scarlet: u.s. stocks erasing earlier gains. oil wraps up is the best week three at. joe: the question is, "what'd you miss?" scarlet: are we seeing a bounce off of all of the negative sentiment, or is the start of a new global market? joe: the currency interventions actually work? our guest says monetary policy is not the same. government for ireland. will they keep the economy on track? scarlet: overall for major indexes, good, but the dow and sap could not hold onto gains. you have materials, financial, energy, and industrial. they highly leverage the economy. these are some of the biggest losers. quiet day overall,

but this is an external narrate week, nasdaq up 2% -- extraordinary week, nasdaq up 2%. pretty incredible comeback. s&p, if you look at the this is a 50 day moving average, so maybe a medium-term trend line. we are right above that level. what does that mean? is a sign the s&p is above moving average for the first time since october, or is a negative side because the 50 day average has moved so much lower? when a continues to come down, that could be dangerous for site -- stocks. joe: we saw a solid jump in the two-year yield. this is after a very solid core pc report, the inflation the fled it looked at -- the fed it looked at. none of these are based in

reality, so it probably means more rate hikes, higher short-term rates. you can see where we were. alix: report was embedded it within the gdp growth, which showed better than expected growth. in terms of currency, the story remains on the count. anxiety. it continues to sink today, and sterling has rounded off its worst week since january 2009. there is indicated more movement, 10% to 50% drop. was: one of the big things copper, it closed at a two-month high. that was relatively surprising. it is usually the global growth metal. in terms of premiums, how much you will pay in the spot price, has been rising. it indicates stronger demand, they had a nice rally in prices. scarlet: those are the market minutes to a deep dive into the

bloomberg. you can see all of the following charts at the function at the bottom of this screen. i want to look at the projection with the snp 500 and the shanghai composite. the yellow line is thyssenkrupp by -- composite. stocks roseghai more, sophomore, but generally dictated the direction of u.s. stocks. let's show you what happened so far this year. you can see the s&p 500 down about 4.5%, the blue line, doing better than the shanghai,, down 22%. chinese stocks are no longer the global growth prophecy people treated them as earlier on. alix: i am looking at network, the tengion on the terminal -- function on the terminal. you can look at the implied currency curve now versus two weeks ago.

the green line is where we are right now. you can see rates moving higher. this is where we were february 11, when we hit the bottom for stocks. we are basically flat. that raised quickly within two weeks. joe: i big reason is this realization that maybe the world is not coming to an end. markets have been rallying, and we got a data point that i mentioned earlier, poor pce year-over-year change, this is an inflation measure. it is up nearly 1.7% year-over-year. that is the fastest rate of growth in three years. you have to go back to february 2013 to see the last time it was at this level. target, 1.7% is not that far away, especially given a few months ago, we were in the 1.2% range. we got about health care inflation, but at the rate it is going, maybe the feds

expectation of the economy will get to do percent inflation is 2% ridiculous -- will get to inflation is not ridiculous. there isthat perhaps forecast about where inflation would trend to, roughly in line with where the last set of dots were. scarlet: maybe the market has been wrong. joe: maybe. scarlet: you can see all of these charts on twitter. we are joined now with action for the market. can you forecast at the global equities were closed to the bottom? they have erased those lows especially since february 11. how you view the bounce? is it the start of a new global market? >> it is going to be a low return year from the beginning, less policy plays ability. thing, we moveg

it down for global equities from november to the trough. short fundamentals, put in a vice between global growth put in by china and policy statement that the fed was going to raise rates regardless. either of those things are going to happen, so this is all fundamentals and sentiment. it was seen as negative. joe: two weeks ago it seemed like the world is coming to an end. people were saying the fed it made a mistake, china was melting down. the class in oil was going to hurt banks. european banks are seeing worries about their ability to pay some of their coupons. are inould you say we sentiment right now? have we been healed? you can see back in the end of august, a huge contrary by signal.

