-- carol: welcome to bloomberg markets. tracy: fed official john williams is sticking to his guns. he sees the economy improving despite some headwinds. what does that mean for stocks? carol: problems are mounting for best buy, coming off a disappointing holiday season and now they say this year may not be any better. tracy: we learned apple will testify in a congressional hearing, but yesterday i director says unlocking the controversial iphone will not be easy. he calls it one of the hardest issues he has faced in government. let's head to the markets desk where julie hyman has the latest. julie: i want to point out what

is going on with oil. to the highs of the session with some comments coming from the venezuelan oil oilster saying venezuelan producers are contemplating a meeting in march. this looks like similar commentary to what he was saying in a story that came out yesterday. he says russia, saudi arabia and cutter have agreed on a meeting qatar have agreed to a meeting. even if that, there would be a and we areroduction seeing oil prices spike by more than 2%. all three major averages, the nasdaq still trading higher.

let's get the latest on how stocks have done thus far. we've seen the s&p 500 in the green. flirting with that level before. if it ends up rising, it will break a losing streak. choking up arkets little bit today. i have been watching the sector movers. almost everything is up right now. energy stocks are not higher as a group. that group down by about 21% but it has become a broad-based rally with financials up the most. there's a lot of concern about energy producers and the exposure banks have to it. materials have turned around and are higher and we see a lot of strength in the defensive

groups, those that are more economically resistant. we have salesforce rising on the strength of its earnings report and united technology gaining strength on speculation that honeywell and it will come to on a deal overcoming trust resistance. and allergan rising as congress makes noise about this implications of pfizer buying allergan, but those shares are doing well today. t-mobile's parent coming out with numbers that beat estimates. they do benefit from that defensive play in today's session as well. let's get to bloomberg's first word news. mark crumpton has more from the news death -- news desk. will hostident obama

republican leaders tomorrow about the vacancy on the u.s. supreme court. the president will meet with mitch mcconnell as well as chuck grassley of iowa, the head of the judiciary committee. they will be joined by harry bothand patrick leahy will democrats. ryan sandoval has been mentioned as a possible replacement and says he is not interested in the job. he says he does not want to be considered for the nomination. fbi director james comey says the avenue -- says the apple cases the hardest case i have seen in government. members of the house intelligence committee asked about a judge's order to help the fbi unlocked the iphone of one of the san bernardino shooters. >> these san bernardino litigation is not about us trying to send a message or establish some president. it's about trying to be

competent investigating something that is an active investigation, so i don't know how lawyers and judges will think about what is the limiting principle. -- apple ceoeo tim tim cook says helping the fbi break into the phone would be bad for america. a friend of the court brief will be filed support apple in its battle against the government. the republican presidential candidates will meet tonight in houston, texas. it's the final debate before super tuesday. mitt romney is responding to donald trump's tweet calling him a fool. methinks thed donald doff our test too much. show your back taxes. there is no crying in baseball and the players union have agreed to and the practice of base runners taking out an

infielder with a rolling slide. they are hoping to avoid a where of last year's game one player was left with a broken leg. he four hours a day powered by our 2400 journalists in more than 150 news euros around the world. joseph edelman, founder and ceo of perceptive advisors was on earlier today. stephanie ruhle asked how he was able to achieve a number one ranking in such a volatile year. good stock picks. we had a mid-stage i/o tech company with two drugs that looked like they work and are approvable. we have a company that is an we havetage company and

a company that has been in the news a lot, which is a drug for muscular dystrophy. they all did well. we did well with private investment with abt k inhibitor for lymphoma and leukemia. it looks like it is probably the best in class and that company was taught by astrazeneca. stephanie: how long were you in these additions? it takes quite some time, sort of the opposite model of valeant. guest: over the life of the fund, we have tended tuesday in longer. we are careful picking these upfront unless something changes and if something changes, we are perfectly willing.

well alonggone quite with our expectations. last year, but what did it look like before last year? waiting is the name of the game and life sciences. guest: these are really long-term positions. over 100 positions and some are smaller that i made via little more tendency to trade. it is a myth. -- it is a mix. we have services and devices, we've done very well in some it is aositions and pretty diversified portfolio. stephanie: when you look at the market of today, does it affect what you do day in and day out? guest: yes.

