betty: from bloomberg world headquarters in new york, good morning. i'm betty liu. excuse me for my voice. stocks are higher after economic growth in the last quarter was revised up. crude oil is higher this hour. we will be heading for a weekly game in oil. as the g-20 gathers and shanghai, china's top central banker says he has plenty of tools to stimulate growth. and what a night in houston. the candidates take off the gloves in the republican debate go afterio and cruz trump ahead of the crucial super tuesday contest. was it a little too late, though, to stop trump's momentum? we have breaking economic news. we will head to the markets desk. julie hyman has the latest on personal income and spending. julie: those are coming out

better than estimated. ,ersonal income rising .4% estimated by economists. .5%.nal spending also up we like get the pce deflator and pce core. pce is personal consumption expenditures, a measure of inflation closely watched by the fed. the deflator year-over-year is up 1.3%. the core number year-over-year is up 1.7%. getting incrementally a little bit closer to the 2% target by the fed. minutes we last few got a lot of economic data but the university of michigan consumer sentiment reading for february, the final rating for february, coming in at 91.7. a lot of data to consider, on top of the final read on the fourth quarter gdp coming earlier this morning that came in better than estimated.

stocks are rallying in the face of that, but not by far a runaway rally. the nasdaq is leading on the outside. considering we saw a big rally overnight out of china as officials they are left the door open to more stimulus, the fact that oil is higher, in the face of all that we are not seeing much of a lift in stocks. let's look at the intraday chart of the s&p 500. even though we are half an hour into training, wanted to see if there was visible reaction to this economic data. we are taking a leg lower here. if you take the gdp fourth-quarter data from this morning and this data we just got here, we might see a slight ratcheting up of expectations for the fed to raise rates this year or hold those expectations forward a little bit. let's look at the race market and the 10-year note to see if there is a reaction in that direction. there is a range moving to the

highs of the morning. 1.70%, highest such as they are on the historical basis still very low. the dollar has been strengthening all morning as well, particularly given the fact that we have weaker inflation data out of europe. the pound is coming down once again. the euro against the dollar. the dollar strengthening against the japanese yen. quick mention on oil prices, we are seeing strengthening their. oil up by 2.5%, set for its strongest week of the year. cany: all right, obviously oil looks like a rebound for the week. thank you so much, julie hyman at the markets desk. want to check in with first word news. matt miller has more than the news desk. matt: good to have you back to front runner donald trump was on the defensive at the republican presidential debate in houston. marco and ted cruz when after trump for everything from his health-care plan to his business activities. at one point rubio brought up

the now-defunct trump university. senator rubio: there are people borrowing $36,000 to go to trump university and they are suing him now. $36,000 to go to a fake school. onetrump: by the way, i most of the lawsuits. matt: super tuesday next week, more than a dozen states and territories hold timers and caucuses -- primaries and caucuses. both rubio and cruz have a ways to go to catch up to trump. all of the southern states show that trump is backed by 37% of likely voters. tied.and cruz are the man who allegedly killed three people and injured 14 others in kansas have been served with a restraining order just 90 minutes before the shooting spree started. authorities it's a domestic troubles may have been a motive. the order was to keep the

suspect away from a former girlfriend. the suspect was shot and killed by police. the united nations security council will approve the cease-fire in syria today that takes effect it midnight, according to russia's foreign minister, who worked out the agreement with the u.s. secretary of state john kerry. sergey lavrov says there is no guarantee that the syrian trees will be observed. such as theups islamic state are excluded. attacks onhem -- them will continue. fifa has approved reforms aimed at ending corruption. delegates tethered in is for the vote. zurich for the vote. u.s. answers authorities are still investigating. datel news 24 hours a powered by 2400 journalists in more than 150 news bureaus around the world. i am matt miller. betty: ok, matt, thank you. china signaling it is open to more easing.

