scarlet: good friday afternoon. i'm scarlet fu. our emerging markets the trade of the decade or a value trap? the debate over this asset class heating up. scarlet: goldman sachs president says the u.s. consumer is strong , echoing similar comments from jamie dimon. u.s.rowth hinges on the dollar. alix: central bankers gathering for a two-day meeting hoping for policy.nated effort on first, we want to head to the markets desk where julie hyman

has been keeping track of all the moves. a fairly sanguine week. julie: we got some relatively strong economic data today. the question is how traders and investors are digesting that data. it looks like it was positive, we had fourth-quarter gdp coming in better than estimated. personal incomes rising in january. a bit of an uptick in inflation as well. stocks seeing not much change today. the dow is under pressure. we see it bouncing around positive and negative and now heading a little more down. the biggest drags on the dow today, mixed picture of stocks here. ibm, mcdonald's and walmart heading lower because of their size and pricing. they are relatively significantly on the index. -- significant weight on the index. also watching the rates market, taking a look at the tenure and 2-year note -- 10 year and 2-year note.

the 10 year yield going up to 1.72%. again on that uptick in inflation. also an uptick in the outlook for a rate increase this year. a pretty significant uptick in expectations for rates to go higher. we are now above 50% again going out to december. no probability of a cut. of course, that could change tomorrow or later today. based on this morning stayed at, that seems to be the read through. morning'sed on this data. a technician at cornerstone macro, he's looking at the 50 day moving average for the s&p 500, the green line here. he says we could be seeing a little coming exhaustion in the market.

that could mean the reason that we've had from the bottom might be losing some steam. lee atolks like thomas fun strata thinks the volatility picture looks more benign and could mean left. he is a longer-term goal. -- bull. alix: let's check in on the first word news this afternoon. mark: republican presidential hopeful marco rubio is continuing to take slaves -- swipes at donald trump. he. on cbs this morning. a con artist is about to take over the republican party and conservative movement. look at the report you just did. that'll jump no answers on the issue of health care. no answersump had to know on the issue of health care.

mark: a bloomberg politics poll of seven southern states shows trump is backed by 37% of likely voters. the united nations security council will decide whether to crack down again on north korea. the yuan is considering new sanctions aimed at forcing the north to curtail its nuclear program after a recent missile launch. pyongyang would be banned from exporting the minerals that are a key source of hard currency. the country can no longer import aviation fuel. president obama heads to jacksonville, florida today to talk about the benefits of the massive spending bill he signed shortly after taking office seven years ago. more than seven herzig $2 $760on was added --

billion. the company won a $95 million recovery grant it used to build the lithium-ion battery plant. has won thetino election to replace sepp blatter fifa.sident of we will continue to follow this breaking news and bring you more information as soon as it becomes available. scarlet: the great emerging markets debate is heating up on wall street here is stacy gilbert to set it up with the bullish perspective. >> if we look at the risk of

being priced into emerging markets first what we see in the u.s., it is back to five-year averages. all the headlines come all the pullback, the markets are saying we are at those levels we've seen over the last five years and more interestingly them a we've seen this shift where the outflows have stopped and we've seen a return of buyers. told richard burner bloomberg surveillance the challenges and still remain for many of these economies. >> it is certainly true that china has been an engine of global growth. a slowdown in chinese growth and global growth has had a huge impact on commodity energy prices -- commodity and energy prices. that comes against the backdrop of a lot of debt taken on by mining producers in emerging markets and by commodity producers around the world. deterioration in the

prices of those assets. further shocks could create more volatility in that area. alix: richard buckland joins the bullish camp come upgrading his rating on emerging-market equities to overweight from neutral this week. thank you for joining us. what are the two main factors behind this call. >> the first one, we all know --rging markets look cheap the dollar was strong. a strong dollar is bad news for emerging markets. now that we are backing off on the strong dollar view, we think the cheapness can come through in emerging markets. reason? the second >> those are the two reasons. fromollar is backing off

being strong and emerging markets are cheap. scarlet: does a falling oil price get in the way? robert: we are not expecting the oil price to continue falling much from current levels. we are expecting them to pick up later in the year. that should turn into a tailwind. alix: the bearish camp .2 main things. two main things. we have the chart. how do you factor that into your more bullish thesis? >> people are worried about the buildup of debt and china. it's important to emphasize that this is a relative call for us. out of the these are woods but we think there's a lot of bad news and most of it is now starting to come through in developed markets.

we know emerging markets are in trouble. it's developed markets that are starting to crack. we can see some relative attraction to going into emerging markets. scarlet: talk about the role of the central banks here. how much are they a determinant of what happens next? robert: the central bank in china still has yet to cut interest rate. what is going on in emerging markets as a contrast to what is going on at developed market central banks. we see more scope for policymakers to throw a few things at the markets in emerging markets now been thanoped markets -- developed markets. within the asset class, we toferred the asian markets

the european and african emerging markets and the latin american emerging markets. asia is the place we would go. alix: in terms of the economic index hassurprise been declining. how do you reconcile that with a shorter term horizon bullish call? emerging-market surprise index is a bit of a contrarian indicator. you have to buy when it is weak, not when it is strong. i know, it is relatively weak. we can see the dollar backing off from being strong. scarlet: it has been pretty weak since earlier this year. bumping along the bottom there when it comes to economic surprises. valuations, we talked about about that. ratio,look at the p/e

what you will see is that we are pretty much at 11 times earnings. that brings us back to april of 2014. it has bounced around quite a bit. there are different metrics you can use. the argument here against buying emerging markets, they could be stuck at these levels for a while. alix: what is the biggest risk to your relatively bullish thesis? robert: you guys mentioned it seconds earlier. this is a product of a change in our currency views. hardly a product of the fact that we expect the fed to hike three or four times this your. back on the hiking track -- a bit of week did in the u.s. is a good thing for emerging markets. if the u.s. suddenly becomes a strong again, it will become a problem. scarlet: how long is your call for -- what is your timeline?