at this point it was not as extreme, one deviation below average. you look at the core index, but look at thetors market. the lowest low since 2009, bearish. thecombine that with fundamentals. we don't think the fed will make a policy mistake, we don't think gross is the same -- you put those two things together. at the beginning of the year it was 11 digit upside. we think that is interesting. i think you will be gradual. it will take time, gradually ease. take time for the fed expectations to normalize somewhat, but we have 11% upside. alix: you also mentioned there were two drivers you saw in the market recovery, central-bank action and earnings release. if you look at central-bank action, what was that you felt was supportive of a market rally? >> we are looking at the fed it

to become more dovish. hopefully we begin to get rhetoric from the fed in march. alix: in action, in essence. >> 50 basis points more from the fed, we would like to see some validation in march. ecb, looking in terms to make rates even more negative. coming up, and today we sat more dovish rates from the pboc, and they have a lot of policies like ability. scarlet: one thing striking is when it comes to sentiment and confidence, things have early in the year, especially at the end of last quarter, anything china saw, the market went into convulsions. if you look at this week, very different story. come inside the bloomberg, and what you see is the five-day chart of the shanghai,. -- shanghai composite. the white line shows the s&p 500, and you can see on

wednesday through friday it defined what happened in china. what does that tell you? are we much more resilient than where we were at the start of the year? >> the sentiment has called down , people are looking at the fundamentals a little bit more. we have more positive, more proactive policy out of china, and in the u.s. we have better economic data and concerts have moderated somewhat. alix: you look at a profit recession that we can kind of say we are definitely in now. joe: i want to ask about earnings because one of the things you hear a lot is dollar, strong dollar earnings. it has been a while since the dollar has actually rallied that much. it feels a little bit of an old story, considering what the dollar has done this year. are we at the end of companies fighting the dollar? of a redk it was a bit

herring, the dollar has been strong for a long time. i concerned about topline growth for the u.s.. relevant tos less stocks. upes are beginning to pick gradually. labor is 60% of the cost of the average s&p 500 company. there is bottom-line pressure, topline pressure, that is why we are seeing earnings like that in the u.s.. firms are coming out and saying by emerging markets. they were say it is a dollar trap. you have to go in. alix: keeping them is not enough. what about emerging markets? >> stabilization of the dollar is taking a lot of pressure off of the emerging markets, off currency. since late more policy stimulus coming out of china is certainly helpful. you have this triple sort of premium in the u.s. with a

strong dollar, the opposite in emerging markets. very depressed earnings, check sheet -- alix: thank you. scarlet: what is behind the risky asset selloff in the g-20 leaders fail to support fiscal stimulus. can we see a negative reaction? ♪

♪ mark: let's get the first word news. a stunning development on the presidential campaign trail. chris christie endorsing donald trump for president.

kristi says trump is the only candidate qualified it to be president and the only one who can beat hillary clinton. kristi dropped out of the race after a poor showing in new hampshire earlier this month. the internal revenue service says weiss as many taxpayers were hit by cyber criminals than previously uncovered. it is the second time in six months they have revised the total. hackers gained access to tech data for more than 700,000 households and try to access 300,000 more. the irs is working to notify taxpayers. the pentagon is launching more cyber attacks against the islamic state. this begins shortly after the defense department called on commanders to wrap up the fight against -- ramp up the fight against the militants. they will have more in place by 2018. we have a new fee for president -- fifa president. he took a decisive majority of ahead of his rival, the front

runner during the four-month campaign. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. back to you. lix: "what'd you miss?" the g-20 needs to man up and deliver global expansion, according to stephen engle under at 20 group. he says markets could react negatively. joining us now from montreal is brandywine codirector of the dow.rch, 10 >> there are probably a couple of reasons for the selloff. quite a few negative things overlapped together. you have a fed it ready to qualify -- titan policy towards china, and you have concerns

about the easing in japan and europe. of that would not have any impact on the economy. i think all of these reasons calls to the selloff in global stocks. of course, the g-20 meeting in shanghai could come up with some coordinated physical attacks, and that would be great. but i have some doubt about it because physical deficit debt are completely demonized in the west. i think it is very politically different for a lot of government to expand physical stimulus at this time. i think of can do it, but i have very serious doubt whether the u.s. will be able to do it, and i have serious doubt whether the eurozone can really do it. joe: you mentioned that china can do it in terms of expanding this bill stimulus to boost demand, but people have been saying that for a long time that china has all this policy, the right power.

every month or week someone says that. will they? why haven't they done it on a level people have expected that will really turn the economy around? >> this is not really something -- i think it is important for people to understand. i think the chinese government made a serious judgment error. they believe the economy can handle it self without having policy support. not only that, they have bought the idea that the chinese economy is leveraged so they cannot increase the indebtedness any well -- anymore. they are in the process of abandoning that belief. the reason i say that, if you think about the chinese economy, they have 50% of gross national savings. it may pave the way for them two final that savings into investment through the banks, through the credit channels.

squeeze credit creation, you are going to create a situation where savings start receiving investment. that is why you have inflation problem, a slowdown in growth. i think they are in the process of abandoning that, and that is probably a good thing. scarlet: isn't that confusing in the market? is it too late to reverse course? 6% ofw, first of all economic growth is not devalued at all. secondly you hear from the beijing government, they are planning to increase his goal stimulus quite dramatically this year. the prime minister will probably report to the national people's congress barry soon that they are going to increase fiscal indebtedness. that is probably sizable but not necessarily enough.