speaking at a conference in shanghai, where g-20 finance ministers and central bankers gathered for the meeting, the pboc governor said they have a "multiple policy instrument" to address any downside risk. where we arei, covering the summit. >> expectations were high for a clarification of where they wanted the currency to be or what their plans were for the renminbi, and perhaps additional stimulus when it comes to the ailing economy. what we got to him as we have heard so far, and acknowledgment of the slowdown, but also for the underlying fundamentals of the economy are not dire enough to merit the big bazooka. at the moment the policy prescription is based on comments from the pboc governor and the finance, a little bit of government spending, stable exchange rate, a promise that just in case the situation

worsens, they have the tools to deal with the slowdown. the more immediate concern on , the pboc governor reminded everyone here that you look at the fundamentals, you look at how strong the current account is, you look at china having the fastest growth rate in the world. there is no basis for further or persistent devaluation in the currency. on the short-term change we are seeing on the reserves, the massive drawdown we have seen. it does not represent the trend. to put it simply, the message was twofold, to businessmen and investors, don't fret. to traders, don't speculate. david ingles, bloomberg, shanghai. betty: how our markets pricing the stronger u.s. growth and the possibility of more economic stimulus in china? brian jacobsen is the chief

portfolio strategist at wells fargo management. he joins us from milwaukee. is anything moving out of the communiqué? have: i suspect we will some market reaction to the communication that comes out of there, although there are already some rumors about what they might say. it is more about aspirational statements and perhaps a little bit of chest puffing and strutting around, saying how resilient their economy can be. i don't think we will see any coordinated action coming out of the g-20 here. as the treasury secretary lew has pointed out, unlike in past instances and crises, this does not require a crisis response so don't expect anything big coming out of your. betty: are you glad hearing the pboc, the chinese central bank, saying wait a minute, guys, we still have our bazooka here, we can do more? does that give you more confidence? brian: well, it does, and this

is an important and fundamental change, that we are hearing more out of pboc officials. that is one of the things that has been lacking over the past year and arguably over the last few decades, that there is very little communication coming out of the chinese government about what their plans are good arguably you can look at the correction was triggered back in august, the correction triggered back in december. both of them have a somewhat common cause, the devaluation or orfusion nation -- depreciation, more properly speaking, of the chinese currency, without communication of what was going on. it is important and a fundamental shift here that they are beginning to communicate more with the public about what their plans actually are coming forward. betty: and they are communicating more about the idea of negative interest rates. we have a world bank president coming out and talking about the impact of negative interest rates, coordinated negative interest rate policy. listen to what he said about that. negative interest rates boost investment and consumption, we

think it is a good thing. but there are side effects and spillover effects you have to be worried about. if the profitability of banks goes down to a very low level, you may see decreased lending. the exact opposite of the effect you want to have. we also are worried that you have inflated asset prices. and there could be excessive risk-taking. betty: even talk of that, why is there any incentive to invest in any banks around the world? a very goodis question, but i think a good answer to that is that banking is still fundamentally a spread business could intervene -- even if you have negative interest rates on the short end of the curve, you could invest further out on the curve. the loans that different banks are making for real estate in commercial industrial loans, they are lower than what they otherwise would be but they are still positive. it is all about that spread.

reasons why ihe was perplexed about people coming out and getting bullish on the banks when the fed was going to raise rates on the ascension that that was going to be a magic bullet for the bank'' profitability went what really matters is the spread between the short and and the long end. likely going negative could stretch that a little bit. that remains to be seen, though. i view it as pretty speculative. seey: but, brian, you it as an all-time high in the market? brian: i think that provided we get further dovish comments from the federal reserve, and if the fed doesn't hike, and they sent a pretty clear message that they are going to be in wait and see mode, and we also see the chinese government stabilize their currency, perhaps tha offers some of the additionl stimulus, we could be at the all-time high for the s&p 500 within the next month. betty: within the next month?

ok, that is a pretty bold prediction. what would be the propellant, though? what would drive us to an all-time high in 30 days? well, i think the thing that would drive it there would be a shift in sentiment. it would not necessarily be a change in the fun or anything like that. it would be a shift in the sentiment saying that the site would be on pause, the pboc has things under control. i believe that the chinese government has plenty of levers it can fall to navigate the growth slowdown. if they can clearly communicate that, that would be an incredible positive for the markets in the near term here. betty: and you yourself modeled on whether the u.s. is going to head into a recession. you looked at, what, 15 different points, and you say no -- 12% possibility, right? right, and i