biotech and health care tend to move with the markets for the most part, but they tend to be recession resistant. the market is predicting a recession, can often be an opportunity to buy these stocks. do you look at the market in the last six weeks as a buying opportunity? guest: i do. biotech is off by 50% from its high. the reason i think there is excessive fearfulness about drug pricing and price controls, particularly with the stocks we invest in our much of an issue. they are going to dramatically impact the internet -- the industry. david: are they regulation resistant? there's a lot of talk on capitol hill and a lot of talk about what percentage of gdp is consumed by health care.

it can't keep growing forever. guest: drugs are a relatively small part of the health care cost. money. cases, they save when you took out the drug in the biotech sector, a lot of concerns are somewhat misplaced. is sort of an investment by society. if you want good health care, there's a lot that is going on that is positive. in the biotech industry, i think it will have a positive economic impact. it can keep a lot of the hospital and keep people productive for longer. if the price of controlling cancer is $1 million a patient, that's an issue society has to face. think we want to at least have a chance to get there. was joseph edelman,

founder of perceptive advisors. up, deutsche telekom once thought about selling its stake in t-mobile but it may have hung up on that idea completely now that it is relying on growth. a less thanbuy had cheerful christmas and this year is not looking much better. carol: the mild winter creating a massive natural gas flood. wait until you hear, a tankers it would take to wipe it out. james comeya break, speaking to a house appropriations subcommittee, testifying on the fbi's budget earlier. testified that the apple conflict is the hardest test of government he has seen. ♪

carol: welcome back to bloomberg markets. i'm carol massar. tracy: and i'm tracy alloway. time for a look at some of the biggest business stories in the news right now. home prices keep going up in the u.s. prices rose 5.8% in the fourth quarter from one year ago. the inventory for homes has shrunk and an improving labor market has brought out more buyers. carol: another big loss at sears holing -- sears holdings. same-store sales down almost 7%. sellingmpert has been and spinning off assets and invested heavily in sears online and in rewards programs. part wayslife may

with its life insurance agents. they are in talks about a possible sale of metlife premier client groups according to a regulatory filing out today. they have 4000 agents to sell a number of policies. that is your bloomberg business flash of eight. carol: right now, let's head to the markets desk and check in with julie who is checking on emerging markets. julie: there is a rising tide of sentiment in favor of buying into emerging markets right now. is advising and managing several funds for pimco. if you look at the index, we are not seeing any strength there that they are joining folks like blackrock and goldman sachs. raising their outlook to

overweight. is thing they are looking at value rates. they say it is possibly the trade of the decade. they're looking at the schiller p/e ratio which looks at the quickly adjusted pe. i could not duplicate that so i took regular pe and we see the tradingon at 11 times earnings and is at a relatively low level. index, ifng markets you look at it, we have seen a significant pullback, a drop of about 26%. been a tough time for those who invest in emerging markets. ,f you take the top five funds take a look at the bloomberg and you see a percentage adjusted. they have tracked that emerging markets index, a drop of about

26%. there's some debate about whether it is time to get into emerging markets. have been waiting until the dollar started to get some of it gains but now that it has, they are changing their recommendation. smithnamed john paul apparently anticipated the downturn back in 2011. riskinks china is a big and state involvement is still too big. he has had a handful of good calls. thank you so much, julie hyman. tracy: deutsche telekom raised its dividend for the first time since 2011. gives you a boost and mobile phone markets. guest joining bloomberg

surveillance to discuss how they planned to keep momentum going with their u.s. unit. guest: we have a great is this in the u.s.. the revenue is going up and flowing. we have no urgency to do anything in the u.s. we had great proposition in the market and no plans to sell the u.s. at that time. but we said if there's an opportunity to grade something beyond what we can do organically, we have an outstanding business these days. >> when you look at europe, it is falling apart and growth is not as strong. why not sell some of your european assets?

guest: i am not that pessimistic on europe. looking at the markets, our stable in a competitive environment and same for the european entities. that, even in the europe environment, we are flat people reason is appreciate the huge investment we are putting into infrastructure. see a good performance here and we are expecting a revenue increase. this is the heart of digitalization. tom: you are in the heart of mergers and acquisitions in continental europe. pan me about

europeanization. combination that is going to occur in europe. how do you foresee m&a in your sector and a fractured europe? the u.s. is a market of 300 million people. if you go to china, there are three carriers in europe. we have more than 150 players here. customers paying in germany is one third of the u.s. always have to prove it and show the synergies are coming in this environment and before we , we dor any outer market

our infrastructure in the markets that we have. europeanupon the network before we consider something a cross-country merger. confident europe will not be falling apart. carol: bloomberg markets continuing on this thursday. ♪