it will probably have to jack up the deck to 6% gdp to reverse this. joe: you talked about equities have been rising in premium. that should make it look like stocks are better valued than they have been lately, but you are in a quick -- negative on equities. you have a higher amount paid it to earn them then treasuries or yields have been. think, if you step back a little bit it is very interesting areas. you look at risk the bond yields, this will start to escalate at the time when interest rate are crashing to zero. whatever the rate reaches zero, this stays high and the reason

is the market knows once it is that zero rates, your stimulated impact on monetary policy maxes out. you are kind of left alone. the market is going to have to read this count or the risk assumptions. we know the playbook, when this goes into effect, drop rates, stimulate economy and the market comes back. today this is a different story. whenever we have a recession, what are you going to do? we don't have any left for the central bank. the market you see demanding reasonably high risk premium to compensate that lack. alix: it seems you do agree with stephen engle under that banks aound the world can't agree fiscal stimulus to support stocks. there is nothing really to support. policy,ly. physical from the 1980's, monetary policy

basically dominated the whole economic policy. since paul volcker came to govern the fed reserve, that actually marked the beginning of the dominance of monetary policy. the rates falling to zero, you have to basically switch back to physical activism, and not a lot of countries accept that reality. have, wession will will tell you -- we will tell with that issue. it will come back in a major way. alix: thank you. scarlet: u.s. consumer spending climbs the most in eight months. we turn to stories you cannot miss. ♪

♪ alix: i have alix steel, "what'd you miss?" we got a slew of vinegar mcdata. the take -- economic data. now the take away. spending,t consumer real spending on recreational goods. how come that stood out? >> we had a really big pop in consumer spending. if you go beneath the headline to some of the sub series, they are interesting. this caught my eye because it is kind of a good gauge of how consumers feel.

the more they spend their paycheck on recreational goods and services, that would speak to a more optimistic consumer. joe: this is the highest level in some time? 2009.e six years, since the factory are spending more on recreational goods, and it has really ramped up over the last -- joe: that is most recreational stuff. alix: what is that? >> sporting goods, skiing, exactly. all that sort of stuff. that is a good sign. it has been flatlining for six years, and in the last month it has really taken off. that speaks to the momentum. alix: consumers are optimistic on their financial situations improved. >> it is not often we get a multi-punch of super confidence and consumers bending data at -- consumere

spending data at the same time, but the survey showed the percentage of respondents to the survey thought they were better now highestfrom since 2006. these consumer surveys are changing a lot from month-to-month, but the latest data we have on the consumer in february shows the point of optimism and they are not other by the market turmoil we are seeing, and we are expecting higher wage growth, something that had not really shown up yet. hopefully we will continue to support the spending gains. a divisionere is between main street and wall street, the u.s. consumer, the stuff people pay attention to .ctually seems to be doing ok if you look at the stock market or the bond market, you would think the world is falling apart. joe: i want to go back to the core pce reading we got earlier. highest level in three years, at

one point getting close to 1.7%. where does this by the fed? it is not far for the feds target anymore. could the fed be justified or vindicated by a number like this? they willitely think be. this will add to the fire of should they raise rates, should they not raise rates. for a while, everything has been pointing towards we should not raise rates. now we have the hotter inflation numbers in the past week or so, that will keep this debate alive and well. it is a tough spot for the fed it to be and because they have the lagging indicators looking well, and forward stuff not great. joe: thank you. writing down a fascinating day in data. alix: is the continued dollar rally call for foreign currency simulation like in 1985? -- is aent guest says currency stimulation expert.

♪ new jersey governor chris

christie endorsed donald trump. he is appearing with jump in texas. says she nikki haley would support mr. trump if he wins the nomination. governor haley, who has endorsed senator marco rubio says rubio can overtake trump. and former transportation hasetary ray lahood endorsed john kasich. a new poll shows the majority of americans backs u.s. government. survey, 51% of americans

says apple should unlock the iphone to assist the fbi. in apple's annual shareholder meeting, no one question ceo tim cook's actions feed at least nine people are dead after a gun man forced their way into the hotel. say five of the gun man were also killed. confirmingent is infections and nine pregnant women in the usb at all cap virus overseas. powered by our journalists around the world. i am mark crumpton. alex, scarlet, joe. howet's get a recap on markets closed. the s&p and dow could not hold onto their gains. we could see losses up to 57

