at the situation with juniper networks. their job is cyber security. they felt they had strong encryption and yet there was a vulnerability. and they were hacked and it put everybody's data, including the date of the u.s., of the fbi and the state department and the department of justice at risk. and we still do not know what was taken by our enemies. did you think about the juniper networks issue when you filed the all writs act report remedy >> no. and think about that and a lot of similar hacks all day long. it is the fbi's response ability to stop those all day long. comment struck by your

that apple has not been hacked, but icloud accounts have been hacked in the past. in 2014, the female celebrity accounts that were hacked from icloud and cnbc had a report that china likely attack icloud accounts. matt: welcome to bloomberg markets. we are following testimony on from director james comey eddie judiciary committee encryption.n this will break in a moment and then apple will join us this afternoon. >> our reporter on capitol hill has more. what have we heard so far on the precedent issue? what has kobe said? >> the director is making the case that they are in the courts looking into this individual phone in san bernardino,

but the broader policy discussion is what we are having on capitol hill. he talked about the need to have a broader conversation, to have this conversation of a warrant being traded on the iphone. matt: many people have suggested have alreadyncies hacked into iphones. his james comey on the record saying that they do not or are not aware of that capability? >> he is saying they have asked all the branches of the government for help to get into this iphone, and that they have not been able to get into it. that they have try, and they cannot. he took some questions from congressman issa, asking if they had gone down enough routes.

withtor also took issue of a backdoor into the iphones. they say there's just one door, apple tojust want remove the vicious guard dog. >> this is a tricky issue. it is not clear where public opinion lies. >> we are still nearly in the hearing, but some sharp exchanges with congressman issa .rom california to the director questioning at all the questions have been asked. the directory is that he is the director of the fbi, if he could answer these technical questions you cannot be a good leader administratively. >> coming up we have bloomberg last -- bloomberg west anger emily chang. withill have an interview

loretta lynch right here on bloomberg. matt: a big rally. we will go over to julie hyman with the highlights from today's session. julie: we do have this strong rally. the yes you 500 at its highest in about seven weeks. it is a little bit of a curious rally. of the continuation rebound that we have been seeing in stocks ever since then is the low for the year february 11. the catalysts were not huge catalyst. we got worse than estimated economic data out in china on both the services and manufacturing fronts. to theems to be leading conclusion we will see more stimulus not just from the pboc but across the globe.. still showing a decline in the united states, over the last months. take a look at the sectors on the move through the

imap, we have seen some usual suspects that are doing well today. large-cap banks, and large cap technologies. those are the two leading groups today. consumer discretionary also higher. the one group that is lower its utilities. i want to check on apple since we have been taking -- talking about it. move data all on this to spew they are having with the u.s. government. but they are rising in stocks, the highs of the session, about 4% at the moment. >> maybe everyone is really into the start of march. i want to talk about oil. we have it at $35 a barrel. was bouncing around close to unchanged, even potentially lower at a couple of weeks during the day. that did not seem to hurt stocks, interestingly enough. we were not seeing a tight correlation. then loyal to a leg up on

headlines that russian oil executives were meeting with vladimir putin. rising towards behind of the day which gave a little bit more stocks. the upturn seems to help it. i also want to look at the 10-year note, because we're seeing yields rise after that manufacturing data 1.83%. we are seeing the yield curve white and a little bit, which is helping the banks. i also wanted to look at w.a.r. interest rate futures, and what they are predicting in terms of interest rate increase is. the probability for the december meeting is 10 percentage points higher than it was yesterday. meetings this year but we have seen the probability move up in the wake of this data today a. >> thank you. we come in with more on the market moves. matt: there are a lot of

negative data points today, what is driving the rally? >> it is a pretty good one, we are over 2%, and there's not a lot of new stuff to back it up. i think it's speaks to a market that is pretty eager to get some kind of return anywhere you have asked us investors looking across different asset classes. it is still in stocks, equities, and that underpins the market where you have some stability and oil, or stability and economic data. maybe tmi is not over, a little bit better than last month that can get people to say i am going out on the risk profile to buy some stocks. matt: did you see the love having index? >> it is not my daily routine. model,ccording to their this shows that we are so significantly into panic that we