updated that as of yesterday with the release of the new orders for durable goods. now want to the likelihood of the u.s. economy dipping into a recession within the next six months at 12% because the economic fundamental -- if you look at the iso new orders component come even though manufacturing is below 50, the new orders component when above 50. it is expanding. we are beginning to see perhaps an end to this long, dark winter for manufacturing, and perhaps it will be i little bit of an early spring. betty: brian, good to talk to you. brian jacobsen, chief portfolio strategist at wells fargo funds. much more ahead on "bloomberg markets." apple versus the u.s. its standoffushing to congress for the supreme court. we will talk about this huge issue coming up. ♪

betty: good morning. you are watching "bloomberg markets." i am betty liu. we are kind of coming back to little bit from the lows of the session. abigail doolittle has more from the nasdaq. we are watching apple. abigail: welcome back, betty, and apple is one of the biggest point movers. the company filing a motion opposing the government's order to open the iphone of the shooter in the san bernadino terrorist attack, citing among many reasons a new burdens. some likely to go on for time with the likelihood of going to washington to be resolved in congress or the supreme court. andss it affects earnings revenue, it is unlikely to affect the stock's performance all that much.

that is what investors are really looking at. in particular, the revenue growth forecast for the march quarter. the street has the negative revenue growth modeled into the june quarter. everybody is watching whether or not that happens. technically speaking, this stock has been trading very strong in recent weeks. if this continues, it could be bullish for apple and the stop higher. if the low $92, the shares could drop lower and it could be bearish for the nasdaq overall. betty: ok, abigail, thank you. issued lawyers have legal arguments against having the tech giant unlock the iphone of one of the san bernadino shooters, as abigail was just talking about. the order demanded by the government compels apple to create a new operating system effectively a backdoor to the iphone that apple believes is too dangerous to build. for more on the battle between apple and the fbi, i want to

bring in michael riley, who has been covering this case from the beginning. what is really the key to apple's argument here? michael: this may end up coming down to the issue of bargaining. apple is making the case that under the law that the fbi is using to compel them to put in the back door, this activity has to be non-burdensome. they went out of their way to argue what the burden would be. it would take 10 engineers, 4 weeks to build this thing, it would have to be a super secure room. the question is, is that argument going to weigh against what is compelling about the case from which is that it is a terrorist incident, many people died. the judge has to make that balance. betty: the fbi's looking for what? there is a space of time that they can't account for and they think the iphone has the key to that? michael: the fbi doctor was a bit more specific and they can't account for what the shooters were doing right after the incident. they can't find them on

destination chemist, they don't know where they went, and they think the phone might be able to tell them that. betty: is apple accurate when they say it is going to take 10 engineers, 4 weeks? michael: we talked to experts and it is a little conservative, but not outrageous. a newave to create firmware for this but they have to test it so they make sure it doesn't wipe the phone when they use it and they want to make sure it cannot beat reverse engineer. they don't want to give it to the fbi and the fbi could then use it on any phone. that could take a while. betty: another argument from apple is that if congress wanted this to happen, they would have legislated this, and they haven't. is that a valid argument? michael: apple is being a little fast and loose there. they say that the fbi is going to ask us to do something that congress has not asked us to do. the reason congress as not ask them to do it is apple was successful in lobbying the white house not to propose legislation. betty: so there was legislation before?

michael: they were considering issuing that the white house the one proposing legislation. apple lobbied at that point to get them to say no. the president look at all the options and set ok, we won't do this. mitch mcconnell, the leader of the senate, he said many times that you might be willing to consider legislation that would require companies, if the government had a warrant, to give them access to data. apple is being a little fast and loose that way. betty: what happens next year? -- next here? michael: this goes before a judge. you can come back to meet with argument about why we shouldn't do this. that is what we saw yesterday. apple laid out a bunch of organs, including free speech, all sorts of stuff. the judge has to way that. betty: doesn't matter that twitter, facebook, google, paul taubman behind them -- have all fallen behind them? michael: not to the judge. they are trying to put as much a

round of opinion of this but the judge will just look at issues. betty: michael riley, who covers private duty for us. breaking news as we had to break the federal regulators protecting the pepco- merger settlement -- rejecting the pepco-excellent merger settlement.