points. the nasdaq finishing higher. when you look at the industry groups, it was the cyclical groups. energy and financials, which led the way on the heels of a third-quarter gdp number. >> the defenses like the utility -- defenses, like the utility, were not that good. very strong week for oil. you'd have to be happy with how this weekend ended up. rallied. just in february. they really have led any kind of come back. >> does the strong dollar rally this acetate a bank intervention? countries helped reset the fx market. joining me is jeffrey frankel, who wrote a paper on the ethic

of -- on the efficacy interventions. >> there is some skepticism about it. if you are the pound sterling in 1992 and you take the market to a higher level, all the intervention is not going to help the bank of england hold out against george soros. about currencies that go up and down all the time. can the central banks buy and sell foreign exchange and have an influence? good idea, just a current economic environment, what is going on in the u.s., europe, china? >> we have to make a distinction between the u.s. dollar and other major currencies and emerging-market currencies. other major market currencies

have been floating. we haven't intervened in years. is question you are asking if it is a time to take a look at that. it is time for a new plaza. in number of pundits asked that on the meeting in shanghai and so on. the dollar, even though it looks pretty major, it is not compared to how strong the dollar was in 1985. more importantly, it is so obviously based on economic fundamentals, which was not clear in 1985. hasreason why the dollar been so strong is because u.s. economy has been relatively strong compared to training partners. and we had the end of quantitative easing by the fed. taking those fundamentals is

given and it makes perfect sense the dollar has appreciated so much. which has more influence, essential bank monetary policy and intervention or the markets? you take a look at what happened to the yen you would be surprised. >> that was surprising. -- if you areding fighting fundamentals by intervening, then it is pretty hopeless. a must you have very heavy capital controls. maybe china can still pull that off. there is something in between saying intervention can't succeed if it is fighting the entire market versus having the entire effect. what was true in 1985, a lot of people knew the. -- new the markets was awfully strong. they were uncertain where it should go.

many thought that was a speculative bubble. they can be pushed by intervention. it depends on whether you are working with or against fundamentals. >> just to get some perspective, wasn't seen as a risky move at the time? the people have hoped it would work or was it really going out on a limb their? >> this is during the reagan administration come after the transition from the first administration to the second administration. they had a policy of not intervening. the u.s. treasury said the dollar is strong, that is the way it should be. changed when james became secretary of the treasury in january 1985. there was a change in attitude. he was taking me be a little bit of a risk that it would work. the trade deficit was so big and there were all these protections coming as a result of it. i think when he finally moved

it was successful and it got a lot of support. >> that leads to the question of where we are today with respect to politics -- the policy. i think there would be some coordinated moves to weaken the dollar, that would invite an extraordinary amount of blowback and congressional anger when our institutions are already under a lot of scrutiny. how important is political capital and credibility if you are going to do something like this? i don't know if the public understands the benefit of a germanic weakening. >> the politics is very confused today. those who have been warning that the fed monetary

policy is too easy and it is going to cause inflation. ifse people would get upset we did something to push the dollar down. lot of support and congress and both parties for stopping currency manipulation. keeping their currencies low and in favor of reversing that and bringing the dollar down. do they u.s. position has been no intervention on the part of these countries. into e.r.a.greement 2013. we let an agreement to refrain from intervention. >> the treasury pursuit this policy.

joe the politics of currency intervention. the also worry about the public takes of currency intervention rates. >> that raises the question is currency manipulation -- you have a lot of countries crying out you are going negative area we are all fighting exports to currency wars. do you buy that argument? true in a circumstance where the economy is weak, they are trying to ease monetary policy. if you are easing faster than your neighbor, it is going to work to depreciate your currency. but if everybody does that it will cancel out. i don't see it as such a big problem. everybody can have easing monetary policy. that is appropriate given the weakness in their economies, which includes emerging markets.

we are no longer just talking about your land and japan. they are easing their monetary policy. the exchange rate mechanism won't work. hopefully that will give them some boost. we just don't need negative interest rates in the u.s. now. >> thank you very much for joining us. >> coming up ireland has seen its economy recover since the financial crisis. wise the government so nervous about today's national election? we dig into the issues and politics in ireland.