can expect up to 40% rally over the next six months. they use this model that takes into account fund flows, volatility, shortselling, etc.. if you type on your bloomberg this code you can see this chart. this.n see >> they are so panic? contrary in. maybe it is a little bit late, because i feel like the blood on the street was more in january and >> that is a common theme. ,hen things get really rough the worst start to a year on record, you get panic and we get people withdrawing from funds, as our investors who will look things sentiment and say are getting really bad if they have not changed their overall fundamental outlook only use that as a positive. fair say we can go down

to 1600 levels. even he will say this type of selloff we have seen requires a bounceback. matt: let's listen to that interview. >> from here to the bottom of the cyclical bear market we expect it will be larger than that. i actually think that the load that we put in 2.5 weeks ago is pretty solid in that a bear market rally is underway. 20t could take us of to the .60 range. that would be a 12% bear market rally. so he says we did go up to 2060? >> he takes a lot of factors that go into the models that say this is why we will go back to where we are. when you look at timeframe of where that could happen it depends if there's conviction buying. it is interesting when you look

at what is happening in the market. there are signs that this is not just a short rally, short stocks are up .5%. there are some signs that maybe people do want to legitimately own equities for various reasons. maintain all theses underlying the market, and we had trouble getting down to the 1600 level that he wants. asset prices have gone pretty high and we have to get a turn back into more reasonable levels as some people would argue. it does not seem unreasonable there could be a big downturn. i think right now you've have had this correction roll through a lot of sectors and i think doug is right that it makes most sense to happen up move it does seem like there's a bit of sentiment buildup where you can see a rebound. can we talk about financials for a second? we were worried about whether deutsche bank was going to fail in some of its debt.

and now it is fine. matt: every single european bank until last week took the entire sector down when they reported disappointing numbers. last week and this week, we have broken that correlation. even if you get a bad number out , it does like barclays not bring down the sector in europe over over here. >> and that is a big part of it. it takes a big part of the index. we have financial center of 12. when you have that kind of a to liftviously helps the rest of stocks with it. i think the factors here is credit spreads and even some commentary getting back to that fund futures to a hike this year. in a couple of months that is the best we have had. that does look favorable for the banks. matt: i know you had, for a moment you flashed seasonality.

i have that up, and i can show last 10ch, seven of the years, march has been a good month. jones here is the dow industrial average. i was looking at data from the spoke investment group. they have research on seasonality. a safety go back to the years 16% of the time the dow was a positive in the month of march. , this is10 years or so what you want to look at the march column. it better for the dow that it does for the s&p. julie: that is true. the other chart i wanted to bring up with the guilt curve. this speaks to the financial discussion. you have seen this with a little bit of widening today as we see the action in the treasury market that we've been watching, which has different implications.

asple watch the yield curve a proxy, although there are questions about its predictive o ability. if you watch oil today and the rebound and the rebounded oil prices, maybe that alleviates the concern a little bit about financials exposure to a lot of oil companies and oil debt. >> we have seen a lot of analysts point out the discrepancy between the economic data coming out in the flatness in the yield curve is something that will possibly not less. they have been saying that for a long time, but i will throw it out there. basically, thanks up today. we see oil of today. the financials and energy stocks have been a big part of this. the question is, can it continue? what are you hearing for forecast? everyone in february was pulling forecast down.