carol: welcome back to bloomberg markets. its latest out with earnings. shares are higher today after the electronic retailer beat wall street earnings. but sales are down compared to one year ago. matt townsend has been digging into the numbers and joins us now. it sounds like a little bit of a

complicated story. : on one hand, the quarter was not that great. basically saying it's going to be flat wishes and sound great, but in the current environment, it did news. other than declining. heading into the holidays, consumer electronics were supposed to be week. phone sales and tablet sales are week. so the fact that they are saying sales are flat or we are going to maintain our margin, shareholders like that as well. it's a little bit of a mixed bag but it seems like investors like it today. blaminghey have been suppliers were sluggish sales -- a lack of innovation, they say. some look at it that way,

if you are a good retailer, you should be able to overcome that. parts of our businesses are growing and we have to focus on the ones that are. there's a built-in excuse to say there's not a hot iphone driving sales or the penetration of s is really high and people are not buying smartphones. the ceo is trying to grow revenues. is there a way for best buy to grow their way out of this? a media call today with some reporters and basically said that is still my goal. to at the end of the day, some other competitors might fall away from the market. they are the strongest player and they are here for the long haul. eventually, that will turn into

growth, whether it is selling more services. they are doing well with home having theirpeople home theaters designed by them. it's just a matter of if you are an investor, can you wait that long? tracy: we have to talk of the buyback and sustainable dividend. is that sustainable? matt: that is one of the critiques. why aren't you investing in the business to grow the business? this is what investors investing in the stock want. carol: thank you so much. back in a moment. ♪

carol: from bloomberg world headquarters in new york, this bloomberg markets. let's kick it off with the

headlines from the bloomberg first word news with mark crumpton at the news desk. mark: the white house is president obama and senate leaders will discuss the supreme court vacancy tomorrow. the president will meet at the white house with senate majority leader mitch mcconnell, chuck grassley, harry reid, and patrick leahy. nevada governor brian sandoval mentioned as a possible replacement for antonin scalia is not interested in the job. governor sandoval said he told the white house today he does not want to be considered for the position. saysirector james comey apple's dispute with the justice department is the hardest question he has seen in government. testifying before the house intelligence committee today, he said there are many complicated factors involved. >> we have to make sure the bureau explains the costs are some people don't look at us five years from now and say

where were you when this happened? my goal is to have the bureau be a factual input so we can have a really robust conversation that is well informed. mark: apple is fighting the order to unlock the phone used by one of the san bernardino shooters. new poll shows donald trump and hillary clinton leading the field of presidential candidates in virginia. 60% supporthows compared to 33% for bernie sanders. on the republican side, mr. trump has 41 percent support followed by marco rubio and ted cruz. after nearly one year in space, scott kelly is just days away from returning to earth. he held his final news conference from the international space station today. he had home tuesday. he says he cannot wait to jump

in his pool and eat at a real table. by the time he comes home, he will have spent 340 consecutive days in space. days set record is 438 by a russian cosmonaut. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. carol: commodity markets closing in new york. let's look at some of today's biggest movers. more -- at the lowest in more than a decade. and wheatuinn -- corn futures higher on today's trade. oil, wtilook at crude rising today. we have to talk about natural gas. natural gas futures have done it

again, tumbling for a second time in two months. you can see prices down about another 4% at this hour. natural gas is a story our next guest says no one is talking about. he's the director of a firm that advises energy companies. fundamentals explain what is going on with natural gas? tom: the storage numbers came in very high. it's about 30% above the five-year average. the reason it is a long-term story is because of how it can be used. this country can power itself with natural gas for decades. just look at the dynegy deal. away.nd nuclear go there's a huge demand that will involve with gas-fired plants

and new plants, plus we can export it. demand out of asia, that's about 70% of demand. it is also growing as a transportation fuel. , huge storage numbers, but the long-term view, particularly down here in this that natural gas is a bullish story. we also seem to be awash in a world of oil. are we expecting consolidation and neither of those industries? tom: yes, we are. what we are following is how the evaluation spreads are narrowing. there had not been a lot of deal activity because the britt off -- the bid offer spreads are wide and people are holding off for better prices. what we see now are good offer

spreads narrowing because of the perception commodity prices are stabilizing. oil has been in a range in the last few weeks. more and more transactions are happening. equityion of new oil issued and that doesn't really happen unless buyers and sellers can get together and find a price. we expect there to be many fewer companies in this industry a year from our 18 months from now. carol: what about the role of technology in all of this? tom: on the upstream side, in oil services and equipment. technology has led to substantial efficiencies and cost rationalization. the amount of cost risen out of the upstream energy business in the last year is really remarkable, measured in weeks and months.