betty: you are watching "bloomberg markets." i am betty liu. we have sent in reinforcements! matt: i'm joining you because your voice is struggling but your brain is still working. i will do the reading and you will do the intelligence -- betty: i will just sit here. matt: after the/rally in u.s. treasuries blind-sided wall street, jpmorgan has a theory in what we really went wrong. that then ideas

futures markets eased up that morning and that led to the cash market. jpmorgan says the problem is the opposite. alexander skaggs is you with the details. did i some data correctly some that up correctly -- did i some that up correctly: a things do tend to move little bit faster in futures, but jpmorgan came out with this note and said that it was the cash market, the market for treasury securities that was the source. matt: so why did we have that move, then? i don't know if we have a chart, but it was a short, sharp shock -- of whate have a chart it looked like on february 11 that reminded people of the rally in october. alexandra: the underpinnings of what caused, or maybe didn't cause, but the underpinnings of what made it happen or made it worse, are still around, and they pointed to february 11. hey, guys, two weeks ago we had

one of these moves. matt: so what was it that made the cash market get bid up like that? alexandra: that is still up in the air. there was a 76-page government report talking about what happened that day, going through all of the trading bit by bit, and they didn't point a finger at any one particular thing. but what is interesting, and when jpmorgan pointed out, is that the actual structure of the market makes the stuff more likely to happen, in their view. matt: and the takeaway from your story, really, is that big traders are dealing with futures markets now and options markets much more because they are more liquid, they are easier to move in and in and out of quickly, whereas the cash market has fewer and fewer players. alexandra: we have been hearing that from investment managers all year. it is really interesting because it is a derivative and the concept of it i find sort of funny because if you want to trade something, you are trading

with derivatives these days instead of actual securities. betty: what is this about the author treasury being traded? alexandra: they just launched one. they just launched an ultra 10-year security. but thereper wonky are parts of that that people say could drive into treasuries. or treasury futures, i mean. that is not a totally done deal. matt: i recommend people check out this story. you can search for alexandra skaggs on bloomberg. i think was the most interesting so what i read yesterday, so nice job. thanks for joining us but still ahead on bloomberg tv, the gloves come off at the republican presidential debate could did marco and ted cruz gain any ground?

betty: we are live from bloomberg world headquarters in midtown manhattan. you're watching some are television. i betty liu. let's check on first word news.

matt miller has more from the news desk. matt: voters in iran are testing ballots in the first election since the nuclear agreement was reached. issident hossein rouhani hoping to increase its support in parliament. his political rivals have blocked his attempts to revive the economy. president obama is in jacksonville, florida today. he will talk about the benefits of the massive spending bill he signed shortly after taking office seven years ago. more than $760 billion was added into a then-something national economy. mr. obama will visit a factory that makes high-tech boundaries. a recovery grant that it used to build to build the lithium-ion battery plant. is launching more cyberattacks against the islamic state militants hit the surge by the u.s. cyber command began shortly after the defense department called on commanders to wrap up the fight against militant -- ramp up the fight against militants.

the pentagon says it will have 150 teams in place by 2018. missileed nuclear roamed out of its underground silo on the california coastline and sort over the pacific. it was a routine test, minus the nuclear warhead, of course. it is also a reminder to north korea and potential u.s. adversaries of u.s. power. north korea says it is working on long-range missiles. and a record cut by the beatles before the band hit stardom is going up for auction. the 1962 recording was made in just one copy and features the ands "til there was you" "hello little girl."it had been in the loft of a member of another little -- another liverpool band, gerry

and the pacemakers. global news powered by our 2400 journalists in a news bureaus around the world. betty: i thought it was going to be more than $14,000. matt: $14,000 for a one-copy record by the beatles. maybe it will beat the estimate. betty: who knows? let's turn to politics and the republican debate last night. marco rubio and ted cruz came out swinging against front-runner donald trump come hoping to slow down his momentum before the critical super tuesday caused test -- contest next week. they challenged him on every thing -- immigration, taxes, jobs, and his record in business. senator rubio: you are the only person on this station was ever been fined or hiring people to work on projects illegally. mr. trump: i'm the only one on this stage was hired people. you haven't hired anybody. betty: that was pretty much the tone of the night. joining us is bloomberg politics reporter jennifer epstein.

