and i'm alix steel. u.s. stocks closing at an eight week high. energy stocks fueling the gain in the s&p 500. our guest predicts a huge rally if the u.k. chooses to stay in the eurozone. is tappinghe nation 80 billion crown from its fund this year. and we have the three charts you can't miss. scarlet: so much for that disappointing isn report because markets are rallied into the s&p 500, the dow closing at eight week highs. energy stocks led the gains. the outliers were tech and health care.

what does that mean for the fed, maybe the bad news is good news for the market. a study kind of day. what he really saw the action was in emerging markets. the emerging market industries are at its longest rally so far this year. a have recouped more than half of their losses since that low in february. this to me was particularly interesting because we got that week services data out of china. china once to be a service economy, not a manufacturing economy. weakness there should be negative but stocks rallied. alix: the selloff and emerging-market assets had gone too far and it was time to go back in. in terms of treasuries with the gains in oil and stocks, he did to treasuries at the long end of the yield curve come down a bit.

and the 10 year yield coming down to 1.83%. tool you're not participating in that in the yield really consolidating. the aussie extending its gain to a fourth day. in the fourth quarter rose more than expected. real.brazilian righ there was testimony that may implicate the president. people are thinking it change will come sooner than expected. alix: part of the rally really has to do with commodities. copper, and the go, zinc all nickel, zinc. impressive because we had that weaker chinese data.

time, you see gold having a serious breakout. look at this extended rally from all of its moving averages. if you take a look at those technical indicators, it could hit a 19 month high and could rally over $1500 an ounce. analysts technical noting this historical breakout and this is significant to me when you also have commodities rallying. are marketose minutes for today. all of these charts using the function at the bottom of the screen. i am looking at the 10 year break even. it shows investors pricing at a faster rate than inflation. a stretch of gains in four years. it shows investors are placing an annual inflation rate at 1.54

percent over the next decade. a lot closer than what we had here, 1.2% on february 10. oil prices are recovering and data has been surprising to the upside. alix: you wonder how much more difficult it makes the fed meeting in march. i want to take a look at the perplexing idea of the manufacturing in china flowing but copper prices continuing to rally. here we have the green line as and thenufacturing pmi white line is copper. hold on. one second. i mistake. -- my mistake. how do they rally when you see the divergence. manufacturing continuing to roll over with the copper price getting stronger.

commodities? in scarlet: you wonder how much of this has to do with the copper trade taking place in china with it being used as a financial aspect. it can see all of these charts and more on twitter. oliver joins us to cover today's market news. scarlet: you talk to investors and analysts all day. what have you been hearing? oliver: it's a solid rally. i think things started moving upwards from 11:30 on. there are some theories floating from a perspective but i will try to dive into but it has .een a pretty solid rebound perhaps folks tomorrow are thinking about it as a potential win-win scenario.

people want to see a u.s. economy that will be the leader around the world, can propel stockings and put a floor under equities and under company profits and build a sustained for the grain. and i think they are pretty confident the fed will hold off in a couple weeks. they are going to say maybe we will move it down to two or three hikes this year. unless it's some kind of huge in think- miss, i don't they're bracing for a massive move down. it's probably people talking about things will be positive for equities. alix: we have seen this year the stock most owned by hedge funds have not been doing well in the market. these are the hedge fund companies going down. you can see 27% of shares owned by hedge funds are down 25% this

year. oliver: exactly. this is one of the themes i think that has been important and will continue to be important and it provides the answer to the question whether or not this is a relief rally or whether or not there are still a lot of pressure is out there. on that chart, we're looking at the percent ownership of shares i hedge funds. really using the company's crowded with hedge fund owners. we talking 20 different hedge funds or 50% of the shares owned by hedge funds. you have these companies that are very crowded, and people opt to try to get out of it. and it's not taking a new turn. it's not just limited to the company they are selling for fundamental reasons.

are hurting across the board. they are having to sell out pretty much everything and that's bringing down these companies in that group very far end of the liquidation attack. there is even a more specific example. alix: this is liquidity. essentially is showing liquidity from a standpoint of companies that not only have a high share ownership percentage but a lot of different hedge funds. you can see since july, those shares are down about 50%. the companies that do have that crowding effect, they are getting hurt the worst. hedge funds are closing up and it's hurting a lot of different names. scarlet: thank you so much. alix: as we have been covering, she'll pioneer aubrey mcclendon died in a car crash in oklahoma city yesterday.