nine out of 10 strategists have pulled it down. it was the worst start to a year since 2003. >> that was true. the grain of salt is that they are still bullish. matt: even the most forecast was 2100. >> right. they are still that positive overall. what you do see the strategists going back and revisiting their estimates and bringing them down at a pace that we have not seen before. but it isme concern, tied into the love panic idea. maybe it is getting overdone. the question about whether or not the selling continued, whether or not the buying from your continues depends upon what the buying occurs on. so far the rally from the february 11, when we got the low this year, it has not been the most encouraging rally. it has been a lot of short covering. we are seeing an exception of that today. we have a commodity index of stock flat and doing well

otherwise, you see stabilization in economic data. caveat. always the there is always a silver lining to take the big question people have is whether or not stocks need to get down to a lower valuation from here. matt: thank you for joining us. we are going to continue following the markets. a check of the major averages as we had to break. more than 306 points added to the dow jones industrial average. we will also cover the apple hearing, when their lead cancel -- lead counsel goes in front of congress. you can count on it here on bloomberg. ♪

matt: look objective bloomberg markets. it is time for to bloomberg business flash, a look at some of the biggest stories in the news right now. kicking off with unemployment in the eurozone had it has follow -- eurozone. it has fallen to the lowest point in 10 years. gap, in a wide employment in germany is only 3.4%, while in spain it is more than 20%. medical device maker olympus has agreed to pay to settle federal litigations. and a similar investigation into kickbacks. and morgan stanley expects to

hire 75 advisors in the u.s. is your to target rich latin americans. it is part of the strategy to focus on the region as other international banks retreat with .he new morgan stanley hires businessour flash update. >> julie hyman has a check on some company movers and what is a big overall rally. julie: i will start with the down universe, because there are some companies this fixed doors to talk about today, where we are seeing some downdraft. even with the uptake we have seen oil prices today, this has become the latest company that is raising cash. the company that increase the offering size to 7.65 piece per share.

this is a company that has also cut in dividends in the past, and that is a move we have seen a lot of energy to -- energy producers do as well. this is still one of the reasons that everyone holds the largest cap companies. the dividends for the group remain at 3.74%. it has come down this year this for us we have seen more and more of these companies cut their dividends in order to try to preserve cash. i talked about utilities being one of the weak spots in part because of higher dividend yield. but also there is a weight have cap and this troubled steel here. -- the rateing to cap advocate says she will not sign off on letting them doing this. they're been a number of regulatory step backs. sending those shares down

14%. and then hurts, the rental car company,. , saying today the company's fourth-quarter was not relatively solid, and also the company's cost control and fleet management were well ahead of expectations. there is a sentiment that appears to be boosting that stock. >> thank you for big movers in markets . matt: oil has been all up for the most of the day. here you see the s&p 500 a 2% gain. tech stocks are making the big percentage move with bank stocks bringing up the indexes as part of index points. here you see the crude oil chart and west texas intermediate

cr. ♪

>> welcome to bloomberg markets. a big rally is taking place on the street today. here with us now to dig into what is moving markets is joe weisenthal, who was anchor of what you miss? joe: it while day. what was really interesting, we were agreeing all morning. --was interest how will interesting how markets shrugged january pmi number. we got a strong construction name and number, and as soon as that happens, not only did you see further gains on the equity side, but use hobby long end of the current jump up. today we saw a reversal, curves

steepening. slowdown, fears about deflation really seem to be coming off the table. here.i have a chart 13 can see that until july -- that is not right. we are on march 1. we are still down. this is the 2/10 fred. -- split. you are saying that we have started seeing a little more? joe: today was very minor. we have flattened a lot and we're still not an version .evels in

the is a sign that some of data we got is not particularly consistent with a recession or deflation. >> is this just our new market regime, we will have everyone panicking and then rallying the next? likee few to miss this endless back-and-forth. matt: thank you for joining us .a lot more coverage ahead on what you miss. more coverage of the apple hearing. stay with us on bloomberg markets.