robert: we try to make our cause 6-12 months ahead. this is a call for this year. up, is monetary policy still effective? the goldman sachs president ways n, next.eighs i alix: the chairman of the federal energy regulatory commission joins us to talk about this new era of energy. scarlet: china trying to call fears over the state of its economy at the g20 summit. ♪

alix: welcome back to bloomberg markets. time now for the bloomberg business flash. core's revised agreement to take over pepco holdings has been washington -- has been rejected by washington regulators. court hasn appeals thrown out apple's patent infringement victory against the samsu samsung. at the same time, it upheld the jury's finding that apple had infringed on a samsung patent. american express will have segments on shows like blind spot, the voice and late night with seth meyers.

newis testing strategies as customers turn away from commercials. and centralsters bankers are gathered in shanghai right now for the two day long g20 conference. scarlet: also in the region, the goldman sachs ceo. we asked them if the u.s. economy is back to precrisis levels. u.s. is betterhe than people may feel. the u.s. consumer is still very, very strong. the fact that we've had this fromtic price cut in oil $140 to $30 which transfers directed to the pump in the u.s., consumers are seeing that. we talked about disposable income. consumers are pretty good at spending their disposable income. at the sales numbers,

not necessarily in the day-to-day retail sales number, but the terrible -- durable goods sales number, we see consumers are spending money selectively come which is strong enough to keep the economy going. i'm not expecting runaway growth, but i'm not expecting recession. i'm talking 1.5-2 percent range. a lot of it depends on the strength of the dollar. the u.s. has been one of the few countries willing to have a relatively strong currency. if we have a stronger currency, that will take growth from the lower end of the spectrum. if our currency falls more into line with other currencies, we could surprise and make the higher end of the spectrum with growth. do you think these rates are at sustainable levels? gary: it will all depend on monetary policy. there's a lot going on with central-bank policy, the g20 is morehere in shanghai

coordination of global monetary policy. we have global problems with growth. we cannot fix these with local monetary policy. we have to talk about monetary policy more globally today than we ever have. >> is it still work? -- does it still work? , six or the boj and ecb seven years of rates being at these levels. what have we achieved? we've been 5-7 years and even longer if you look at japan of relatively low to zero interest rates with very little growth to show for it and almost no inflation. how leads one to question, effective has this monetary policy been? would it have been more effective initially if countries

used their lower interest rates to lower their currency to try to grow their economy at the expense of another economy? what has happened is every other central bank could lower their interest rates to not allow their economy to be the victim of someone else's growth. if you look at the 5-7 years, that is what is happened. lower interest rates across the board and we don't have higher growth and we don't have inflation. you take that scenario, now you say our historic policies are not working, why is that? it is relatively simple. if you look at what has happened over the last couple decades, the amount of transparency we amount markets and the of funds in markets come it's extraordinary.

everybody can see the real-time price of every asset in the world and the real-time trade of every asset in the world. they can arbitrage that out. the market has become so ing outve at arbitrage the differences in the world come it is taking away the effectiveness of local monetary policies. >> what does that do for the fed? we can talk about the effectiveness of monetary policy. at the moment, people have started talking about -- does the fed need to counter this aggressive policy and maybe even reverse course? >> it is today's discussion. the twoand china are countries left that have allowed their currency to be relatively strong versus the other countries.

that is a tough position to be in. the value of your currency is being dictated by the actions of others, not by your actions. that theomething chinese are contemplating and something the fed has to contemplate. are they in a position where they have a currency at the right level for the economic growth for the u.s.? boc iss something p looking at as well. , steadyill ahead hiring, cheap gasoline, rising home values powering americans to spend more. why the consumer does not look to be rolling over. ♪

alix: welcome back to bloomberg markets.

let's head over to our markets desk where julie hyman been checking on company movers. julie: there are some big winners in today's session. one of them is sun edison. it is a really volatile stock. higher today after a delaware judge refused to block its acquisition of vivid solar. forceeholder in terror aforce power -- this deal is able to go forward. we've seen shares of these other companies surging on the session. we are watching herbalife, coming up with earnings after the close yesterday beating estimates, it did cut its full-year earnings forecast. the stock is really up on comments about the federal trade commission. it is havingaid talks with the ftc and those talks could still result in some kind of material impact

on the company, but there appears to be optimism that it would be a positive outcome. has a long term dollars short bet against the company. he believes the stock is worth zero. and that the stock is a pyramid scheme. bet billion-dollar short against the company. we are watching jcpenney after that company came out with profit and sales that top estimates. in sharp contrast to the other department store operators, like macy's. .ame-store sales up 4.1% jcpenney coming from a lower has been trying to turn it around and looks to be making some progress. in its second report as a combined public we traded

entity in the quarterly earnings topping estimates, revenue falling 3%, but still ahead of estimates as the company is selling more of its core offerings like ketchup. those shares up 3.5%. scarlet: thank you so much. alix: still ahead, we will talk to the head of the federal energy regulatory commission about how the commodity route could change the landscape of u.s. energy markets. ♪

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sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. alix: from bloomberg world headquarters in new york, welcome back to bloomberg markets. i am alix steel. scarlet: let's start with the

headlines. mark crumpton has those at the news desk. mark: thank you. hillary clinton has a nearly 3-1 lead over bernie sanders in florida. pollis a wording to a new released today. mrs. clinton leads mr. sanders, 59%-30 3%. she also holds a commanding lead , which holdslina its primary tomorrow. internal revenue service it says there is nothing holding trump back from releasing his income returns. he said last night that he has to wait until the irs completes an audit. in a statement, the agency reported that is not the case. ted cruz a marco rubio reported they would release their returns. the surge by the cyber command started shortly after the defense department called on commanders to ramp up the fight

against militants. the pentagon says it will have 133 cyber teams in place by 2017. fifa has a new president. he won on the second ballot, votes. 115 of 207 he comes from the same part of switzerland as sepp blatter, removed over corruption allegations. voters in iran are casting the first election since the islamic state reached an agreement with the west -- the islamic government reached any agreement with the west. i mark crumpton. back to you.