was this trump's worst performance so far? wasifer: i don't know if it his worst performance so far so much as it was a much more feisty and aggressive position, certainly by marco rubio. ted cruz as well tried to get in there. the realization that this trump thing has traction, this is not a fluke, and looking ahead to super tuesday, rubio and cruz are the 2 likely people to knock off trump or knock him off his pedestal of it and really felt like i had to go for him and tried to raise as many questions as possible heading into this important day that could kind of set trump even more on the path to the nomination or make as much longer process. betty: what has to happen super tuesday for trump to lose his lead? jennifer: you know, ted cruz is leading in texas, his home state

. if he wins their, that is a little bit. the southgins across are not that big for him, he could be in a situation where he doesn't have as much of a delegate advantage going forward. really it is also kind of the broader message and direction of the republican party. marco rubio this morning was out is a conat trump artist and that is the line we have not heard from him or any of the other leading republican candidates who are still in the race or who were trying to go after trump on some level. and maybe the way to get at him, they are finally trying, is actually through the message and through trying to say are we for real, america? of course, a lot of americans say yeah, this is for real, we believe in trump, for there is

this part of the establishment in the republican party that is shocked that this whole thing is going on. matt: he is finally getting some congressional backing. i know a commerce man, jennifer come here in new york who was supporting jeb bush and got behind donald trump and another on the west coast has gotten behind trump. i don't know how many other endorsements he has gotten. he has a well, he says big one coming today in texas so we will see what that is. matt: does that help him at all? when rubio got a whole bunch of adjustments, trump said i don't really care about endorsements. i will take them, they are nice, but i don't need them. jennifer: i think for trump, that is kind of his appeal. endorsements, whatever. and one of the house numbers who endorsed him even said "i'm endorsing him because he doesn't care about getting my endorsement." and that is his appeal. there is the moment where what happens this week with rubio is

that a lot of the senators who have been on the fence or some who had endorsed bush kind of jumped on board with rubio. ok, we don't dislike him the way we dislike ted cruz. we are not as confused and afraid of him as we are with trump. here we are with rubio is the most likely establishment cap forward. -- half forward. , it is kind of an irrelevant thing and it doesn't matter to him one way or the other. matt: we look forward to your continued coverage of super tuesday. senator marco rubio did not just go toe to do with donald trump. he took a big swing at apple, attacking the tech giant for defying the government. senator rubio: that is all they are asking them to do to disable the self-destruct or ottawa race mode on one phone in the entire world that apple does not want to do it because they think it hurts their brand.

their brand is not superior to the national security of the united states of america. matt: rubio and his rivals have been tapping into voter fury by bashing big business on the campaign trail, but for the most part corporate america has responded by turning the other cheek. the latest issue of "bloomberg withessweek" explores why this fantastic cover good we can say why because this is a cable-television channel. by business is getting hit these politicians but they are not really responding to much. that was a great segue. i'm glad you put up that clip from rubio last night. that is characteristic of the tone on the campaign trail. donald trump going after one company after another, including apple, by the way -- matt: and oreos. peter: nabisco, for making products outside the united states. nobody needs to tell anybody

that bernie sanders has been going after big banks, accusing them of business model based on fraud. jeb bush, considered the favorite of business and even he had a negative things to say about big business. that is how you win in 26 team an antiestablishment message. antisocial with message. betty: so why is big business being so wimpy? peter: they are being strategically quite because they can get what they may without fighting in the public sphere, without going into a twitter war with the likes of donald trump. it has been working so far. look at the successes they had. the export import bank, the charter expired last june. it is back in business through legislative lobbying. we have the $305 billion highway bill, the longest period for many years. one victory after another. it shows that business can get things done. my question is how long will

that last? whether there is a danger in the long-term of losing public support. matt: can i just point out that a conservative skeptic would say doesn't big business know that it already has it in the bag with hillary clinton? she has taken so much money from wall street, she has taken so much money from corporate america and global corporations through cgi. and she does not going to lose, really, to donald trump. betty: well, we don't know that. matt: no, i know that. i'm just saying -- peter: advocate here. the theory is we don't need to respond because we have one anyway. i don't think that would be a good strategy if indeed that is what is going on here. hillary herself has been pulled to the left. matt: well, during the election. peter: but there are things you say in an election that are hard to walk back. he's the subject line, it would pipeline, keystone xl