>> time for the bloomberg

business flash, a look at the biggest business stories. offering investors a chance to cash out of its $2 billion boom era fund. that is according to people with knowledge of the matter. credits weeps is looking to find new backers. given an option of investing in a future fund. sold $36 million in shares of aerospace manufacturer. regulatory filing says sales were etsy kidded february 16 -- were executed february 16. united technologies rejected honeywell's latest offer today, saying it grossly undervalued the company. >> and the pace of interest rate increases in the u.s. may be slower than the u.s. that may be slower than anticipated. be slower than anticipated. finance ministers and central bankers from around the world are gathering to discuss how best to arrive the global

economy in 2016. the pollvoters went to today, choosing who will run the country for the first time since exiting an international bailout in 2013. i spoke earlier with -- about government may be in trouble. >> you go back to 1992 in the united states. it ismous quotes was clearly not the economy, because the economy is doing spectacularly well. looked like they were not going to be returned to government. it was actually a list of three things. those a list of three things. if you look at ireland, people are still unhappy they look at

the figures for the irish bond .eals there are still high tax rates. they were voted in by the current government. charges in the last couple of years. that has been something to rally around. >> essentially the government has made a number of moves the markets really like. in terms of most people on the street it doesn't feel it particularly good times. for the text to go up someone has to pay the tax -- it looks like they are going to punish the current government in the selection. the current government is -- and a junior coalition in the labour

party. that labour party came into the selection at the 2000 level. they got nearly 17% of the vote in right now are pulling in 7%. they lost more than half their support because they supported government. >> let's talk about that specifically, what is the makeup of the irish government right now and what do people think it is going to look like when all the votes are counted? moment one of the two traditional parties in ireland -- it is a center-right party. they are both center-right parties. basedpolitics are still on the civil in 1922. traditionally in the last 30 years, we have never had a

cinema jordy of government. it has owes been a large party propped up by smaller parties, whether the government also had the green parties, which also got wiped out. you are generally not looking at the following election. up isy the numbers stack that the teat of largest parties should form an easy coalition. unfortunately -- their supporters had a civil war 100 years ago. it was almost the most logical it looks like they will remain the largest party.

>> let's talk about something we have seen in elections around the eurozone. the rise of more radically oriented parties we have seen it create issues in spain, issues in portugal, scenario that investors have been uncomfortable with. how are they looking in the election. how could they upend the things? is one they are doing less for a party that may be a form of government. it's a form of blocking minority. to -- are theyng going to have their best result

in modern irish politics? >> absolutely. are pulling 15 or 16%. >> from the perspective of investors, is anyone seriously proposing a radical economic change that would make a bond investor anxious? ,> people that are not empower -- they areland influencing austerity policy in northern ireland. they have no track record. was the majority of thennment, even

bondholders shouldn't get that nervous. >> election results should start coming out sometime this weekend. >> we head to houston to get the highlights next.

>> what did you miss? a lot of for the biggest players gather this week in houston and -- joins us now. at the first one had to have been when the saudi oil minister came out and said we are not cutting production.

>> it was a terrifying thing. the room was full of oil men and women from texas and out in oklahoma. we are going to continue producing at the levels we have been producing, nearly at record levels. cut the cost, borrow more money, and a very strong message to deliver in houston. lot -- foreat, for a a long time that has been perceived as the saudi strategy. put the competition out of business. strategy isthat starting to bear fruit that u.s. producers are starting to feel the pain in a real way? >> absolutely. what is very important as we

knew that was our strategy for saudi arabia. they have never articulated this strategy on such a way. ino to deliver that strategy front of the people he is trying to get out of business, that was something to watch and listen. look at oil and gas. three years ago it was 5%. more bankruptcy and also more companies, they are taking extreme measures. one of the pioneers of the industry say they will cut spending for the year by 80%. >> as this gathering was taking place there was also big news

from the energy because they moved the first natural gas tanker for export. >> in talks to what you were speaking about. you have continental leaving north dakota. a time when natural gas prices fell to an unbelievable circumstance. news.was very positive that tankard heading into brazil. it is happening at the same time the industry was undergoing pain, because that was happening --the same day that tankard the price of natural gas fell to a 17 year low. it is really weathering this amount of pain.

>> thank you so much, great takeaway. >> coming up what you need to know to gear up for trading next week.

tomorrow morning berkshire hathaway comes up with an annual .hareholder letter we will hear what warren buffett has to say about the macro environment. >> on monday i'm looking forward to see chicago percent -- chicago purchasing managers. when my favorite indices, manufacturing gauges in the midwest region.

will we see a manufacturing bottom? >> monday night you have to look at china. manufacturing pmi comest services mark: with all due respect to

everything else -- >> texas i am here today to proudly say i endorse donald trump for president of the united states. ♪ from dallas, texas, where everything, including presidential candidate endorsements come is bigger. this has been a genetic day on the campaign trail. how about this huge and surprising endorsement from new jersey governor todd whitman backing