alix: thanks so much. it is a new era of u.s. energy. come inside the bloomberg. you're looking at cheniere energy's first shipment of liquefied gas. a left on wednesday from louisiana,, going to brazil. really signals a sea change in the reality on energy as the u.s. moves from being an importer of oil to a natural gas exporter. companies are scrambling to get a piece of this action. scarlet: timing is not so great, right? as a commodity route deepens, will command subside? let's asked the man responsible for granting those permits. chairman ofs the the federal energy regulatory commission. he joins us from houston. alix: have you noticed any

change in companies working to build a terminal as prices have fallen? >> we still have the same applications pending before us. sixave certificated facilities. our nine pending and 13 that are prefiling.ing -- so far, no one has left the queue. alix: do you expect all of these facilities, if approved, to get built? >> that is the big question. ultimately, the driver there will be the global market for lng. doe has the authority to approve the export license for lng, as a commodity. there is divided authority here. alix: indeed. part of the issue is these exports are coming online as

demand is coming off a bit, as we get more elegy demand from al australia. how do you see this playing out over the next 4-5 years in the global market? >> that is the big question. , demand has slumped in asia, with the japanese nuclear fleet coming back online , and with the economic slowdown in china. you have softer demand. you have more supply. supply coming from australia, malaysia, and indonesia, not to .ention qatar a lot is happening here. ultimately, we will have to see what happens in the market. the market forces will drive the development of lng, or not, in the united states. scarlet: so much of that is still up in the air. let's take a step back. rc should notfe

be in the business of picking winners and losers in energy business. talk about the pressure that ferc faces in moving markets in any sort of direction. whether from the government, energy sector, where the public. asi would not describe ferc being pressured in any way. certainly, it is a tough competitive landscape right now. the low natural gas prices have been a big end of it -- benefit for consumers, but have also made it very difficult for other resources to compete. at the end of the day, ferc has el be feel neutral -- fu neutral. all we can do is ensure there is a level playing field. alix: five years ago, we are tight but natural gas import terminals, then there was a switch, now we're talking about export terminals. what are we talking about in five years? >> that is the thing about the

energy market. it is very difficult to make predictions. you are actually right. 5-10 years ago, people were talking about lng, but lng import facilities. now, of course, we're talking about lng export. very hard to say. scarlet: not too long ago, people were talking about nuclear power plants. they obviously represent some huge investments. nuclear did not figure in as a big topic in houston this year. what is your view of the dynamics at play here? >> i think the difficulty, to a large extent, are being caused by the power prices. and just about every region of the country, last year, wholesale prices were down more from 2014-2015. again, great for consumers, tough for certain resources. ferc has tried to basically improve price formation in some

of the energy markets, the regional energy markets. the united states. that, i think, will help resources that are very, very reliable. scarlet: do you think there's anything fundamentally wrong with what is happening in the nuclear industry? the would not characterize situation as one in which there is something fundamentally wrong. other kind of like of the energy world here in the bys. is transporting oil pipelines. pipelines can be deemed as safer than male, what do you think do? energy will be driven by will market forces. i can't say that at ferc we have granted petitions for dinklage declaratory order for a

number of pipeline facilities. we have an estimate capacity of ion barrels. whether or not there is a continued request, we will have to see. scarlet: there does seem to be a lot of opposition to gas pipelines, protesters attending commission meetings. we see the northeast being hot spent -- a hotspot. is there any merit to their arguments? >> ferc has the responsibility, when it considers hartline applications, to do a thorough review, consistent. we understand what are obligations are under the law. i'm pleased to say that the courts have repeatedly upheld commission orders. alix: thanks for your insight on the industry. we're certainly at a historic time as the united states transforms energy. scarlet: coming up in the next way minutes of lumber markets,

what challenges did china face at the g-20 meetings? alix: and, three charts you can't miss on inflation. scarlet: and, a conversation with chief investment officer, kate nixon, on central banks. are they critical or irrelevant in today's economic climate? ♪

scarlet: you are watching bloomberg. i am scarlet fu. alix: i am alix steel. this is your global business report. scarlet: the world bank of scotland was once the biggest, but that is the distant memory.

it now has more bad news for investors. g-20 notna tells the to worry. scarlet: and, a 12 year fight is finally over. to endh company agrees the litigation battle. alix: we begin with more troubles for european banks. the world bank of scotland says it will take longer than originally planned to resume its dividend payouts. reporting its eighth annual loss. it says it is unlikely to return cash to shareholders by 2017, as hoped. the stock is down 40%. scarlet: china is trying to restore confidence in its economy as financial leaders from g-20 nations gather in

shanghai. the people's bank of china repeated assurances that the country would not stage another toaluation of the yen stabilize the economy. they said they had other tools to establish growth. we have been encouraging them to communicate more. ethical you are seeing today is a -- i think what you are seeing today is a much more aggressive approach to communication. there was a press conference which,during part of english was spoken. he speaks very good english. it is a good signed a he is speaking english directly with global markets. scarlet: speculation has been increasing the g-20 members would speak directly on how to bolster growth. is outnother hedge fund of business. heinrich for capital management

managementer capital . the shutdown as to the closures of other hedge funds in the region, as running them has become more cumbersome. a longt: along ending -- pe ending dispute with the vivendi media. in the case, liberty argued that vivendi had inflated the value of its stock. separately, liberty says its almost fell 6%. alix: that is your global business report. for more stories, visit bloomberg.com.

