is you have specialized in going to a bigger company and taking out an unwanted unit. our little companies unwilling to sell this point? >> i come back to how these things run in cycles. after companies make a lot of big acquisitions, smaller investors follow. m&a levels have been among strategic acquisitions over the last several years. there is a lag of a year or two. people look at their portfolios and say, why is that there and

wire you spread so far across? a focus concentrated portfolio would deliver greater results and ceos look at the portfolio and say it is time to sell some things. i think corporate in the united states and europe, particularly those unrelated units, will likely be selling this year. that was a ceo speaking from the international private equity conference that takes place in berlin. still ahead, valeant saying it will reshape some of the earnings after the board reviewed its relationship with a pharmacy. what this means for investors next. ♪

vonnie: you're watching bloomberg markets and i am vonnie quinn. abigail's life from the nasdaq. the bear market in biotech with the nasdaq biotech industry down as much as 40%. one stock plunging today is therapeutic's, a small cap stock , the second-biggest drag after an application for muscular .ystrophy drug the application was incomplete. we have got at least a few people weighing in here. oppenheimer is defending. -- martin ceo of shkreli came out and said he is glad the fda rejected the drug that the program is a travesty and it insult to signs and patience. you.e: thank

we will check back with you later on. valeant has denied any .rongdoing the stock is up today but it is down. >> the thing to keep in mind is not a one-day move that volatility. stock was down 10% in today, we are down 10%. people think positively a relatively small -- that they an internalowing investigation. everyone is saying this will continue to be up and down. they will have a call to talk about the fourth quarter we will see more volatility between now and then. we saw a chart and there was a gap opening higher.

a $58 million statement is not in context massive. >> it is not. folks who have been pretty bullish on the stocks for a long been a massive decline since august and are saying this is good news and it puts a piece of bad news behind them. leave the door open for more disclosures. the fact that the board investigation there is still ongoing. we have seen a lot of other outside pressures ongoing. investment managers who control what they get, they are putting a lot of pressure on the products. they say the products are overpriced. we will put every single one of them under extreme scrutiny. cbs runs 75 million people. they said one of valeant passes biggest drugs, a little wiggly foot at the super bowl.

saying we will make people fail before we allow them to try the strut, costs $1000 a vial. there is a lot more of that scrutiny under way. the troubles are not over. about hedge funds? hedge funds might be getting in now? something we will need to see. we have not heard anything from him. some of these positions have been absolutely destroyed. vonnie: you will be following , ju story i believe armstrong. microsoft's cofounder bill gates, the fbi in its fight with apple. it is a bloomberg exclusive. ♪

vonnie: we are at the roosevelt room in the white house with president obama is scheduled on a plan to close the

prison for kuan, and obey. -- guantanamo bay. we will bring you the president's marse live right here as soon as he begins speaking. .ou can also watch on bloomberg just use the function life go. in washington with more details on what the president might say. the president is not going to give us any locations, is he? >> no. the plan is lacking in a lot of specifics. he will not face specifically where he wants to transfer the prisoners in the u.s. it is something lawmakers have been fighting him on for the last seven years. this is a promise the president made when he ran for president in 2008. it will be difficult for him to get it through congress. we are looking at whether or not this will be done for presidential action.

those who know what is in this say there is nothing new and we will not learn any new. is there a potential for earning something, even the numbers and so forth? they are eligible at least for moving. >> the defense department put out some numbers and said it would be between 30 and 60 prisoners sent from guantanamo andhe u.s. has a mark desk they say they will reap the savings each year on this going forward. vonnie: the president is stepping up to the microphone or let's listen. president obama: we are using every element of our national power. lawland security, enforcement, federal, state, and local, as well as the example of our ideals as a country committed to universal values, including rule of law and him

and rights. fight, we learned and we worked to constantly improve. when we find something that works, we keep on doing it. when it becomes clear something is not working as intended, when it does not advance our security, we have to change course. for many years, it has been clear the detention facility at does not advance our national security. it undermines it. it is not just my opinion. this is the opinion of experts, many in the military it is counter productive to the fight against terrorists because they use it is -- as propaganda in their efforts to recruit. drains military resources with nearly $450 million spent last year alone to keep it running and more than 200