pressure is put on the services side where a lot of technology is to drive cost out of the system. wells in thist of country that can be produced with low marginal cost per barrel and the drilling costs come down substantially. it makes the company's much more competitive globally and they are excited to compete. we are exporting oil and exporting gas and they want to take market share. carol: we are going to leave it on that note. thank you for joining us. tracy: let's continue the discussion of nat gas but shift to what is being done about those record output levels. supplies are 30% above the five-year average with no sign of easing. now the first export of shale gas is on the way from 10 year energy. natural gas for bloomberg news and joins us now. first we talk about this

u.s. lng export. how significant is that? it is significant in that it is a symbolic gesture. first time -- it has been historically a domestic market. -- carol: we have been a taker and not a giver. guest: yes. no one not be shale boom was going to be this massive. they went from needing to import this gas but what do we do with it all? seen that gap for -- nat gas prices at their lowest in decades. is this bad timing? guest: it does offer a glimmer of hope. as they come online, we will have an outlet. for now, we have so much gas and

these exports are doing too little. i saw the price move today and the levels we are at, hasn't the market in anticipating some of this? they understand the trendlines and see what is going on. the thing -- people just see relentless production. we have hit records as everything is cratering. part of that is because producers are trying to make any money that they can to survive. with nat gas prices still so low, as u.s. still competitive? it depends where you look. a couple of years ago, the u.s. was selling at a discount of about $20 and now it is two dollars or three dollars. the discount has narrowed dramatically. it doesn't make that much sense to ship to asia anymore, but we

will see how this plays out. prices are down globally. carol: coming up in the next 20 minutes, the remaining republican presidential candidates facing off in houston tonight. is this the last chance for marco rubio and ted cruz to slow down donald trump? ♪

tracy: welcome back to bloomberg markets. turning to politics -- we did not get a mitt romney endorsement, but we have gotten a former candidate calling out donald trump on taxes.

romney and trump have been dueling on twitter. to sort this all out, let's bring in john heilemann. us.s live at with so much better to see you. we like when it works out that way. spat onyou make of this twitter going back and forth? john: great to be with you. we were just having a discussion that tracy and carol is confusing because they can be named for men or women. very confusing. , like every romney other member of the republican establishment is horrified that donald trump may be the nominee. and it mitt romney is trying to figure out more than one different way to stop that from

happening. he may endorse marco rubio or ted cruz. maybe john kasich. in the meantime, he has decided trump game.the stop senate majority leader harry reid demanded mitt romney he said taxes and then the taxes he released were not completely legitimate and that romney took great umbrage at himy reid making demands on and now romney has turned into harry reid and is doing the same thing to donald trump. umbrage atking romney. tracy: is this type of criticism going to have any affect on trump? we have seen plenty of criticism so far and it has not seemed to dent his popularity.

predicted a who cable news spat between an admittedly famous guy like mitt romney and donald trump, it is a cable news spat. probably not anything more than that. anyone who thinks that is going to stop donald trump has not been paying attention. i'm out of the game of ever related tohing donald trump would stop him outside of a speeding bullet or bus. the people who love donald trump are not going to be bothered by the fact mitt romney is attacking them. he's an exemplar of the establishment. it just makes them stronger with his supporters who hate the establishment and romney may be adding to that. don't get? is it we

you are there at the donald trump rallies and what is it we are missing? howee snippets of it, but strong is that momentum? ask you toe to repeat that question because there was a siren that went by and i could not hear what you said. whenever donald trump gives a speech, what does it you like to be on the campaign trail ? what are we missing when we see him on tv? john: there are a lot of implicit assumptions in that question. i don't know what you are missing. i don't know how people react to think if you are at a trump rally, it's some nnarooation of being at bo or coachella for a slightly

different part of the population, with some of a little bit of a tea party rally and barbecue festival altogether. show, arock 'n roll southern fried festival atmosphere. energized to see donald trump. they feel like he is saying things that they wish they could say out loud. there's a lot of people there just there for the entertainment value. aere's a little bit of worldwide wrestling federation kind of thing. most a show, more than lyrical events i normally attend. it is performance art as much as anything else. you see a little bit of it at the bernie sanders rally. people are there for the show. part of the thing that appeals