over to abigail doolittle. she is life in the nasdaq with the latest on markets. a slight gain at the nasdaq. abigail: we do have the nasdaq trying to hold onto its gain from earlier. we have to 100 trading down in the red, as microsoft drugs, and other big number weightings are not offsetting that. it could reflect investors are digesting the recent acquisition of a company that had $30 million of revenues last year. not an equal exchange, you would think. apparently, it is a strategic move. cloudoft recruit more engineers. after just hit up again

a series of lower highs. turning to another point on the nasdaq today. apple. the company is certainly in the news, looking be on the news into what could be moving the stock, it will come down most likely to earnings and revenues. it appears that investors have come to terms with the fact that revenues are scheduled to go negative for the march quarter, possibly even the june quarter, considering that shares continue to travel above last year's lows. scarlet: thank you so much. abigail doolittle live from the nasdaq. markets are paying close attention to the g-20 meetings that kicked off in china today. alix: the challenges china is facing as it communicates policy ahead of the weekend g-20 meetings. >> the chinese have so many goals. they would like to stabilize the economy, what is going on with inflation, social issues, if you will.

monetary policy is not the answer to all of those issues. that is why a very important issue is they are basically trying to tell us, listen, we have other options. we are looking at what is going on, and by going out and doing this, and speaking english, it positive signal. >> the financial ministers that there is a way to loosen policy. >> absolutely. is made economic policy up of three things. on thursday, they liberalized bonne flows. now it is much easier to get money into china. that is trying to offset the outflows that are going on. it is a very difficult development to qualify because we don't know how much money will come into china. as david was speaking to,

monetary policy is quite complex at the moment. and look at the trouble are great, and typically you expect that to be cut down. there are a lot of people talking about that exacerbating outflows. what levers do they have? potentially do more soon. the question for them is, why should we do that now, particularly if economic data is not falling as much as people seem to be worried about. down markets.lm maybe they should exploit this opportunity to try to get things in, waters, and then evaluate, what do we need to do, instead of panicking. off today'srly headline that everyone is sitting at the same table? >> one day, they get very

excited, another day, very anxious. that is why, communication, not only by the chinese, but the central bank, is very important. typically, we come into a g-20, and there are two camps. one that says, this is a political talk shop that means nothing for me as an investor, and another who looks at the seriously, looking for coordinated action. what are you looking for out of the g-20 in shanghai? what is actually going on, economic data. it not to say that policy makers don't follow what is going on. it's to say that policymakers are saying, is this really a crisis that requires a court in its statement? i would say, at least based on what has been going on generally, it is probably not quite there yet. we may not get there. they are saying, let's take it easy, and see if we can be here,

and talk about things, and see if markets will calm down. dorsch: that was jewish economic analyst. alix: we have some breaking news. in fortrump is speaking worth, texas. chris christie is talking as he endorses donald trump. he is looking at the five people on the stage last night a clear stand up, and the person who will do what needs to be done to make america a leader around the world again to provide strong, unequivocal leadership, do what needs to be done. scarlet: that is chris christie speaking. he is endorsing donald trump as the nominee for the republican party. we will have more coverage as we return. ♪

mark: i'm mark crumpton. we're live in new york with the breaking news that scarlet and alix told you about just before we went to commercial. chris christie endorsing donald trump for president. they were, of course, challenges, up until a little bit ago. president obama also weighed in on trump when he was asked. he said that that was for the republicans to decide, and not eigh in.to way we're live in fort worth, texas. governor christie is at the podium. what donaldie: went trump is about is about the people of this country. i heard senator rubio's comments. none of them were about the people of this country. when are we going to start talking about them?

the fact that the class folks in this country are suffering. the fact that we can't, any longer, as a country, stand up and defenders of the around the world because we have a leader that brings his hand -- hands.is flailing punches in the last days of a losing campaign. the fact of the matter is no one could get inside this guy's head. he has lived a lot of life. he has had a lot of fights and battles. there is no better fighter than donald trump. not hear senator rubio talking about any of that this morning. >> mr. trump! endorsement, ig want to ask what it means to your campaign? you said that endorsements don't matter much. could have had

many, but i didn't want to take the time. this was an endorsement that really means a lot. chris is an outstanding man with an outstanding family. he has done a great job. i think this is one endorsement i felt very strongly about. >> i want to ask you about marco rubio and the debate. he's adjusted the uber sweating he suggested that yo that you were sweating backstage. donald trump: i saw him backstage with a pile of makeup. makeuphim, easy with the , you don't need it tha that mu. he looked like he came out of a swimming pool, he was a mess. i heard he had some nasty personal comments, by saw him backstage, and he was putting it on. yes. [indiscernible]

chris called, we have this great relationship, and i said, that is really great. amazing person. >> mr. trump! >> [indiscernible] trump: it is a civil case. won much of it. mark: breaking news, again, from fort worth, texas. governor chris christie endorsing front runner donald trump. ♪

alix: 1:00 p.m. in new york, 6:00 a.m. in london, and one a.m. in -- 1:00 a.m. in hong

kong. welcome to bloomberg markets. ♪ from bloomberg world headquarters in new york, good afternoon. i alix steel. this is what we're watching at this hour a. gary cohen says to look for clues on where global growth will come from. innovation is only as good as the behind it, says a good -- a new report. battle over privacy. we make the event to apple's arguments, and how this case we have some to breaking news. mark crumpton has the latest. new jersey governor chris christie, endorsing donald trump . been mr. trump has

speaking to reporters. he was asked by a reporter about endorsements, because he had said that at some point you do not believe that endorsements without important. however he called chris christie, his former rival for the presidential nomination a spectacular governor. mr. christie says he was mark: proud to endorse donald trump for president of the united dates. they are taking questions from reporters. let's listen in. my taxes have been under audit. for some reason i have a lot of rich friends, they have never been audited. i've been audited for 12 years. until such time as the auditors a routinewhich is audit, but until such time as it is finished, i will not be going in releasing, because obviously that would not be a very good thing to do. >> how you feel about the recent endorsement from david duke? >> i did not even know he endorsed me.

mr. trump -- mark: live press conference from fort worth, texas. picking up a major endorsement, his first major endorsement of this campaign. he is now officially being supported by new jersey governor chris christie, his one-time rival. s remit megan murphy. talk to us about this. this seems to have been unexpected. unexpected,y and it is the endorsement that will be heard around the world. this is a huge name to bring in.