million in additional costs needed to keep it open going than 100or less detainees. when i talk to other world leaders, they bring up the fact that guantanamo is not resolved. moreover, keeping the facility open is contrary to our values. it undermines our understanding of the world. record of upholding the higher standards of rule and law. as americans, we pride ourselves on being a beacon to the other nations, a modern -- a model of the rule of law or 15 years after 9/11, 15 years after the worst terrorist attack in american history, we are still

having to defend the existence of a facility and a process where not a single verdict has been reached in those attacks. not a single one. for president,n it was widely recognized the facility needed to close. this was not just my opinion. it was not some radical, far left view. there was a bipartisan support to close it. predecessor, president bush, to his credit, said he wanted to close it. was one of the few things i and my republican opponent senator john mccain agree on. and so, in one of my first acts as president, i took action to begin closing it. and because we had bipartisan support, i wanted to make sure

we did it right. i indicated we would need to take our time to do it in a systematic way. options.amined all the time, what had previously been bipartisan support suddenly -- suddenly, people previously had said it would back off because they were worried about the politics. was scared into thinking that if we close it, it will somehow -- we will somehow be less safe. since that time, congress has repeatedly opposed restrictions aimed at preventing us from closing this facility. despite the politics, we made promises.

more than 85% of already -- have already been transferred to other countries. more than 500 of these transfers occurred under president bush. since i took office, we have so far transferred 107 more him each under new and significant restrictions to keep them from returning to the battlefield. as a result of the actions, today, just 91 detainees remain, less than 100. department,efense thanks to very hard work by the secretary of defense, bashar, as well as his team, working in concert with the office of management budget, today, the department is submitting to congress our plan for finally closing the facility of guantanamo once and for all. it is a plan that reflects the

hard work of my entire national security team. so i especially want to thank .sh and his team at dod his plan has my full support. it reflects our best thinking on how to best go after terrorists and deal with those who we may capture, and it is a strategy with four main elements. first, we will continue to securely and responsibly transfer other countries. the 35 have already been approved for transfer. keep in mind the process careful coordination across the federal government to ensure national security interest are met when an individual is transferred to another country. we insist that foreign countries institute strong security measures. as we move forward, it means we around 60 and

potentially even fewer detainees remain. second, we will accelerate the periodic reviews of remaining detainees to determine whether detention ised necessary. our review board, which includes representatives from across government, will continue to -- relevantrelative information including intelligence, and if certain detainees no longer pose a continuing, significant threat, they may be eligible for transfer to another country as well. three, we will continue to use all legal tools to deal with the remaining detainees still held under flawed war detention. currently, 10 detainees are in some stage of the military commission's process, a process that we worked hard to reform in my first year in office with bipartisan support from congress.

i have to say with respect to these commissions, they are very costly. they have resulted in years of litigation without a resolution. we are therefore outlining additional changes to improve these which would require congressional action, and we will be consulting with them in the near future. on that issue. out that into point contrast to the commission process, our article three toeral courts have proven have an outstanding record of convicting some of the most hardened terrorists. these prosecutions allow for the gathering of terrorists against terrorist groups. it proved we can both prosecute terrorists and protect the american people. so think about it. terrorists like the shoe bomber, -- who tried to blow up an airplane in detroit.