>> from bloomberg world headquarters in new york, this is bloomberg markets. matt: we are 90 minutes away from the close of trading.

stocks are just off session highs but about 300 points. thes kick it off with headlines on bloomberg first word news. mark crumpton has those from our news desk. mark: the house judiciary committee is holding a hearing on protection and privacy -- encryption and privacy. part of mark komi is the first debate. lot of good people who care about things, they all caps off the same thing. the fbi cares about innovation and privacy. we devote our lives stop people from stealing our innovation for our secrets, and hacking into our devices. we care about the same things, which should make this an easier conversation. mark: apple's senior vice president and general counsel will appear in the second session. the company is fighting a court order requiring it to help the f hack into a locked iphone

belonging to one of the san bernardino shared his -- bernadino shooters. the fbi wants apple to create wouldlized software that yes it's pass code without triggering security member measures that would raise phone data. polls show that sanders trail hillary clinton in most of the stands being contested. meanwhile, donald trump is hoping to put himself distanced away from his rivals in the republican race. he is leaving almost all the super tuesday states except for texas. at 5:00 p.m. new york time for a special two-hour edition of with all due respect for extensive super tuesday coverage. obama met with senate republican leaders today. they are promising to block anyone he needs to the supreme court.

they are hoping to keep the seat open for a republican president to fill. as for obama was expected to discuss the historical precedent for confirming justices during an election year. zoosmithsonian's national shut down its kits farm exhibit after e. coli was found in some animals. he areas knowledge of 14. all the animals are being treated with antibiotics. the exhibit will remain closed until zookeepers have three weeks of negative test from the animals. two officials say staff members have not been affected. news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. matt: back to you. matt:thank you. let's take a look at the big movers on the day. futures steady as the u.s. is expecting milder weather across 48 states inventories are above

the average for the biggest surpluses 2012. natural gas futures have all into a 16 year low, but are up almost 2% today. almost touching $35, a session crude.n nymex route erik: prices right now are settling a little bit lower, just over 30 or dollars, $.30 a barrel -- $34.03 a barrel. compelling all producers to freeze output. here's what he had to say today in apple docking. -- abu dhabi. current prices will force everyone to freeze production. our next guest says the strategy forcesing production marketplace by year.

i want to bring in berkeley's head of commodities research. a lot of uncertainty in the market at the moment. most of the opec producers in january that are on this list of people who are so-called planning to freeze output are already producing at level that are unlikely to be breached going forward. exception ofe saudi arabia, none of them can produce any more oil than they are already producing. >> right. when you look at iran, iraq, and what they are planning to do this year, they are planning to grow output. foring constant output these countries is likely to do a whole lot when you have production growing in opec. matt: we see production rolling in u.s.. >> we do. if you look at the top line number, down only 43 barrels a day. when you break it down to the

city that there has been continued growth in the gulf of exit code -- gulf of mexico. 48n you look at the lower onshore output, and is down around 50,000 barrels a day month over month. when you break that down further, you are looking at 30,000 barrels a day plus or minus declines in north dakota. overseas 2000 barrels a day decline in texas and new mexico. $30 oil is clearly having an impact. >> you have said before in your research that you think oversupply is too simplistic a basis on which to predict teacher will prices. what you suggest people look at instead? >> people look at stocks and spreads, and differentials. history,ar, looking at that the precision between the imbalance and supply and demand is not fair. there has been massive revisions to supply, massive revisions to demand. when you look at things

historically it does not make a lot of sense to base your outlook purely on a 1.1 million barrel a day bill nelson the market. it is better to look at now, such a fast pace environment, what stocks are doing. what are crude stocks to them, water products, and wintertime spreads doing -- what are crude stocks doing, what are price stocks doing, and what our time stocks doing? >> what are they doing right now? >> you continue to see stocks building in the u.s., but you had seen a little bit of an improvement in time spreads in wti. he also saw slight improvement in the u.s. basis as well, which may be signaling that there is supply coming off in those areas. with the improving differentials it seems like there is an adjustment occurring. at wheret when we look stock levels are and where the

inspected imbalance is at the moment. we expecting over q1 and q2, the balance will remain a relatively large and we will see stock builds. only beyond that point will we see the market begin to recover. matt: how much does the capacity or near capacity of storage facilities affect the price action? it is hard to find any place to store oil for very little. i assume that must be a problem for producers. >> the marginal cost will continue to creep up as stocks continue to build. we are growing stocks in the likely to seeare stocks continue to creep higher over the next half year, for the first half of the year. i think beyond that point we are looking for refinery turnarounds to finally come off, and summer driving season demand to draw