marco rubio has taken a page at a chris christie's book in attacking donald trump last night's win what he is done is to be a complete master of this entire political cycle, when anything appears to get in his the rolls over and turns the cycle to his advantage. and amazing development today. mark: what do you think the strategy behind this was? they alluded to the fact that some people said could this tv first -- be the first in the series in between these two men which could lead to chris christie being as vice president mate?ng >> this one is looking like people would love to see this one. the camp that is looking at the was a little concerned is hillary clinton. chris christie was incredibly popular in some pockets of new jersey, a popular in others.

he is a candidate that a litmus test, just like donald trump. you either love him or do not love him. those two as a matchup are going to be incredibly compelling team. there is speculation on whether this will be the ticket, but there is a major name behind donald trump. "how we, what does this do to ted cruz and marco rubio? campaigns toheir go after chris christie as well, saying that this is an endorsement that really cannot political lester, given the fact that mr. christie does not do so well either in the debate or in the polls? to correctone thing is that chris christie had a consistently good debate performance. traction with get a broad swath of american voters. his message was not the message that people wanted to hear. for marco rubio ted cruz, this is not welcome news today. this takes all the momentum they had last night from this attack

on donald trump and shifts that once again back to donald trump, just shows himself to be an amazing master of media hype, of media manipulation, whatever you want to call it. he managed to bring the chips back to his table. mark: thank you. repeating our top story, the breaking news this afternoon, i major -- a major endorsement in the presidential campaign. chris christie, a presidential hopeful one time, throwing his support behind donald trump. we will bring you more developed as we get them. back to you. midst of the turmoil, investors have the role of central banks. they cannot create growth, they can only create conditions conducive to risk-taking and investments.

they can only set it up for you to do well. can even do that anymore? they certainly bought us a lot of time to allow banks to recapitalize and provide little ground for investment spending. under the cloud of this global uncertainty, no one is willing to invest or spend. in the absence of anybody else joining them in the center ring, central banks have made themselves so in a cool. but it is getting complicated. that a lot of rhetoric is you have easy be going into negative, boj going into negative, and it was actually working. the fear was that they were ineffective. do you buy that? our perspective is that going into negative interest rates is certainly deeper into uncharted territory. any counterintuitively, central causing a price to be paid for safety and security

will force people to invest and to spend. the opposite is actually true. you create uncertainty which forces investors and take risk off the table and for consumers to sit and wait and see what happens the deeper you go into these unconventional policies and deeper into the toolkit, the less effective ultimately it becomes. alix: in erie, global stocks are now at the level they were at the beginning of the year. you had some really good data eight today. personal consumption was up 2%. you have personal study coming in higher than estimated. is it actually working? >> yet to separate the u.s. from non-us. here in the u.s. the fed has been steadfast in saying we're data dependent, we will do with the data tells us. we will tighten at a pace that is consistent with our inflation expectations. outside the u.s., the data has been very volatile and quite fragile.

you have ecb, which potentially next month will have to go deeper into the unconventional toolkit. you have a lot of problems with then in terms of expectations even in the face of negative interest rates. alix: we had a tremendous rally from the february 11 low. what is the question you're getting from clients now? >> is this rally sustainable. we thought the market was very oversold earlier this month. this rally is not surprising. we do think that further advances in equity markets are going to be coupled with increased volatility. we are positive on risk after for the year. even emerging markets will have a positive return this year. that return will be joined with a lot of volatility and a lot of noise. there is a fragility investor sentiment right now that we do not see clearing over the near term. alix: so this is not a dead cat bounce. it will just be a volatile rally? >> fundamentals are supportive.

that is the most important thing fo and -- for investors. that would be earnings. earnings are supportive. we think interest rate will stay very low. that is also supported to risk-taking. valuations will come down to sit historical averages. those three things should provide nice momentum to risk assets. the dampener will be investor sentiment. that will create volatility. alix: we keep hearing about a profit recession. do you not buy that? >> we have had several quarters of negative earnings growth as more quarters of negative revenue growth. the, ande long-term on the strong negative associated with the head when of a strong dollar, and a deep bound in commodity prices is much further behind us so the effects are going to be more muted. energy is a very small percentage of the s&p 500. even that will have less of an

effect. alix: you were talking about valuations but we have seen a rotation into consumer staples, but they are very expensive now. what happened there? >> easy investors trending toward more defensive names. that is going to happen when you carries uncertainty, and times of uncertainty. we think we can sustain above average evaluation, because the consumer is healthy. we see momentum, so it is not surprising to see it pop up there. alix: thank you very much. lots more coming up on bloomberg markets. a repeat of the breaking news we told you about earlier, new jersey governor chris christie endorsing donald trump for the republican nomination for president. we will be right back. ♪

alix: we do have some breaking news for you. new jersey governor chris christie is endorsing donald trump. mark: the news breaking within last half hour. donald trump receiving the endorsement from his one-time rival. ae two of them are seeking to press conference in fort worth, texas. >> i will tell you where they is at, the new york times totally failing paper, with some really inaccurate hoarding. they go out of their way, and you try to make a correction, they do not want to do it. they may statement about it. i do not know where they got it.

i would say that the number is run by a factor of a fun fortune. i got a small loan, started a business, and it is now planes and billions and billions of dollars. if i ever wanted to sell the some of the best , my propertyountry would sell for numbers like nobody would believe. i have among the best properties anywhere in the world. >> does this make you rethink your pledge? >> i think it is unfair when a guy says my father gave me $200 million. if you knew brooklyn in the the 1970's,, and there was a $200 million, that i can tell you. i do have brothers and sisters. was from cholera

message of them and then i got a call from my brother, late at night. all the one it to does only wanted to do was say why did they say that? he actually mention some companies, and some of those companies are very successful companies. he said they close. i sold some, like ms. universe for a lot of money. i sold others. he mentions the wine company, the biggest vineyard on the east coast. for nightclubs. we make vodka for the club. it is not closed. >> the pledged to endorse the nominee, you pledged to support whoever the nominee hais. reason it didn't

work out for me, chris would understand this. i'm going back to what i do. i do not need to do this. we are going to make america great of just great again. politicians are not going to do marco rubio is a lightweight. he does not have the talent, the temperament, he can never make us great. do you know if you can write up the money you are using for your campaign? governor christie, can i ask you a question? it is their position in the cabinet that you would be interested in, attorney general, something like that? what you like to be his running mate? newre you governor of jersey until 2018. then i plan to go into private life. >> if you were offered a

position, would you take it? i do not speculate on the kinds of things. i have a term of office until genera 19th 2018. i intend to fulfill my term. thethen i will go into possibly make and more money than my wife does in a year. [laughter] >> thank you. we have thousands and thousands of people -- mark: donald trump and chris christie ramping up their press conference in fort worth, texas. the new jersey governor at one-time rival to donald trump for the presidential nomination. today throwing his official support behind donald trump. when mr. christie began the press conference, he said when are we going to start talking about the middle class?