it would be hard to walk back and say i like it after all. she was pulled by bernie sanders away from endorsing that in which she once called the gold standard trade deal. it would be hard to turn on a dime and say yes, let's go for that after all. although there is more wiggle room there because you could just say definitely -- matt: i am a child of "read my lips, no new taxes." peter: absolutely true, matt, that people can change their minds when they come into office. matt: and to do. on, doest peter, come it ever work for big business to fight back? they are universally hated by the public. peter: they do not want to engage -- betty: it has never worked for them, right? peter: they can have a more positive message, get in front of the story and say that we have an agenda that will do for prosperity for the country as a whole, for the planet as a whole.

organizationsella -- that is the message they want to convey. they have not succeeded so far. matt: peter, thank you so much. looking fortitude reading your story and all of -- looking forward to reading your story on all of "bloomberg business week." betty: don't let your dog near it. matt: coming up, we have highlights from the g 20 summit in shanghai, including an exclusive interview with the goldman sachs president and coo, gary cohn. fascinating, fascinating comments you don't want to miss. ♪

matt: it is time now to get you caught up on the action all around the world. let's kick it off in asia.

the g-20 has begun as world leaders are trying to tackle global monetary policy. bloombergs david ingles at an exclusive interview with president and coo of goldman sachs, gary cohn, in shanghai, and of right into what he is focusing on. gary: we have global problems with growth. we cannot fix these with local monetary policy. we have to talk about monetary policy more globally and we have. work? does it still all guns blazing. we had the drg and won't get into details, but six or seven years of race at these levels. what have we achieved?that is a little bit of my point. years, andto seven relatively low to zero interest rates, with very little growth to prove for it, and almost no inflation. that leads one to question how effective has this monetary

policy bent. what this monetary policy has been more effective at initially is countries trying to use their lower interest rates, i believe, to lower their currency to try and grow their economy at the expense of another economy. what has happened is every other central bank is then lowering their interest rates to not allow their economy to be the victim of someone else's growth. david: and the public -- gary: no, they are not. if you look at the last five to seven years, that is in essence what happened. we don't have higher growth and we don't have inflation. , nowu take that scenario you say, ok, i'll historic policies are looking. why is that? i think it is relatively simple. if you look at what is happened in reality over the last few decades, the amount of transparency we have in markets and the amount of findability we fungibility we have

in markets is extraordinary. almost every investor in the world on their mobile device can real-time see the price of every asset in the world and in real-time can trade every asset in the world. one currency's high relative to another currency, they can trade that. if one interest rate is high bills of to another interest rate, they can arbitrage that out. the market is so effective that they are arbitrage and out the slight differences in the world that has taken away the effectiveness of local monetary policy and we need much more of a global approach to monetary policy. david: what does that do, then, for the fed? we can talk about the effectiveness to a certain extent of monetary policy. but at the moment, does the fed thisd to counter aggressive policy from all the central banks and maybe reverse course? gary: it is an interesting discussion. like i say, the fed and china more or less are the two

countries left that have allowed their currency to be relatively strong versus the other countries. that is a tough position to be in, where the value of your currency is being dictated by the actions of others, not by your actions. i think that is something that the chinese are contemplating, and i think that is something the fed has to contemplate. are they in a position where they have a currency that is at the right level for the economic growth and potential economic growth for the united states? i think that is something the pboc is looking at as well. cohen, chiefs gary operating officer of goldman sachs, speaking to david ingles from shanghai. let's go to europe, where mark barton sees european stocks higher amid for this stimulus speculation. mark: you said it, matt. it was the bengals -- people's bank of china governor who vocalize the weaker monetary policy that set the tone today.