down some of those crude oil inventories. >> we're all going on road trips. >> exactly. >> we have seen some analysts to parallels with the oil glut of the 1980's to do you think that that analogy holds true? >> there are a lot of similar letters between today and back then. there are a few key things that i would point out. today we had this revolutionary technology that accounts for 8% of total production. it is believed that that is highly elastic, and thus will basically, because it is more elastic, be more price and lower cost assets. thank you for joining us. breaking news. head of commodities research at barclays with us. mentioned the summer driving

season. if you're in a tesla, that is not going to help to boost oil demand. these are tesla shares today. what has happened to bring them down by 4%? citroen research has tweeted out that it is short tesla am a 48% downside by year-end. one of the reasons is the short interest rate. you can get that on your bloomberg with any stock. short interest is currently 32.5%. belichick and make these more visible -- i wish i could make these more visible. previously it has been more like 25%. that is one of the reasons that citroen says there are a number of news items coming out with supply and demand issues. news flow does not look at around the stock. citroen has historically had a pretty good price action when it puts out a report.

>> much more on the markets and the rally ahead. ♪

matt: fbi director james comey taking questions i can. appleounsel for comes, we will bring that to you live. frontrunners hillary clinton and onald trump are trading fire a date when 13 states are holding nominating contests. about half of the delegates needed are up for grabs. democrats are fighting for about a third of the delegates. with that in mind let's bring in

john heilemann and mark halperin. good to see you back from the campaign trail. what is the deal? i have seen so many different numbers. what is the deal with super tuesday? a number of states and territories. what is the exact number? john: there is a figure, but it is different for the republicans and democrats. they keeping is there is a lot of states, and american samoa. mark: and no winner take all states. the republicans do not have winner take all states for a couple of weeks. you have to make a threshold to be eligible for delegates, etc.. even if from and clinton win every state to commit and there's a chance that they could

with the exception of earning centers winning vermont -- bernie sanders winning vermont, it is not how well they will do, finishedsomeone second in enough states to say i am still in the hunt. even if donald trump wins everything, including texas, there is a chance that marco rubio or john kasich -- mark: four ted cruz. he will have the delegates by a lot, but do they went enough in enough places by districtsnal that they can show people a tally of the total delegates and say this is not over? i should get to face him one-on-one. , it: but the other thing is is going to be the numbers, but

when it looks like. what did the average american in other states think? seeing them when 11, 12 contests. there is a huge psychic element to see a candidate on a roller. the states like hillary clinton and barack obama did. but seeing one candidates dominate, it gives them huge momentum going into the next states in the calendar. you can count delegates or you can look at the big picture. big picture will be good for heller cotton and donald trump. john: and it is the first day we have multiple states voting on one day. winld trump will probably massachusetts and alabama. lastole was the person to win both states. you can go back to 1996 to find the year when the same

republican one alabama and massachusetts. part of tonight is the psychology. show a dominance in regional support that is quite striking. john: as well hillary clinton, andcould win massachusetts, who can win torn ligament and oklahoma, and minnesota. georgia, oklahoma, and minnesota. those are things that matter a lot as you go forward, especially for bernie sanders, because the democratic race is split. if you need to win 62% of the popular vote in the every other huge tall order for someone like bernie sanders to ever accomplished.

to ask them a assuming we get that big win from trump, what can we expect from the republican establishment? mark: some people are going to get on board with him as chris christie have done. some will draw a line and start thinking about getting someone else in this race, who if they did, would ensure that hillary clinton, if she is the democratic nominee, the president. there are some that will try to mend fences with him, and think if this as our nominee, we need to support him. paul ryan is someone in that camp. john: and others will light their hair on fire. matt: i look forward to watching your special. in one.o hours watch for them at 5:00 p.m. 120 minutes with both of them.