as for the attacks and mr. trump was subjected to during last night's debate, mr. christie said no would look inside his head. mr. trump was asked about running for president, and how that might conflict with what he has been doing in the private sector. he says there have been so many inaccurate stories. newelieves the york times have printed inaccurate about his wealth and his holdings. he said he wanted to do this because he wanted to make america great again. he took a shot at some of his rivals, in particular marco rubio, was very aggressive against mr. trump during last night's debate. he called mr. rubio a lightweight who does not have the temperament to be president. donald trump, the presidential front-runner, receiving a major endorsement today from jersey governor chris christie, his one-time rival.

the two men speaking in fort worth, texas. stay tuned to bloomberg , we will bring you more details. the burger today continues in a moment. -- bloomberg market day continues in a moment. ♪

♪ alix: welcome back to bloomberg markets. i want to get a quick check on the markets. julie hyman has a check on company movers as well as moving averages. julie: i will take a big look. we will look at the dollar today. it is a very broad rally as well. we got a connect out of this morning that seems to signal that inflation is finally heating up. both in the gdp report and the price expenditures depart, that is the favorite inflation measure of the fed. this is not just rising against

the usual suspects like that found in the euro, it is also rising against the most esoteric currencies. the new zealand dollar falling versus the u.s. dollar, and it is even strengthening against the swiss franc. this expresses that at least in the currency market, it is more of a risk on environment and trade that we are watching today. we also watched the market in terms of treasuries. we are seeing the 10-year note yields rise on back of that inflation data as well. we are to 1.77% today. wrip being praised into the interest rate futures. for the december meeting, we've gone back up above 15% to 53%. pretty normal woman on that screen we have a modern closely, because the odds had dropped so dramatically. reacted ass have not

if all of a sudden the fed is going to have to act sooner rather than later. julie: has not been a sharply positive reaction to economic data. it has not been negative to that reaction. it is just muddling along today as stocks have traded once again in a tight range here, and not seen a lot of movement. , we have seen it bounce around again in that very tight range. there you have it. alix: thank you. the g-20 meeting kicking off with investors looking for signs that finance ministers are taking actions to bolster global growth. i think expectations are always high going into these g-20 meetings, these imf meetings. the reality is, the messages are never that clear. i would do as i

would temper expectations that something really major comes out of this weekend's meeting. that said, one of the big fundamentals that is driving market volatility today, outside of liquidity, is what is going on global growth. china is clearly at the center of one of the questions where is global growth going to come from? we have all seen china slowdown from a double-digit growth economy, when they were going through their big environment, and we see them drop into the mood single digit growth environment. whether it is 5, 6, or seven, none of us know. but we know that they are transitioning to an object environment. meaning that the environment today is being driven by consumer spending. what does that mean? consumer spending is consumer discretionary spending. the world is trying to figure beenhas china financial transmission them to

become real consumers? if they have, what economic growth is not created? that is a big mystery right now. >> the slowdown as you mentioned , whether it's 4, 5, 6, 7, we can see them coming. why do you think people are panicking at this moment? this has been highly telegraphed by the chinese government. we are talking about 20, 30 years of policy. talking about inhabiting the cityscape talking about creating consumption. none of this comes at a surprise whatsoever. but this is happening on top of, unfortunately, a slowdown in any of the other economies around the world. it may be bad luck, it may be bad timing, but the reality is

that we need a stronger and economy to drive the other economies along with it. we have relied on china for so long to be degrom miguel cotto the other, that without china unsure aboutd is where to rely on for growth. alix: that was the president and ceo of goldman sachs, speaking in shanghai. still ahead and bloomberg markets, a new survey study shows that humans win over technology when it comes to trading. we will talk to the author of that report. ♪

from bloomberg world has

currently numeral, welcome back to bloomberg markets. let's chart with the st were news. mark crumpton has more from our news --. defaulted surprising on the campaign trail, new jersey governor chris christie endorsed donald trump for president. governor christie is campaigning with mr. trump texas. in the meantime, self airline a governor nikki haley said she would support trophy was the nomination. governor haley has endorsed marco rubio, who she says can overtake trope. former secretary of transportation has endorsed john kasich as has the former new jersey governor. gunmen have forced their way into a hole in the small you -- capital ofli mogadishu. the hotel is located across from the presidential palace in mogadishu.

altuve claimed responsibility for the attack. michigan governor rick snyder is billssing paying water -- is off the rising funding to pay the water bills for the residents of flint, michigan. that includes water used for drinking, or bathing. they still have to put the bill for the sewage portion of their bills. 115 of the 207 eligible votes to take a decisive majority ahead of the front runner. the vote comes after the governing body approved reforms. fever is trying to overcome corruption allegations that took down sepp blatter. they are still investigating.