-- who put a car bomb in times square. who bombed the boston marathon. they were all convicted in our article three courts and are now behind bars. the united states. so we can capture terrorists, protect the american people, and, when done right, we can try --m and put them in our mass maximum-security prisons and it works just fine. in this sense, the plan we are putting forward today is not just about closing the facility at guantanamo. it is not just about dealing with the current group of detainees. which is a complex piece of business because of the manner in which they are originally apprehended and what happened. a chapterout closing

in our history. it reflects the lessons we have learned since 9/11. lessons that need to guide our nation going forward. so even as we use military commissions to close out the cases of some current detainees, which, given the unique it difficult, make to try them in our courts. this type of use of military commission should not set a precedent for the future. have the -- as they have been in past courts, military positions will continue to be an option when individuals are detained during battle. option, the most effective option for dealing with individuals detained theaters, musty be our strong, proven, federal courts. fourth, and final, we are going

to work with congress to find a secure location in the united states to hold remaining detainees. these are detainees who are subject to military commissions, but it also includes those who cannot yet be transferred to other countries, or who we have determined must be continued to be detained because they pose a significant threat to the united states. we are not identifying a specific facility today in this plan. we are outlining what options look like. as congress has imposed restrictions that currently prevent the transfer of detainees to the night states, we recognize this will be a challenge. we will keep making the case to congress that we can do this in a responsible and secure way, taking into account the lessons and the great record of our maximum-security prisons. let me point out the plan we

are submitting today is not only the writing to do -- the right thing to do for security. it will also save money. the defense department estimates this plan, compared to keeping guantanamo open, will lower costs by up to $85 million a year. years, it would generate savings of more than 300 million. over 20 years, the savings would be up to $1.7 billion. in other words, we can ensure a full tower values around the world, and, save american taxpayers a lot of money in the process. in closing, i want to say i am clear eyed about the hurdles to finally closing guantanamo. the politics of this are tough.

i think a lot of the american public are worried about terrorism and in their mind, the notion of having terrorists held in the united states rather than in some distant place can be scary. but part of my message to the american people here is we are holding because we threw the book at them. and there have been no incidents. we have managed it just fine. in congress, i recognize, in part because of some of the fears of the public that have been fanned often times by misinformation, there continues to be a fair amount of opposition to closing guantanamo. it were easy, it would have happened years ago as i wanted, as i have been working to try to get done. bipartisanemains

support for closing it. the stakes involved for our security, the plan deserves a fair hearing, even in election year. we should be able to have an open, honest, good-faith dialogue about how to best ensure our national security. the fact that i'm no longer running, joe is no longer running, we are not on the capacityt gives us the to not have to worry about the politics. let us do what is right for america. let us go ahead and close this chapter. and do it right and do it carefully and do it in a way that makes sure we are safe, but gives the next president and more importantly, future generations to death the ability

to apply the lessons we have learned in fighting terrorism and doing it in a way that does not raise some of the problems guantanamo has raised. opportunitye is an here for progress. i believe we have got an obligation to try. president bush said he wanted to close guantanamo. despite everything he had invested in it. i give him credit for that. assessmentn honest on his part about what needed to happen. but he did not get it done and it was passed to me. i've been working for seven years now to get this thing closed. as president, i have spent countless hours dealing with this. i do not exaggerate about that. our closest allies raise it with me continually. they often race specific cases of detainees repeatedly. want to pass this problem onto the next president, whoever it is. if as a nation, we do not deal with this now, when will we deal with it?

are we going to let this linger on for another 15 years, another 20 years? another 30 years? if we do not do what is required now, i think future generations are going to look accurate ask, why we failed to act when the , the right side of history and justice and our best american traditions, was clear. so again, i want to thank secretary carter. you and your team did an outstanding job and you have shown great leadership on the issue. with this plan, we finally have the opportunity to limited a terrorist propaganda tool, strengthen our relationships with our allies and partners, and most importantly, uphold the values as americans. i'm committed to closing the defense and -- the detention facility in guantanamo and i

will make the case in doing so as long as i am in office. it is a good moment for everyone to step back and take a look at the facts and take a look at the been of those who have most committed to fighting terrorism and understand the stuff. our operatives, our intelligence officials, our military, let's go ahead and get this thing done. thanks very much, everybody. >> mr. president -- we have been listening to president obama outlining his plan to close the president guantanamo bay, cuba. let's bring back our washington correspondent. there seems to be a change in tone here since the president came into office determined to close guantanamo. it took a long time to get around to the plan he outlined and he began to say things like, this has been passed onto me and i have spent countless hours on this. he would leave office with guantanamo still open, isn't he?