it will be simulcast on radio as well. >> we are to leave politics for a second. we are going to move back to markets. we have stocks rallying at the start of the month, rebounding from the selloff. leading the way our financials, getting a much-needed boost. julie hyman has the details for us. thee: it today sectors by report, we are looking at the xls, the financial spider edf. financials are higher, up by 3%. it is one of the leading groups. it is also one of the heavily weighted groups in the s&p 500. when it is up, it contributes significantly to the games overall. i should mention that the financials are one of the strongest groups it's the stock market bottom of this year so far. they have been helping to contribute to the gains. thee pointed out earlier, yield curve having a bit of a

widening today. take a look at the bloomberg. the spread between the 10 and a two-year yield. we are a very small bump in widening in that today. there are a number of things contributing. there was the broad economic that appears to be in effect today with that manufacturing this morning coming in a little better than estimated. there is this view here in the u.s. that maybe we are going to see tightening a little bit more quickly than had been anticipated, while at the same time there is the view around the globe that we are going to see more using. all of this continues to be equaling this game that we see. take a look the big cap thanks, leading the gains. really all of the big banks are participating in this. the regional makes are also getting a dramatic fashion. they are in the neighborhood of 5% across the lord. the brokerage stocks are getting

today as well. it is a broad-based rally in financials. insurancey, even the stocks are getting in on the act today. in theseeing a rally metlife's of the world as well. the magnitude of these ga ins is remarkable because they have usually not been this large. matt: thank you. coming up, apple takes its light against the fbi to capitol hill today. we will bring you all the latest, next. ♪

>> welcome back to bloomberg markets. a house hearing on encryption privacy is underway right now on capitol hill. the director wrote down why we should care about this.

>> we only use the tools given to us under the law. our job is simply to tell people there is a problem. everybody should care about it, everybody should understand. if there are warned proof spaces in american life, what does that mean, what is the cost of that, and how do we think about that? >> we're waiting for the opening statements from apple's general counsel. we go to washington where our apple expert tim higgins is standing by. what have we heard from his testimony? >> tough questions to the director from certain members of congress. congressman isis hitting him hard, asking them if they had done enough to explore all avenues. hittingt he is him hard. we are the full force of the united states government and military as covert operation

agencies cannot crack a iphone 5c? gone to all members of the government and asked for help and had not been able to get into it yet. that is why they need to take this up, use the courts to access this one phone in southern california, following these terrorism attacks. matt: has director called me made any statements to the larger issue? people are saying that he wants to push this to make more americans willing to trade privacy for security. >> he wants both. he wants privacy, and he also one security. they have to find a balance. he is asking huggers to have that debate, and they are beginning to have it here today. this," related this to a house security. he wants apple to have the dishes guard dog stand down, and let them pick the lock of the

door. >> we are hearing continuously that they are worried about cyber security, worried about hackers, and now we are right back to the crypto war debate of the late 1990's. think about the end of 2014, we were having a lot of conversations about how celebrities had had their iphone cloud accounts were being attacked. it was just month later that they came out with their improved iphone technology that made it harder for people to get in. it made it possible for the fbi to open these phones without a key. we do have a cyber security conference going on right at this very moment. what a rehearing on the issue there? the attorney general in san francisco today, trying valley thatlicon the government wants to be a partner on this subject may and

that they are there to work together. you have to know that silicon valley is a very skittish on this issue, especially after interrupted into the public's this-- public sphere with apple case. publicly saying they stand with apple. interesting that michael heated, the former director of the cia, think this would be bad for national security. officials in government are for breaking down apple stores, and officials who are outside of it are for security. thank you for that. we will break new apple's general counsel life when he begins his testimony in front of congress plus at 4:00 p.m., loretta lynch. ♪

vonnie: welcome to bloomberg markets. here is what we want -- here is what we are watching this hour. equities on track to have their best day in a month. catalysts for today's gains, new manufacturing data. slump may be easing. has manufacturing turns the corner? and the apple fight to keep the fed out of the iphone is taking center stage on capitol hill right now. saying it istor is time for apple to take the guard dogs away and let the feds pick the locks. from the end of trading. julie hyman is looking at the situation. julie: stocksti