i am mark crumpton, back to you. alix: thank you. who wins the battle for trading desk supremacy? a recent report of greenwich associates. firms spend more money than technology. was -- what is this say about the future of the training? what was the most surprising finding in this report? >> this is a report we do every 256, where we talked to traders around the globe. there are a couple of things coming out of it. the overall budget increased by 4% in 2014. within that, there is a shift in 64% to 69%.on from

it is increasing budget, and more focused on the human side of it. alix: fly? why? >> they need traders who understand market issues. they know how to use one is there. is it so much an endorsement of traders, or more of i hate technology? >> i think it is an endorsement of traders to the large extent. the turning point was a couple of years ago, where market structure found themselves getting calls from asking how they are navigating these issues. there haveppened is

been investments already, and they have a lot of tools. the next stage is making sure righthe trading desk have data to understand what is going on. alix: and has gotten increasingly more difficult to trade in markets. in humansthis play versus technology? that change is more pronounced in fixed income. it is a 70% shift towards the trading talent. in a lot of that is driven by the lack of liquidity in the fixed income market. also, you will see the fixed income month it is going very time of change where there are a lot more venues. have the traders who understand what is going in the market, that is important right now. alix: do you know how that dynamic will play out over the next year or so? >> we will have to wait and see. we will continue experimenting with the new venues that are out there.

i think the liquidity situation will say the same -- stay the same. alix: you still have those creating bonds that are not computerized rate is the opposite complaint you here in the bond market. >> you also hear that the bond market is acting like the equities market in something -- in some banks. that are some changes to --s not alix: what is your take on ie exit exchange? do you think it will become the stock exchange, trying to avoid those polls? >> this is why people need to have people who understand these issues. a lot of stuff out there. --comes down to this default

of this speed bump that they have. there are negative points about the. at. it means that the quotes are not immediately excitable, which is contrary to this. raise, butd issue to overall there are a lot of problems with market structure anyway. they are trying to fix it, they have broad support from asset managers. i think they should approve it. alix: thank you very much. vice president of market structure and technology. treasuries falling today after a life better than expected data prompted traders to reevaluate their views. we were talking about the state of the china market -- of the credit markets. >> we think that bonds can earn 4% to 8%.

these fallen angels are actually going to be quite manageable. overall, i think the inflows into credit are going to offset this risk. i think investors are going to buy non-energy-related credit, and this capital inflows are going to cause credit to rally. credit is actually going to be the place to be this year. stephanie: quite manageable for whom? theou think about all of investors that went into the credit market because they got so little out of bonds, they bought corporate bonds hitting the more a safe haven. they do not look that way anymore. newest told our two investors around the world are so low that credit offers 4% to 8%. we are expecting significant inflows to offset what will be a fallen angel risk. but the reality is there default rate, excluding energy and beals and mining is going to around 2% or 3%. the market is pricing in a percent default. they aretunity is that

getting much like his press than a recession. pimco does nothing that it will happen this year. credit should outperform. crude has been blamed for all is everything happening in high-energy. thatdn't we be flipping around saying that oil is just exposed to the dreadful investing that has happened over the past eight years, and that is all that has happened here? credit markets are going to get tighter for the weakest companies. that is the reason we have been underweight on the energy sector, underweight on these higher lever companies. but the fact is there are many great companies to invest in that are tied into the consumer that is growing 2% or 3%. beis a beautiful market to an active manager like him, because we can pick the winners like the consumer housing health care sectors that are doing well, and avoid the losers and outfit for a client through active management. high-yieldso is ho

corporate management finally at the right price? >> that is exactly right. we took a pause and took a step back when those yields were low. now that we see the wider spread in these attractive yields, we are now playing selected offense. we are even playing selected offense, believe it or not, in the energy sector. these low commodity prices are not going to be forever. at some point you to government defense of position you as we have gone, to playing selected offense, picking the winners within the energy sector, because a year from now, there will be great gains made in energy. stephanie: are you in a much better position from your hedge fund brethren right now? we do not like the strategy, we read this money in a better position to invest. >> pimco is basically a

long-term investor in what we think are the best teaching assets of the world. hedge funds have to day trade. they are going to be much more susceptible to a liquidity crunch than a long-term investor like pimco or warren buffett. we have a long-term discipline approach, based on barriers to entry, pricing are, superior growth rate there are numerous assets out there that make great investments over the long run. investments take focus on the consumer, the consumer is a strong as it has been in 10 years in the health care sector. even in the pipeline area, as well as areas where you have significant pricing power. the last point i would make is that we have always focused on the upper tier of high-yield and we are buying companies rated high-yield today that will be investment-grade wanted to years from now. that is the catalyst for spreads tightening, and that is how you outperform in the credit markets. pimco's global chief advertisement credit officer. what a sticky mess in

canada. the opec of maple syrup under pressure. we have details of the syrup cartel causing key back to see market share decline -- québec to see market share decline. what was surprising about the argument in the courts. and we will go back to shanghai and talk to the vice-chairman of kissinger associates about what he thinks will be accomplished at the meeting. ♪

alix: you are watching bloomberg markets. i am alix steel. it is time now for the bloomberg business flash. the biggest business stories in the news right now.

$6.8 billion rupees i agreement -- revised agreement to be taken over by washington regulators. they voted to reject the deal by the companies and the city's mayor. courtbt the supreme justice antonin scalia has had a n impact on a case in dow chemicals. it disputed that it conspired to fix prices. it asked the supreme court to take a class action case on appeal. previouslylia had voted to scale back the reach of such groups. have content. for by american express next week. the content will include extra scenes and interviews from stars -- with stars from the show. they are testing strategies as they turn away from 32nd

commercials. that is your bloomberg business flash. let's go over to the markets desk for julie hyman had a look at water stock. julie: on the utility side of the equation water stocks are suffering today. they are down across the board for a number of reasons. let's start with aqua america. didn't report earnings earlier in the week, but no special headlines today. california water service group with earnings that ms. analyst estimates. company saw increases in wages, and had job-related and maintenance cost, the based in california. those shares down by 6%. american water works was caught from neutral -- cut from neutral to buy. american states water was cut to

sell from neutral. a price target of $40 following on the company's results which missed estimates. companiesne of these in the utility index is american waterworks. it is hoping to weigh down the .ndex with the rise i was looking at rbc on the bloomberg. this lets you look at the valuation and play with the metrics for different companies versus their peers. works, american water which is being downgraded because of its valuation. it is the for price earnings estimate on this access trailing earnings-per-share growth on this access. you can see, versus its peers and purple, its valuation is a bit higher here.