charlie maxwell, former senior spoke to usst, earlier this afternoon. >> he was a very sociable fellow and very well-spoken, capable of about energy in any context. i found him to be quick, alert, fun to be with. miss him. he had a very controversial life and we understand -- i will miss him. he had guts and determination and he build a great company and the effects of building that company or felt throughout the united states and the world as he helped to bring down the price of energy over the last 10 years. alix: what was your interpretation of how he dealt with controversy?

he butted heads with carl icahn. there was controversially he was using his stakes to get personal loans. how did he take these kinds of things? i don't think it's easy to sort them out. for instance, to just give you a classic example, the oil people in theor years independent oil exploration area , passed the hat if they were young and ambitious to ask people to contribute to their drilling funds. some of them succeeded wonderfully well and we have stories of all kinds of millionaires emerging and so on. she was doing that on a larger scale. -- he was doing that on a larger scale. they had been passing the hat

for a long time and he contributed to passing the hat and his own company, taking his own wealth and putting it to work. now it's seen as a practice we should no longer follow but i think to call this people would be a little harsh on the history of how it emerged and what was common when he started in business so i think we should hold back on the consequences of these things, being so sure and conclusive until all the facts are in. i do understand the government is going to let the main indictment go, which is the one of colluding with other companies forbids. -- for bids. coming up, grexit risks

are rising. we measure the price swings next. ♪

trump firing back at mitt romney after the former presidential candidate made his case why trump should not be the nominee. speaking at a campaign and portland, maine, trump said romney was a disaster as a candidate. i was not a fair number of obama and that is why i back to mitt romney. he was begging for my endorsement. i could have said "drop to your knees." he would have dropped to his knees. rentedarlier, romney

trump a phony and a fraud. he carson tells yahoo! news is still evaluating his campaign stand and will make an official announcement tomorrow but yesterday, carson said he didn't see a path to the nomination and is skipping tonight's debate. president obama highlighting how his signature health insurance overhaul is helping many americans gain coverage. the number of insured dropped 24.844.8 million to million. concerns the installation of the cauldron that houses the olympic plane may violate fire loss. global news 24 hours a day. i'm mark crumpton. get ready for a major rally in the pound according to our next guest, david bloom,

global head of fx strategy. the u.k. has to stay in the eu and move beyond grexit fears. the vote is june 23. what kind of price swings fully expect? david: options are so expensive. grexit, sterling will go, swinging downwards aggressively. about twoou talk moving parts in determining the pricing of the sterling. cyclical and political. walk us through these factors. traditionallyg trades cyclically come on interest rate differentials. if you see them, they move together. since december, sterling has

been on the plunge and the only explanation, political risk. it should be trading around 155, 1 52 but here we are at 140. despite a big 15 figure discount because of politics. scarlet: there is a 9% gap between the expected differential and cable. david: yes. when we saw these in the thought referendum, we there would be a coalition government in u.k. politics immediately when the risk premium went away, when the political worries what a way. scotland remained conservative majority. sterling closed the gap immediately and within two or three days, we are trading. some say we remain in the eu, we close that gap. scarlet: let's talk about the polls. your take is that politics

entered sooner rather than later with the referendum scheduled for 2016 now. right now, the opinion polls show the result is split. 41% stake, 41% go. to what extent will big changes move the pound? david: we don't really trust the thes that much but bookmakers, people with hard dollar cat that put it down, they are only saying the chances of us leaving are 33%. fallen,ing has already we are already halfway priced in. we can get another 15 on the downside. think that much will move the opinion polls. then it comes the big date on the 23rd of june and the next

day, we get explosive moves in either direction. what currency do you think sterling will rally the most after june 23? scarlet: good question. david: i'm afraid it's the mighty greenback. you could get a situation with the euro coming under pressure. people talking about grexit and possible problems in the european union. the euro could fall against the dollar but the one currency you say what a difference doesn't make, the dollar is best currency to go against. scarlet: to what extent are other countries monitoring the grexit opinion swings and talking about their own possible exit? there was talk about perhaps the netherlands exiting the eurozone. devitt: no, the netherlands is going nowhere. but there is talk of grexit.