to them is the communal experience and that's why i go back to the rock 'n roll analogy because it's like seeing a band beloved by the followers. it is hard not to be impressed by the momentum. john heilemann from south carolina. don't miss "with all due respect" tonight. john heilemann and mark halperin will have more tonight on tonight egg debate. the markets head to with julie hyman where we have a trading halt. julie: this is for energy trading partners and williams -- it looks like what investors have feared may be coming to pass. energy transfer is perhaps mulling pulling out of its acquisition of williams. citing people familiar with the talks, they say energy transfer considered but did not present an offer for a $2 billion

payment to williams to walk away from the deal. bey say they seem to suffering from buyers remorse and looking for a way to pull out of the deal. looks like stocks have opened up again, but that is not the current price. look at the bloomberg on my screen. we saw energy transfer as the acquirer spike up here. the volatility as the circuit breakers were triggered. let's look at williams company. it is paused for that volatility. it is ounce in around all over the place. energy transfer made the agreement to buy williams. we continue to see the plunge and natural gas and oil prices, so a lot of folks questioning the wisdom of this deal. oath start -- both stocks have

been down sharply this year. energy transfer down 18%. monitor theinue to situation and bring you any updates but i'm going to make a transition because now is the time i do my sector spider reports. i want to look at the xrt today in sharp contrast with what we have been seeing. up, as a retail etf number of different components gaining. elle brands, best buy and colts have been rising, but curiously, these companies do not come in with blockbuster quarters. best buy says it will continue to cut cost but it's numbers contribute -- it's numbers trailed estimates. and yet we are seeing them rise perhaps on optimism for the rest of the year. two companies yet to report -- the gap be coming out with its

numbers after the bell. they want to know if the old divestment is continuing. jcpenney out with numbers tomorrow morning. not a confirmation, wore a complete headline. carol: thank you so much, julie hyman. coming up, the battle between apple and the government continues with ceo tim cook and bothirector james comey speaking out. what this means for the case going forward, up next. ♪

carol: welcome back to bloomberg markets. tracy: the battle between tim cook and the u.s. government

continues. earlier today, james comey testified to the house intelligence committee where questions about apple dominated the hearing. the san bernardino litigation is not about trying to establish some president. to beabout trying competent investigating something that is an active investigation. carol: for the latest, let's turn to cory johnson who joins us from our san francisco bureau. lots of twists and turns, but where does the case go from here? we are waiting for this filing from apple to see how they are going to do this. we don't understand how apple is going to frame this. apple is taking an interesting take -- this notion of free speech activity, if indeed a

code is speech, but while the f ei director may not see this as establishing a precedent, it will establish a president and that is clear -- establish a precedent and that is clear. microsoft out today and their executive, brad smith thomas saying they are supporting apple and the government should not be able to compel apple to write software to break into the phone. we did see microsoft say they would file this reef in support of apple. how much would that support the argument? lester markets going to depend on how it is framed. framed about how to do business in america, it's a very different thing than what to do about this one phone. when you have the weight of these very big companies lining

up on one side, i think the judge will have to listen. it's interesting to see the way the judges responding to this. we know one company after another ballot to government pressure to allow back doors but it has hurt their business internationally. we see these companies coming together to say we are not going to do this. tracy: tim cook spoke yesterday on abc world news tonight and talked about how much information is actually on our phones. >> we need to stand tall and stand tall on principle. our job is to protect our customers and our customers have incredibly detailed information on their phone. there's probably more information about you on your phone than there is in your house. our smartphones are loaded with our intimate conversations, financial data, health records

and also located with the location of our kids in many cases. it's not just about privacy, it is about public safety. it makes you wonder if he is right or if he is playing to our emotions. cory: running both sides are very much playing to emotions and we will see more of that. coming up in the next -- aof bloomberg markets lot coming up. or towerype of gps signals. >> these phones are wonderful. ♪

when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them. so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. vonnie: good afternoon. we start with breaking news. let's go to cory johnson.

cory: response to the court case compelling apple to open the iphone of the san bernardino terrorists. a powerful legal filing. draft, with5 page very powerful responses to the governor. i want to read the beginning because it is powerful stuff and powerful language. they say fundamentally they do not want to do this or be a part of this. compelling them will violate the 300 55 page filing, the language is strong and a lot of court cases, as you would expect, in the history of this. the case of one isolated iphone. the department of justice and the fbi's taking a dangerous power congress and the american people have withheld. to force companies like apple