earnings-per-share growth is also a little bit higher, just to give you an idea. california water company is all the way out here. below average earnings growth for the group, also much cheaper than the other groups. just an interesting snapshot of these water companies that are set up -- suffering today. alix: thank you. it is prime numeral syrup season in canada. producers are prepared to fight back against a cartel like system. pamela joins us now. explain to me the setup of the maples are industry in canada. >> is almost completely in québec. the world syrup comes from producers in that province.

they make sure that the market is not flooded and that they have an uninterrupted supply of maple syrup for the world and cell phone -- and so on. in his acting a little bit like a cartel in the sense that they price, they bring in all their vendors worldwide. they were priced at $2.16, which has seen growth each year. they're making sure that producers are not overproducing break. they have strict quotas, and they make sure that they are not letting the market in any way. producersusing some in québec to not want to stick to the quota system and produce a bit more. they are perpetuating a bit of a black market events. i compare it to opec, it sounds somewhat similar. on the other side, you have the u.s. reducing as much oil as they want.

in opec, they do not have to stick to the quota. they can do whatever they want. why is it different in québec? >> there is cheating. you are right. it goes along, and that is exactly what there's been a political paper that just came out that needs to review this quota system that is not working anymore. world demand is growing exponentially. for natural sweeteners across the board, whether this defense, honey, enables syrup has great command to go in every thing pop tarts to yogurt and so on. holdcartel wants to put a on its power command and wants to make sure that it is selling in bulk. maket also is trying to sure that whatever is left over is put into storage, and then you have this uninterrupted supply. that is the good side of the cartel. alix: maple syrup pop tarts? i had to take a moment. what about the industry in

québec and naval surprises? -- maples her prices? is there any correlation here? >> in vermont, the growth of the taps thaters, to give us arees out has grown 45% over the past eight years. that is expected to grow much more. in vermont, only 6% of the very accessible trees have been tapped. there will probably be lots of growth in there and in other places. the idea that these quotas have to stick to where they are is a problem. but the other piece of it is that u.s. producers can go ahead and are tried mostly -- type mostly to the producers. they sell what they want on a without a quota. alix: thank you. a great story. we want to get to mark crumpton who is at our breaking news desk , looking at some headlines coming up.

mark: thank you. the president of the united states is in jacksonville, or the. -- jacksonville, florida. ,e is talking about jobs getting a snapshot from his 7.5 years of office, telling the audience assembled there where the country was, before he took office, and where he believes the country is now, and where it can be going forward. let's listen in to the president, live from jacksonville. >> it was not someplace you would want to be wandering around. it has been ignored for more than a decade, since the navy base here closed. then, all around us, the economy was in a freefall. 800,000 americans were losing their jobs every single month. that is almost the entire population of jacksonville joining the unemployment line every few weeks. lost their homes,

families lost their savings, and people here in florida are especially hard hit. the unemployment rate here in florida hit 11.2%, which was even higher than the national average. fast-forward to today. businesses like yours that created jobs for 71 straight months. 14 million new jobs overall. we have cut the unemployment rate by more than half. nationally, the high was 10%, it is now down to 4.9%. here in jacksonville, it is even lower. our auto industry just had its best year ever. we have created more than 900,000 new manufacturing jobs over the past six years. meanwhile, our high school graduation rate is at an all-time high, nearly 18 million americans have gained health care coverage, although here in

florida there are a lot of people who haven't, because the state has not expanded medicaid. that is another topic. [applause] are leading a clean makingrevolution that is our planet safer and more secure at the same time. you do not hear a lot about this from the people who are on the campaign trail. they are talking down america. i do not know when it became fashionable to do that. i sure am proud of what i've over theicans do course of the last seven years since the crisis hit. notanybody who says we are absolutely better off today than we were seven years ago, they're not leveling with you. they are not telling the truth. almost every economic

measure, we are significantly better off and florida is significantly better off. jacksonville is a whole lot better off. [applause] and the reason i make this point , is none of this was an accident. of your hardecause work, it happened because of your resilience, it happened because americans looked out for one another and families rims and saved and workers retrain, and businesses hired an expanded and students in the books, and , myappened because early on administration put in place some pretty smart policies to rebuild our economy on a foundation for growth and prosperity. america's steady, persistent work, those policies are paying off a big of a tangible ways. we're not talking about it

enough. talk about why it is that things got better, then we may end up pursuing policies that will make things worse. it is not to argue that everything is perfect, there are still people who are looking for work. there are still problems in terms of people getting higher wages. being able to pay for college, being able to retire, but if we do not recognize the progress we have made and how that came about, then we may chase some snake oil, and that of having policy -- mark: the president of the united states being in jacksonville, florida speaking at a factory for high-tech batteries. the company won a recovery grant, and maxed that amount to build the factory. back to you. alix: thank you.

we do have some breaking news for you on united technologies. let's get to julie hyman at our markets desk. julie: this morning united technologies received a offer from honeywell for $108 a share. the two had been in talks, and now united technologies is rejecting that offer from honeywell, saying it is woefully undervalued. but technology shares are halted at this time, before they were up about one third of 1%. we are not seeing much reaction going into this headline. we will get updates to you as they come in. alix: thank you. much more coming up. we will be right back. ♪

alix: it is 2:00 in new york. tracy: welcome to bloomberg markets. ♪

>> good afternoon everybody. tracy: here is what we are watching this hour. >> we start with the u.s. economy expanding in the fourth quarter war than previously thought. did a grow in the wrong places? there are still plenty of tools for china to stimulate growth. is evaluating the yuan one of them? >> chris christie coming out in support of donald trump. it raised how much of a boost before the candidates are ready for super tuesday? we are going to head over to the markets desk for julie has the latest study with a look at honeywell and united technologies. julie: ongoing. we just got headlines a few months