there is talk of one of the political parties saying you get us, we get this referendum. it starts breaking a bit at the seams. ,t's a u.k. is very successful if it does leave, others may want to follow. it becomes a very fragile situation and there's nothing more the market was talking about and that is another european breakup it never happens and this will be no different. alix: the backdrop of this is if the fed ends up raising rates, what kind of upward pressure does that put on the dollar? good point.t's a to what extent are you factoring in what the fed does or doesn't do next? changes so it rapidly weather data comes in better or wars than expected. david: i'm looking at the dollar versus the euro. if i'm looking at sterling, i'm

just worried about politics. , atfor the other currencies the moment what we are seeing is a bit of a comeback for commodity prices. marketsoment, the chewing a bit of risk at the -- nt and wanting to alix: i think you are one of our most passionate guests we've ever had. david: the markets are roughly 2000 or so. market will move a lot and say what did the fed do? everyone says the fed will raise rates. we have this massive duration because the number that really matters is the payroll. wage pressers, unemployment rates.

is the big number. i've been doing this 25 years and when i see that payroll number, that is a heartbeat of capitalism and tomorrow, we will see. alix: thank you for joining us today. we love it. the charts you need to know ahead of tomorrow's jobs report. scarlet: a quick note. results benchmark index has entered a bull market of 20 6% from its low in january. brazil entering a bull market even with all of this impeachment speculation. we will discuss that more later. ♪

alix: the job numbers for february released tomorrow morning. first, i'm looking at the potential of a further slowdown in jobs growth. part of that is if you melt manufacturing and services together. you can see a definite decrease recently. 50.act, it's right around year on yearde, growth, the blue line, up almost 3%. the concern is that will roll over. they tend to track each other. scarlet: another thing you want to keep in mind is the total job growth slowed in january.

if we pull up a chart, we can see when you take deeper into the jobs number, tabouli education and health care services. that is the white line holding pretty flat relative to service industry payroll. 6000 educationy and health services jobs were added for the month. that will be a key industry to watch for in tomorrow's payroll number. alix: especially health services and education, where there has been plans for job growth and future job growth. i'm also looking at the services data because they have an cutting jobs. you have the job cuts, slower growth since 2014. really fallen off a cliff. below 50, that expansion territory. scarlet: these are all things to watch out for. certainly some headwinds as a

service part of the economy slows down. manufacturing seems to have come out a bit but is the convergence good or bad? another way to keep track of market expectations for the jobs whis pay go. basically the whisper number. i am going to add in my entry and the expectation is for 190 2000. let's say 200-1000. track of keeps everything. they will keep score and rank the most accurate predictors. for january, the most accurate prediction -- there were 10 people that came in with 150,000. the actual was when hundred 51,000.

-- 151,000. coming up, norway faces larger withdrawals. ♪

mark: let's get to first word news. mitt romney says donald trump should not be the party's nominee for president. speaking at the university of said any of the other candidates would be a better alternative to donald trump. >> here is what i know, donald trump is a phony, fraud. he is promises are as worthless as a degree from trump university. he gets a free ride to the white house, and all we get is a lousy hat. mark: donald trump fired back saying mitt romney ran a

terrible campaign in 2012. north korea is thumbing its nose at new sanctions punishing the country for a nuclear test. the north fired a short-range missile into the ocean. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. i am mark crumpton. u.s. stocks closing higher, rallying into the close. asian markets opening and a couple of hours. paul allen joins us. strong lead expected to play into gains in the asia-pacific. we are expecting modest gains in australia. 30 minutes now, already looking good, up .5%. the market will be watching

china this weekend. it is the national people's congress and the release of the five-year plan. we will be watching for anything to do with the yuan nationalization and capital outflow from china. that's what we are hoping for. what we can realistically expect might be different. terribly concrete or different is expected out of this five-year plan. scarlet: australian gdp was better than expected, retail sales are also due out. paul: we're expecting a gain of .4%. this has usually been a week print. those gdp figures much stronger than expected, driven by household consumption, so we would expect to see a strong

read out of retail sales, and that would play into another boost for the australian dollar. it has been performing strongly this week, up four days. the reserve bank will be hoping the u.s. raises interest rates sometime soon. alix: "what'd you miss?" will have to tap that sovereign wealth fund this year. expected $4.9 billion. the principle is not touched, only returns. the fund does stop growing. what are the longer-term implications of drawing down on the interest payments? getting as we are little poorer as a nation. and were our savings,

are using them faster than expected. , and theis also large fiscal guide says you can use 4% of the fund. used more.ve -- if we will have a recession or fiscal spending fiscal rule could be a binding restriction and 5-10 years with oil prices being so low. only 4% can be taken out of the fund per year, but there is a huge buffer, 32 billion, that the government can play with. how long do oil prices have to stay at that level for that to erode? >> you can always use this buffer.