look at this: right here. european markets rising today. looking for a second weekly gain after we saw two weeks of declines. this is the industry pick up on the stoxx 600. every industry, matt, is rising today, except telecom. oil and gas tracking the price of brent crude, which is at its highest level since january of this year. what a wiki it has been for sterling against the dollar. this is the five-day job. four days of declines, one day of gains. the weekly drop, 3.5%, is the biggest since 2009. uncertainty ahead of the june referendum on eu membership. big data today out of the euro zone. we had inflation out of spain, germany, france, all those nations told us they had a negative inflation which sets us up lovely for the upcoming ecb meeting, which basically puts further pressure on mr. draghi to add more stimulus to the

economy on march 10. here actually rises, we get a little bit more disparity between the 2 central banks. mark, thanks very much. right now i want to go to julie hyman at the markets desk for what is going on in u.s. markets. julie: quick check on markets overall. we still have stocks going higher with the nasdaq and getting the most after all the economic data we got. i will give you more details at 11:00. i want to get to some of the big movers we have been watching. there was late breaking news on the agreement between pepco and exelon. d.c. regulators initially saying they would block pepco's acquisition of exelon, then saying they would look at a new merger settlement. shares have dropped and have since recovered. exelon shares as well very volatile after this announcement, down .3%. isther move we are watching sun edison after a judge refused

to block the acquisition, which the billionaire had made. he did that because of a provision in this acquisition that has a bearing on terraform power, separately traded unit own renewabled to energy power plants. it is down just slightly today. also going down in trading today, weight watchers. actually, let's talk about southwestern energy first. jeffries is downgrading it to underperform, setting just say there is great concern about the company's financial concern. finally, let's take a look at weight watchers, since i mentioned it. the company posting an unexpected loss and seeing a decline in active subscribers of 4.8%. not enough help from the oprah effect. matt: she just came on in

october with her state. betty: matt what she 26 pounds. matt: and she can sleep bread. -- eat bread. betty: and lose weight. matt: we are going to take a quick break on "bloomberg markets." back with a wrap of everything going on in europe and around the world. all eyes on the g-20. ♪

matt: you are watching "bloomberg markets." i am matt miller come here with betty liu. we are going to talk first about california going head-to-head with the michigan auto industry to secure a massive facility to test driverless cars. whoever can lock in the deal would get billions in federal funds. keith naughton with bloomberg news joins us from detroit. the auto industry, the state

versus state to get the business of the auto industry will use. when you have is president obama's and ministers has proposed $4 billion for research into driverless cars. michigan is developing this test track at a former world war ii factory. california wants it for a test drive at a former world war ii munitions location for the navy. there is an adjusting competition, which mirrors the detroitension between and silicon valley for control of the driverless car. betty: michigan's big argument is what? keith: a couple of them, betty. one is that we have lousy weather in michigan. and it gives us the big potholes we are known for in our roads. if you want a real-world test for driverless cars, there is no better life than michigan. betty: i want to driverless car that avoids potholes, though.

keith:keith: you have to have them there to avoid up, i guess. matt: and the cars are closer to that area. even still with tesla's factory out in, i guess, fremont, most cars in america are made near michigan, ohio, kentucky, right? keith: and more than just manufacturing compares the research and development. a billion dollars worth of r&d in detroit and it is not just gm, ford, and chrysler. that is the biggest piece, of course, but toyota has a facility, nissan has a facility. betty: keith, how much money are we talking about? this is funded by the government. keith: what michigan is proposing is an $80 million test track. they are asking for the rest from the fence. in california they have not put a price on what they want to do with what they call -- this may be based.

but they say they could use the money to upgrade their crumbling facilities. matt: i guess it comes down to what you have been talking about, keith, the fight between silicon valley and michigan. who is going to develop the cars that we eventually all buy? betty: what are you going to do, matt, when there is driverless cars? matt: i will just try. hopefully they will leave a lane open for me. keith, great story. where i goop trn, for top transportation stories. european stocks driving for a second a as investors taking earnings from rbs and the speculation in shanghai where the g-20 finance ministers are meeting, and that he will go home and rest.

>> it is 11:00 a.m. in new york, 4:00 p.m. in london. from bloomberg headquarters, i am matt miller, in for betty liu. mark: from london, i mark

barton. this is the european close. matt: we are going to take you from new york to london to zürich in the next hour. shares of royal bank of scotland most since 2012 after reporting and eight consecutive annual loss. we will look at what the bank is doing to try to turn things around after reporting on $3 billion in losses last year. mark: fifa approving reforms aimed at ending corruption in soccer. the" to replace satellite blatter goes to a second round. matt: sotheby's posts a fourth-quarter