it sounds is what like it we did not hear the president tip his hand on anything about a -- a presidential action, which seems to be the quickest way to do this, when congress basically said they will not play along with his idea of putting for the planet everyone coming together and agreeing to close this. republicans control congress and have said repeatedly they do not want to close guantanamo, even with the president's plan. without an executive action, it does look like it may get passed on to the next president. vonnie: mitch mcconnell was speaking as well about various different things, but he mentioned the supreme court, and when you were listening, you are monitoring those headlines as well. what else do you say about the particular issue? >> the president said he hopes on thea fair hearing guantanamo bay. he also hopes to get a fair issue -- hearing on the supreme court. mitch mcconnell, the senate leader, just said he does not plan to give the president a

fair hearing or any hearing on whoever the president nominates per we are likely to see another fight on that for the last 11 months of the presidency. the president saying congress should put forward hearings and go forward with hearings on his appointment. it sounds like the senate does not plan to do that. vonnie: our thanks for keeping on that.all -- an eye and exclusive. bill gates says he is disappointed by the reporting suggesting his fighting with government over its clash with apple. we will give you the details of the interview this morning exclusively on to -- on bloomberg television. ♪

vonnie: in an exclusive interview this morning on bloomberg television, bill gates describes why he was disappointed. gates: it is a challenge to

upgrade the policies including the issues of when the government has a right to know. having a really good debate about, when is that appropriate, and the extreme view that the government always gets everything, no one supports that, having the government be blind, no one supports that. whether it is this particular case or a few others in the court -- >> saw headlines same bill gates backs fbi. ill gates: i was disappointed because that does not state my view on this. i believe with the right safeguards, there are cases with the government on our behalf, like stopping terrorism, which could get worse in the future, that that is valuable. but striking that balance, clearly the government's peak in information historically has used it in ways that we cannot expect going all the way back to the fbi under j edgar hoover.

can have thisw we discussion. i believe there are sets of safeguards where the government should not have to be completely blind. >> what specifically should be done in this case, just because you are blind? ll: the courts will decide this. apple says whatever the courts decision is still abided by. in the meantime on it gives us the opportunity to get the discussion, and the issues will be decided in congress. the patriot act, how that gets involved, you do not want to just take a minute after a terrorist event and swing in that direction, nor do you want to completely swing away from government access when you get some abuse being revealed. you want to strike the balance that the united states leads in setting an example. quite the same stage now as environmentalism was perhaps when you were younger. it is one of the issues were people will come to work in microsoft and people will come

to work at apple. it is becoming as fundamental to them as -- was to a previous generation. bill: everybody wants to feel their information is kept private, particularly because more and more activity has been there so long. then again, when people are empowered by technology and terrorist activities, it is not just that they can kill a few people. it is there -- they could kill a lot. we do want the government to be out there and trying to stop those things from happening. it is not completely in one direction. >> if you look back in history, the 19th-century liberals , letters of anarchists and terrorists because they were frightened that would somehow be a liberal. do you think the definition of what you liberal is is changing? : governments have always

been there to try to maintain order. having some awareness of what is going on, the u.k. strikes the balance differently than the u.s. because there was some degree of terrorist activity, the idea of having cameras in london. people are comfortable with that. i do not think that is likely to happen in the u.s.. the u.s. will always the, probably wanting to make sure the government does not overreach, more than most places. ♪ ♪

vonnie: it's 11:00 in new york, 4:00 in london, and midnight in hong kong. i'm vonnie quinn in for betty liu.

mark: and i'm mark barton. this is the european close. ♪ vonnie: here is what we are watching. the ftse 100 ceo has publicly lacked -- backed david cameron's campaign to stay in the eu. the bank of england is staying on the sidelines. --k: the world's biggest company/his dividends after earnings plunge. stock europe's biggest exchanges are possibly creating one of the biggest exchange companies in the world. paradise on four wheels. rolls-royce gets ready to replace one of its iconic limousines with one with an aluminum frame.