the oil fund would have to fall by some 30% for the fiscal rule to be binding at the moment, so we still have some fiscal space, but the fear going forward is hurtax base will be because of poor economic output. , ande fearing a recession , itconomic growth is weak will not be as large as it has been. so fiscal space is very large at the moment, but it will shrink going forward. we could see the fiscal rule become a binding restriction in the next five years. scarlet: norway's oil in 2015,ts fell 15% expected to decline another 15% and 2016. does that put norway in a

position or it optimal position when oil prices recover? >> this is very serious for norway. mosts been the single important engine for growth for the norwegian economy. indirectly, it is much more than 15% of gdp. big problem for norway going forward, and we could well see a recession this year. weakerhy hasn't the kroner helped? about theet's talk norway sovereign wealth fund. how is it different from other state wealth funds across the middle east and asia? >> it is supposed to be spent to

cover tensions in the future. i'm not very familiar with the set up of the other funds, but what is exceptional for norway is we have a fiscal rule that says you can use 4% of the fund each year for public spending, so this is a disciplined rule for public spending and i don't think they have this in the other countries. when the oil prices fall, we are nation andorer as a our spending is limited more than before. alix: you heard me mention about the decline in local current state and why that has not been a boost for experts to offset the decline we have seen in investments. boost, buts been a we are also facing serious , weak international demand, so even if traditional

industries are gaining in competitiveness due to the weakness of the currency, they have not been able to expand exports as much as they wanted to because of the week international demand. are struggling, chemicals growing, but less than expecting, so these are the international headwinds that are being talked about at the moment. alix: to counter all these headwinds has been the advent of negative rates. do you expect norway to undertake something like that? >> at the moment we have the key policy rate and expect the central bank to cut the right. i would expect to see the rate go to zero this year, and maybe also negative rates this year or next year. alix: wow. really dire straits now. no way can handle it, but a precarious situation.

thank you very much. coming up, is an imf bailout the only hope for brazil's rising debt? we will discuss, coming up. ♪

scarlet: i am scarlet fu. it is time for the bloomberg business flash. shares of hewlett-packard enterprise arising in extended trading after profit forecasted that may exceed projections. the company is looking for a profit of $.39 to $.43 per share, compared to 42 or percent -- $.42. goldman sachs may lay off

5%, going beyond a companywide cull already started. yahoo! has a new idea to save itself, schilling it's yahoo! japan stake along with web operations. in yahoo! a 36% stake japan, the most profitable website. yahoo! is relying on goldman sachs, j.p. morgan, and pgp .artners to explore a sale that is your bloomberg business flash. brazilian stocks entering a bull market, but is brazil stock? the central bank can't lift the economy out of recession while trying to contain inflation, and the government is trying to corruption

investigation. does brazil need some kind of external intervention to get back on track? >> brazil needs a lot of things. i don't think it will be the imf. the conditions for imf and pullman are not there. it has different issues internally domestically and political issues there will not be solved by the imf. rally in brazilian stocks has a lot to do with the idea that this is a political and economic problem. the politics in

order before you fix the economics. the news recently has been a higher probability that the president may get him peach or implicated in the corruption scandals, and the market begins to weigh the possibility that we get a change in government, but it is very speculative at this point and far from the resolution. alix: you wouldn't buy this rally, would you? >> no. scarlet: congress is far too fractured to do much about addressing the budget deficit. >> it is fractured, but it would make for a turn in the politics. again, this is a political and economic situation. anything that improves and politics would help towards repairing the economy. scarlet: what does muddling through look like for brazil? you have inflation at a 13 year can'tthe central bank

raise interest rates because the economy is shrinking so quickly. >> muddling through his right now further deterioration. brazil has not hit bottom. he economy is still dear deteriorating. we need i fiscal adjustment, major policies in place, to turn this around. muddling through essentially means brazil goes on with the current situation, i fiscal deficit, debt deteriorating, getting downgraded every other day. right now there is no bottom. scarlet: interest payments are not 10% of gdp. at what point does brazil default? >> we are far from a default, but we are entering -- there is a difference between the domestic and external. the external side is in pretty good shape. i think we are far from a

default, but an sovereign debt there is a situation where at some point you enter a very bad dynamic and the dynamics of the debt becomes such that it is hard to pull back. brazil if it continues the way it is an 2-3 years, it could be that situation. scarlet: that internal that crisis -- debt crisis could blow up into an external debt crisis. >> how they pay and the ability to pay. scarlet: something you noticed is that the brazilian riel was also rallying -- real was also reality -- rallying. it is really stuck in the middle of nowhere. why has the currency stabilized? the currency has held on. >> the latest rally is for the same reason the stock market is

rallying, a little better feeling for the politics. i think that is wishful thinking. the other point is that most emerging market currencies are stable this year. a lot of the countries that sought really bad negative dynamics in the currencies last year, turkey, south africa, , they haven mexico stabilized in the early part of this year and that is helping brazil as part of the emerging market group. the impact beld on brazil of a china that grew a little bit more? >> it would certainly help. china is good for latin america, commodity prices. alix: it is really tightly correlated? >> it certainly helps in many respects. what remains an issue for

currencies in brazil and emerging markets is china's currency situation, the fx situation. chinese had said let's put a halt to this, leading to greater stability and markets across the world. back to these go gradual depreciation of the currency, that would hurt all emerging-market currencies. for the time being, it is a timeout and it is helping emerging-market currencies. alix: thank you very much. earningsreporting , thee the opening bell proposed deal to buy office depot. that is for staples as it fights the ftc. ♪

scarlet: i am scarlet fu. "what'd you miss?" staples, it future depends , attempting to block its merger with home depot. sales at staples have been heading south the last few years, 6% following the last quarter. online competition and declined in office supply retail are partly to blame. it has just under 2000 stores in total. storempany is reducing size of by 50% in response to amazon and exemplifies a shift in focus to more commercial business. that business to business segment is staples riemer he growth driver, 40% of overall sales.

primary growth driver, 40% of overall sales. staples was considering the to createf home depot synergies, so the rejection is seen as a long-term negative. forexpected cost savings general and administrative expenses, especially advertising and marketing. revenue synergies would not be relies and tell years after the transaction closes. for more on staples, were joined by a consumer retail analyst from bloomberg intelligence. you heard scarlet talking about the growth of staples commercial business, at the center of why the ftc is opposing the deal for office depot. >> the ftc is concerned that if

the two companies merged, then it will end as a monopoly. it looksaces battle as to get regulatory approval, and office depot said it would sell its year -- it's your business to appease regulators. they're willing to sell commercial contracts in the u.s. the companies need this deal. demand side is weak, secular declines, competition from amazon. scarlet: you paint a good reason why they need to go through with this. time, the opposition of the ftc cannot be a complete surprise either. what steps have they taken to head it off? said they would sell a large portion of contract business. , andare closing stores

would argue that amazon is a key competitor, and if they end up opening stores, you don't have that monopoly. stores? amazon open a competitor to them and that's what they're counting on. alix: staples has negative sales growth. all these guys end up with fighting amazon and no way to compete. has figured out how to be the amazon killer. what is the way to turn that around? >> to focus on productivity within the store, rightsizing, grow sales and copy and print, an extension of a small business office. scarlet: i actually go to staples, believe it or not, because my son keeps losing his school supplies. dedicated aisles to

other things than office supplies. sell more toble to contract customers as a one-stop shop, making them more competitive. concern's office, not necessary discretionary. is office, not necessarily discretionary. >> they are highly leveraged to it, ticky in employment. sellet: they also antiseptic hand wash, random things, paper towels. alix: thank you very much. that you can find fullberg intelligence's analysis on the terminal. really great stuff. scarlet: what you need to know to gear up for tomorrow's trading day. that is next. ♪

scarlet: i am scarlet fu. "what'd you miss?" tonight, retail sales the consensus is for a gain of 4/10 of 1%. alix: spanish election voting tomorrow to attempt to secure a coalition government. the socialist contender seems to be giving concessions, and we have the 10 year spread widening out since the election. scarlet: at 8:30 a.m. tomorrow, job stay in the united states. the consensus estimate is for 195,000 jobs added, unemployment rate unchanged at 4.9%.

all about the average hourly earnings per that is all for "what'd you miss?" thank you for watching. scarlet:

>> you can criticize donald trump for a lot of things, but the hat? it is really not that bad. we are here at the fabulous fillmore in downtown the trade. detroit. we will review that impending role, but the other brouhaha of the day. mitt